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https://www.courtlistener.com/api/rest/v3/opinions/1920586/ | 447 N.W.2d 286 (1989)
STONEWOOD HOTEL CORPORATION, INC., Plaintiff and Appellee,
v.
DAVIS DEVELOPMENT, INC., Defendant and Appellant.
Civ. No. 890045.
Supreme Court of North Dakota.
October 24, 1989.
*287 Beauclair & Cook, Bismarck, for plaintiff and appellee; argued by James L. Norris
Kelsch, Kelsch, Ruff & Austin, Mandan, for defendant and appellant; argued by Thomas D. Kelsch.
LEVINE, Justice.
Davis Development, Inc. (Davis), appeals from the judgment in an eviction action *288 brought by Stonewood Hotel Corporation, Inc. (Stonewood). We reverse and remand for further proceedings.
On July 18, 1988, Stonewood purchased the Stonewood Inn from Norwest Bank. At the time of the purchase, the Stonewood Inn was being operated by Davis and Seven Seas, Inc. After the purchase, Davis operated the bar in the Stonewood Inn while Davis and Stonewood negotiated the terms of a contemplated long-term lease. Barry Davis is the chief executive officer of Seven Seas, Inc., and he and his ex-wife own Davis. It is undisputed that the parties contemplated two leasesa bar lease for Davis and a restaurant lease for Seven Seas, Inc. The parties continued their negotiations until Stonewood's attorney informed Davis' attorney by letter that Stonewood was withdrawing its offer to lease the bar facilities to Davis and directed Davis to vacate the bar premises by November 30, 1988.
By summons and complaint served on December 19, 1988, Stonewood brought an action in Morton County Court to evict Davis from the premises. The Honorable Benny A. Graff, Presiding Judge of the South Central Judicial District, assigned the matter to the Honorable Burt L. Riskedahl, a judge of the Burleigh County Court. The matter was tried in the Burleigh County Courthouse on December 29 and 30, 1988. The court denied Stonewood's motion to join Seven Seas, Inc.; denied Davis' motion for dismissal based on improper venue; concluded that "[t]here existed a month-to-month tenancy at will between the parties from July 19, 1988, to November 30, 1988;" concluded that "[t]he parties in good faith negotiated for a long-term lease but the parties did not ever come to an agreement on a long term lease;" and concluded that Davis should vacate the premises by January 31, 1989. Judgment was entered accordingly and Davis has appealed, raising the following issues:
"I. WHETHER VENUE OF THIS CASE IN BURLEIGH COUNTY WAS PROPER.
"II. WHETHER SEVEN SEAS WAS AN INDISPENSABLE PARTY TO THE EVICTION ACTION.
"III. WHETHER THE PARTIES AGREED TO ALL MATERIAL TERMS OF A LONG-TERM LEASE.
"IV. WHETHER STONEWOOD IS BOUND TO THE LEASE AGREEMENT BECAUSE OF PART PERFORMANCE BY DAVIS.
"V. IF THERE IS NO LONG-TERM LEASE, WHETHER THE LEASE RELATIONSHIP WAS A MONTH-TO-MONTH LEASE, OR ONE-YEAR LEASE PURSUANT TO 47-16-05, NDCC."
1. Venue
Venue means the place of trial. III W. Blackstone, Commentaries on the Laws of England *384; 77 Am.Jur.2d Venue § 1, p. 832 (1975); Black's Law Dictionary 1396 (5th ed.1979). Because the real property involved is located in Morton County, § 28-04-01, N.D.C.C., required the action to be brought in Morton County, "subject to the power of the court to change the place of trial upon agreement of counsel or in other cases provided by statute."
Stonewood brought the action in Morton County but in its summons directed Davis to appear before the Morton County Court in the Burleigh County Courthouse on December 29, 1988. In its answer, Davis alleged that "[t]he proper venue for the trial of the action is the Morton County Courthouse, and the Defendant objects to any and all proceedings outside of that venue." The trial court overruled Davis' objection on the ground that "[t]he trial was only held at the Burleigh County Courthouse because no space was available in Morton County as of December 29, 1988."
Relying on § 28-04-01, N.D.C.C., Davis argued that "in absence of an agreement or Court order, Davis had an absolute right to trial in Morton County." Stonewood, on the other hand, argued that "Section 28-04-07(3), N.D.C.C., provides the court with authority to allow the trial to be held in *289 Bismarck since the ends of justice would be promoted."
Section 28-04-07(3), N.D.C.C., provides that the court may change the place of trial "[w]hen the convenience of witnesses and the ends of justice would be promoted by the change." "A motion for a change of venue is addressed to the sound judicial discretion of the trial court." Marshall v. City of Beach, 294 N.W.2d 623, 625 (N.D.1980). A movant for change of venue must show "that both the convenience of witnesses and the ends of justice would be promoted by such a change." Id., at 628. Generally, the convenience of parties will not be considered. Jerry Harmon Motors, Inc. v. First National Bank & Trust Co., 440 N.W.2d 704, 711 (N.D.1989); American State Bank of Dickinson v. Hoffelt, 246 N.W.2d 484 (N.D.1976). Courts may consider the relative speed with which a trial may be had when determining venue questions. See, e.g., Mullen v. Mullen, 135 Minn. 179, 160 N.W. 494 (1916); Thomas v. Small, 121 A.D.2d 622, 504 N.Y.S.2d 132 (1986); Gerber v. B.C.R. Hotel Corp., 10 A.D.2d 956, 201 N.Y.S.2d 749 (1960); 77 Am.Jur.2d Venue § 65 (1975).
The instant action was an eviction action under Ch. 33-06, N.D.C.C., which is a summary proceeding to recover possession of real estate. South Forks Shopping Center, Inc. v. Dastmalchi, 446 N.W.2d 440 (N.D.1989); Fireman's Fund Mortgage Corp. v. Smith, 436 N.W.2d 246 (N.D. 1989). Section 33-06-02, N.D.C.C., provides an "expedited time period [of 3 to 15 days] ... within which a defendant must appear and defend in an eviction action." Flex Credit, Inc. v. Winkowitsch, 428 N.W.2d 236, 240 (N.D.1988).
While it is a close question, we are not persuaded that the trial court abused its discretion in allowing the action to be tried in the Burleigh County Courthouse. In view of the summary nature of an eviction action and the absence of a jury trial, the ends of justice were promoted by conducting the trial within the period allotted by § 33-06-02, N.D.C.C. No courtroom was available in Morton County for the prompt resolution of the action. The Burleigh County Courthouse was convenient for the witnesses, who were owners of the corporations or their attorneys. Under these circumstances, trial in Burleigh County was permissible and the trial court did not abuse its discretion in changing venue.
2. Indispensable party
Rule 19, N.D.R.Civ.P., provides for the joinder of persons needed for just adjudication. Rule 19(b) provides for the dismissal of actions in which a person cannot be made a party and is indispensable. Davis contends that, by not joining Seven Seas, Inc., Stonewood failed to join an indispensable party. Stonewood argues that we should not consider this issue because Davis did not raise it in the trial court.
Generally, failure to join a party under Rule 19 should be raised in the responsive pleading or in a timely Rule 12(b) motion, but failure to join an indispensable party may be raised "as late as the trial." 3A Moore's Federal Practice ¶ 19.05[2], p. 19-78 (1989). An appellate court may consider a question about joinder of an absent person even though it was not raised below. Id., ¶ 19.19-1, p. 19-296.
"[I]ndependent of Rule 12(b)(7) and Rule 12(h)(2) both the trial court and the appellate court have the power and the duty to act sua sponte to protect the rights of the absent person, whether by ordering that he be added or, if this is not feasible, by dismissing the action. But a party's objection to the non-joinder of a person whose joinder is feasible will be treated as untimely if made after the pleadings are closed, since a defendant should not be allowed to postpone his objection until trial when joinder will inevitably delay resolution of the controversy."
Id., ¶ 19.05[2], p. 19-81. "Upon a literal reading of Rule 19, a person cannot be an indispensable party unless he ... `cannot be made a party.'" Id., ¶ 19.05[2], p. 19-79.
There is nothing in the record indicating that Seven Seas, Inc., could not have been made a party. Seven Seas, Inc., therefore, was not an indispensable party and Davis' objection, raised for the first *290 time on appeal, to Stonewood's failure to join Seven Seas, Inc., is untimely.
3. Lease
The trial court concluded that "[t]here existed a month-to-month tenancy at will between the parties from July 19, 1988, to November 30, 1988," and that "[t]he parties in good faith negotiated for a long-term lease but the parties did not ever come to an agreement on a long term lease." The rationale underlying the trial court's conclusions is not apparent in the court's findings of fact and conclusions of law.
Leases are subject to the general rules for interpreting contracts. South Forks Shopping Center, Inc. v. Dastmalchi, supra. "Under traditional common law, no contract was reached if the terms of the offer and the acceptance varied." Steiner v. Mobil Oil Corp., 20 Cal. 3d 90, 141 Cal. Rptr. 157, 569 P.2d 751, 757 (1977). However, Section 9-03-21, N.D.C.C.,[1] provides:
"Acceptance must be absolute. Except as provided by section 41-02-14, an acceptance must be absolute and unqualified, or must include in itself an acceptance of that character which the proposer can separate from the rest and which will conclude the person accepting. A qualified acceptance is a new proposal."
Thus, under the statute, an acceptance must be absolute and unqualified or at least separable from those parts of the acceptance which are not absolute and unqualified. Thus, not every new proposal constitutes a qualified acceptance or counteroffer. An acceptance is not necessarily invalidated by proposing changes or additions. See Restatement (Second) of Contracts § 61 (1981) and Comment a thereto:
"§ 61. Acceptance Which Requests Change of Terms
"An acceptance which requests a change or addition to the terms of the offer is not thereby invalidated unless the acceptance is made to depend on an assent to the changed or added terms.
"Comment:
"a. Interpretation of acceptance. An acceptance must be unequivocal. But the mere inclusion of words requesting a modification of the proposed terms does not prevent a purported acceptance from closing the contract unless, if fairly interpreted, the offeree's assent depends on the offeror's further acquiescence in the modification. See Uniform Commercial Code § 2-207(1)."
See also, Pravorne v. McLeod, 79 Nev. 341, 383 P.2d 855 (1963).
The parties' attorneys exchanged three drafts and redrafts of proposed leases during the summer of 1988. In September, Stonewood's attorney submitted to Davis' attorney proposed leases (draft 4). This was followed by an October 6, 1988, letter to Davis' attorney, stating in part:
"It appears that the only unsettled provision with regard to the restaurant lease relates to the manner of verifying sales generated by the restaurant.... In the most recent draft of the lease agreement, I proposed that lessee provide copies of cash register receipts prepared upon closing out the restaurant's cash registers at the end of each business day.
* * * * * *
"Please obtain lessee's signature on the lease agreement and forward it to me along with his check in the amount of $4,943.71 for rent and restroom cleaning through October. Upon receipt, I will obtain my clients' signatures on the leases and forward executed copies to you. Please be advised that if I do not receive the executed lease and rental payment within ten days of the date of this letter, I will have no alternative but to assume *291 that lessee is not interested in occupying the premises, in which case appropriate measures will be taken."
After a telephone conversation with Stonewood's attorney, Davis' attorney made some changes and returned leases executed by Davis (draft 5). Draft 5 was the same as draft 4 except for changes (relating to prorating rent, a change in the monthly rent payment date, substituting cash register summary sheets for cash register receipts, and deleting "or licensees," "visitors or licensees," and "or invitees" in liability provisions) discussed by the attorneys in the telephone conversation. Stonewood then withdrew its offer and directed Davis to vacate the premises. It does not appear to us that the trial court considered whether the new proposals may have constituted an acceptance not dependent on Stonewood's assent to the added terms, in accordance with Restatement (Second) of Contracts § 61, supra, and § 9-03-21, N.D.C.C.[2] We, therefore, reverse and remand for reconsideration.
4. Tenancy-at-will
Davis contends that "even if the Court were to reject all of Davis's arguments that a long-term lease exists, it would be compelled to apply Section 47-16-05 and rule that Davis has a one-year lease from July 18, 1988 to July 18, 1989." Stonewood argues that "[s]ince there is no lease, Section 47-16-05, N.D.C.C., cannot apply."
Section 47-16-05, N.D.C.C., provides:
"A lease of real property, other than lodgings, in places where there is no usage on the subject, is presumed to be for one year from its commencement, unless otherwise expressed in the lease."
Stonewood placed Davis in possession of the premises as a tenant while the parties negotiated the final terms of a contemplated long-term lease. Davis partially performed its duties.
Stonewood did not present evidence overcoming the statutory presumption of a one-year lease provided in § 47-16-05, N.D. C.C. Thus, even if on remand, the trial court determines that the parties did not agree to a long-term lease, Davis had a one-year lease under § 47-16-05, N.D.C.C., unless Stonewood presents further evidence sufficient to overcome the presumption of a one-year lease.
The judgment is reversed and the matter is remanded for further proceedings in accordance with this opinion.
ERICKSTAD, C.J., and GIERKE, J., concur.
VANDE WALLE, Justice, concurring specially.
I concur in the majority opinion. I write separately to note my concern with the procedure by which the change of the place of trial occurred in this case. Although I agree that the court had the right to change the place of trial and may have had adequate reason for doing so in this instance, I believe the proper procedure is a motion, upon notice, to change the place of trial, not a summons which directs the defendant to appear in a place other than that prescribed by the statute. The change of place of trial is not automatic and a party to the action has the right to object to the change. See, e.g., Jerry Harmon Motors v. First Nat. Bank, 440 N.W.2d 704 (N.D. 1989).
Here, Davis's objections to the change of place of trial were heard but rejected by the trial court at the time set for trial. Although this may minimally satisfy due process I do not approve of the procedure. Because it was a trial to the court and *292 because the change in place of trial entailed only a few miles, counsel for the plaintiff and the court may have assumed, presumptuously as it turns out, that the defendant would have no objection. Had there been any substantive effect on the ability of Davis to adequately try its case, I would reverse on that basis also. Because I do not discern that happening in this instance and because of our action in reversing for other reasons I concur in the majority opinion.
MESCHKE, Justice, concurring.
I join in parts 2, 3, and 4 of Justice Levine's opinion for the majority. I respectfully disagree that trial of an action for possession of real estate in Morton County could be summarily held in Burleigh County. Therefore, I do not join in part 1.
The majority opinion scarcely notices that a local trial for real estate has historic significance. The ancestory of this conviction in the common law traces to the Magna Charta. See paragraphs 18 and 19 of the Magna Charta in 13 North Dakota Century Code, p. 3. "In local actions, where possession of land is to be recovered, or damages for an actual trespass, or for waste, etc., affecting land, the plaintiff must lay his declaration or declare his injury to have happened in the very county and place that it really did happen; ..." III W. Blackstone, Commentaries on the Laws of England, § 371, *294. Deviation from that enduring tradition is not trivial.
The majority opinion does not cite or discuss Johnson v. Johnson, 86 N.W.2d 647 (N.D.1957), which was relied upon by Davis. In Johnson, the landlord sued in Pierce County District Court to enjoin a former tenant from interfering with Bottineau County farmland. This court reversed the restraining order, declaring that it was "void for want of jurisdiction on the part of the District Court of Pierce County . . . ." 86 N.W.2d, at 651. Tracing the history of the predecessor of NDCC 28-04-01 from territorial times through revision by the Code Commission in 1943 (adding "must be brought"), this Court declared that it was "a matter of jurisdiction rather than of venue and that unless the action is brought in the proper county the court has no jurisdiction over the subject matter." 86 N.W.2d, at 651. Thus, the locale of the trial of real estate actions has been endowed with a jurisdictional quality in North Dakota. Today's decision disregards that standing.
Of course, like all matters that come to the judicial branch of government, Hayden v. North Dakota Workers Compensation Bureau, 447 N.W.2d 489 (N.D.1989), the court has power to change the place of trial and disposition in a proper way and for a proper case. NDCC 28-04-01 says that venue is "subject to the power of the court to change the place of trial ... in ... cases provided by statute." But in this case, the place was neither changed in a proper way nor for a proper reason.
The place of trial was scheduled for the Burleigh County Courthouse in the summons issued by the attorney for Stonewood. Apparently, this was done arbitrarily and ex parte by Stonewood's attorney because a Burleigh County judge had been designated to handle the case while the Morton County judge was on vacation. While we recognized the summary nature of eviction proceedings in South Forks Shopping Center, Inc. v. Dastmalchi, 446 N.W.2d 440 (N.D.1989). (Civil No. 890018; filed 9-26-89), we have not set aside due process. A change of the place of trial must be made by a judicial order. Jerry Harmon Motors, Inc. v. First National Bank & Trust Co., 440 N.W.2d 704 (N.D. 1989). A judicial order needs a notice and a hearing. McWethy v. McWethy, 366 N.W.2d 796 (N.D.1985). At the opening of the trial in the Burleigh County Courthouse, the trial court overruled Davis' objection to the place of trial. This fait accompli was not a proper way.
Nor was this a proper case. NDCC 28-04-07(3) authorizes a court to change the place of trial "[w]hen the convenience of witnesses and the ends of justice would be promoted by the change." Convenience of witnesses was not involved. The trial *293 court ruled that "no space was available in Morton County," which was evidently based on an argument by Stonewood's counsel that "this is the only place in which the hearing could take place within the [time] parameters of the statute." If space, not time, was the reason, no "ends of justice" were "promoted." When a customary courtroom is unavailable, any meeting room can be made suitable for dispensation of justice. Consecration of the facility is not a judicial prerequisite. Thus, the reason seems rather to have been the convenience of an assigned judge, who did not want to take time from his hectic schedule to go to the nearby county for a trial. The "ends" of the judge are not the same as the "ends of justice." A judge's convenience is not an acceptable reason for changing the place of trial.
In my opinion, the trial court misruled and abused judicial discretion in changing the place of trial. Since we are remanding for reconsideration for other reasons which I join in, I do not dissent. However, I would direct that proceedings on remand be held in Morton County, not in the Burleigh County Courthouse.
NOTES
[1] The reference in § 9-03-21, N.D.C.C., to § 41-02-14 (U.C.C. § 2-207), N.D.C.C., does not make § 41-02-14 applicable to real estate transactions. Section 41-02-02 (U.C.C. § 2-102), N.D.C.C., provides that "[u]nless the context otherwise requires, this chapter applies to transactions in goods." The Uniform Commercial Code does not apply to real estate sales. Southcenter View Condominium Owner's Ass'n v. Condominium Builders, Inc., 47 Wash.App. 767, 736 P.2d 1075 (1986).
[2] Stonewood argues that under Cooke v. Blood Systems, Inc., 320 N.W.2d 124 (N.D.1982), an "acceptance cannot introduce additional terms and conditions." The fact that Stonewood placed Davis in possession of the premises as a tenant, which partially performed leasehold obligations distinguishes this case from Cooke v. Blood Systems, Inc., supra. In a case such as this, possession and partial performance render application of flexible tests of acceptance, such as those contemplated in Restatement (Second) of Contracts § 61 (1981), all the more appropriate for determining if parties have agreed to a lease even though they have not signed a lease, rather than application of the mirror-image offer-and-acceptance-rule enunciated in Cooke, supra. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1920640/ | 107 B.R. 689 (1989)
In re WOODS FARMERS CO-OPERATIVE ELEVATOR COMPANY, Debtor.
Wayne DREWES as Bankruptcy Trustee for Woods Farmers Co-operative Elevator Co., Plaintiff,
v.
Fred A. CARTER, Rodney Thompson, Marie Thompson, St. Paul Bank for Cooperatives, Dorothy A. Anderson, Norman Sletmoe, Merle Schatzke, Wayne Schatzke, Alex Watt, Jack Christensen, Cleo Brown, Clayton Brown, Wade Motter, Joanne Motter, Wayne L. Heuer, Gordon Pearson, Larry Nesemeier, Bradley Gust, Roger L. Thompson as personal representative of the Marion Thompson Estate, Colfax Farmers Elevator, James E. Nygard, United States of America, acting through Commodity Credit Corp., Roger McDonald, Carmen Lynnes, Lynnes Farms, Roesler Land & Cattle Co., Kent Roesler, Lyle Roesler, Ada Roesler, Kellerman Brothers, Sheldon Farmers Elevator, Orville Pfingsten, Roland Heuer, Gary Dittmer, Allen Solhjeim, Brian McDonald, Al Halvorson and Ron Halvorson, Paul Brakke, Jim Bueling, Ron W. Plath, Land O'Lakes, Inc., Farmers *690 Union Central Exchange, Inc., and Pepsi Cola Bottling Co. of Fargo, Inc., Defendants,
v.
FARMLAND MUTUAL INSURANCE CO., Intervenor.
Bankruptcy No. 89-05299, Adv. No. 89-7067.
United States Bankruptcy Court, D. North Dakota.
October 20, 1989.
Wayne Drewes, Fargo, N.D. Trustee.
Kip M. Kaler, Fargo, N.D. for trustee.
Roger J. Minch, Fargo, N.D. for St. Paul Bank for Co-ops.
Rodney and Marie Thompson, West Fargo, N.D., pro se.
Jay D. Carlson, Fargo, N.D. for James E. Nygard.
John C. Irby, Casselton, N.D., Lowell P. Bottrell, Fargo, N.D., and David L. Johnson, Fargo, N.D., for various grain claimants.
Vicki Aldridge, Fargo, N.D., for USA/CCC.
William Binek, Bismarck, N.D., for North Dakota Public Service Com'n.
Dorothy Anderson, Sheldon, N.D., pro se.
Bruce Carlson, Fargo, N.D., for Farmland Mut. Ins. Co.
*691 Rebecca Theim Benson, Bismarck, N.D., for North Dakota Grain Dealers.
MEMORANDUM AND ORDER
WILLIAM A. HILL, Bankruptcy Judge.
The matters before the court are motions for summary judgment and judgment on the pleadings filed by various defendants. Wayne Drewes, trustee for the estate of Woods Farmers Co-operative Elevator Company, by Complaint filed September 8, 1989, seeks to avoid an alleged statutory lien on grain proceeds pursuant to section 545 of the Bankruptcy Code. Motions for judgment on the pleadings and/or motions for summary judgment were filed by various defendants in this matter. Objections to these various motions were filed by the trustee and St. Paul Bank for Cooperatives. In addition, St. Paul Bank for Cooperatives filed a counter-claim and cross-claim against the trustee and various defendants.
The Debtor, Woods Farmers Co-operative Elevator Company, filed for relief under Chapter 7 of the Bankruptcy Code on April 13, 1989. Prior to filing, the Debtor was a licensed and bonded grain warehouse and storage facility in Leonard, North Dakota. On June 7, 1989, this court authorized that all grain that remained on the Debtor's premises or in space controlled by Woods Condominum Elevator be sold by the trustee. The grain was sold and the proceeds in the amount of $1,603,459.94 were deposited with interest in a separate account. The trustee by the instant action seeks to avoid an alleged statutory lien upon the grain proceeds. The defendants in this present action move for dismissal of the trustee's complaint. All the motions in this case will be treated as motions for summary judgment because a Rule 12(c) motion can be granted only on the pleadings and if outside matter is introduced, the court must treat the motion as one for summary judgment. Brittian v. Belk Gallant Company, 301 F. Supp. 477, 478 (D.C. Ga.1969).
Summary judgment is available where the pleadings or other documents on file show there to exist no genuine issue as to any material fact and where the moving party is entitled to summary judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986); Mandel v. United States, 719 F.2d 963, 965 (8th Cir.1983). When considering motions for summary judgment the weight of authority is that summary judgment may be rendered in favor of the opposing party even though no formal cross motion has been made, providing the facts developed reveal the opponent is entitled to judgment. National Expositions v. Crowley Maritime Corp., 824 F.2d 131, 133 (1st Cir.1987); British Caledonian Airways, Ltd. v. First State Bank of Bedford, Tex., 819 F.2d 593, 595 (5th Cir.1987).
It is with the foregoing standard in mind that the facts and issues as they presently appear will be considered.
1.
At the outset, the court would point out that the grain and subsequent proceeds are "property of the estate", within the jurisdictional parameters of section 541 of the Bankruptcy Code. See, State of Mo. v. U.S. Bkrtcy. Court, 647 F.2d 768, 774 (8th Cir.1981). In light of the broad definition of property under section 541 of the Code the possessory interest of the Debtor, in the grain/proceeds, are sufficient to trigger jurisdiction over the property in this bankruptcy court. Id. at 774. Whether in fact the grain proceeds are "property of the Debtor" is an issue previously dealt with in an opinion of this court entered October 13, 1989, and which will now be further discussed in the context of the section 545 avoidance powers.
2.
The trustee, by the nature of his complaint, has two primary assertions. First, the trustee asserts that section 60-02-25.1 of the North Dakota Century Code creates a statutory lien upon the grain proceeds. Second, that the trustee has the power to avoid the statutory lien pursuant to section 545 of the Bankruptcy Code. Therefore, in order to address these various motions the court must determine whether North Dakota Century Code *692 § 60-02-25.1 creates a lien in favor of the receipt holders on the grain proceeds.
Section 60-02-25.1 provides:
60-02-25.1. Receipt Holders Lien. Grain contained in a warehouse, including grain owned by the warehouseman, is subject to a first priority lien in favor of outstanding receipt holders storing, selling, or depositing grain in the warehouse. The lien created under this section shall be preferred to any lien or security interest in favor of any creditor of the warehouseman regardless of the time when the creditor's lien or security interest attached to the grain. Notice of the lien created under this section need not be filed in order to perfect the lien. The lien created by this section is discharged as to grain sold by the warehouseman to a buyer in the ordinary course of business. Such sale does not discharge the lien in favor of an individual receipt holder in the remaining grain in the warehouse. N.D.Cent.Code § 60-02-25.1.
It is clear that section 60-02-25.1 as determined in this court's October 13, 1989, opinion that the subject statute does create a lien in favor of receipt holders. Therefore, once determining that there is a lien on the subject grain proceeds the issue becomes whether such lien may be avoided by the trustee pursuant to section 545 of the Bankruptcy Code.
3.
Section 101(47) of the Bankruptcy Code defines "statutory lien" as a lien arising solely by force of statute on specified circumstances or conditions. 11 U.S.C. § 101(47); Gardner v. Com. of Pa., 685 F.2d 106, 109 (3rd Cir.1982). Since the lien created by 60-02-25.1 arises by force of statute it is a statutory lien within the definition of the Bankruptcy Code. 11 U.S.C. § 101(47).
In order for the trustee to avoid a statutory lien pursuant to section 545 the lien must be on "property of the debtor". 11 U.S.C. § 545. Generally, all the defendants contend that the trustee's complaint should be dismissed because the grain proceeds are not "property of the debtor." North Dakota Century Code § 60-02-25 provides in part:
Whenever any grain shall be delivered to any public warehouse and an unconverted scale ticket or warehouse receipt is issued therefor, such delivery shall be a bailment and not a sale of the grain so delivered. N.D.Cent.Code § 60-02-25 (emphasis added).
Therefore, pursuant to 60-02-25 any grain delivered to a warehouse for the purpose of storage is a bailment whether the storage is evidenced by a scale ticket or warehouse receipt. The North Dakota Supreme Court defines a bailment as:
A trust relation arising from lawful possession of property taken with consent of the owner for an agreed time and purpose, and the duty to later account for it to the owner. Bower v. Western Livestock Company, 103 N.W.2d 109, 112 (N.D.1960).
Therefore, by statute and case law the grain owners who deposited grain for storage had a bailment relationship with the Debtor.
It is well settled under bankruptcy law that a bailor may recover property held by a debtor as bailee. In re Ralph Veon, Inc., 12 B.R. 186, 188-89 (Bankr.W.D.Pa. 1981). Furthermore, in a bailment relationship, title to the property remains in the bailor and since the trustee takes only the property rights which the debtor/bailee possessed, title to the property does not become a part of the Debtor's estate. Id. The court agrees with the defendants that the proceeds represented by a receipt holder are not property of the Debtor because the Debtor has no ownership interest in the grain proceeds, and thus, the trustee may not avoid the statutory lien on such proceeds. However, in earlier hearings the trustee testified that there may be grain owned by the Debtor in the warehouse. Additionally, consistent with this court's previous Order dated October 13, 1989, commodity quantities in excess of receipt totals for that commodity held by individual receipt holders/owners of that commodity is not owned in common by receipt holders of other non-fungible commodities but *693 instead may be owned by the Debtor, and would therefore constitute "property of the debtor". It is apparent from this court's Order dated October 13, 1989, with the exception of winter wheat and rye, that there is sufficient quantities of commodity type sold to cover the warehouse receipts of like commodity. The excess bushels of individual commodity type, if no distinction is made for grade, is as follows:
Commodity | Spring Wheat Corn Soybeans Barley Oats
| --------------------------------------------------------------
Bushels |
Sold | 36,934.58 322,618.43 34,795.98 242,195.31 910.00
|
Bushels |
Claimed | 28,562.00 275,905.87 23,015.07 234,945.34 81.87
| _________ __________ _________ __________ _____
Excess |
Bushels | 8,372.58 46,712.56 11,780.91 7,249.97 828.13
The statutory lien created by section 60-02-25.1 runs to "Grain contained in a warehouse, including grain owned by the warehouseman . . .". N.D.Cent.Code § 60-02-25.1. Therefore, as to the portion of the grain/proceeds which do not constitute bailed property of the receipt holders, the trustee may avoid the fixing of the statutory lien created in section 60-02-25.1 as consistent with section 545.
4.
The Bankruptcy Code gives the trustee the power to avoid certain statutory liens pursuant to section 545. Section 545 provides:
The trustee may avoid the fixing of a statutory lien on property of the debtor to the extent that such lien
(1) first becomes effective against the debtor
(A) when a case under this title concerning the debtor is commenced;
(B) when an insolvency proceeding other than under this title concerning the debtor is commenced;
(C) when a custodian is appointed or authorized to take or takes possession;
(D) when the debtor becomes insolvent;
(E) when the debtor's financial condition fails to meet a specified standard; or
(F) at the time of an execution against property of the debtor levied at the instance of an entity other than the holder of such statutory lien;
(2) is not perfected or enforceable at the time of the commencement of the case against a bona fide purchaser that purchases such property at the time of the commencement of the case, whether or not such a purchaser exists;
(3) is for rent; or
(4) is a lien of distress for rent. 11 U.S.C. § 545.
Generally speaking, section 545(1) allows the trustee to avoid the claim of a statutory lien on the Debtor's property if the statutory lien becomes effective upon the initiation of federal bankruptcy proceedings or other defined insolvency conditions. 11 U.S.C. § 545(1). However, section 545(1) does not invalidate the receipt holder's lien in this case. The receipt holder's lien is not defined in terms of the insolvency of the warehouse. N.D.Cent. Code § 60-02-25.1. The receipt holder's lien arises upon delivery and storage of the grain in the subject warehouse. Id.
Section 545(2) allows the trustee in bankruptcy to defeat statutory liens if the lien "is not perfected or enforceable at the time of the commencement of the case against a bona fide purchaser that purchases such property at the time of the commencement of the case whether or not such purchaser exists." 11 U.S.C. § 545(2). Thus, the *694 Code invalidates liens that would not be enforceable against a bona fide purchaser, real or hypothetical. Id. In addition, a statutory lien is not effective against a claim of a trustee in bankruptcy unless it is perfected prior to filing of a petition in bankruptcy. Selby v. Ford Motor Company, 590 F.2d 642 (6th Cir.1979). A lien is not perfected if under state law a bona fide purchaser would receive title superior to the lien holder upon transfer of assets subject to the lien. Id. North Dakota Century Code § 60-02-25.1 expressly provides that, "The lien created by this statute is discharged as to grain sold by the warehouseman to a buyer in the ordinary course of business." N.D.Cent.Code § 60-02-25.1. As the Amicus Curiae brief for the North Dakota Grain Dealers Association so aptly points out, every buyer in the "ordinary course of business" is a "bona fide purchaser", but not every bona fide purchaser is a buyer in the ordinary course. The court agrees with this premise, because it is clear that pursuant to state law, the term, "buyer in the ordinary course" encompasses the term bona fide purchaser.[1] Therefore, it logically follows that if the receipt holder's lien is discharged as to a buyer in the ordinary course of business it is also unenforceable against a bona fide purchaser. Thus, section 60-02-25.1 is an avoidable statutory lien pursuant to section 545(2) of the Bankruptcy Code.
In conclusion and as consistent with the above discussion, any grain which was owned by the Debtor and as to which the receipt holder's section 60-02-25.1 lien would attach, is avoided. Accordingly, the defendants' motions for summary judgment of dismissal are granted as to grain proceeds not owned by the Debtor. As to grain proceeds which do not constitute bailed property belonging to receipt holders, the statutory lien created by North Dakota Century Code § 60-02-25.1 is avoided pursuant to section 545 as a matter of law. Judgment may be entered consistent herewith.
IT IS SO ORDERED.
NOTES
[1] The North Dakota Supreme Court has held that a bona fide purchaser is a purchaser in good faith and for value, and must have "acquired title without notice, actual or constructive, of another's rights and also must have paid value for the same." Wehner v. Schroeder, 335 N.W.2d 563 (N.D.1983).
North Dakota Century Code § 41-01-11(19) defines a buyer in the ordinary course of business as "a person who in good faith and without knowledge that the sale to him is in violation of the ownership rights or security interest of a third party in the goods buys an ordinary course from a person in the business of selling goods of that kind. . . ." Id. There are more conditions on a buyer in the ordinary course than that of a bona fide purchaser. But it is clear that a bona fide purchaser is encompassed in the term buyer in the ordinary course. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1920676/ | 107 B.R. 678 (1989)
In re WOODS FARMERS COOPERATIVE ELEVATOR CO., Debtor.
Bankruptcy No. 89-05299.
United States Bankruptcy Court, D. North Dakota.
October 13, 1989.
*679 Wayne Drewes, Fargo, N.D. Trustee.
Kip M. Kaler, Fargo, N.D. for trustee.
Roger J. Minch, Fargo, N.D. for St. Paul Bank for Co-ops.
*680 Rodney and Marie Thompson, West Fargo, N.D., pro se.
Jay D. Carlson, Fargo, N.D. for James E. Nygard.
John C. Irby, Casselton, N.D., Lowell P. Bottrell, and David L. Johnson, Fargo, N.D., for various grain claimants.
Vicki Aldridge, Fargo, N.D., for USA/CCC.
William Binek, Bismarck, N.D., for North Dakota Public Service Com'n.
Dorothy Anderson, Sheldon, N.D., pro se.
Bruce Carlson, Fargo, N.D., for Farmland Mut. Ins. Co.
Rebecca Theim Benson, Bismarck, N.D., for North Dakota Grain Dealers.
MEMORANDUM AND ORDER
WILLIAM A. HILL, Bankruptcy Judge.
This matter is before the court on issues raised in connection with interests claimed in the proceeds of grain formerly in storage at the Debtor's elevator facility.
The Debtor, Woods Farmers Cooperative Elevator Co. (Elevator), was the owner and operator of a public grain warehouse licensed under the laws of North Dakota and situated at Leonard, North Dakota. It filed for relief under Chapter 7 of the U.S. Bankruptcy Code on April 13, 1989, and on that date Wayne Drewes was appointed trustee. On June 7, 1989, an order was entered pursuant to section 557 of the Bankruptcy Code authorizing the trustee to sell all grain in storage with any liens and claims of ownership attaching to the proceeds. It was further ordered that all sale proceeds be deposited in an interest bearing account. An agent was duly employed for this purpose and all grain was sold. The trustee's report reveals the following grain sold:
Commodity Bushels Sold $ Net/Bushels Price $ Net to Fund
WINTER WHEAT
# 2 1,944.03 3.8301 7,445.64
SPRING WHEAT
# 1 31,259.27 4.131 129,123.17
# 2 5,675.31 4.090 23,225.74
__________
36,934.58 bu.
CORN
# 1 7,159.96 2.552 18,272.92
# 2 35,800.36 2.552 91,366.33
# 3 64,439.64 2.520 162,379.88
# 4 50,134.59 2.470 123,821.22
# 5 60,828.26 2.371 144,222.41
Sample 88,006.90 2.148 189,065.97
Screenings 16,248.72 1.885 30,641.07
__________
322,618.43 bu.
SOYBEANS
# 1 12,798.00 6.717 85,959.37
# 2 17,112.25 6.693 114,536.49
# 3 2,912.30 6.662 19,403.16
# 4 993.65 6.460 6,419.03
Sample 979.78 6.728 6,591.67
__________
34,795.98 bu.
BARLEY
# 1 111,814.34 1.881 210,272.64
# 2 77,746.40 1.857 144,372.89
# 3 23,894.51 1.890 45,167.46
Sample 28,740.06 1.707 49,050.06
__________
242,195.31 bu.
*681
Commodity Bushels Sold $ Net/Bushels Price $ Net Fund
OATS
# 4 910.00 1.239 1,127.90
RYE
# 2 553.53 1.450 802.62
__________ _____________
TOTAL 639,951.86 bu. $1,603,459.94
Interest has continued to accumulate and as of July 31, 1989, interest totalling $6,541.10 had been earned on the proceeds on deposit.
A scheduling order issued on June 7, 1989, expediting the procedures under section 557(d) resulted in there being filed 53 claims against the grain asset proceeds which in turn spawned a number of objections and issues regarding the nature of the claims themselves and the relative priorities between them. On September 7 and 8, 1989, a hearing was held to resolve general issues central to any proceeds distribution as well as the validity and amount of certain specific claims which also must be resolved before distribution. Claims against the grain proceeds are variously based upon warehouse receipts/scale tickets, contracts for future delivery, present contracts, installment sale contracts, unit train shipments and blanket security interests in the Debtor's personal property and inventory.
Claims based upon receipts and upon which the commodity type, quantity and grade are identified are summarized below:
Commodity Bushels
WINTER WHEAT
# 4 5,731.50
(no receipts specifying # 2 winter)
SPRING WHEAT
# 1 18,370.50
# 2 5,977.00
# 3 495.00
__________
28,062.00 bu.
CORN
# 1 24,405.09
# 2 183,072.62
# 3 38,692.98
# 4 5,129.40
__________
251,300.29 bu.
(no receipts specifying # 5, sample or screening grades)
SOYBEANS
# 1 18,825.74
# 2 2,984.33
# 3 1,205.00
__________
23,015.07 bu.
(no receipts specifying # 4 or sample grades)
BARLEY
# 1 5,445.00
# 2 141,585.08
# 3 67,632.26
# 4 19,744.00
__________
234,406.34 bu.
*682
(no receipts specifying sample grade)
OATS
# 2 8,187.00
(no receipts specifying # 4 grade)
RYE
# 4 558.00
(no receipts specifying # 2 grade)
__________
TOTAL 548,040.50 bushels
In addition to the above, there are in evidence grain receipts upon which either the commodity type or grade are unspecified, to-wit: 500 bushels of # 1 wheat unspecified as to winter or spring (claim # 2); 24,605.58 bushels of corn unspecified as to grade (claims # 56, 51, and 44); 539 bushels of barley unspecified as to grade (claim # 45).
Except for winter wheat and rye, there were sufficient quantities of commodity type sold to cover the receipts for like commodity if no distinction is made between grades. However, when the particular grade of the commodity sold is taken into account there are the following deficiencies:
# 4 Winter Wheat 2,512.00 bu.
# 2 Spring Wheat 3,521.19 bu.
# 3 Spring Wheat 495.00 bu.
# 1 Corn 17,245.13 bu.
# 2 Corn 147,272.26 bu.
# 1 Soybeans 6,027.74 bu.
# 2 Barley 63,838.68 bu.
# 3 Barley 43,737.75 bu.
# 2 Oats 81.87 bu.
# 4 Rye 558.00 bu.
1.
THE CLAIM OF ST. PAUL BANK FOR COOPERATIVES. The St. Paul Bank for Cooperatives (Bank) does not premise its claim upon receipts of any kind and makes no claim to the proceeds which can be traced to a receipt for a specific grade, quantity and type of commodity. Its claim rests upon a series of three security agreements each of which granted it a security interest in all the Debtor's personal property and fixtures including (among other things) inventory and general intangibles.
Recognizing that it is not the intrinsic nature of the goods which classifies them but the manner in which they are used, grain once sold to an elevator may constitute inventory. N.D.Cent.Code § 41-09-09(4) (U.C.C. § 9-109(4)). First Bank v. Pillsbury Co., 801 F.2d 1036 (8th Cir.1986). Upon this principal the bank claims a perfected security interest in any grain owned by the elevator that ownership existing in any grain sold to the elevator as well as that to which there are no receipts specifying a particular type and grade of grain. In this regard the bank is quite correct since its claim under the Bankruptcy Code can prevail only to the extent that the elevator itself had an interest. Section 506(a) of the Code provides that a secured creditor's claim is allowed only to the extent of the estate's interest in the property. Ergo, if the elevator had no interest then there is nothing to which the bank's security interest could attach. In the context of the competing interests of the bank and grain receipt holders, it is the ownership interest of the elevator rather than the receipt holder which is critical to the bank's claim.
Several of the objecting parties believe that pursuant to N.D.Cent.Code § 60-04-03.1 all the grain in the elevator became part of a common trust for the benefit of receipt holders. Chapter 60-04 is wholly inapplicable in those situations where an insolvent grain warehouse chooses the route of liquidation under the United States Bankruptcy Laws. Chapter 60-04 of the North Dakota Century Code is designed to provide a prompt procedure for claims recovery by receipt holders through a process of state court appointment of the state public service commission as trustee. *683 Its provisions closely parallel the very objective of Chapter 7 of the Bankruptcy Code. Once a bankruptcy case is filed the bankruptcy court acquires exclusive jurisdiction over the estate created and this jurisdiction preempts state insolvency proceedings. State of Mo. v. U.S. Bkrtcy. Court, Etc., 647 F.2d 768, 776 (8th Cir. 1981). Under section 541 property of the estate created by the event of a filing is comprised of virtually all legal or equitable interests of the debtor. The trust fund envisioned by N.D.Cent.Code § 60-04-03.1 would be inclusive of property coming into the bankruptcy estate and thus can have no effect in a bankruptcy context since its operation would be directly opposed to section 541.
Although the Bankruptcy Court has exclusive jurisdiction over the estate and the Code provides the exclusive procedure for assuming control over property belonging to the Debtor, the court must still resort to state law to determine the ownership rights of holders of documents of title and the priorities in fungible goods where, as here, there is insufficient grain of a particular type and grade to satisfy all receipt holders. Butner v. United States, 440 U.S. 48, 99 S. Ct. 914, 59 L. Ed. 2d 136 (1979). State of Mo., supra at 774; In re Schauer, 835 F.2d 1222 (8th Cir.1987); Nelson v. Cavalier Rural Elec. Co-op., 68 B.R. 910 (Bankr.N.D.1987); In re Bearhouse, Inc., 84 B.R. 552, 566 (Bankr.W.D. Ark.1988).
Section 557 of the Bankruptcy Code although enacted to facilitate an expeditious determination of interests in and claims to the grain assets of a grain storage facility, does not substantively address those interests except with regards to recoverable costs. Hence, the extent to which the bank has an interest in the grain proceeds turns upon state law.
Under North Dakota Law persons who deposit grain for storage with a warehouseman are issued a receipt and a bailment is thereby created regardless of whether the receipt is a scale ticket or warehouse receipt. N.D.Cent.Code 60-02-25. A warehouse receipt by its nature is a document of title and the relationship of its holder to the warehouseman, other receipt holders and third parties is governed by the Uniform Commercial Code provisions relating to documents of title and warehouse receipts as well as by the regulatory provisions of N.D.Cent.Code Ch. 60-02 relating specifically to bailments with public seed warehouses. As defined in N.D.Cent.Code § 41-01-11(15), a "document of title" is a document issued by a bailee covering goods in his possession which are identified or which are part of an identified mass. It is well established law that the holder of a document of title retains ownership in the goods stored. Although Article 7 of the Uniform Commercial Code in § 7-207 refers only to warehouse receipts the term itself like the concept of document of title is broadly defined and addresses the ownership interest of a bailor in stored goods. N.D.Cent.Code 41-07-08(1) (U.C.C. § 7-202(1)) provides that a warehouse receipt need not be in any particular form. The concept of bailor ownership interest in a document of title is expanded by N.D. Cent.Code § 60-02-25 to include unconverted scale tickets issued for the storage of grain. Therefore the provisions of Article 7 when applied to grain deposited for storage in a warehouse have reference to holders of scale tickets as well as warehouse receipts. The concept becomes the same. The North Dakota Supreme Court in North Dakota Public Serv. v. Valley Farmers, 365 N.W.2d 528, 539 (N.D.1985) has held that "When a public warehouseman accepts grain for storage "such delivery shall become a bailment and not a sale . . .". There is nothing in Article 9 of the Uniform Commercial Code that dilutes this ownership interest which is vested in a bailor. Clearly, a secured creditor's security interest does not attach until the warehouseman bailee has rights in the goods. See N.D.Cent.Code § 41-09-16(1)(c) (U.C.C. § 9-203(1)(c). This interest never arises in bailed property. Chapter 60-02 is a statute for the regulation of grain and seed warehouses. Section 41-07-03 (U.C.C. § 7-103) as well as section 41-07-10(4) (U.C.C. § 7-204(4)) make reference to its provisions, making it clear that Article 7 must *684 be read in conjunction with Chapter 60-02 and to the extent they are at variance Chapter 60-02 overrides Article 7. Section 60-02-25 of the North Dakota Century Code[1] in part codifies the established law regarding the bailment relationship between a warehouseman and receipt holder to-wit: "Whenever any grain shall be delivered to any public warehouse and an uncontroverted scale ticket or warehouse receipt is issued therefor, such delivery shall be a bailment and not a sale of the grain so delivered . . .". Difficulty arises where the goods stored in a warehouse are fungible in nature. N.D.Cent.Code § 41-07-13(2) (U.C.C. § 7-207(2)) provides:
"Fungible goods so commingled or owned in common by the persons entitled thereto and the warehouseman is severally liable to each owner for that owner's share. Where because of overissue a mass of fungible goods is insufficient to meet all the receipts which the warehouseman has issued against it, the person entitled includes all holders to whom overissued receipts have been duly negotiated." (emphasis added).
This court has previously interpreted the foregoing section as meaning that persons with claims to fungible goods of equal priority are entitled to a proportionate share of the proceeds from the goods stored. In re Jamestown Farmers Elevator, Inc., 49 B.R. 661, 663 (Bankr.N.D.1985). This sense of this interpretation rests upon the principal that bailors of fungible goods whether evidenced by a warehouse receipt or scale ticket become tenants in common of the entire mass the effect of which is to defeat a warehouseman's creditor claiming a security interest in the fungible-goods. Preston v. United States, 696 F.2d 528, 535 (7th Cir.1982); White & Summers, U.C.C. § 20.5 (2d.Ed.1980). The effect according to the District Court in the case of First Nat. Bank of Smith Center, Kan. v. Nugent, 72 B.R. 528, 530 (D.C.Kan.1987) is that "The warehouseman cannot claim any ownership interest in the commingled mass until the other ownership interest of grain depositors/owners have been met." See also, In Re Bucyrus Grain Co., Inc., 78 B.R. 296, 299 (Bankr.Kan.1987).
Section 60-02-25 makes this result clear where in the last sentence it goes on to provide, "In the event of the failure or insolvency of the warehouseman, all the grain in the warehouse, whether the same is stored or not, first shall be applied at all times to the satisfaction of receipts issued by the warehouseman." What is omitted from section 60-02-25 is any reference to fungibility. Rather, the focus is upon all the goods in storage without regard to whether they are fungible or not. Section 60-02-25.1 then gives outstanding receipt holders a first priority lien in all grain in the warehouse again without regard to its fungible quality.[2]
Owners of goods which by their nature are fungible become, under section 7-207 of the Uniform Commercial Code, tenants in common of the commingled mass by virtue of the very nature of the goods being fungible and the fact that they were *685 commingled. Such goods are not easily identifiable one from another and by trade usage are commonly mixed together. If such commingling and resultant loss of separateness resulted in a reduction in the amount available to satisfy the ownership interest of a bailor, then his title could be totally defeated by the wily and unscrupulous bailee/warehouseman. The tenancy in common referred to in section 41-07-13 of the North Dakota Century Code (U.C.C. § 7-207) however, is not dependent upon the fact that a warehouseman may have in storage wheat as well as corn. These are not by their nature fungible and Article 7 does not accord respective receipt holders of non-fungible commodities an ownership interest in the commodity of the other which could then be expanded into a tenancy in the entire quantity of store goods. Ownership in the entire mass (U.C.C. § 7-207) depends first of all upon a document of title (as expanded by Ch. 60-02) in a type of property which is by its nature fungible and secondly that the particular fungible property be actually commingled with others of the same type. Merely because goods are fungible does not always mean that they are commingled with other fungible goods. To the extent that section 60-02-25 and section 60-02-25.1 eliminate the element of fungibility as a basis for a right to a distributive share of the entire mass, that right is not based upon a preexisting ownership interest existing in the bailor in consequence of his warehouse receipt or scale ticket. Section 60-02-25.1 suggests that all that is necessary to give an interest in the entire stored product whether fungible or not, is an outstanding receipt or scale ticket. Thus, a holder of a corn receipt is given a lien not only in corn which is fungible with other corn and in which the holder of a corn receipt may well become a tenant in common with all other corn receipt holders, but also in grain of any type without regard to whether it was fungible and commingled with the corn placed in storage. The interest created thereby is not the kind of ownership interest addressed in Article 7 but goes beyond it and creates, in favor of a holder of a receipt in commingled fungible goods, a lien in other non-fungible and non-commingled goods which coincidentally happen to be stored in the same warehouse as the receipt holders goods.
The bank's interest in and to the proceeds of the grain is valid only to the extent its security interest attaches to property owned by the elevator an ownership interest which does not exist where commingled fungible goods are insufficient to satisfy outstanding receipt holders. Even if the bank's security interest attaches to excess goods of a particular commodity type, it still stands in second priority to the blanket lien given warehouse receipt holders by section 60-02-25.1.
2.
COMMODITY CLASSIFICATION FOR DISTRIBUTION PURPOSES. The proceeds to be distributed are derived from seven commodity types and a wide range of grades within those types. The trustee and the bank argue that for purposes of proceeds distribution, recognition must be given to not only commodity type but grade as well. Consistent with their argument, a holder of a receipt for # 2 corn, for example, would be entitled to share in the proceeds of # 2 corn but not in proceeds of any other grade and to the extent the sale proceeds of # 2 corn might be deficient, the holder of a # 2 receipt would be merely an unsecured creditor. Most of the receipt holders disagree with this approach arguing that a bailor of farm commodities cannot control a grade or quality change due to the elevator's blending, rotation and general warehouse management practices.
The court believes it is appropriate to recognize a commodity differentiation between the different grains in storage. As acknowledged at the hearing by Clark Holsworth, an individual with sixteen years of experience in grain buying and selling and the individual who marketed all of the grain at issue, "You can't change corn to wheat". The particular commodities fungibility therefore must be taken into account. Under the general definition set out in N.D. Cent.Code § 41-01-11(17) (U.C.C. § 1-201(17)), "fungible" means goods of *686 which any unit is, by nature or usage of trade, the equivalent of any other like unit. Corn is not the fungible equivalent of wheat. Therefore, for purposes of proceeds distribution, holders of receipts are entitled to a distribution of proceeds derived from the particular commodity in which they hold a receipt. Grain, while not fungible as to type, is fungible as to grade. According to Mr. Holsworth it is common in the industry for commodities to be delivered to the elevator as # 3 or # 4 but upon being shipped out become # 1 or # 2 for a variety of reasons. This commonly occurs because an elevator can improve a grade by blending grades and cleaning. According to Holsworth it is an industry practice to blend grades to improve quality and according to his testimony all grain can be upgraded in this fashion. He also stated that grain can also deteriorate in storage and can suffer breakage due to normal handling both of which affect grade. Thus a farmer could have shipped and received a receipt for # 1 corn but upon shipment due to normal elevator handling the grade could have been reduced to # 2 or # 3.
In the instant case the trustee asked Mr. Holsworth to do what he could to upgrade all grain in storage and this was done by cleaning and blending. The court believes it would be fundamentally unfair to make a distribution between grades of a particular commodity due the way in which a grade can be affected by the action or non-action of the warehouseman. One would be blind to reality to deny a receipt holder of # 1 corn a right to share in the total corn proceeds merely because at sale there was insufficient # 1 corn but considerable quantities of lesser grades. Under normal elevator occurences, the # 1 corn could well have deteriorated into # 5 or been cracked in handling. The receipt holder is no less a bailor or the corn albeit of a reduced quality. The court regards receipt holders to be tenants in common of all commodities of a particular type without regard to grade. Accordingly, all receipt holders of # 1 grade receipts, for example, are entitled to receive full payment in recognition of their receipts from proceeds of that particular grade. Any deficiency is to be satisfied from the other grades of the same commodity type remaining after satisfaction of scale tickets for those grades. As an example, holders of # 2 Barley receipts should be first satisfied from # 2 proceeds with any deficiency satisfied pro rata from excesses of # 1, # 3 and sample.
3.
PRICING. The issue here is what price should be paid for the particular commodity appearing on the warehouse receipts. Considerable testimony was taken regarding the market prices of the particular commodities as of the date of bankruptcy filing. This issue must be viewed in recognition of the fact that it is the warehouse receipt holders and not the estate which is the owner of the commodity. Placing a price on the value of an interest in estate property as of the date of filing is appropriate when estate property is involved. But here, the sale proceeds are proceeds not of the estate's property but of the bailors' and it is they who are entitled to the proceeds. The court believes the price to be paid warehouse receipt holders is the price obtained as of the date of sale plus interest from the date of sale. Consistent with the type, grade and quantity reflected on a particular receipt together with interest. A holder of a receipt for # 1 or # 2 corn, for example, is entitled to payment for that grade and to the extent insufficient quantities of # 1 or # 2 were sold to satisfy all # 1 or # 2 receipts the difference should be made up out of # 3, # 4, # 5, sample and screenings. Holders of receipts for winter wheat, oats, and rye are to be paid consistent with their receipts to the extent sufficient proceeds (without regard to grade) exist.
Holders of receipts of a grade which was not among the grades existing at sale are nonetheless entitled to be paid for the grade reflected on the receipt.
As to non-ownership claims, the court accepts the Minneapolis market prices existing as of April 13, 1989, as being the appropriate price to be accorded claimants claiming an interest in elevator owned grain. According to Clark Holsworth, the *687 Minneapolis prices as of April 13, 1989, after deduction for load out charges are the following:
Spring Wheat $3.94
Winter Wheat $3.89
Corn # 2 or better $2.38
Barley # 2 or better $2.00
Oats # 2 or better $1.80
Rye $2.00
Beans # 2 or better $6.94
Hard durum $4.00
The trustee urged an April pricing based on Kansas City markets but according to the evidence elevators in this area typically use the Minneapolis market.
4.
SETOFFS. The trustee believes under section 553 that a setoff is appropriate against grain claimants and that any claim is disallowable where the claimant may be liable for a setoff or a preference. Storage charges and loadout charges are the grain specific charges the trustee believes are appropriate for setoff. Loadout charges are already factored into the price received and preferences (irrespective of § 557(h)(1)) are merely conjectural at this point as no proceedings have been commenced.
Sections 60-02-17 and 60-02-33 of the North Dakota Century Code in their reference to storage charges merely allude to the lien of warehousemen provided for by North Dakota Century Code § 41-07-15 (U.C.C. § 7-209) which accords to a warehouseman a lien against the bailor for storage, transportation, insurance, labor and expenses reasonably necessary to the preservation and sale of the goods. The storage charges specified in chapter 60-02 and the lien provided for in Article 7 of the Uniform Commercial Code are not in the nature of a section 553 setoff and as regards grain assets, must be modified in the context of bankruptcy by section 557(h)(1) of the Code which provides that the trustee may recover from the proceeds of grain assets only the reasonable and necessary costs and expenses allowable under section 503(b) attributable to preserving or disposing of the grain. The limitation of section 557(h)(1) takes precedence over any otherwise available bankruptcy remedy of setoff and recovery of these expenses does not hinge upon either state law or agreements between the parties. Section 547 preferences are not an expense incidental to the preservation or disposal of grain and thus are not legitimate items of "offset" under section 557. Whether or not the scale tickets or warehouse receipts provide for collection of storage charges is likewise immaterial. Section 557(h)(1) contemplates only recovery of what are normally characterized as administrative expenses rendered after commencement of the case. For this reason storage charges incurred pre-petition although legitimate expenses of the elevator were not incurred post-petition and are not the kind of expenses that may be recovered from grain proceeds under section 557(h)(1). Post-petition insurance, loadout charges, handling expenses, and storage expenses are legitimate expenses attributable to grain maintenance and disposal. To the extent these post-petition charges are reasonable and necessary they may be deducted from the proceeds distribution. Post-petition storage charges incurred by the elevator are an artificial expense based not upon the necessary expense of preservation and disposal of the grain, but merely incidental to liquidation of the grain assets. It is inappropriate to charge grain receipt holders with post-petition storage charges of the elevator itself.
5.
CONTRACTS FOR PRESENT SALE OF GRAIN, BASES FIXED, DEFERRED PRICING. A number of the grain claims[3] are premised upon a document captioned, "Contract for Present Sale of Grain, Bases Fixed, Deferred Pricing." By its terms the document states that the elevator hereby buys and the undersigned hereby sells the grain which has been delivered to the elevator. The contract provides for fixing the price based upon the Chicago future price with a time specified for the last pricing date. Upon demand the elevator is to pay *688 the seller the full purchase price. The claimants argue that irrespective of how the document is captioned, no title passed to the elevator and they remain owners of the grain delivered pursuant to the contract. The bank objects, suggesting that a sale occurred and that any scale tickets existing do not represent an ownership interest. As previously discussed in part 1 of this opinion, a scale ticket is a document evidencing title only when it is issued to a person who deposits grain for storage. It does not take on that character when issued in connection with a sale. A sale is defined in North Dakota Century Code § 41-02-06(1)(d) (U.C.C. § 2-106) consists of the passing of title from the seller to the buyer for a price. Unless otherwise explicitly agreed, title passes to a buyer at the time and place at which the seller completes his performance with reference to the physical delivery of the goods. N.D. Cent.Code § 41-02-46(2) (U.C.C. § 2-401(2)). Even though the seller may receive a receipt which under section 60-02-01(7) includes a scale ticket, that scale ticket is not representative of an ownership interest where a true sale occurred that is to say, where title passed to the buyer. No bailment is created in a sale situation and the only claim a holder of a non-storage scale ticket can make is under N.D.Cent. Code § 60-02-25.1 which goes beyond the concept of a bailment and grants a lien to the holder of any receipt whether it was for storage or sale.
The contracts in question were by their terms, present sales of grain by which the elevator took title subject only to a requirement of paying the seller upon later demand. Accordingly, the claims based upon these contracts are disallowed as claims of owners/bailors. The claimants merely retain a lien in the grain for the balance due them under the contract and otherwise are unsecured creditors of the estate. The contracts unpriced as of the date of bankruptcy filing should be priced at the Minneapolis futures prices prevailing on April 13, 1989.
6.
INSTALLMENT SALE CONTRACT. The claim of John Heuer (claim # 4) is based upon a document captioned, "Installment Sales Contract". As with the present sale contracts, this document provides that the elevator, as buyer, and the claimant as seller, agree to the sale by the claimant and the purchase by the elevator of a quantity of grain. The purchase price specified is to be paid by a particular date. The document bears every indication that the agreement was intended as a sale. Accordingly, this claim is disallowed as an owner/bailor claim against the grain fund. The document upon which the Heuer claim is based contains a credit-sale contract notice as required by N.D.Cent.Code § 60-02-19.1 which has the effect of taking the document out of the N.D.Cent.Code § 60-02-01(7) definition of "receipt". In failing to constitute a "receipt", John Heuer's claim # 4 is not entitled to receipt holder's lien status under N.D.Cent.Code § 60-02-25.1 and is entitled to treatment only as an unsecured claim against the general assets of the elevator.
7.
CONTRACTS FOR FUTURE DELIVERY. The claims of the Colfax Farmers Elevator (claim # 17) and Cleo Brown (claim # 56) rest upon documents captioned "Contracts for Future Delivery of Grain". The contract provides for a present purchase of a certain quantity of grain with delivery to be made later. According to Mr. Brown the reason that he entered into the contract was so that he could sell at a set price before the market fell.
Colfax Farmers Elevator became involved with the elevator in unit train assembly with the agreement memorialized by a contract for the delivery of 35,000 bushels of corn. Delivery was completed and the claimant is claiming $10,659.45 as a claim against the grain proceeds.
These contracts do not give rise to a bailment situation either. The claimants contracted for the sale of grain with delivery in the future. To the extent delivery was completed title passed to the elevator. Any scale tickets merely constitute a lien *689 for the balance remaining consistent with N.D.Cent.Code § 60-02-25.1 but do not represent an ownership interest. Absent a lien, the sums due these claimants merely constitute unsecured claims.
8.
CLAIM OF SHELDON FARMERS ELEVATOR. Claim # 40 of Sheldon Farmers Elevator in the amount of $16,700.08 is not represented by a written contract. According to the testimony of Sheldon's manager, it participated in a unit train with the elevator on two occasions in 1989 with the elevator acting as sales agent. The manager stated that these were sales to the elevator with an obligation on the part of the elevator to pay for the grain delivered. Clearly this delivery was not one intended for storage at the elevator. Rather, it was an arrangement whereby the elevator acted as Sheldon's sale agent for the delivery and consignment of grain to a purchaser via a unit train shipment. The scale tickets are merely representative of grain contributed to the unit train and do not represent an ownership/bailor interest in any grain which remained at the elevator. The claim of Sheldon Farmers Elevator is accordingly disallowed as an ownership claim against the grain proceeds. Sheldon Farmers Elevator yet retains a lien under section 60-02-25.1 and otherwise is an unsecured claimant against the general assets.
9.
CLAIM OF JOHN CHRISTENSEN. The claim of John Christensen (claim # 9) in the sum of $4,080.90 is not based upon a written contract. Testifying at the hearing, Mr. Christensen stated that in March and April 1989 he sold the elevator 9,036 bushels of wheat expecting to be paid as soon as the elevator had been paid by the broker, Continental Grain. Several attachments to the proof of claim refer to the elevator as the buyer and one of them provides, "Claimant states that this was a cash sale". At the hearing Mr. Christensen acknowledged the grain was never stored at the elevator.
Accordingly, the court concludes this transaction was a sale with title to the grain passing to the elevator upon delivery by the claimant. As a consequence, the scale tickets do not represent a bailor/ownership interest in the grain proceeds. The receipts merely give rise to a lien under section 60-02-25.1 of the North Dakota Century Code and otherwise the claimant has an unsecured claim for the balance due.
Conclusion
Distribution of the grain sale proceeds shall be made consistent with the foregoing discussion.
SO ORDERED.
NOTES
[1] 60-02-25. Bailment not a sale. Whenever any grain shall be delivered to any public warehouse and an unconverted scale ticket or a warehouse receipt is issued therefor, such delivery shall be a bailment and not a sale of the grain so delivered. In no case shall the grain so delivered be liable to seizure upon process of any court in any action against such bailee, except in an action by an owner of such unconverted scale ticket or warehouse receipt to enforce the terms thereof or obtain redelivery of such delivered grain. In the event of the failure or insolvency of the warehouseman, all the grain in the warehouse, whether the same is stored or not, first shall be applied at all times to the satisfaction of receipts issued by the warehouseman.
[2] 60-02-25.1. Receipt holder's lien. Grain contained in a warehouse, including grain owned by the warehouseman, is subject to a first priority lien in favor of outstanding receipt holders storing, selling, or depositing grain in the warehouse. The lien created under this section shall be preferred to any lien or security interest in favor of any creditor of the warehouseman regardless of the time when the creditor's lien or security interest attached to the grain. Notice of the lien created under this section need not be filed in order to perfect the lien. The lien created by this section is discharged as to grain sold by the warehouseman to a buyer in the ordinary course of business. Such sale does not discharge the lien in favor of an individual receipt holder in the remaining grain in the warehouse.
[3] Anderson claim # 5; McDonald claim # 22; Lynnes claim # 28; Roland Heuer claim # 43; Roesler claims # 35, # 36, # 37 and # 38; Kellerman claim # 39; Pfingsten claims # 41 and # 42. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1622774/ | 15 So. 3d 214 (2009)
Mary Clulee, Wife of/and Neal CLULEE and Homeplace Batture Leasing, Inc.
v.
Shirley J. Rousseau, Wife of/and Nicholas P. GIAMBELLUCA, Marie A. Sunseri, Wife of/and Michael J. Giambelluca, Beverly Construction Company, L.L.C. and Phillip Family, L.L.C.
No. 08-CA-645.
Court of Appeal of Louisiana, Fifth Circuit.
May 12, 2009.
*215 Wiley J. Beevers, Raylyn R. Beevers, Steven M. Mauterer, Michael F. Somoza, Beevers and Beevers, L.L.P., Gretna, LA, for Appellees, Mary and Neal Clulee.
Anthony J. Staines, Stephen Mattesky, Aaron K. Rives, Staines and Eppling, Metairie, LA, for Intervenor/Appellant, Bayou Fleet Partnership.
Panel composed of Judge SUSAN M. CHEHARDY, CLARENCE E. McMANUS, and FREDERICKA HOMBERG WICKER.
SUSAN M. CHEHARDY, Judge.
This particular litigation is over the ownership of a 25-foot strip of batture land in St. Charles Parish.[1] The property *216 in question is the southern half of the strip of land, which was a road formerly known as the Morgan Street Extension. The former Morgan Street Extension lies between two tracts of land; the Dugazon tract is north of the road and the Rivarde Place is south of the road. To put this litigation into context, it is beneficial to understand the relationship of the parties to the property at issue.
In 1870, Michael Hahn acquired a plantation on the Mississippi River in St. Charles Parish. Two years later, Hahn subdivided the land according to a plat. When the property was subdivided, it included a road that ran from River Road over the levee across the batture to the water's edge. The road came to be known as Morgan Street. The portion of the road that ran across the batture, i.e., from the riverside toe of the levee to the water's edge, is known as the Morgan Street Extension.
In 1872, Hahn sold the parcel south of Morgan Street, which included the batture, to Rivarde. The title to that parcel, which is commonly referred to as the Rivarde Place, reflected that it was bounded on the north by a "continuation of the line of Morgan Street."[2] In 1887, during the administration of Hahn's estate, the sheriff sold the parcel north of Morgan Street, including the batture, to C.T. Dugazon ("Dugazon tract").[3]
In 1975, the Giambellucas acquired the batture portion of the Dugazon tract, which is north of the strip of land in question, to use in their construction business as a sand pit and materials yard. When the Giambellucas purchased the tract, the levee ramp was in place. The ramp traversed the levee from the toe on the road side to the toe on the river side. The Giambellucas obtained a permit from the Levee Board to use the ramp and, subsequently, asphalted the ramp and used the road to access their property from the levee to the river. The road, which the Giambellucas used in their business, was the Morgan Street extension.[4]
In 1981, the Clulees acquired the Rivarde Place, which is south of the property in question. According to the property description, the Clulees' obtained all the land, including batture and levee, bounded on the south by Home Place Plantation, on the east by Sal Saia's property, on the west by the Mississippi River, and on the north by "a continuation of the line of Morgan Street." In 1981, the Clulees sold a one-third interest in that property to the Saias.
In 1989, the Clulees began to use the Morgan Street extension in their business of hauling crushed rock off of barges on the river. The Giambellucas, who disputed the Clulees' right to use the road, constructed a gate on their property to block access to the road.
In 1990, the Clulees filed suit seeking a declaratory judgment that the Morgan Street extension in Hahnville, Louisiana from the River Road to the Mississippi River had been "impliedly" dedicated as a *217 public road, and, therefore, could not be blocked. On September 4, 1991, the trial court declared that the Morgan Street extension was a public road.[5]
Subsequently, on May 19, 1992, at the Clulees' request, the St. Charles Parish Council declared that the Morgan Street extension served no public interest and no longer constituted property utilized or needed by the public. That day, the Council issued ordinance number 92-5-20 revoking and abandoning the Morgan Street Extension as a public road.[6]
On March 12, 1993, the Giambellucas filed suit, seeking revocation of ordinance number 92-5-20. They also wanted injunctive relief to prevent the Parish from destroying the levee-crossing ramp that formed part of the Morgan Street Extension, and a writ of mandamus directing the Parish to restore the levee-crossing ramp or, in the alternative, to create a right of passage over adjoining land.[7] The trial judge dismissed the claims but, on appeal, this Court remanded for a trial of the issues on the merits.
On remand, the trial court declared the St. Charles Parish ordinance void and unenforceable in part. On appeal, this Court set aside St. Charles Parish Ordinance 92-5-20 with regard to Morgan Street from River Road to the levee and the public ramp over the levee.[8] This Court, however, affirmed the revocation of the dedication of the road over the batture or the Morgan Street extension. Id.
When the Giambellucas again tried to assert control over the entire batture road, the Clulees sought a declaratory judgment regarding the ownership of the former Morgan Road extension. Subsequently, the trial court declared that the Clulees owned the southern half of the Morgan Street extension, which abuts their property, and the Giambellucas owned the northern half of the Morgan Street extension, which abutted their property.[9] This Court affirmed that judgment, finding that by operation of law, "the parties each acquired one-half of the [Morgan Street] road bed when the Parish revoked [its] dedication."[10]Clulee v. Giambelluca, 777 So.2d at 1262.
Meanwhile, to satisfy an earlier judgment, Louisiana Materials provoked the sheriffs sale of the Clulees' two-thirds interest in the Rivarde Place on January 27, 1993.[11] On April 15, 1993, Louisiana Materials *218 sold its recently-obtained two-thirds interest in the Rivarde Place to Bayou Fleet Partnership. Therefore, in 1993, Bayou Fleet did have a two-thirds ownership interest in the entire Rivarde tract. The remaining one-third interest in that property was owned by the Saia family.
On February 12, 1996, after a number of clashes with the Saias over property rights, Bayou Fleet petitioned to have the Rivarde Place partitioned by licitation. After the litigation began, Home Place Batture Leasing, Inc. ("Home Place"), through Neal Clulee, purchased the Saias' one-third interest in the Rivarde Place.[12] Thus, in 1996, Home Place Batture Leasing through the Clulees owned one-third of the Rivarde Place and Bayou Fleet owned two-thirds of Rivarde Place.
At trial, the district court judge ordered that the property be partitioned by licitation and sold at public auction by the Sheriff. Home Place appealed that ruling. After careful review of the record, this Court found that the trial judge erred as a matter of law, reversed the judgment, ordered that the property be partitioned in kind, and remanded to the district court for further proceedings.[13]
On May 27, 1999, when the property was partitioned in kind, the Clulees were awarded, pursuant to law, the northernmost one-third of the entire Rivarde Place, which abutted Morgan Road and the former Morgan Road extension. Bayou Fleet was awarded ownership and all its attendant rights to the other two-thirds, or the remaining and southernmost portion, of the Rivarde Place.
On March 22, 2002, the Clulees and Home Place Batture Leasing, Inc. sued the Giambellucas, Beverly Construction C, LLC, and Phillip Family, LLC, for damages for continued trespass onto the Clulees' 25-foot strip of batture land, including conversion of sand from the Clulees' batture land and interference with the Clulees' use and enjoyment of their property. Later that year, on October 16, 2002, Bayou Fleet filed a Motion for Leave to file an Intervention, on the basis that it was also entitled to damages because it still held a two-thirds interest in the Morgan Street extension. In sum, Bayou Fleet argues that it still holds a two-thirds interest in the 25-foot strip of batture land formerly known as the Morgan Street extension because the strip was never named in or added to any property description when the land was transferred after the road was undedicated by the Parish.
On September 18, 2007 at the hearing on Motion for Leave to Intervene, Bayou Fleet introduced evidence, including various Acts of Sale of all or part of Rivarde Place dating back to 1974; the 1999 Judgment of Partition of Rivarde Place; property tax records; a certified copy of St. Charles Parish ordinance 92-5-20 revoking the Morgan Street dedication; and reported opinions of this Court on rights of various parties with respect to Rivarde Place. At that same hearing, the Clulees introduced virtually the same documents, including documents to support the chain of title; property tax records; judgments from the district court and opinions from this Court.
On December 14, 2007, the trial judge dismissed "Bayou Fleet Partnership's Intervention *219 to be declared owner of a two-third [2/3] undivided interest in the Southern twenty-five [25] feet of the property comprising the Morgan Street Extension." Further, the trial judge denied "Bayou Fleet Partnership's request ... that the Court declare a Right of Passage across the plaintiffs' property" ... "as not plead and suitable for adjudication in this intervention proceeding." Furthermore, the trial judge made the following findings of fact:
This case arises out of a property dispute between the intervener, Bayou Fleet Partnership [hereinafter Bayou Fleet], who contends that it owns a two-third [2/3] undivided interest in the southern twenty-five (25) feet of the roadway property referred to as the "Morgan Street Extension," and the plaintiffs, Mary Clulee, Neal Clulee and Home Place Batture Leasing Inc. [hereinafter Mary Clulee, et al], who claim they are the sole owners of the southern twenty-five (25) feet of the Morgan Street Extension because they are the owners of the directly adjacent property; additionally, they claim Bayou Fleet never acquired an interest in the "Morgan Street Extension," since Bayou Fleet's acquisition documents originating from a Sheriffs Sale failed to include a legal description of the "Morgan Street Extension."
Prior to 1992, the Morgan Street Extension was a public road owned and maintained by the Parish of St. Charles, State of Louisiana. The Morgan Street Extension is an unpaved road running east to west over the Mississippi River levee and dead-ending into the Mississippi River. On May 19, 1992, the St. Charles Parish Council adopted an ordinance whereby the Parish revoked and abandoned the Morgan Street Extension. At the time of the revocation, Mary and Neal Clulee together with Salvador Saia owned the property south of the Morgan Street Extension, and the Giambelluca Family owned the property north of the Morgan Street Extension.
On January 27, 1993, the Clulees' interest in the Mississippi River batture property south of the Morgan Street Extension was sold at Sheriffs Sale to Louisiana Materials Co., Inc. (a company related in interest to Intervener). However, the Sheriffs sale to Louisiana Materials Company, Inc did not include the legal description of the property comprising the Morgan Street Extension. Intervener, Bayou Fleet, subsequently acquired Louisiana Materials Co.'s interest in the Mississippi River batture property south of the Morgan Street Extension while Home Place Batture Leasing acquired a one-third [1/3] interest in the property from the heirs of Salvador Saia. Despite numerous transfers of the property adjacent to the Morgan Street Extension, the property comprising the Morgan Street Extension was never included in any legal description on acquisition documents by Intervener.
On June 2, 1999 Intervener Bayou Fleet obtained a Judgment of Partition of the property south of the Morgan Street Extension from the 24th Judicial District Court in Jefferson Parish. The partition of the property resulted in (1) Home Place Batture Leasing obtaining the lot adjacent to the property comprising the Morgan Street Extension and (2) Bayou Fleet obtaining the remaining two [2] lots which do not front on the property comprising the Morgan Street Extension. Following this, on February 18, 2000, the 29th Judicial District Court, Division C, in case number 51,940, entitled Mary Clulee wife of/ and Neal Clulee and Home Place Batture Leasing, Inc., vs. Nicholas P. Giambelluca, *220 Michael J. Giambelluca, and Giambelluca Land & Development Co., Inc., issued a judgment recognizing: (1) Mary and Neal Clulee as the owners of the southern 25 ft. of the property comprising the Morgan Street Extension and (2) Nicholas P. Giambelluca and Michael J. Giambelluca as the owners of the northern twenty-five [25] feet. It is important to note that Bayou Fleet filed a Motion to Intervene prior to the court's ruling in this case (number 51,940 Mary Clulee wife of/ and Neal Clulee and Home Place Batture Leasing, Inc., vs. Nicholas P. Giambelluca, Michael J. Giambelluca, and Giambelluca Land & Development Co., Inc.) alleging Bayou Fleet's ownership interest in the Morgan Street Extension roadway. The trial court denied the Motion to Intervene as untimely. Bayou Fleet filed a Supervisory Writ with the Louisiana 5th[sic] Circuit Court of Appeals which affirmed the lower court's decision.
At trial Bayou Fleet argued that it is entitled to a two-thirds [2/3] ownership interest in the Southern twenty-five [25] feet of the roadway comprising the Morgan Street Extension because: (1) at the time of the Parish's revocation the ownership of the property comprising the Morgan Street Extension "reverted to the then present owner or owners of the land contiguous thereto," (citing Martin v. Fuller, 214 La. 404, 37 So. 2d 851 (La.1948)); and (2) Bayou Fleet is the successor in interest, by virtue of chain of title, to the owners of the adjacent property at the time of the Parish's revocation of the Morgan Street Extension. The Court however is not persuaded by Bayou Fleet's suggestion that Martin v. Fuller ... is necessarily dispositive of the case at bar. The Court notes that Bayou Fleet, although a subsequent purchaser of an ownership interest in the adjacent property, was not the "present owner" of an interest in the adjacent property at the time of the public revocation and abandonment of the roadway. Furthermore, to acknowledge Bayou Fleet's ownership interest in the Southern twenty-five (25) feet of the property comprising the Morgan Street Extension, Bayou Fleet's chain of title must necessarily comport with traditional requirements governing transfers of interest in real property, which requires parties to a transfer of real property to provide a legal description of that property. Unfortunately for Bayou Fleet the legal description of the property comprising the Morgan Street Extension was not included in the Sheriffs sale documents or any other ownership transfer document to Bayou Fleet.
Bayou Fleet's request at trial to grant a Louisiana Civil Code Article 689 Right of Passage is denied as not plead and developed for litigation by Bayou Fleet's intervening pleadings in this case. The testimony of Intervener's representative, Mr. Robin Durant, merely asserted that Bayou Fleet's property was landlocked. Neither the intervening pleadings nor the evidence at trial established the LCC [sic] Article 691 and 692 prerequisites for a right of passage (location of road, type of road, construction specifications, etc) and therefore, Bayou Fleet's request that the Court grant a Right of Passage across the property belonging to the plaintiffs, Mary Clulee, et al, must be denied in this litigation. That issue is reserved for future resolution. (Emphasis added).
La. C.C.P. art. 1091 provides, in pertinent part:
A third person having an interest therein may intervene in a pending action to enforce a right related to or connected with the object of the pending action *221 against one or more of the parties thereto by:
(1) Joining with plaintiff in demanding the same or similar relief against the defendant;
(2) Uniting with defendant in resisting the plaintiffs demand; or
(3) Opposing both plaintiff and defendant.
To be allowed to intervene, the challenge is two-fold: the intervener must have a justiciable interest in, and a connexity to, the principal action.[14] "[J]usticiable right" as it is used in the context of an intervention as "the right of a party to seek redress or a remedy against either plaintiff or defendant in the original action or both, and where those parties have a real interest in opposing it."[15] The jurisprudence has held that the justiciable right must be "so related or connected to the facts or object of the principal action that a judgment on the principal action will have a direct impact on the intervener's rights."[16]
In this case, the trial judge found that Bayou Fleet did not prove that it had a current ownership interest in the former Morgan Street extension necessary to establish a justiciable interest in the Clulees' suit for trespass against the Giambellucas and their successors-in-interest. Upon review, we cannot say that the trial judge was clearly wrong. Pursuant to the 1999 partition sought by Bayou Fleet, the Clulees obtained 100% of the rights particular to the northernmost one-third of the Rivarde Place, which happened to include ownership of the adjacent 25-foot strip formerly known as the Morgan Street extension. Bayou Fleet did not introduce evidence to the contrary. Accordingly, we find that the trial court was correct in refusing to allow Bayou Fleet's intervention.
Bayou Fleet further argues that the trial judge erred in failing to award it a right of passage "across the Clulees' property at a point fronting the Mississippi River in an area not affected by seasonal flooding." The trial judge denied this claim because it was not plead. We agree. Bayou Fleet's Petition for Intervention focused on establishing an ownership right in the batture road to share in any award in favor of the Clulees for trespass by the neighboring landowner.
The trial judge further found that Bayou Fleet had not introduced evidence to establish a right of passage. Upon review, we find that Bayou Fleet did not introduce evidence that it was an enclosed estate or other elements necessary to support burdening its neighboring estate with a servitude. See La. C.C. art 690 et seq. Based on the foregoing, we affirm the trial court's refusal to adjudicate Bayou Fleet's right of passage as well as the trial court's dismissal of Bayou Fleet's Petition for Intervention. Costs of this appeal are taxed solely to Bayou Fleet Partnership.
AFFIRMED.
WICKER, J., dissents in part.
WICKER, J., dissenting in part.
I agree with the majority insofar as the majority affirms that portion of the judgment denying Bayou Fleet Partnership's *222 request that it be granted a right of access across the plaintiffs' property. However, I respectfully dissent from that part of the opinion which affirms the portion of the trial court judgment dismissing Bayou Fleet Partnership's intervention. In my view, the majority errs in affirming the judgment in its entirety.
The majority views the 1999 partition as determinative of the ownership of the disputed tract. The majority concludes that the Clulees, by that judgment, obtained 100% of the rights allotted to that tract, which included ownership of the adjacent 25-foot strip of batture land. I disagree for the reasons that follow.
Bayou Fleet argued it owns a two-thirds undivided ownership interest in the Southern twenty-five feet of the roadway because in 1992 when the Parish revoked public use of the road, the ownership reverted to the present owner of the land that was contiguous to the road. Bayou Fleet argued that it had that ownership interest, as the successor in interest to the owners of the adjacent property at the time of the Parish revocation. The Clulees and Homeplace disagreed because, among other things, there was no act in the chain of title that included a description of the road and the ownership of the roadbed was previously declared as owned by the Giambellucas and the Clulees.
The testimony and evidence at trial, along with prior litigation to which the trial judge took judicial notice, revealed the following:
On May 19, 1992, the St. Charles Parish Council adopted an ordinance whereby the Parish revoked and abandoned the Extension of Morgan Street, which had been a public road. The road ran from La. Highway 18 (River Road) to the Mississippi River. At the time the Parish revoked the road, the Giambellucas owned the property North of the road. The Clulees and Salvador Saia owned the property South of the road, known as the Rivarde Tract. The Clulees owned a two-thirds undivided interest in the Southern property, while Saia owned a one-third undivided interest.
Robin Blair Durant, Bayou Fleet's managing partner, testified that he is an owner of Bayou fleet Partnership. Louisiana Materials Co., Inc. was a family-owned corporation. On February 14, 1989, Louisiana Materials was granted a judgment against several other defendants, including Neal Clulee. As a result of that judgment, in January 1993, the Clulees' undivided two-thirds interest in the Mississippi River batture property South of the Morgan Street Extension was sold at a Sheriffs sale to Louisiana Materials Co. Inc. The Saia family had the other one-third undivided interest in that property. A few months later in 1993, Bayou Fleet purchased from Louisiana Materials the two-thirds undivided interest in the Rivarde Tract.
Mr. Durand testified that Bayou Fleet attempted to reach an agreement with the Saias regarding reimbursement to Bayou Fleet for taxes, and maintenance of the property. No agreement was ever reached and the Saias were not interested in selling their portion or in purchasing Bayou Fleet's portion. As a result of the breakdown in communication, and the failure to resolve the dispute, Bayou Fleet filed suit against the Saias seeking to sell the undivided property at a public auction in order that one person own the property.
But, in 1996, before the suit was tried, Mr. Saia became ill and the Saias sold their undivided one-third interest to Homeplace Batture Leasing, Inc. Neal Clulee, as president of Homeplace, represented Homeplace at the sale transaction. Ultimately, the matter was tried. At the district court level, Bayou Fleet was successful *223 in arguing that the property should be divided by licitation. On appeal, this court reversed and remanded the matter to the district court. Bayou Fleet Partnership v. Saia, 98-306 (La.App. 5 Cir. 2/5/99), 745 So. 2d 629, writ denied, 99-0459 (La.4/1/99), 742 So. 2d 559.
In that opinion, this court recited the history of the litigation:
On February 12, 1996, Bayou Fleet filed a petition to have the property partitioned by licitation. On May 22, 1996, Home Place Batture Leasing, Inc. (hereinafter Home Place) purchased the Saia family's one-third (1/3) interest in the land for $23,000.00. On June 11, 1996, Home Place intervened in the suit, praying that the property be partitioned in kind. The Saia family was later dismissed from the suit.
98-306 at 2, 745 So.2d at 629.
The court explained:
The trial judge ordered that the property be partitioned by licitation and sold at public auction by the Sheriff, with costs of these proceedings assessed against the gross proceeds of the sale. The trial judge ordered partition by licitation because he concluded that the best use for this property is barge fleeting and that the possibility of Home Place getting the middle lot existed since the selection process must be random. Thus, he concluded that the property could not be conveniently divided and that division would result in a diminution of the property's value.
98-306 at 5, 745 So.2d at 631.
This court reversed the judgment of the trial court, ordered that the property be partitioned in kind, and remanded the matter to the district court for further proceedings. 98-306 at 8, 745 So.2d at 632.
The trial judge then rendered a judgment on June 2, 1999 after conducting a random lot selection process. He divided the lots as A, B, and C. He flipped a coin to determine who would choose first. As a result, Homeplace chose first. Bayou Fleet was declared owner of Lots B and C and Homeplace owner of Lot A as indicated by the attached Appendix. The ownership of the Morgan Street Extension was not addressed in that judgment.
The first time that ownership was addressed was in February 2000, when the 29th Judicial District Court trial judge rendered a declaratory judgment dividing the ownership of the Morgan Street Extension. The court recognized Mary and Neal Clulee as owners of the Southern one-half (25 feet) of the property from the riverside toe of the Mississippi River Levee to the Mississippi river. The court further declared that Nicholas P. Giambelluca and Michael J. Giambelluca were the owners of the Northern one-half (25 feet). The Giambellucas appealed the judgment asserting that they owned the entire roadbed between their batture properties. Clulee v. Giambelluca, 00-1057 (La.App. 5 Cir. 1/23/01), 777 So. 2d 1259. This court affirmed the judgment.
Mr. Durant testified that when Bayou Fleet discovered that there was a potential claim for ownership of the road, they attempted to intervene in that suit. However, testimony had been received at that point and the trial judge denied the request to intervene. A supervisory writ was denied by this court without reasons. Clulee v. Giambelluca, 00-108 (La.App. 5 Cir. 2/18/00) (unpublished). According to the appellate opinion, the trial judge rendered judgment declaring ownership on February 18, 2000, the same date as this court's writ denial. Clulee v. Giambelluca, 00-1057 at 7, 777 So.2d at 1263. Thus, it appears that the intervention was untimely filed. In any event, Bayou Fleet was not a party to the suit for a declaratory *224 judgment regarding ownership of the Morgan Street Extension.
Mr. Durant explained that the instant suit was the first opportunity Bayou Fleet had to assert its ownership interest in the road.
At trial, Ms. Clulee, Mr. Clulee's wife, testified she was married to Mr. Clulee at the time they acquired an ownership interest in the Rivarde Tract. Homeplace is a company that is owned by the Clulees. In her opinion, she and her husband asserted an ownership interest in the Morgan Street Extension in litigation involving the Giambellucas on the basis that they were adjacent property owners at the time of the revocation and also because they became the owners following the judicial partition when they were awarded lot A.
Albert S. Cote, a title abstracter, testified as an expert in title examinations and real estate. He performed a title examination of the Morgan Street Extension in 2007. The writ of seizure did not include a legal description of the Morgan Street Extension, which is the bounding piece of property. The sale from Louisiana materials to Bayou Fleet did not include the extension. Only the Rivarde property was described in the Sheriffs sale. The sale from Saia to Homeplace did not mention the extension. It only mentioned the Rivarde property. In the conveyance records, the extension is not legally described anywhere. Before the 1992 revocation, Louisiana Materials had a lien on the Clulees' propertythe Rivarde tract. Mr. Cote, has had experience with revocations of public roads. Sometimes the revoked roads are described in sales and sometimes they are not.
The evidence at trial revealed that although there have been numerous transfers of the Rivarde Tract, which is adjacent to the Morgan Street Extension, the Morgan Street Extension was never included in any legal description on acquisition documents, including documents concerning the Sheriffs sale to Louisiana Materials. Additionally, when the Clulees filed for bankruptcy in 1992 about four months after the Parish's revocation, they did not list among their assets an ownership interest in the Morgan Street Extension.
La. R.S. 48:701 pertinently provides:
The parish governing authorities ... of the state ... may revoke and set aside the dedication of all roads, streets, and alleyways laid out and dedicated to public use within the respective limits, when the roads, streets, and alleyways have been abandoned or are no longer needed for public purposes.
Upon such revocation, all of the soil covered by and embraced in the roads, streets, or alleyways up to the center line thereof, shall revert to the then present owner or owners of the land contiguous thereto[.]
Therefore, at the time of the Parish revocation, the Morgan street Extension reverted to "the then present owner or owners of the land contiguous thereto."
As a result of the revocation, the road again became part and parcel of the property from which it had been originally carved and the ownership then became vested in accordance with the ownership of the property contiguous thereto at the time of the revocation. Martin v. Fuller, 214 La. 404, 422, 37 So. 2d 851, 857 (La. 1948).
It is undisputed that at that time, the Clulees, Giambellucas, and Saia owned the contiguous property. The Giambellucas owned the property North of the road while the Clulees and Salvador Saia owned the Rivarde Tract, which was property South of the road. The Clulees owned a two-thirds undivided interest in the *225 Southern property, while Saia owned a one-third undivided interest. Pursuant to R.S. 48:701, the ownership of the road vested as follows: The Giambellucas acquired the Northern twenty-five foot tract and the Clulees together with Saia acquired the Southern twenty-five foot tract. The Clulees acquired a two-thirds interest in the Southern tract with Saia acquiring the remaining one-third interest.
The parties disagree, however, as to whether Bayou Fleet subsequently acquired an interest in the Southern twenty-five feet of the former Morgan Street Extension. The trial judge concluded that since the sale and acquisition documents did not contain a description of the Morgan Street Extension, Bayou Fleet never acquired ownership.
Appellant argues the trial judge erred because the presumption of transfer provided in La. R.S. 9:2981 governs and, therefore, the interest in the abandoned road was transferred along with the Clulees' ownership interest in the Rivarde Tract. I agree that the trial judge erred in failing to apply the presumption.
La. R.S. 9:2981, which was added in 1958, provides for a conclusive presumption of the grant of interest in an abandoned road:
It shall be conclusively presumed that any transfer, grant, sale or mortgage of land and property abutting or contiguous to an abandoned road, street or alley, the dedication of which has been revoked, shall be held, deemed and construed to include all of grantor's or mortgagor's interest in and to said abandoned road, street, or alley, in the absence of any express provision therein particularly excluding the abandoned property therefrom; provided further, however, that no then existing valid servitude or rights of third parties in or on the abandoned property shall be in any manner or to any extent impaired, prejudiced, or otherwise affected by any of the terms and provisions of this Part.
Appellees argue, however, that jurisprudence interpreting a similar provision, La.R.S. 9:2971, does not support a presumption that the Clulees' interest in the abandoned road was ever transferred. Bayou Fleet disagrees.
R.S. 9:2971[1] provides:
It shall be conclusively presumed that any transfer, conveyance, surface lease, mineral lease, mortgage or any other contract, or grant affecting land described as fronting on or bounded by, or as described pursuant to a survey or using a metes and bounds description that shows that it actually fronts on or is bounded by a waterway, canal, highway, road, street, alley, railroad, or other right-of-way, shall be held, deemed and construed to include all of grantor's interest in and under such waterway, canal, highway, road, street, alley, railroad, or other right-of-way, whatever that interest may be, in the absence of any express provision therein particularly excluding the same therefrom; provided, that where the grantor at the time of the transfer or other grant holds as owner the title to the fee of the land situated on both sides thereof and makes a transfer or other grant affecting the land situated on only one side thereof, it shall then be conclusively presumed, in the absence of any express provision therein particularly excluding the same therefrom, that the transfer or other such grant thereof shall include the grantor's interest to the center of such waterway, canal, highway, road, street, alley, railroad, or other right-of-way; *226 provided further, however, that no then existing valid right-of-way upon, across or over said property so transferred or conveyed or so presumed to be conveyed and no warranties with respect thereto shall be in any manner or to any extent impaired, prejudiced, or otherwise affected by any of the terms and provisions of this Part or because of the failure of such grantor or transferror to therein make special reference to such right-of-way or to include or exclude same therefrom.
In Crown Zellerbach Corp. v. Heck, 407 So. 2d 770, 773-74 (La.App. 1 Cir.1981), a case involving mineral rights, the First Circuit interpreted the phrase "described as fronting on or bounded by" in R.S. 9:2971 and found that the presumption did not apply in that case. In Crown, the property description in the deeds did not describe the property as "fronting on or bounded by" the highway or right-of-way. The court held that the omission evidenced the intent to convey only the property included within the exact and precise limits of the surveyed description. It concluded that a survey that excluded the contiguous land satisfies the express reservation requirement.
Crown interpreted the pre-2003 version of the statute. In 2003, the legislature amended the statute to provide for other means of describing the property.[2] The legislature added: "or as described pursuant to a survey or using a metes and bounds description that shows that it actually fronts on or is bounded by" before the phrase "a waterway, canal, highway, road, street, alley, railroad, or other right-of-way[.]"
All of the subsequent transfers to Louisiana Materials and then to Bayou Fleet contain a metes and bounds description that shows that the Rivarde Tract is bounded by Morgan Street. There is no express provision that particularly excludes the road. Thus, even assuming that R.S. 9:2971 applies to this situation, the presumption applies.
The Clulees also argue that La.R.S. 13:3851 provides that Sheriffs sales are sales per aversionem. As such, Louisiana Materials only acquired the property that was specifically described in the writ of seizure and sale.
La.R.S. 13:3851 pertinently provides:
Whenever a party to an action or proceeding desires to have the sheriff to whom a writ of attachment, sequestration, distringas, fieri facias, or seizure and sale is directed make a constructive seizure of any immovable property, whether vacant or improved, under the provisions of R.S. 13:3851 through 13:3861, the party shall annex to the writ at the time of its issuance, or deliver to the sheriff to whom the writ is directed, an exact and complete description of the immovable property to be seized.
Appellees rely on Cornish v. Kinder Canal Co., 267 So. 2d 625, 629 (La.App. 3 Cir.1972), writ denied, 263 La. 624, 268 So. 2d 679 (La.1972), application not considered, 263 La. 800, 269 So. 2d 248 (La. 1972) for its holding that in a sale of immovable property by certain bounds or limits, the vendee receives all of the land embraced within those limits, and nothing more. But in that case, the court could not rely on the presumption in R.S. 9:2971 because the act was retroactive. 267 So.2d at 631.
Pursuant to R.S. 9:2981, the Sheriffs sale conveyed the additional interest in the *227 Morgan Street Extension to Louisiana Materials because there was no "express provision therein particularly excluding the abandoned property therefrom."
Likewise, Bayou Fleet acquired the Clulees' former two-thirds undivided interest in the Rivarde Tract from Louisiana Materials with no express provision excluding the abandoned property. Therefore, Bayou Fleet rather than the Clulees own an undivided two-thirds interest in the Southern twenty-five feet of the Morgan Street Extension.
I disagree with the majority that the 1999 partition judgment determined ownership of the disputed property. It was not until 2000 that the ownership interest in that property was ever addressed. Although the 2000 judgment declared the Clulees and the Giambellucas to be the owners of the road, Bayou Fleet was not a party to those proceedings and until the instant proceeding has never had its ownership claim considered on the merits. In Law Offices of Robert M. Becnel v. Ancale, 00-295 (La.App. 5 Cir. 9/26/00), 769 So. 2d 761, 763-64, this circuit addressed a similar situation. In that case, an attorney had originally intervened to assert an interest in attorney's fees and costs. The court had dismissed the intervention without ruling on the merits. Ancale held that the former dismissal of the intervention could not serve as the basis for maintaining a plea of res judicata in the subsequent Ancale case. 769 So.2d at 764. Therefore, to the extent that appellees rely on the 2000 judgment, that reliance is misplaced.
For these reasons, I respectfully dissent from that portion of the opinion which affirms the judgment dismissing Bayou fleet's intervention. I would reverse that portion of the trial court judgment of December 14, 2007 dismissing Bayou Fleet Partnership's intervention; render judgment declaring that Bayou Fleet Partnership is the owner of an undivided twothirds interest in the Southern twenty-five feet of the property comprising the Morgan Street Extension, and remand this matter for further proceedings.
*228 APPENDIX
NOTES
[1] Batture is the property between the toe of the levee and the low watermark of a navigable water body. Here, the property, which is approximately 23 miles upriver from New Orleans, Louisiana, is between the toe of the levee and the Mississippi River in St. Charles Parish.
[2] Clulee v. Giambelluca, 00-1057 (La.App. 5 Cir. 1/23/01), 777 So. 2d 1259, 1260-1261, writ denied, 01-0789 (La.5/4/01), 791 So. 2d 660.
[3] Id.
[4] Giambelluca v. Parish of St. Charles, 96-364 (La.App. 5 Cir. 11/14/96), 687 So. 2d 423, 425-426, writs denied, 96-3096 (La.2/21/97), 688 So. 2d 512; 97-0160 (La.2/21/97), 688 So. 2d 513
[5] id.
[6] The parties introduced a certified copy of the revocation ordinance into evidence at trial and the trial court took judicial notice of that ordinance. La. C.E. art. 202(A); Bayou Liberty Ass'n, Inc. v. St. Tammany Parish Council, 05-1228 (La.App. 1 Cir. 6/9/06), 938 So. 2d 724, 729(judicial notice is mandatory, even without request, as to ordinances enacted by any political subdivision within the court's territorial jurisdiction, if a certified copy of the ordinance is filed with the clerk of court).
[7] Giambelluca v. The Parish of St. Charles, 626 So. 2d 740 (La.App. 5 Cir. 1993).
[8] Giambelluca v. Parish of St. Charles, 96-364 (La.App. 5 Cir. 11/14/96), 687 So. 2d 423, writs denied, 96-3096 (La.2/21/97), 688 So. 2d 512; 97-0160 (La.2/21/97), 688 So. 2d 513.
[9] The trial court ruled on February 18, 2000.
[10] Clulee v. Giambelluca, 111 So.2d at 1262. The Louisiana Supreme Court denied writs. Clulee v. Giambelluca, 01-0789 (La.5/4/01), 791 So. 2d 660. That judgment was final when the delay for rehearing expired, which was well before the instant action was instituted.
[11] In 1989, Louisiana Materials, Co., Inc. sued on an open account and the Clulees, among others, were cast in judgment for $39,434.41 plus interest, costs, and attorney fees. The Sheriff's Sale of the Clulees' interest in Rivarde Place was recorded on January 29, 1993.
[12] On June 11, 1996, Home Place intervened in Bayou Fleet's suit, praying that the property be partitioned in kind. Bayou Fleet Partnership v. Saia, 98-306 (La.App. 5 Cir. 2/5/99), 745 So. 2d 629, 629-632. The Saia family was later dismissed from the suit.
[13] Bayou Fleet Partnership v. Saia, 98-306 (La.App. 5 Cir. 2/5/99), 745 So. 2d 629, 629-632, writ denied, 99-459 (La.4/1/99), 742 So. 2d 559.
[14] Livingston Downs Racing Association, Inc. v. State, Through Edwards, 96-1988 (La.App. 1 Cir. 9/23/97) 700 So. 2d 1021, 1023.
[15] Amoco Production Company v. Columbia Gas Transmission Corporation, 455 So. 2d 1260, 1264 (La.App. 4 Cir.), writs denied, 459 So. 2d 542 (La. 1984), 459 So. 2d 543 (La. 1984).
[16] Livingston Downs Racing Association, Inc. v. State, Through Edwards, 700 So.2d at 1024.
[1] Added by Acts 1956, No. 555, § 1. Amended by Acts 2003, No. 723, § 1.
[2] As amended by Acts 2003, No. 723, § 1. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1622777/ | 15 So. 3d 177 (2009)
STATE of Louisiana
v.
Josh D. BAUMAN.
No. 08-KA-1169.
Court of Appeal of Louisiana, Fifth Circuit.
May 12, 2009.
*180 Paul D. Connick, Jr., District Attorney, Twenty-Fourth Judicial District, Parish of Jefferson, Terry M. Boudreaux, Thomas J. Butler, Appellate Counsel, James A. Adair, Trial Counsel Assistant District Attorneys, Gretna, LA, for Appellee, State of Louisiana.
Margaret S. Sollars, Attorney at Law, Louisiana Appellate Project, Thibodaux, LA, for Appellant, Josh Bauman.
Panel composed of Judges SUSAN M. CHEHARDY, WALTER J. ROTHSCHILD, and JEROME M. WINSBERG, Pro Tempore.
SUSAN M. CHEHARDY, Judge.
On November 4, 2004, the Jefferson Parish Grand Jury issued an indictment charging defendant, Josh Bauman, with second degree murder, a violation of La. R.S. 14:30.1. Defendant pled not guilty at his arraignment.
On June 14, 2006, defendant filed various pre-trial motions, including a motion to suppress the evidence. On September 28, 2006, defendant filed a Motion to Appoint a Sanity Commission to Determine Competency to Stand Trial. After the competency hearing, defendant was found competent to stand trial on December 7, 2007.
The trial court heard and denied defendant's motion to suppress evidence on January 11, 2008. Defendant applied to this Court for supervisory writs. This Court found no error in the trial court's denial of defendant's motion to suppress evidence. State v. Bauman, 08-98 (La.App. 5 Cir. 2/8/08), (unpublished writ disposition). The Louisiana Supreme Court denied defendant's writ of certiorari. State v. Bauman, 08-0402 (La.2/25/08), 976 So. 2d 1291.
On May 13, 2008, defendant proceeded to trial before a twelve-person jury. On May 14, 2008, the jury unanimously found defendant guilty as charged. On June 6, 2008, the trial court sentenced defendant to life imprisonment without benefit of parole, probation, or suspension of sentence.
On appeal, defendant seeks review of his conviction and sentence raising two assignments of error: the trial judge erred in denying the motion to suppress evidence and the evidence was insufficient to find defendant guilty of second degree murder. Of note, on January 6, 2009, this Court granted defendant leave to file a pro se supplemental brief in this matter. To date, this brief has not been filed.
Testimony of witnesses at pre-trial suppression hearings and at trial revealed the following facts. Brandy Ronquille testified that she and Michelle Bauman were longtime friends and co-workers. Ronquille stated that they worked at International Drug Detection ("IDD"). Their office was one of six businesses located at 7521 Westbank Expressway in Marrero, Louisiana. On September 7, 2004, Ms. Ronquille left the office, as usual, at about 11:00 a.m. to get lunch from a nearby restaurant. When Ms. Ronquille left the office, Ms. Bauman was alone in their office doing paperwork.
Joann McKnight, who had been good friends with Michelle Bauman for ten years, worked at a doctor's office two doors down from Michelle's office. On the morning of September 7, 2004, a patient entered her office saying that a woman *181 was outside screaming that her husband had shot her. When Ms. McKnight went outside, she saw Ms. Bauman lying on the sidewalk between their offices. She held Ms. Bauman's hand and talked to her; Ms. Bauman tried to say something to her, but she was unable to speak. McKnight's employer, Dr. Vo, came outside to help Ms. Bauman.
Dr. Fong Vo, who has an internal medicine practice at 7521 Westbank Expressway, worked with Michelle Bauman for four years. Dr. Vo testified that, at around noon, on September 7, 2004, he was examining patients when he heard people shouting in the front of his office. He went to investigate, and found Ms. Bauman on the ground outside the entryway to his office. Ms. Bauman was lying face-down. He turned her over and saw a lot of blood in her right eye. He found an entry wound in her cheek. Ms. Bauman was not talking. She was grunting and moaning. Dr. Vo attempted to provide medical treatment to Michelle Bauman.
While Dr. Vo was tending to Michelle, Ms. McKnight went to the IDD office to look for Ms. Ronquille. When Ms. McKnight entered the IDD offices, she saw a man sitting on the floor, slumped against a wall with his legs straight out. She did not immediately recognize him. Ms. McKnight called 9-1-1 from a telephone in the IDD office. While she spoke to the 9-1-1 operator, she realized that the injured man was Josh Bauman.[1] At that point, Josh Bauman picked up the gun, and Ms. McKnight thought he was going to shoot her. Instead, he pointed the gun at his own head. Ms. McKnight immediately fled the IDD office.
Debra Guidroz, who worked for Dr. Vo in the same building as Michelle, called 9-1-1 from her office, when she heard that there was a woman, who was bleeding, outside calling for help because her husband had shot her. After calling for help, Ms. Guidroz, who had known and worked with Michelle Bauman since 1994, went to the IDD office. When she entered the office, she saw a man, with blood on his head and shirt, sitting on the floor leaning against the wall. A gun was lying on his chest/stomach area. Ms. Guidroz testified she did not see anyone else inside the IDD office, nor did she see anyone fleeing the scene.
Deputy Paul Sperandeo of the Jefferson Parish Sheriffs Office testified that, at about noon on September 7, 2004, he responded to a reported shooting at 7521 Westbank Expressway in Marrero, Louisiana.[2] He and his partner arrived at the scene less than five minutes after receiving the report.
Deputy Sperandeo testified that, when he and his partner approached the business, several people standing outside told them, "`He's in there, he's in there.'" An injured woman was lying on the sidewalk near the doorway, and someone was giving her medical assistance.
When Deputy Sperandeo entered the business, he saw a man sitting on the floor, leaning against a wall. There was blood on his head and body, and he was unresponsive. There was a chrome revolver lying between his right arm and his body. The barrel of the gun pointed towards defendant's head. When paramedics arrived *182 to assist defendant, Deputy Sperandeo's partner retrieved the gun.
Homicide Detective David Morales, who was the lead investigator of the shootings, arrived to find a 1994 Buick Century with a Missouri license plate parked at an odd angle in the parking lot. Through a computer search, Detective Morales learned that the car was registered to Danny Bauman from Ridgedale, Missouri. The car's front windows were rolled down, and Detective Morales saw a handwritten note on the front passenger seat. The note read, "`Judy and Danny Bauman, XXX-XXX-XXXX, call and tell them I love them and I am sorry. Josh.'"
Detective Morales seized the note and called the telephone number on the note. He learned that Josh Bauman had been living with his parents, Danny and Judy, in Ridgedale, Missouri, until three days earlier. Detective Morales made arrangements to have the car towed to the detective bureau, and he later obtained a warrant to search the vehicle.
Detective Morales testified that Sergeant Rodney Newman collected a .22 caliber Smith and Wesson revolver from the injured man. The chamber of the gun contained six spent cartridge casings, indicating that it had been fired six times. A lead bullet fragment was found on the floor in the IDD office where the shootings occurred. Detective Morales traced the weapon through the Bureau of Alcohol, Tobacco, Firearms, and Explosives ("ATF"), and determined it was purchased by Danny Bauman, defendant's father.
Michelle Bauman was pronounced dead on arrival at the hospital. Detective Morales arrested Josh Bauman for second degree murder within an hour of the shootings.
Dr. Susan Garcia of the Jefferson Parish Forensic Center, who was accepted as an expert in forensic pathology, performed an autopsy on Michelle Bauman's body on September 8, 2004. Her autopsy report was introduced into the record at trial.
Dr. Garcia testified that Ms. Bauman had three entrance gunshot wounds and one exit wound. Ms. Bauman had one entrance wound on the right side of Ms. Bauman's head lateral to the eye. The exit wound that corresponded with the first entrance wound was through the victim's right eye socket. A second wound was on Ms. Bauman's right cheek around the lip area. Wound three was in the midback area. Ms. Bauman also had a graze wound on her right shoulder. The victim had non-firearm injuries to her anterior chest and her left knee, consistent with scraping her skin against a rough surface such as concrete.
Dr. Garcia testified that the lethal wound was the one to the victim's back, which caused injury to the right lung and a great deal of internal bleeding. Dr. Garcia classified Ms. Bauman's death as a homicide.
The trial court accepted Joel O'Lear as an expert in forensic firearms analysis and identification, and tool mark evaluation. Mr. O'Lear testified that he examined the.22 caliber Smith and Wesson revolver, six cartridge casings, one unknown caliber lead-like fragment, two unknown caliber lead-like projectiles, and a group of small lead-like fragments. Mr. O'Lear testified that the six cartridge casings were all .22 caliber class and were all fired from the same gun to the exclusion of all other weapons.
Defendant also testified in his own behalf. He had lived in Jefferson Parish all of his life, except for the year before the shooting, which he spent living with his parents in Missouri. He had returned to Louisiana three days before the shooting *183 to take a job as a welder. He was staying in a motel.
Defendant and Michelle met during the 1980s. They were married in 2000, and divorced in 2003. During their thirteen-year relationship, they had one daughter, Logan, who was six years old when they divorced.
Defendant testified that, on the morning of September 7, 2004, he drank a case and a half of beer while he drove around Gretna. When he called Ms. Bauman at her office to discuss their daughter, Ms. Bauman hung up on him. Because he was "aggravated" and "mad," defendant "flew over there to her work" to confront Michelle. Before he left his car, he wrote a note for his parents, which he left on the front seat of the car. He stated that he wrote the note because he knew that he would be going to jail "eventually ... because of the stupid thing" he did.
Defendant, armed with his father's gun, entered Michelle's office. He was carrying the gun to deter anyone from impeding his conversation with his ex-wife. He also admitted that he thought the gun might "scare" Michelle into letting him see his daughter. When Ms. Bauman questioned him about his intent, he told her that he had come to finish their telephone conversation. Ms. Bauman told him he was nothing more than a "sperm donor" to Logan, and that she would never allow him to see her.
According to defendant, Ms. Bauman then tried to take the gun away from him. While they were struggling, he got control of the gun and, in a rage, shot her in the shoulder. Even though he did not remember it, he knew that he shot his ex-wife three more times. He also did not remember shooting himself twice in the head. As a result of his self-inflicted wounds, defendant was in a coma for a month. He has no sight in his right eye, and seizures due to brain swelling. He complains of memory loss limited to events immediately before and after the shooting.
In his first assignment of error, Mr. Bauman argues that the evidence at trial was insufficient to support his conviction for second degree murder; and that the State proved only the lesser offense of manslaughter.[3] Defendant does not dispute that he shot Ms. Bauman, but he argues that the State failed to prove he had the specific intent necessary to commit second degree murder.[4] The State responds *184 that the evidence showed that he had the requisite intent; specifically, defendant wrote a note of apology to his parents, armed himself with a loaded gun, and shot Ms. Bauman four times.
The constitutional standard for testing the sufficiency of the evidence, as enunciated in Jackson v. Virginia, 443 U.S. 307, 99 S. Ct. 2781, 61 L. Ed. 2d 560 (1979), requires that a conviction be based on proof sufficient for any rational trier-of-fact, viewing the evidence in the light most favorable to the prosecution, to find the essential elements of the crime beyond a reasonable doubt. State v. Ortiz, 96-1609, p. 12 (La.10/21/97), 701 So. 2d 922, 930, cert. denied, 524 U.S. 943, 118 S. Ct. 2352, 141 L. Ed. 2d 722 (1998). The rule as to circumstantial evidence is "assuming every fact to be proved that the evidence tends to prove, in order to convict, it must exclude every reasonable hypothesis of innocence." La. R.S. 15:438. This is not a separate test from the Jackson standard, but rather provides a helpful basis for determining the existence of reasonable doubt. State v. McFarland, 07-26 (La. App. 5 Cir. 5/29/07), 960 So. 2d 1142, 1146, writ denied, 07-1463 (La.1/7/08), 973 So. 2d 731. Ultimately, all evidence, both direct and circumstantial, must be sufficient to support the conclusion that the defendant is guilty beyond a reasonable doubt. Id.
Second degree murder is defined as the killing of a human being when the offender 1) has specific intent to kill or to inflict great bodily harm, or 2) is engaged in the perpetration or attempted perpetration of one of several enumerated felonies even though he has no intent to kill or to inflict great bodily harm. La. R.S. 14:30.1(A); State v. Kirkland, 01-425 (La.App. 5 Cir. 9/25/01), 798 So. 2d 263, 268, writ denied, 01-2967 (La.10/14/02), 827 So. 2d 415. In the instant case, the State proceeded under the first theory of second degree murder regarding specific intent.
Specific intent is "that state of mind which exists when the circumstances indicate that the offender actively desired the prescribed criminal consequences to follow his act or failure to act." La. R.S. 14:10(1). Specific intent need not be proven as a fact, but may be inferred from the circumstances surrounding the offense and the conduct of the defendant. State v. Graham, 420 So. 2d 1126, 1127 (La.1982); State v. Young, 05-702 (La. App. 5 Cir. 2/14/06), 938 So. 2d 90, 95. Whether a defendant possessed the requisite intent in a criminal case is for the trier-of-fact, and a review of the correctness of this determination is guided by the Jackson standard. State v. Gonzalez, 07-449 (La.App. 5 Cir. 12/27/07), 975 So. 2d 3, 8, writ denied, 08-228 (La.9/19/08), 992 So. 2d 949.
Our review reveals that the evidence, both direct and circumstantial, was sufficient to support the conclusion that the defendant had specific intent to kill or inflict great bodily harm on his ex-wife. First, the act of aiming a lethal weapon and discharging it in the direction of the victim supports a finding by the trier-offact that the defendant acted with specific intent to kill. State v. Hidalgo, 95-319 (La.App. 5 Cir. 1/17/96), 668 So. 2d 1188, 1197-98. Defendant admitted that he shot his ex-wife in the shoulder while they were struggling over the gun.
Second, it is reasonable to conclude that defendant intended to discharge his weapon during his confrontation with Michelle. He wrote an apology note with his parents' contact information, which he left in his car, before entering Michelle's office. When asked why he apologized to his parents before the shootings took place, defendant stated that he knew he "was coming *185 to jail eventually, you know, because of the stupid thing I did."
Defendant further argues that he shot his ex-wife in the heat of passion, out of provocation, and that he was guilty of manslaughter rather than second degree murder. According to La. R.S. 14:31(A)(1), manslaughter is a homicide that would be a first or second degree murder, but
the offense is committed in sudden passion or heat of blood immediately caused by provocation sufficient to deprive an average person of his self-control and cool reflection. Provocation shall not reduce a homicide to manslaughter if the jury finds that the offender's blood had actually cooled, or that the average person's blood would have cooled, at the time the offense was committed."
"Sudden passion" and "heat of blood" are not elements of the offense of manslaughter; rather, they are mitigatory factors that may reduce the grade of the offense. State v. Dobbins, 05-342 (La.App. 5 Cir. 12/27/05), 920 So. 2d 278, 283-84.
In order to be entitled to the lesser verdict of manslaughter, the defendant is required to prove the mitigatory factors by a preponderance of the evidence. Id. Provocation and time for cooling are questions for the jury to determine under the standard of the average or ordinary person, one with ordinary self-control. State v. Deal, 00-434, p. 5 (La.11/28/01), 802 So. 2d 1254, 1260, cert. denied, 537 U.S. 828, 123 S. Ct. 124, 154 L. Ed. 2d 42 (2002). The question for this Court on review is whether a rational trier-of-fact, viewing the evidence in the light most favorable to the prosecution, could have found that the mitigatory factors were not established by a preponderance of the evidence. State v. Lombard, 486 So. 2d 106, 111 (La.1986); State v. Lawson, 08-123 (La.App. 5 Cir. 11/12/08), 1 So. 3d 516.
In this case, the jury found that defendant failed to meet his burden of proof that he acted in "sudden passion" or "heat of blood." After our review, we find that a rational trier-of-fact could find defendant failed to establish the mitigatory factors.
Defendant claimed that he shot his ex-wife because he was enraged by her refusal to allow him to see his daughter. He testified that all he was thinking was that he would not ever see his daughter again, and she was the only thing he loved in the world. But, defendant also testified that, since he and Ms. Bauman divorced in 2003, he had not tried to visit with their daughter. Thus, a reasonable trier-of-fact could find that his testimony regarding provocation was not credible.
Defendant further stated that he was "seeing red" over the fact that Ms. Bauman had hung up on him then referred to him as nothing more than a "sperm donor" to their daughter. Again, a reasonable trier-of-fact could conclude that this was insufficient to deprive an average person of his self-control and cool reflection.
In our review, we find that the evidence at trial showed that defendant drove around on the morning of the incident, consuming copious amounts of alcohol while armed with a deadly weapon. He had the presence of mind to write a note apologizing to his parents for his actions. He then entered the victim's workplace, armed with a loaded gun, and purposely fired it at her. Considering the circumstances, defendant's actions, and the extent of Ms. Bauman's injuries, the evidence was sufficient under Jackson to support the jury's finding that defendant had specific intent to kill or inflict great bodily harm on Ms. Bauman and was, thus, guilty of second degree murder.
*186 In his next assignment of error, defendant argues that the handwritten note seized from his car at the scene should have been suppressed because it was the product of an illegal warrantless search. The State contends that the seizure fell under a number of exceptions to the warrant requirement.
Detective Morales testified, at the pre-trial suppression hearing, that when he arrived at the scene, he saw a four-door, blue Buick Century with a Missouri license plate parked oddly in the parking lot. He learned, through a computer search, that the car was registered to Danny Bauman, the victim's ex-father-in-law, who lived in Missouri. Witnesses at the scene informed Detective Morales that a man exited that car with a pistol and ran into the IDD office, where the victim was gunned down.
Detective Morales testified that he had other officers secure the car until he had an opportunity to examine it. When he approached the vehicle, he noted that the two front windows were completely open. Standing next to the car, he looked in through the passenger side window. He saw, on the front passenger seat, a handwritten note on a notepad. From his vantage point, he had an unobstructed view of the note, which he was able to read.[5] The note read, "`Judy and Danny Bauman, XXX-XXX-XXXX. Call and tell them I love them and I'm sorry. Josh.'"
Detective Morales immediately believed that the note was pertinent to the investigation and instructed crime lab personnel to collect it. The detective explained that, although he would usually have a vehicle towed from a scene to the detective bureau before having it processed for evidence, he did not follow that procedure in this case because he was concerned that the note would be destroyed or lost in transit. To preserve the evidence properly, the car had to be processed in the same state that it was found, with the front windows open.
Detective Morales testified that the car was ultimately towed from the scene. He obtained a search warrant on September 10, 2004, but no evidence was seized from the car when the vehicle was searched pursuant to the warrant.
At the conclusion of the suppression hearing, the trial judge found that the seizure of the note was valid because it was based on exigent circumstances. The judge further commented it was readily apparent from a reading of the note that it was important to the investigation.
A warrantless search is per se unreasonable unless justified by one of the narrowly drawn exceptions to the Fourth Amendment's warrant requirement. Schneckloth v. Bustamonte, 412 U.S. 218, 219, 93 S. Ct. 2041, 2043, 36 L. Ed. 2d 854 (1973). If evidence is derived from an unreasonable search or seizure, the proper remedy is to exclude the evidence from trial. State v. Boss, 04-457 (La.App. 5 Cir. 10/26/04), 887 So. 2d 581, 585. In a hearing on a motion to suppress, the State bears the burden of proving that such an exception applies. La.C.Cr.P. art. 703 D; State v. Addison, 05-378 (La.App. 5 Cir. 12/27/05), 920 So. 2d 884, 890, writ denied, 06-1087 (La.11/9/06), 941 So. 2d 36. Trial courts are vested with great discretion in ruling on a motion to suppress and, consequently, the ruling of a trial judge on a motion to suppress will not be disturbed absent an abuse of that discretion. State v. Long, 03-2592 (La.9/9/04), 884 So. 2d 1176, 1179, cert. denied, 544 U.S. 977, 125 S. Ct. 1860, 161 L. Ed. 2d 728 (2005).
*187 In this case, the State contends that the evidence was validly seized pursuant to, among others, the "plain view" exception. The "plain view" doctrine is a recognized exception to the warrant requirement. Coolidge v. New Hampshire, 403 U.S. 443, 465, 91 S. Ct. 2022, 2037, 29 L. Ed. 2d 564 (1971); State v. Smith, 07-815 (La.App. 5 Cir. 3/11/08), 982 So. 2d 821, 825, writ denied, 08-0927 (La.11/14/08), 996 So. 2d 1088. Police may seize evidence under the "plain view" doctrine when: 1) there is prior justification for an intrusion into the protected area and 2) it is immediately apparent, without close inspection, that the items seized are evidence or contraband. Horton v. California, 496 U.S. 128, 135-136, 110 S. Ct. 2301, 2307, 110 L. Ed. 2d 112 (1990). In the instant case, Detective Morales was rightfully in the area of defendant's vehicle, which was parked in a public parking lot.
Defendant argues it was not immediately apparent that the note was evidence of a crime. The record, including photographic evidence, reveals that Detective Morales could easily read the note on the seat of the car through the car's open window. The detective had a witness who stated that the driver of the Buick Century exited the vehicle carrying a gun and ran into the office where the shootings took place. Based on his forty years of experience as a homicide investigator, he stated that he believed the note constituted evidence relevant to the shootings. We agree.
The "plain view" exception does not require a police officer to be certain that the object in plain view is contraband; it simply requires that the officer have probable cause to believe that the item in question is either evidence and/or contraband. Texas v. Brown, 460 U.S. 730, 742, 103 S. Ct. 1535, 1543, 75 L. Ed. 2d 502 (1983); State v. Smith, 07-815 at 6, 982 So.2d at 825. In this case, the note was evidence relevant to the crime in question. Based on the foregoing, we cannot say that the trial court abused its discretion in denying defendant's motion to suppress the evidence.
Finally, as is our customary practice, we have reviewed the record for errors patent. La C.Cr.P. art. 920. We note that neither the transcript nor the commitment/minute entry indicates that the jury was sworn as required by La. C.Cr.P. arts. 788 and 790. Jury irregularities were not, however, raised in the trial court or on appeal. Consideration of that issue is, therefore, waived. More importantly, we find no prejudicial error. State v. Wilkinson, 00-339 (La.App. 5 Cir. 10/18/00), 772 So. 2d 758, 771. No corrective action is required.
In conclusion, we find no merit in defendant's arguments on appeal. Defendant's sentence and conviction are hereby affirmed.
AFFIRMED.
NOTES
[1] Ms. McKnight knew Josh Bauman when he was married to Ms. Bauman.
[2] Deputy Billy Lewis of the Jefferson Parish Sheriff's Office Communications Division testified that he is the custodian of records for emergency communications. His department received five 9-1-1 calls regarding this case. A recording of those 9-1-1 calls was played for the jury.
[3] When the issues on appeal relate to both the sufficiency of evidence and one or more trial errors, the reviewing court should first determine the sufficiency of the evidence by considering the entirety of the evidence. State v. Hearold, 603 So. 2d 731, 734 (La. 1992). If the reviewing court determines that the evidence was insufficient, then the defendant is entitled to an acquittal, and no further inquiry as to trial errors is necessary. Id. Alternatively, when the entirety of the evidence, both admissible and inadmissible, is sufficient to support the conviction, the defendant is not entitled to an acquittal, and the reviewing court must consider the assignments of trial error to determine whether the accused is entitled to a new trial. Id. Therefore, we will address the sufficiency of the evidence as his first assignment of error.
[4] Prior to trial, defendant filed notice of defense based on mental condition under La. C.Cr.P. art. 726, stating his intention to introduce testimony relating to a "mental disease, defect or other condition, including but not limited to intoxication, drugged and/or other mental condition(s) from which the defendant was suffering at the time of the offense bearing upon the issue of whether he/she had the mental state required for the offense charged." The records reflects that, aside from his own testimony that he had a "buzz" after consuming a case and a half of beer on the morning of the shooting, defendant did not offer any evidence regarding a mental condition or defect from which he suffered at the time of the offense.
[5] At trial, Detective Morales identified photographs, which were introduced into evidence at the trial, depicting the car and the note's position inside the car. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1622831/ | 272 Neb. 846
IN RE ADOPTION OF KENTEN H.
MEAGHAN H., APPELLANT,
v.
MARK J. AND SHERYL J., APPELLEES.
No. S-06-204.
Supreme Court of Nebraska.
Filed January 5, 2007.
Patricia A. Knapp for appellant.
Susan K. Sapp and Stanton N. Beeder, of Cline, Williams, Wright, Johnson & Oldfather, L.L.P., for appellees.
Jon Bruning, Attorney General, and B. Gail Steen, Special Assistant Attorney General, for amicus curiae Nebraska Department of Health and Human Services.
HEAVICAN, C.J., CONNOLLY, GERRARD, STEPHAN, McCORMACK, and MILLER-LERMAN, JJ.
STEPHAN, J.
Meaghan H., the biological mother of Kenten H., petitioned the county court for Lancaster County to vacate the adoption of Kenten pursuant to the Nebraska Indian Child Welfare Act (NICWA), Neb. Rev. Stat. §§ 43-1501 to 43-1516 (Reissue 2004). The matter was assigned to the separate juvenile court of Lancaster County, which had entered the decree of adoption, and that court granted a motion to dismiss for failure to state a claim filed by the adoptive parents, Mark J. and Sheryl J. Meaghan filed this timely appeal.
BACKGROUND
In considering the motion to dismiss, the separate juvenile court took judicial notice of documents filed in earlier juvenile court proceedings and the adoption proceeding, which proceedings disclose the following facts: Kenten was born prematurely on August 16, 2002. On November 14, the State of Nebraska filed a petition in the separate juvenile court seeking to adjudicate Kenten and three of his siblings as minor children within the meaning of Neb. Rev. Stat. § 43-247(3) (Cum. Supp. 2002) due to the fault or habits of their parents, Meaghan and Kent H. At that time, Kenten was still hospitalized in Lincoln, Nebraska. On the same date, Kenten was placed in the temporary custody of the Nebraska Department of Health and Human Services (DHHS). On January 8, 2003, he was released from the hospital and placed in foster care.
An adjudication hearing was scheduled, and on March 19, 2003, a deputy county attorney gave notice of the hearing to the Iowa Tribe of Kansas and Nebraska (the Iowa Tribe). In an affidavit accompanying the notice, the deputy county attorney affirmatively stated that Kenten and his siblings "are a member [sic] of or may be eligible for membership" in the Iowa Tribe. The notice was given pursuant to NICWA and the federal Indian Child Welfare Act of 1978 (ICWA), 25 U.S.C. §§ 1901 to 1963 (2000). A petition to terminate the parental rights of both parents as to Kenten was filed on April 8. Notice of a hearing on the adjudication and termination was given to the Iowa Tribe. The notice included a statement that Kenten was "a member of or may be eligible for membership in" the Iowa Tribe.
On June 24, 2003, the court determined that Kenten was a child as defined by § 43-247(3)(a) due to the fault or habits of Kent. The adjudication as to Meaghan was continued. On August 20, the court found that Kenten was a child as defined by § 43-247(3)(a) by reason of the fault or habits of Meaghan. On the same date, the court granted the State's motion for leave to withdraw the petition to terminate the parental rights of Kent and Meaghan as to Kenten.
Meanwhile, on August 19, 2003, the adoptive parents, who at that time were the foster parents, filed a petition seeking to adopt Kenten. The petition was filed in the county court for Lancaster County and transferred to the separate juvenile court, which had concurrent jurisdiction pursuant to Neb. Rev. Stat. § 43-102 (Reissue 2004) by virtue of its prior adjudication. Attached to the petition was an "Affidavit of Identification of Father" in which Kent was identified as the biological father and his tribal affiliation was listed as "UTE." In the petition, the adoptive parents alleged that the county attorney's office had notified "the Ute tribe" of the pending adoption, but never received a response. The adoptive parents further alleged that "neither Meaghan [nor] Kent . . . is a registered member of any Indian tribe and the minor child [Kenten] is not an 'Indian child' as defined in Neb. Rev. Stat. § 43-1503(4)." Also, attached to the petition was a "Relinquishment of Child by Parent" purportedly signed by Meaghan on June 20, 2003, stating that she voluntarily relinquished to DHHS "all right to and custody of and power and control over" Kenten so that DHHS became his legal guardian. The relinquishment further provided that Meaghan authorized DHHS to place Kenten in a suitable family home and "consent to and procure" his adoption. An identical relinquishment signed by Kent was also attached to the petition.
In its decree of adoption entered on September 30, 2003, the separate juvenile court specifically found that all of the allegations in the petition were true. Eight days after the entry of the decree, the Iowa Tribe filed an "Entry of Appearance & Notice of Intervention to Monitor." This document recites that Kenten is enrolled in the tribe and assigned an enrollment number. This is the only filing by any tribe appearing in the record.
On August 24, 2005, Meaghan filed a petition to vacate the adoption pursuant to NICWA. The petition was filed in the county court for Lancaster County and assigned to the separate juvenile court. In the petition, Meaghan alleged that she was Kenten's biological mother and an enrolled member of the Iowa Tribe, that Kenten was eligible for enrollment through her family and was enrolled as a member of the tribe on June 25, 2003, and that he was therefore an "Indian child" for purposes of NICWA and ICWA. Meaghan further alleged that she was hospitalized and "under the influence of morphine and other mind-altering medications" when she signed the relinquishment on June 20 and that while she was in this condition, a DHHS caseworker told her that her only hope of keeping any of her children was to voluntarily relinquish her rights to Kenten. Meaghan alleged that the relinquishment was obtained through "fraud, threats, coercion, and duress" and in violation of certain DHHS regulations and provisions of NICWA. Meaghan attached to her petition a "Withdrawal of Parental Consent to Adoption" purportedly signed by her on August 24, 2005, stating that she was withdrawing her consent to Kenten's adoption "on the grounds that my consent was obtained through fraud and duress and in violation of the provisions of the federal and Nebraska Indian Child Welfare Acts."
After initially filing an answer to the petition, the adoptive parents filed a motion to dismiss pursuant to Neb. Ct. R. of Pldg. in Civ. Actions 12(b) (rev. 2003) on October 20, 2005. In this motion, the adoptive parents alleged that the petition to vacate was not timely pursued, that there was a defect of the parties because DHHS was not joined, that Meaghan had waived and is estopped from asserting parental rights to Kenten, and that Meaghan had made no claims of fraud or duress until 26 months after executing the relinquishment. No evidence was received at a hearing on the motion, but at the request of the adoptive parents and without objection by Meaghan, the court took judicial notice of its file in the earlier proceedings. On January 18, 2006, the juvenile court entered an order dismissing Meaghan's petition to vacate, concluding that the showing that Kenten was an "Indian child" to whom NICWA applied came too late and that thus, Meaghan was not entitled to invoke NICWA's provisions as a basis for vacating the adoption. The court acknowledged that notice as required by NICWA had been given to the Iowa Tribe during the juvenile proceedings, but found that this was only because there was an indication that the case may involve an Indian child under NICWA. The court concluded that notwithstanding the notice, until it had knowledge from the tribe that Kenten was a child subject to NICWA or other evidence that Kenten was enrolled as a member of a tribe, Kenten was not an "Indian child" subject to NICWA. In this respect, the juvenile court specifically determined that at the time of the initial juvenile abuse and neglect proceeding and later in the adoption proceeding, it had "no knowledge or evidence" that the case involved NICWA. The court concluded that the Iowa Tribe's appearance and notice was filed too late in the adoption proceeding to trigger the provisions of NICWA, and it therefore granted the motion to dismiss.
Meaghan filed this timely appeal, which we moved to our docket pursuant to our statutory authority to regulate the caseloads of the appellate courts of this state. See Neb. Rev. Stat. § 24-1106(3) (Reissue 1995). Kent is not a party to these proceedings.
ASSIGNMENT OF ERROR
Meaghan assigns that the juvenile court erred in dismissing her petition to vacate the adoption.
STANDARD OF REVIEW
[1] The trial court's grant of a motion to dismiss for failure to state a claim under Neb. Ct. R. of Pldg. in Civ. Actions 12(b)(6) (rev. 2003) is reviewed de novo, accepting all the allegations in the complaint as true and drawing all reasonable inferences in favor of the nonmoving party. Moglia v. McNeil Co., 270 Neb. 241, 700 N.W.2d 608 (2005).
[2] When an appeal calls for statutory interpretation or presents questions of law, an appellate court must reach an independent, correct conclusion irrespective of the determination made by the court below. Young v. Midwest Fam. Mut. Ins. Co., ante p. 385, 722 N.W.2d 13 (2006); Turco v. Schuning, 271 Neb. 770, 716 N.W.2d 415 (2006).
ANALYSIS
Procedural Matters
The motion to dismiss does not specify which of the defenses enumerated in rule 12(b) are asserted. From the narrative content of the motion, we construe it as asserting the defenses of failure to state a claim upon which relief can be granted, pursuant to rule 12(b)(6), and failure to join a necessary party, pursuant to rule 12(b)(7). Rule 12(b) provides that a motion asserting any of the enumerated defenses "shall be made before pleading if further pleading is permitted." The motion to dismiss in this case was filed after the filing of the answer and is therefore technically untimely. In construing our current pleading rules, we have looked to federal cases interpreting similar federal rules. See Weeder v. Central Comm. College, 269 Neb. 114, 691 N.W.2d 508 (2005). Generally, federal courts have considered the merits of untimely rule 12(b) motions if the defenses asserted therein were previously included in an answer. See, Litchfield Financial v. Buyers Source Real Estate, 389 F. Supp. 2d 80 (D. Mass. 2005); Puckett v. U.S., 82 F. Supp. 2d 660 (S.D. Tex. 1999); 5C Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1361 (3d ed. 2004 & Supp. 2006). Because the defenses asserted in the adoptive parents' motion to dismiss were previously asserted in their answer, the untimely filing of the motion does not preclude consideration of the merits. In addition, rule 12(h)(2) provides that the defenses of failure to state a claim upon which relief can be granted and failure to join necessary parties may be made in any pleading.
[3] According to rule 12(b), if on a motion to dismiss for failure to state a claim "matters outside the pleading are presented to and not excluded by the court," the motion shall be treated as one for summary judgment. See Wise v. Omaha Public Schools, 271 Neb. 635, 714 N.W.2d 19 (2006). However, a court may take judicial notice of matters of public record without converting a rule 12(b) motion to dismiss into a motion for summary judgment. Ferer v. Erickson, Sederstrom, ante p. 113, 718 N.W.2d 501 (2006). We therefore consider the judicially noticed filings from the previous proceedings in resolving the motion to dismiss.
Rule 12(b)(6) Defense
In her petition to vacate, Meaghan sought to set aside Kenten's adoption because her relinquishment "was obtained through fraud, threats, coercion and duress" and because her consent was obtained in violation of certain DHHS regulations and provisions of NICWA. Her petition specifically referenced § 43-1506(4), a NICWA provision which provides:
After the entry of a final decree of adoption of an Indian child in any state court, the parent may withdraw consent thereto upon the grounds that consent was obtained through fraud or duress and may petition the court to vacate such decree. Upon a finding that such consent was obtained through fraud or duress, the court shall vacate such decree and return the child to the parent. No adoption which has been effective for at least two years may be invalidated under the provisions of this subsection unless otherwise permitted under state law.
NICWA was enacted "to clarify state policies and procedures regarding the implementation by the State of Nebraska of the federal Indian Child Welfare Act, 25 U.S.C. [§] 1901 et seq." § 43-1502. The Legislature declared that "[i]t shall be the policy of the state to cooperate fully with Indian tribes in Nebraska in order to ensure that the intent and provisions of the federal Indian Child Welfare Act are enforced." § 43-1502. The NICWA provisions correspond closely to the ICWA that was enacted by Congress in 1978
to protect the best interests of Indian children and to promote the stability and security of Indian tribes and families by the establishment of minimum Federal standards for the removal of Indian children from their families and the placement of such children in foster or adoptive homes which will reflect the unique values of Indian culture, and by providing for assistance to Indian tribes in the operation of child and family service programs.
25 U.S.C. § 1902. Generally stated, the substantive portions of ICWA and the corresponding provisions of NICWA provide heightened protection to the rights of Indian parents, tribes, and children in proceedings involving custody, termination, and adoption.
[4] Applicability of these protective statutes depends on whether the proceedings involve an "Indian child." See In re Interest of J.L.M. et al., 234 Neb. 381, 451 N.W.2d 377 (1990). Pursuant to § 43-1503(4) and 25 U.S.C. § 1903(4), "Indian child means any unmarried person who is under age eighteen and is either (a) a member of an Indian tribe or (b) is eligible for membership in an Indian tribe and is the biological child of a member of an Indian tribe." Under Nebraska law, a party to a proceeding who seeks to invoke a provision of NICWA has the burden to show that the act applies in the proceeding. In re Interest of A.M., C.M., and L.M., 235 Neb. 506, 455 N.W.2d 572 (1990); In re Interest of J.L.M. et al., supra. For purposes of reviewing the juvenile court's disposition of the motion to dismiss, we must accept as true Meaghan's allegation that Kenten was enrolled as a member of the Iowa Tribe on June 25, 2003. Similarly, we assume the truth of the statement by the Iowa Tribe in its notice of intervention filed in the adoption proceeding that Kenten is an enrolled member.
Meaghan's allegation and the tribe's statement clearly establish that Kenten is an "Indian child" within the meaning of NICWA. But the critical issue in the instant case is not whether Kenten is an "Indian child," but, rather, when his status was established in these proceedings. The adoptive parents argue that because Kenten's status as an Indian child was established after the decree was entered, Meaghan has completely waived her rights under NICWA. Alternatively, they argue that Meaghan's action is untimely because no court action to invalidate the adoption occurred within 2 years of the date of the decree. We find both arguments to be unpersuasive.
In In re Interest of A.M., C.M., and L.M., supra, we held that the fact that notice was given to an Indian tribe prior to the entry of an order terminating parental rights was insufficient to make the provisions of NICWA applicable to the termination proceedings, where there was no other evidence of Indian child status. In In re S.B., 130 Cal. App. 4th 1148, 30 Cal. Rptr. 3d 726 (2005), Indian child status was established just prior to the final hearing in a termination of parental rights case and the court applied ICWA to that proceeding. However, the court rejected the biological mother's claim that prior orders entered in the case should be invalidated on the ground of noncompliance with notice provisions of ICWA. The court determined that the mother had waived the right to claim the protection of the statute by failing to assert and establish the children's Indian child status earlier despite her "superior access to this information." 130 Cal. App. 4th at 1160, 30 Cal. Rptr. 3d at 732.
Similarly, the court in State ex rel. Juv. Dept. v. Tucker, 76 Or. App. 673, 710 P.2d 793 (1985), held that where Indian child status was not established until 2 years after the child was placed in foster care and the court had no reason to know that the child was an Indian child at the time of placement, the placement could not be invalidated for failure to comply with ICWA. Colorado courts hold that until the party asserting the applicability of the Colorado ICWA establishes, on the record, that the child is an "Indian child," the ICWA is not applicable. In Interest of A.G.G, 899 P.2d 319 (Colo. App. 1995); People in Interest of A.E., 749 P.2d 450 (Colo. App. 1987).
[5] These cases establish that the provisions of ICWA and NICWA apply prospectively from the date Indian child status is established on the record. In this case, Kenten's status as an Indian child was established on the record when the Iowa Tribe entered its appearance in the adoption proceeding on October 8, 2003, 8 days after entry of the decree of adoption. We hold that NICWA applies prospectively from that date.
The adoptive parents argue that Meaghan may not rely on any provision of NICWA because Kenten's status as an Indian child was not established until after the entry of the decree. We agree that Meaghan may not rely upon NICWA provisions to challenge certain matters that were completed prior to the date Kenten's status was established on the record. In this action, Meaghan's consent to Kenten's relinquishment was completed on June 20, 2003. Kenten's Indian child status was not established on the record until October 8. Because NICWA applies only prospectively from the date it is established on the record, Meaghan may not now argue that her consent to Kenten's relinquishment is invalid because it was not obtained pursuant to the substantive provisions of § 43-1506(1).
However, Meaghan also seeks to set aside the decree of adoption on the basis that her consent was obtained through fraud and duress. This type of postdecree challenge is specifically authorized by § 43-1506(4). Meaghan therefore is entitled to assert the provisions of § 43-1506(4) in her petition to vacate, assuming her petition was timely filed.
The adoptive parents assert that Meaghan's fraud and duress challenge is untimely under the last sentence of § 43-1506(4), which provides: "No adoption which has been effective for at least two years may be invalidated under the provisions of this subsection unless otherwise permitted under state law." The adoptive parents contend that this language requires judicial action within the 2-year period and that because the decree was not invalidated within 2 years after its entry, it can never be invalidated under § 43-1506(4). They rely on three cases from other jurisdictions, none of which involve statutes similar to § 43-1506(4). See, Kellogg-Citizens Nat. Bank v. Francois, 240 Wis. 432, 3 N.W.2d 686 (1942); Lawson v. Hughes et al., 127 Or. 16, 256 P. 1043 (1928); Babbitt v. Hualde, 23 Ariz. 582, 206 P. 161 (1922).
The construction of § 43-1506(4) urged by the adoptive parents is both novel and incorrect. We read § 43-1506(4) to require that the petition to vacate be filed within 2 years from the date of the decree, not to require that the court actually invalidate the decree within the 2-year period. To construe the language otherwise would ignore the phrase "unless otherwise permitted under state law." Under general Nebraska adoption law, it is
conclusively presumed that the adoption and all instruments and proceedings in connection therewith are valid in all respects notwithstanding some defect or defects may appear on the face of the record, or the absence of any record of such court, unless an action shall be brought within two years from the entry of such decree of adoption attacking its validity.
Neb. Rev. Stat. § 43-116 (Reissue 2004). A party may challenge an adoption on the ground of fraud within the 2-year limitations period of § 43-116. See Hiatt v. Menendez, 157 Neb. 914, 62 N.W.2d 123 (1954). A parent of a non-Indian child thus clearly has 2 years from the date the adoption decree is entered to challenge the decree. Furthermore, ICWA provides:
In any case where State or Federal law applicable to a child custody proceeding under State or Federal law provides a higher standard of protection to the rights of the parent or Indian custodian of an Indian child than the rights provided under this subchapter, the State or Federal court shall apply the State or Federal standard.
25 U.S.C. § 1921. To construe § 43-1506(4) as establishing a more restrictive limitations period than that established by § 43-116 would be incongruent with this federal requirement, as well as the language of § 43-1506(4) itself.
We find no merit in the adoptive parents' argument that Meaghan waived the right to rely on § 43-116 in arguing that her petition to vacate states a claim upon which relief can be granted. Although Meaghan's petition to vacate specifically referenced only § 43-1506(4), the petition alleged that her consent to Kenten's relinquishment and ultimately to his adoption was obtained by fraud and duress. Such a claim based on common-law principles can be asserted within the 2-year limitations period stated in §§ 43-116 and 43-1506(4).
In their motion to dismiss, the adoptive parents alleged that "Kenten was never a member of an existing Indian family and therefore the Existing Indian Family Exception applies." They argue this as an alternative basis for affirming the judgment of dismissal. Some state courts have concluded that the purpose of ICWA is not served by applying it to children who have never been part of an existing Indian family, and these courts have thus declined to apply ICWA in situations where neither the child nor his parents have any significant contact with an Indian tribe. See, e.g., Rye v. Weasel, 934 S.W.2d 257 (Ky. 1996); Hampton v. J.A.L., 658 So. 2d 331 (La. App. 1995); Adoption of Crews, 118 Wash. 2d 561, 825 P.2d 305 (1992); In Interest of S.A.M., 703 S.W.2d 603 (Mo. App. 1986); In re Adoption of Baby Boy L., 231 Kan. 199, 643 P.2d 168 (1982). Other courts and commentators, however, argue that this judicially imposed "existing Indian Family" exception to ICWA is unwarranted, unjustified, and renders many of its provisions superfluous. See, e.g., In re Baby Boy C., 27 A.D.3d 34, 805 N.Y.S.2d 313 (2005); In re A.B., 663 N.W.2d 625 (N.D. 2003); Michael J., Jr. v. Michael J., Sr., 198 Ariz. 154, 7 P.3d 960 (Ariz. App. 2000); State in Interest of D.A.C., 933 P.2d 993 (Utah App. 1997). A number of jurisdictions have determined that the U.S. Supreme Court's decision in Mississippi Choctaw Indian Band v. Holyfield, 490 U.S. 30, 109 S. Ct. 1597, 104 L. Ed. 2d 29 (1989), weighs heavily against the adoption of the exception. See, e.g., In re Baby Boy C., supra; In re A.B., supra; Matter of Adoption of Baade, 462 N.W.2d 485 (S.D. 1990).
Nebraska's appellate courts have never decided whether to adopt the "existing Indian family" exception to ICWA and NICWA, and we need not do so in this appeal. Meaghan's petition to vacate the adoption on the ground that her consent was obtained through fraud and duress states a claim that is not time barred under either § 43-116 or § 43-1506(4). Thus, a determination that the exception applied would not affect the ultimate validity of her claim. We therefore do not reach any issue involving the existing Indian family exception.
Rule 12(b)(7) Defense
As another alternative basis for affirming the judgment of dismissal, the adoptive parents argue that Meaghan failed to join DHHS and the guardian ad litem in the prior juvenile proceeding as necessary parties. The juvenile court did not reach this issue.
[6,7] The presence of necessary parties to a suit is a jurisdictional matter and cannot be waived by the parties; it is the duty of the plaintiff to join all persons who have or claim any interest which could be affected by the judgment. Robertson v. School Dist. No. 17, 252 Neb. 103, 560 N.W.2d 469 (1997). An indispensable or necessary party to a suit is one whose interest in the subject matter of the controversy is such that the controversy cannot be finally adjudicated without affecting the indispensable party's interest, or which is such that not to address the interest of the indispensable party would leave the controversy in such a condition that its final determination may be wholly inconsistent with equity and good conscience. See Ruzicka v. Ruzicka, 262 Neb. 824, 635 N.W.2d 528 (2001).
We conclude that neither DHHS nor the guardian ad litem is a necessary party in this action. Although DHHS was Kenten's legal custodian immediately prior to the adoption, it relinquished Kenten for purposes of adoption. The juvenile court entered an order relieving DHHS of custody. Thus, DHHS has no present interest which could be affected by a judgment in this proceeding.
Although the adoptive parents argue that the guardian ad litem appointed in the prior juvenile proceeding is a necessary party in this action, they did not raise that issue in their motion to dismiss. In any event, we conclude that the previous guardian ad litem has no present interest which could be affected by a judgment in this proceeding.
CONCLUSION
For the reasons discussed, we conclude that the petition to vacate the decree of adoption states a claim upon which relief can be granted in that it alleges that Meaghan's consent was obtained by fraud or duress. The action to obtain such relief was timely filed and included all necessary parties. We reverse the judgment of the juvenile court and remand the cause for further proceedings consistent with this opinion.
REVERSED AND REMANDED FOR FURTHER PROCEEDINGS.
Wright, J., not participating. | 01-03-2023 | 10-30-2013 |
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<P><SPAN STYLE="font-size: 14pt"><STRONG><CENTER>TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN</STRONG></SPAN></CENTER>
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<STRONG><CENTER>NO. 03-9<A NAME="1">8</A>-00<A NAME="2">230</A>-CV</CENTER>
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<STRONG></STRONG><CENTER><A NAME="3">A.M.R. Limited Partnership</A>, Appellant</CENTER>
<BR WP="BR1"><BR WP="BR2">
<P><STRONG><CENTER>v.</CENTER>
</STRONG></P>
<BR WP="BR1"><BR WP="BR2">
<P><STRONG><CENTER><A NAME="4">The Texas Lottery Commission and the Attorney General </CENTER>
</STRONG></P>
<P><STRONG><CENTER>of the State of Texas</A>, Appellees</CENTER>
</STRONG></P>
<BR WP="BR1"><BR WP="BR2">
<BR WP="BR1"><BR WP="BR2">
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<SPAN STYLE="font-size: 11pt"><STRONG><CENTER>FROM THE DISTRICT COURT OF <A NAME="5">TRAVIS</A> COUNTY, <A NAME="6">53RD</A> JUDICIAL DISTRICT</CENTER>
</STRONG></SPAN>
<P><SPAN STYLE="font-size: 11pt"><STRONG><CENTER>NO. <A NAME="7">97-05102</A>, HONORABLE <A NAME="8">PAUL DAVIS</A>, JUDGE PRESIDING </STRONG></SPAN><STRONG></CENTER>
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<STRONG>PER CURIAM</STRONG>
<BR WP="BR1"><BR WP="BR2">
<P> Appellant A.M.R. Limited Partnership appeals from the trial court's summary
judgment in favor of appellees The Texas Lottery Commission and the Attorney General of the
State of Texas. Because appellant has failed to file a brief, we will dismiss the appeal for want
of prosecution. Tex. R. App. P. 38.8(a)(1), 42.3(b).</P>
<P> The Clerk of this Court filed the clerk's record in this cause on May 8, 1998.
Accordingly, appellant's brief was due on Monday, June 8, 1998. <EM>See</EM> <EM>id.</EM> 38.6(a)(1). By letter
dated June 22, 1998, the Clerk of this Court notified the parties that appellant's brief was overdue
and that the appeal was subject to dismissal unless appellant tendered a motion for extension of
time reasonably explaining the failure to file a brief. Thus far, appellant has submitted neither
a brief nor a motion for extension of time to file a brief.</P>
<P> Accordingly, we dismiss the appeal for want of prosecution on our own motion.
<EM>Id. </EM>42.3(b).</P>
<P> Appellees filed a Motion to Dismiss Appeal on June 18, 1998. Because this Court
dismisses the appeal for want of prosecution, appellees' motion to dismiss appeal is dismissed.</P>
<BR WP="BR1"><BR WP="BR2">
<P>Before Justices Powers, Kidd and B. A. Smith</P>
<P>Dismissed for Want of Prosecution</P>
<P>Filed: July 30, 1998</P>
<P>Do Not Publish</P>
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</HTML> | 01-03-2023 | 09-05-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/2861703/ | TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-97-00057-CV
Rehabilitation Facility at Austin, Inc. d/b/a The
Rehabilitation Hospital of Austin, Appellant
v.
Hazel Cooper, Appellee
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 353RD JUDICIAL DISTRICT
NO. 94-05873, HONORABLE PAUL R. DAVIS, JR., JUDGE PRESIDING
The Rehabilitation Facility at Austin ("the Hospital") appeals a judgment awarding Hazel
Cooper $1,235,000 plus pre- and post-judgment interest for injuries she sustained while at the Hospital.
We will affirm the trial-court judgment.
BACKGROUND
In early May 1992, Hazel Cooper was seventy-one years old and had rheumatoid arthritis
and osteoporosis. At that time, she could stand at a walker, and she could sit for roughly one to two hours
at a time. She could not, however, walk. Her son was able to transport her to the car, and she was able
to ride along with him on afternoon drives. Cooper had already had both hips replaced and thought her
difficulty walking was due to deterioration of her knee joints. On May 20, 1992, she consulted Steven
Tynes, M.D., who opined Cooper was a good candidate for knee-replacement surgery. The next day,
Cooper checked into the Hospital, a rehabilitation facility, to begin therapy to improve her mobility in
preparation for surgery. Over the next several days, two orthopedic surgeons evaluated Cooper and
concluded she was not a good candidate for knee-replacement surgery after all. Dr. Tynes then counseled
Cooper that she would have to establish rehabilitation goals other than regaining the ability to walk.
On May 31, 1992, while Cooper was still in the Hospital, nurses attempted to transfer her
from a bed to a wheelchair. During the transfer, Cooper experienced great pain, became nauseous and
sweaty, and "blacked out." Cooper remained in her wheelchair for some time and eventually, nurses
transferred her back to her bed. The nurses called Dr. Tynes, and administered oxygen and medication.
Several hours later, hospital personnel discovered two bones in Cooper's right leg were broken. The next
day, after Cooper complained of persistent pain in her left leg, hospital personnel discovered two bones
in her left leg were also broken. The nurses apparently broke both her legs when they transferred her from
the bed to the wheelchair.
Cooper spent the next two months in full leg casts. After her legs were broken, Cooper
was unable to stand even with a walker and could not sit for more than twenty minutes at a time. She had
to spend the rest of her time prone and was no longer able to enjoy afternoon drives with her son. She
experienced pain at the fracture sites and took medication to alleviate this problem. One witness testified
that because of Cooper's decreased mobility, her body began to deteriorate more quickly after the
accident. Furthermore, Cooper became depressed after the accident.
She sued Dr. Tynes for allegedly violating the Deceptive Trade Practices Act. See Tex.
Bus. & Com. Code Ann. §§ 17.41-.63 (West 1987 & Supp. 1998). Specifically, Cooper alleged Dr.
Tynes misrepresented her candidacy for knee-replacement surgery. She also alleged the Hospital and the
nurses negligently caused a different injury, her broken legs. Before trial, Cooper settled with Dr. Tynes
for $15,000. Cooper then amended her pleadings to dismiss her claims against Dr. Tynes, and she non-suited the nurses.
She went to trial against the Hospital alone on a negligence theory. The jury returned a
verdict in favor of Cooper for $1,250,000. The Hospital moved to reform the judgment, asserting it was
entitled to a credit for the $15,000 settlement Cooper reached with Dr. Tynes. Cooper agreed to the
credit without conceding the Hospital was entitled to it. The court then rendered judgment for Cooper in
the amount of $1,235,000 plus pre- and post-judgment interest.
The Hospital appeals in three points of error. First, the Hospital contends the trial court
erred in refusing to submit a proposed question to the jury. Second, the Hospital argues the evidence is
factually insufficient to support the award of damages. Finally, the Hospital argues the trial court erred by
denying one of its motions for continuance.
DISCUSSION
Charge Error
The Hospital asked the trial court to include the following question in the jury charge:
What percentage of the responsibility that caused the occurrence do you find to be
attributable to each of those named below? The percentage that you find must total 100%.
Responsibility attributable to any of those named below is not necessarily measured by the
number of acts or omissions found.
a. The Rehabilitation Hospital of Austin
b. Steven Tynes, M.D.
In its first point of error, the Hospital argues the trial court erred by refusing to submit the question. The
Hospital relies on Texas Rule of Civil Procedure 278 and section 33.003 of the Texas Civil Practice and
Remedies Code. See Act of June 3, 1987, 70th Leg., 1st C.S., ch. 2, § 2.07, 1987 Tex. Gen. Laws 37,
41 (Tex. Civ. Prac. & Rem. Code Ann. § 33.003, since amended). (1) Neither the rule nor the statute
required the court to submit the question under the circumstances of this case.
Rule 278 provides that "[t]he court shall submit the questions . . . which are raised by the
written pleadings and the evidence." Tex. R. Civ. P. 278. Cooper's Fifth Amended Petition, the live
pleading, did not allege any wrongdoing on Dr. Tynes's part, certainly not with respect to Cooper's broken
legs. The only legal theory Cooper asserted in her petition was that the Hospital and its employees
negligently broke her legs and caused other damages resulting from her physical injury. The Hospital's
answer does not accuse Dr. Tynes of negligently causing Cooper's accident. Furthermore, the evidence
adduced at trial did not raise the issue. The evidence concerning Dr. Tynes suggested only that he initially
encouraged Cooper to check into the hospital, saw her regularly in consultation for possible knee-replacement surgery, and assisted in treating Cooper after her legs were fractured. The evidence in no way
suggested he caused Cooper's legs to break or that he supervised the nurses who participated in the
botched bed-to-wheelchair transfer. Because neither the pleadings nor the evidence suggested any legal
theory upon which the jury could hold Dr. Tynes responsible for Cooper's broken legs, we hold Rule 278
did not require the trial court to submit the requested question.
The Hospital also argues section 33.003 of the Texas Civil Practice and Remedies Code
mandated submission of the question. See Act of June 3, 1987, 70th Leg., 1st C.S., ch. 2, § 2.07, 1987
Tex. Gen. Laws 37, 41 (since amended). Section 33.003 read as follows at the time pertinent to this case:
The trier of fact, as to each cause of action asserted, shall determine the percentage of
responsibility with respect to:
(1) each claimant;
(2) each defendant; and
(3) each settling person.
Id. The Hospital argues this statute mandated that the jury assess Dr. Tynes's responsibility for Cooper's
broken legs, despite that the live pleadings and the evidence did not allege or suggest that he was
responsible for the broken legs. We disagree.
First, the Hospital's interpretation of the statute would effectively require submission of the
issue of a settling person's responsibility even when Rule 278 does not. Nothing in section 33.003
contradicts Rule 278 or indicates that the legislature intended it to supersede Rule 278. We harmonize two
rules of law when possible. See U.S. Resources, Inc. v. Placke, 682 S.W.2d 403, 405 (Tex.
App.--Austin 1984, no writ). Reading the statute in conjunction with Rule 278, the settling person's
liability need be submitted to the jury only if the pleadings and evidence raise the issue of that person's
liability.
A 1995 amendment to the statute bolsters our interpretation. Effective September 1, 1995,
the legislature amended the section of the proportionate-responsibility statute entitled "Applicability" to
read:
(a) Except as provided by Subsections (b) and (c) [not applicable here], this chapter
applies to any cause of action based on tort in which a defendant, settling person,
or responsible third party is found responsible for a percentage of the harm for
which relief is sought.
* * *
(f) Nothing in this section shall require a submission to the jury of a question
regarding conduct by any party absent sufficient evidence to support the
submission.
Tex. Civ. Prac. & Rem. Code Ann. § 33.002(a), (f) (West 1997) (emphasis added). Although the
amendment did not apply to this case, it clarifies the legislature's original intent in enacting the statute. The
legislature apparently did not intend to require juries to assess responsibility when none was alleged or
proven.
The trial court did not err, therefore, in refusing to submit the requested question. We hold
neither Rule 278 nor section 33.003 of the Texas Civil Practice and Remedies Code required the jury to
assess the responsibility of Dr. Tynes, a settling person, for an injury he was not alleged in the pleadings
and evidence to have caused. Accordingly, we overrule point of error one.
Factual Sufficiency of the Evidence
The court charged the jury with determining the amount of money that would compensate
Cooper for her (1) physical pain and mental anguish, (2) reasonable expenses of necessary medical care,
and (3) physical impairment. The jury awarded the sum of $1,250,000, which the trial court reduced to
$1,235,000. The Hospital contends in point of error two that the award is not supported by factually
sufficient evidence.
In determining the factual sufficiency of the evidence, we review all the evidence and set
aside the finding only if the evidence is so weak it renders the finding clearly wrong and unjust. Cain v.
Bain, 709 S.W.2d 175, 176 (Tex. 1986). Our review of the testimony admitted at trial reveals the
following.
Before the accident, Hazel Cooper could sit for long periods of time, stand at a walker,
and go on outings with her son. She was motivated to improve her condition and had a positive attitude,
which was essential if any improvement was to take place. She made progress with physical therapy at
her home and she made more progress in the Hospital before the accident. Her prognosis for walking again
was poor, but she still had the ability to do some things for herself and hoped to do more. She clearly could
enjoy her life.
The evidence supports the conclusion that Cooper's life took a tragic turn for the worse
when the nurses transferred her from her bed to her wheelchair, breaking both her legs in the process.
First, she experienced extreme pain during the transfer from her bed to her wheelchair. She became
nauseated and sweaty and "blacked out." She was left unattended in the hall and later found slumped in
her wheelchair. Cooper waited several hours for hospital personnel to discover her right leg was broken.
Furthermore, Cooper suffered until the next day before hospital personnel found her left leg to be broken.
Clearly Cooper experienced pain and anxiety during this time, especially in light of the fact that she entered
the hospital to gain mobility and independence, not lose it.
Furthermore, the record suggests Cooper's ability to do things for herself severely
diminished as a result of her being in full leg casts for more than two months. Her bones and joints
deteriorated more quickly and she was in more pain. She could no longer go on rides with her son, and
she could not even sit upright for more than fifteen to twenty minutes at a time. She became depressed,
gained weight, and spent most of her time on her back. One doctor testified that her decreased mobility
decreased her chance of living as long as she might have had the accident not happened.
The Hospital suggests the damages are excessive in light of Cooper's limited mobility
before the accident. The Hospital also points to evidence that Cooper did not experience great pain after
the accident because she was given pain medication. This evidence does not outweigh the evidence that
the Hospital's negligence deprived Cooper of what little hope and independence she had before the
accident. In fact, the record supports the conclusion that the ability to stand, sit upright for long periods,
and leave her house were probably more important to Cooper than they would have been to a healthy
person, simply because of her condition. We hold the evidence is factually sufficient to support the award
on the bases of pain and mental anguish and physical impairment alone. We overrule point of error two.
Denial of Continuance
The parties agreed to set this case for trial the week of August 26, 1996. On August 16,
1996, the Hospital moved for a continuance because its lead counsel was busy representing another client
in a trial in another city. After a hearing, the court denied the motion. The Hospital re-urged its motion on
the day of trial. The court again denied the motion. The Hospital argues in point of error three that the
court erred in denying its motion for continuance.
In general, absence of counsel is not good cause for a continuance. See Tex. R. Civ. P.
253. The court does have the discretion, however, to allow a continuance if good cause is shown. Id. We
must decide, therefore, whether the court abused its discretion in denying the continuance. State of Texas
v. Crank, 666 S.W.2d 91, 94 (Tex.), cert. denied, 469 U.S. 833 (1984).
We conclude the court did not abuse its discretion. Although the Hospital's lead attorney
was unavailable for the August 26 setting, another attorney from the same law firm represented the Hospital
at trial. That attorney had signed pleadings and conducted discovery in this case before trial. Nothing in
the record suggests that attorney was incapable of rendering adequate representation. It is not an abuse
of discretion to deny a continuance under these circumstances. See, e.g., Echols v. Brewer, 524 S.W.2d
731, 734 (Tex. Civ. App.--Houston [14th Dist.] 1975, no writ).
The Hospital briefly argues the court's denial of the continuance violated the Hospital's
rights under the Fifth Amendment to the United States Constitution. See U.S. Const. amend. V. It is true
that the Fifth Amendment protections extend to civil matters and afford the right to choose a lawyer. See,
e.g., Texas Catastrophe Property Ins. Ass'n v. Morales, 975 F.2d 1178, 1181 (5th Cir. 1992).
However, the trial court did not infringe on the Hospital's right to choose an attorney when it denied the
continuance. The Hospital was still represented by the same firm, and as noted above, this case was tried
by a lawyer from that firm who had signed pleadings and conducted pretrial discovery. Consequently, we
hold the trial court did not violate the Fifth Amendment, and we overrule point of error three.
CONCLUSION
Having determined (1) the trial court did not err in refusing to submit the Hospital's
proposed jury question, (2) the court did not err in denying the Hospital's motion for a continuance, and
(3) the evidence is factually sufficient to support the award of $1,235,000, we affirm the judgment of the
trial court.
_____________________________________________
Jimmy Carroll, Chief Justice
Before Chief Justice Carroll, Justices Jones and Kidd
Affirmed
Filed: January 15, 1998
Publish
1. The legislature amended the statute in 1995; the pre-1995 version applied to this case.
the next day before hospital personnel found her left leg to be broken.
Clearly Cooper experienced pain and anxiety during this time, especially in light of the fact that she entered
the hospital to gain mobility and independence, not lose it.
Furthermore, the record suggests Cooper's ability to do things for herself severely
diminished as a result of her being in full leg casts for more than two months. Her bones and joints
deteriorated more quickly and she was in more pain. She could no longer go on rides with her son, and
she could not even sit upright for more than fifteen to twenty minutes at a time. She became depressed,
gained weight, and spent most of her time on her back. One doctor testified that her decreased mobility
decreased her chance of living as long as she might have had the accident not happened.
The Hospital suggests the damages are excessive in light of Cooper's limited mobility
before the accident. The Hospital also points to evidence that Cooper did not experience great pain after
the accident because she was given pain medication. This evidence does not outweigh the evidence that
the Hospital's negligence deprived Cooper of what little hope and independence she had before the
accident. In fact, the record supports the conclusion that the ability to stand, sit upright for long periods,
and leave her house were probably more important to Cooper than they would have been to a healthy
person, simply because of her condition. We hold the evidence is factually sufficient to support the award
on the bases of pain and mental anguish and physical impairment alone. We overrule point of error two. | 01-03-2023 | 09-05-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/67467/ | [DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR THE ELEVENTH CIRCUIT FILED
________________________ U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 08-12359 MAY 4, 2009
________________________ THOMAS K. KAHN
CLERK
D. C. Docket No. 06-00439-CV-4-SPM-WCS
EMPIRE INDEMNITY INSURANCE COMPANY,
Plaintiff-Appellant,
versus
ASHLEY WINSETT,
LINDSAY CARR,
CHRISTINA HARRIS,
MORGAN LYNCH,
ADAM LYNCH, et al.,
Defendants-Appellees.
________________________
Appeal from the United States District Court
for the Northern District of Florida
_________________________
(May 4, 2009)
Before BIRCH, DUBINA and WILSON, Circuit Judges.
PER CURIAM:
The Preserve at San Luis, LLC and The Housing Trust Group of Florida,
LLC (“Preserve”) were sued by Ashley Winsett and fifty-five other tenants
(“Renters”) who rented apartments at The Preserves in Tallahassee, Florida. The
Renters alleged, among other things, that the Preserve’s failure to build a vapor
barrier was both the direct and proximate cause of their mold-related damages and
injuries. That lawsuit has been settled.
What has not been settled, however, is the insurance coverage dispute
between Preserve and its insurance provider, Empire Indemnity Insurance
Company (“Empire”). Before the Renters’ lawsuit against Preserve was settled,
Empire sought a declaratory judgment that it did not owe a duty to defend and
indemnify Preserve. Empire asserted, among other things, that the insurance
policy that it issued to Preserve excluded coverage for the Renters’ mold claims.
Empire appeals the district court’s grant of summary judgment declaring that
Empire has a duty to defend and indemnify. It also appeals the court’s declaration
that Empire is liable for attorneys’ fees. For the reasons below, we reverse the
grant of summary judgment; vacate the declaration regarding attorneys’ fees; and
remand for further proceedings.
S TANDARD OF R EVIEW
2
We review de novo the district court’s grant of summary judgment. Lime
Tree Vill. Cmty. Club Ass’n v. State Farm Gen. Ins. Co., 980 F.2d 1402, 1405 (11th
Cir. 1993). Summary judgment is appropriate where “the pleadings, the discovery
and disclosure materials on file, and any affidavits show that there is no genuine
issue as to any material fact and that the movant is entitled to judgment as a matter
of law.” F ED. R. C IV. P. 56(c). “The interpretation of an insurance contract is also
a matter of law subject to de novo review.” LaFarge Corp. v. Travelers Indem.
Co., 118 F.3d 1511, 1515 (11th Cir. 1997) (per curiam).
D ISCUSSION
This is a diversity case in which Florida insurance law applies. We first
discuss the Renters’ mold claim. Then we briefly address the defenses raised by
Empire that the district court did not reach. Finally, we address attorneys’ fees.
A. Renters’ Mold Claim
Empire’s general liability insurance policy contained a mold provision
excluding coverage for the following:
a. “Bodily injury” or “property damage” which would not
have occurred, in whole or in part but for the actual,
alleged or threatened inhalation of, ingestion of, contact
with, exposure to, existence of, or presence of, any
“fungi” or bacteria on or within a building or structure,
including its contents, regardless of whether any other
cause, event, material or product contributed
concurrently or in any sequence to such injury or
3
damage.
b. Any loss, cost or expenses arising out of the abating,
testing for, monitoring, cleaning up, removing,
co n tain in g , treatin g , d eto xifying, neutralizin g ,
remediating or disposing of, or in any way responding to,
or assessing the effects of, “fungi” or bacteria, by any
insured or by any insured or by any other person.
This exclusion does not apply to any “fungi” or bacteria
that are, are on, or are contained in, a good or product
intended for consumption.
(Dist. Ct. Doc. 54-2).
Empire argues that the district court erred twice, first, by applying Florida’s
efficient proximate cause doctrine to the policy and, second, by disregarding the
policy’s plain language against applying the doctrine and rendering the mold
exclusion meaningless. Preserve responds that the doctrine applies. It argues that
the district court properly found that the mold, the allegedly excluded cause, is
dependent on the negligent failure to construct a vapor barrier, a covered cause.
Preserve argues that because the negligent failure to construct a vapor barrier
caused the mold, Empire has a duty to defend and indemnify.
Preserve’s argument accurately illustrates how the efficient proximate cause
doctrine works in Florida. The efficient proximate cause is “the one that sets
others in motion.” Hartford Accident & Indem. Co. v. Phelps, 294 So. 2d 362, 364
(Fla. 1st Dist. Ct. App. 1974). If the efficient proximate cause is covered, then the
4
claim for damages will be covered even if the other causes are not covered. See id.
But “the efficient cause doctrine cannot be incorporated into an insurance
policy if doing so would render part of the policy meaningless.” Arawak Aviation,
Inc. v. Indem. Ins. Co. of N. Am., 285 F.3d 954, 958 (11th Cir. 2002). Under
Florida law, “insurance contracts must be construed in accordance with the plain
language of the policy.” Swire Pac. Holdings, Inc. v. Zurich Ins. Co., 845 So. 2d
161, 165 (Fla. 2003). “[I]f a policy provision is clear and unambiguous, it should
be enforced according to its terms whether it is a basic policy provision or an
exclusionary provision.” Taurus Holdings, Inc. v. U.S. Fid. & Guar. Co., 913 So.
2d 528, 532 (Fla. 2005).
However, “[i]f the relevant policy language is susceptible to more than one
reasonable interpretation, one providing coverage and [] another limiting coverage,
the insurance policy is considered ambiguous.” Auto-Owners Ins. Co. v. Anderson,
756 So. 2d 29, 34 (Fla. 2000). “Exceptions to coverage in an insurance policy are
strictly construed against the insurer and any doubt or ambiguity is resolved in
favor of the insured.” Hartford, 294 So. 2d at 364.
Here, the district court agreed with Preserve that the negligent failure to
build a vapor barrier was the efficient proximate cause of the mold. It noted that
the failure to build a vapor barrier was a covered cause. It thus concluded that
5
Empire had a duty to defend and indemnify even though the policy excluded
coverage for injury or damage caused by mold.
The district court, however, overlooked the policy’s unambiguous language
against applying the efficient proximate cause doctrine to mold claims. Preserve
denies that the language is unambiguous because the mold exclusion does not
expressly prohibit coverage when damage is the result of causes dependent on each
other. We disagree with Preserve. The policy plainly excludes coverage for mold
“regardless of whether any other cause, event, material or product contributed
concurrently or in any sequence to such injury or damage.” (Dist. Ct. Doc. 54-2 at
30). By the plain language “in any sequence,” the policy was written to exclude
applying the efficient proximate cause doctrine. Overlooking that plain language,
the district court erroneously concluded that the efficient proximate cause doctrine
applies and triggers Empire’s duty to defend and indemnify Preserve.
Accordingly, we reverse the district court’s grant of summary judgment.
B. Empire’s Other Defenses
The district court did not reach Empire’s other defenses to the Renters’
claims. The court properly recognized that, under Florida law, “[w]here the
complaint contains allegations partially within and partially outside the scope of
coverage, [Empire would be] required to defend the entire suit.” Tropical Park,
6
Inc. v. U.S. Fid. & Guar. Co., 357 So. 2d 253, 256 (Fla. 3d Dist. Ct. App. 1978).
In reversing the district court’s declaratory judgment that Empire has a duty to
defend and indemnify Preserve based on the Renters’ mold claims, we do not reach
Empire’s other defenses. On remand, the district court will have the opportunity to
rule on them in the first instance.
C. Attorneys’ Fees
The district court concluded that Preserve is entitled to attorneys’ fees under
under Florida law. Florida law makes an insurer liable for trial and appellate
attorneys’ fees “[u]pon the rendition of a judgment or decree by any of the courts
of this state against an insurer and in favor of any named . . . insured . . . .” F LA.
S TAT. § 627.428(1). Since we reverse the district court’s grant of summary
judgment, we vacate the district court’s declaratory judgment that Preserve is
entitled to attorneys’ fees. The outcome of further proceedings will resolve which
party, if any, should be liable for attorneys’ fees.
C ONCLUSION
We would agree with Preserve that Empire had a duty to defend and
indemnify if the efficient proximate cause doctrine applied here. But according to
the policy’s unambiguous language, it does not. Therefore, we REVERSE the
district court’s grant of summary judgment; VACATE its declaratory judgment
7
that Preserve is entitled to attorneys’ fees; and REMAND for further proceedings
consistent with this opinion.
8 | 01-03-2023 | 04-26-2010 |
https://www.courtlistener.com/api/rest/v3/opinions/67574/ | [DO NOT PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FILED
FOR THE ELEVENTH CIRCUIT U.S. COURT OF APPEALS
________________________ ELEVENTH CIRCUIT
JUNE 23, 2009
No. 08-17001 THOMAS K. KAHN
Non-Argument Calendar CLERK
________________________
D. C. Docket No. 08-03514-CV-TWT-1
DAVID CHARLES SUTTON,
Plaintiff-Appellant,
versus
DISTRICT ATTORNEY’S OFFICE,
of Gwinnett Superior Court,
STATE OF GEORGIA,
et al,
Defendants-Appellees.
________________________
Appeal from the United States District Court
for the Northern District of Georgia
_________________________
(June 23, 2009)
Before BIRCH, HULL and KRAVITCH, Circuit Judges.
PER CURIAM:
Plaintiff-appellant David Charles Sutton, a prisoner proceeding pro se,
appeals the district court’s sua sponte dismissal without prejudice of his Petition
for Injunctive Relief pursuant to 28 U.S.C. § 1915(g). For the following reasons,
we affirm.
Section 1915(g), the three strikes provision, bars a prisoner, who has filed
three or more complaints that have been dismissed as frivolous or malicious or for
failure to state a claim, from filing a complaint in forma pauperis, unless the
prisoner is “under imminent danger of serious physical injury.” On appeal, Sutton
does not dispute that he has more than three strikes under section 1915(g). Sutton,
therefore, may not bring his action in forma pauperis unless he sufficiently alleges
that he is under imminent danger of serious physical injury. See Brown v.
Johnson, 387 F.3d 1344, 1349-50 (11th Cir. 2004) (holding that complaint
sufficiently alleged imminent danger of serious physical injury where prisoner
asserted that he was in danger of more serious afflictions if he continued to not be
treated for his HIV and hepatitis).
Sutton filed his Petition for Injunctive Relief in forma pauperis, alleging that
during his 1997 criminal trial, the District Attorney’s Office of Gwinnett Superior
Court, the State of Georgia, and unnamed additional defendants wrongfully
2
withheld evidence which Sutton alleged would have been favorable to his defense.
It is uncontested that the Petition did not allege that Sutton was in any imminent
danger of serious physical injury. Accordingly, after taking judicial notice of the
five prior cases filed by Sutton which were dismissed as frivolous, the district court
properly dismissed the Petition pursuant to the “three strikes” provision of
28 U.S.C. § 1915.
In his brief on appeal, Sutton provides no argument regarding the district
court’s dismissal pursuant to § 1915(g), opting instead to argue the merits of his
underlying complaint. After commencing his appeal, however, Sutton submitted
an “Affidavit of Indigency,” in which he asserted that he is “in imminent physical
danger of growing older and is in grave danger of perhaps dying here in this prison
system.” He also asserted that his allegedly “illegal sentence and conviction” has
“endanger[ed his] physical health” by “causing him stress, anxiety, depression, and
further his life is deteriorating here inside this Georgia state prison for no reason at
all.” We conclude that these types of general assertions, even construed liberally,
are “insufficient to invoke the exception to § 1915(g) absent specific fact
allegations of ongoing serious physical injury, or of a pattern of misconduct
evidencing the likelihood of imminent serious physical injury.” Brown, 387 F.3d
at 1350 (citing Martin v. Shelton, 319 F.3d 1048, 1050 (8th Cir. 2003)). Thus, we
3
agree with the district court that Sutton has failed to establish that he is entitled to
the imminent danger exception to the three strike rule and we AFFIRM the district
court’s judgment.
4 | 01-03-2023 | 04-26-2010 |
https://www.courtlistener.com/api/rest/v3/opinions/65347/ | 564 F.3d 719 (2009)
In the Matter of: Elvin L. MARTINEZ, Debtor.
United States of America, Appellee-Cross-Appellant,
v.
Elvin L. Martinez, Appellant-Cross-Appellee.
No. 07-31163.
United States Court of Appeals, Fifth Circuit.
April 3, 2009.
*722 Francesca Ugolini Tamami (argued), John M. Bilheimer, Michael J. Haungs, U.S. Dept. of Justice, Tax Div., App. Section, Washington, DC, for U.S.
Eric Joseph Derbes, Albert J. Derbes, IV (argued), Melanie Mabile Mulcahy, The Derbes Law Firm, Metairie, LA, for Martinez.
Before REAVLEY, BARKSDALE and GARZA, Circuit Judges.
REAVLEY, Circuit Judge:
This appeal presents questions of a limitation bar to income tax adjustments for limited partnerships and the effectiveness of extensions executed by the tax matters partner. Debtor Elvin L. Martinez seeks to avoid tax liabilities associated with various partnerships for the years 1987 through 1993, which he contends were discharged in his personal bankruptcy because the Internal Revenue Service (IRS) failed to assess the taxes within the three-year limitations period for doing so. The issue on appeal is whether the limitations period was tolled by actions of the tax matters partner, Walter J. Hoyt, III. The bankruptcy court determined that for the years 1990 to 1993 Hoyt's challenge to the taxes in the tax court precluded the IRS from assessing any tax until completion of those proceedings, and therefore the later assessments for those years were not filed outside the limitations period, and Martinez's liabilities were not discharged. For the years 1987 to 1989, however, the court *723 determined that Hoyt's consents on behalf of the partnership to extend the limitations period were invalid because Hoyt had a disabling conflict of interest of which the IRS was aware, and therefore Martinez's tax liabilities were discharged in bankruptcy. Martinez and the Government cross appeal from the district court's order affirming the bankruptcy court. We AFFIRM the district court's judgment with respect to the years 1990 to 1993, but we REVERSE with respect to the years 1987 to 1989.
I.
Beginning in the 1970s Walter J. Hoyt, III, formed scores of limited partnerships, ostensibly to engage in the business of breeding cattle and sheep. Although the partnerships owned real livestock, they actually served as abusive tax shelters from which individual tax savings could be achieved through partnership deductions and losses. Hoyt promoted the partnerships to investors around the country, much to his personal gain.
The partnership interests consisted of "units" purchased by investors with cash and promissory notes. The partners also used notes to buy the cattle from Hoyt's family-run cattle operation, which then acted as manager of the herds. The cattle purportedly would produce calves, which could be sold to cover the partnership costs. The herds would also increase in size through the purchase of additional mature cattle. Partnership losses and credits would be passed through to the individual partners to reduce their personal tax liabilities to zero and to obtain tax refunds. The refunds were used to cover the cost of the investors' investment and to make payments on the promissory notes. Hoyt was the general partner and prepared all of the tax returns for both the partnerships and most of the individual partners through his tax preparation firm.
Since 1980, the IRS and other government agencies had been investigating Hoyt's partnerships because of the suspicion that Hoyt routinely overvalued the cattle in order to achieve excessive depreciation, overstated the number of cattle in existence, and commingled the herd among the different partnerships. In 1989 the IRS unsuccessfully challenged Hoyt's partnerships in Bales v. Commissioner,[1] where the tax court held that the partnerships were not shams and that the individual partners were entitled to claim their allowable share of partnership losses. The IRS conducted criminal investigations of Hoyt from April 1984 to August 1987, and from July 1989 to October 1990. In each case the Government decided not to prosecute Hoyt. Hoyt was also investigated from August 1993 to October 1993 and again in September 1995, but each investigation ended without a prosecution. The Government was unable to prevail against Hoyt until 2001, when he was convicted of conspiracy, mail fraud, bankruptcy fraud, and money laundering in connection with partnership activities.
Debtor Martinez became an investor and partner with Hoyt in 1985 and remained involved in four partnerships until 1994. Hoyt was the designated tax matters partner for all of the partnerships and acted accordingly as liaison with the IRS in administrative and litigation proceedings on tax matters concerning the partnerships.[2] Beginning in 1988, the IRS sent numerous notices to Martinez about its concerns with Hoyt's activities and the claimed deductions and losses on partnerships *724 returns. The notices stated the IRS's belief that purported tax shelter deductions and/or credits were not allowable and that, if claimed, the IRS planned to disallow them. The notices also informed Martinez that the Internal Revenue Code provided for penalties against partners for negligence, overvaluation, and understatement of income on partnership returns, and that if Hoyt claimed the deductions and credits Martinez might wish to seek an adjustment himself. The IRS also sent several notices in 1992 informing Martinez of problems with claimed deductions for passive losses that Hoyt advocated, and it suggested that Martinez might wish to file an amended personal return or consult with an accountant or attorney. Martinez did not respond to the IRS's notices and instead forwarded them to Hoyt.
Generally, when the IRS disagrees with a partnership's claim on a return it has three years in which to audit the return and issue a deficiency notice, known as a Notice of Final Partnership Administrative Adjustment.[3] The period for the tax assessment is then extended for one year after the adjustment.[4] In the instant case, the IRS disagreed with Hoyt's partnership returns for the tax years 1987 to 1989 but was unable to issue timely adjustments. Hoyt, acting as the tax matters partner, granted the IRS extensions of the three-year limitations period, however. The validity of the subsequent adjustments hinges on the validity of the extensions.
The extensions were signed from February 1991 to March 1993. Hoyt granted the first extension of the limitations period for 1987 because an IRS team was already conducting an audit for the years 1980-1986, and he wished to delay the 1987 audit until the earlier examination was complete. In December 1991 the IRS then asked Hoyt to agree to a second extension. It believed that without that extension it would have to close its audit and issue adjustments with blanket disallowances of all claimed deductions, but it wished to avoid that circumstance and wanted to obtain further documentation from Hoyt.
At about the same time that it asked for the extension, the IRS also informed Hoyt that it was considering assessing preparer penalties against him. Hoyt responded that he would grant the extensions to issue the adjustments if the IRS would agree to extend the limitations period for assessing the preparer penalties. The IRS finally agreed as part of a settlement in other litigation involving Hoyt's partnerships occurring in federal court in Oregon, where the IRS was seeking to conduct a physical headcount of the cattle. Hoyt agreed to the extensions and gave the IRS until December 31, 1993, to issue the adjustments for the 1987 to 1989 tax years. The IRS issued them before that deadline.
For the tax years 1990 to 1993, the IRS did not need any extensions and issued timely adjustments disagreeing with Hoyt's partnership returns. Hoyt challenged all of the adjustments from 1987 to 1993 by filing petitions in the tax court contesting them. Those challenges were still being litigated at the time the instant action was filed.
In August 2002 Martinez filed a Chapter 7 bankruptcy petition. The bankruptcy court issued a discharge, and the case was closed. The IRS subsequently sent notices of tax deficiency to Martinez for the years 1987 through 1993 in connection with improperly claimed deductions from his membership in Hoyt's partnerships. Martinez then reopened the bankruptcy case in *725 October 2003 to claim that all of his tax liabilities had been discharged. Martinez's theory was that Hoyt had acted under a disabling conflict of interest when, as tax matters partner, Hoyt granted the IRS extensions of the limitations period for the 1987 to 1989 tax years and when he challenged the IRS's adjustments in the tax court for the 1990 to 1993 tax years. He reasoned that any taxes sought by the IRS were therefore no longer assessable and had been discharged by the bankruptcy proceeding.
After a two-day trial, the bankruptcy court issued a decision separately analyzing the two time periods. First, with respect to 1990 to 1993, the court held that the IRS issued valid adjustments, which Hoyt then challenged by filing timely tax court petitions. Once those petitions were entered on the tax court docket, said the court, the IRS was statutorily precluded from assessing a tax until the conclusion of the tax court proceedings, regardless of any alleged conflict of interest. Because those proceedings were still pending, the court held that the limitations period had been tolled and the tax liabilities for 1990 to 1993 were not discharged.
Second, with respect to 1987 to 1989, the bankruptcy court held that the taxes were no longer assessable and were discharged because when Hoyt had signed the extensions of the limitations period he had a disabling conflict of interest and had breached his fiduciary duty to his partners as the tax matters partner. The court found that internal IRS documents showed that Hoyt was committing fraud and deceiving his partners through his control over all aspects of the partnerships and tax documents. Hoyt's activity included preparing individual partner tax returns reflecting partnership losses when there were problems with shortages of cattle inventory and overvaluation of cattle. The court noted that the IRS was considering imposing return preparer penalties on Hoyt in December 1991 at the same time that it asked Hoyt to sign the extension of the limitations period for the 1987 to 1989 tax years. The court also found that Hoyt attempted to extract a quid pro quo for his agreement to sign the extensions because he conditioned the extensions on the IRS agreeing to extend the limitations period for the assessment of preparer penalties. The court referred to the transcript from the Oregon district court proceedings where Hoyt consented to the extension after the IRS agreed to forbear assessing preparer penalties until the adjustments issued. Finally, the court concluded that Hoyt was attempting to stall the IRS investigations and the issuance of the adjustments, and it noted that the IRS was concerned about issuing them without obtaining extensions. The court concluded that a delay benefitted Hoyt personally but was contrary to the interests of the partners. The court held that Hoyt was not acting in the interests of his partners when dealing with the IRS, and the extensions of the limitations period were therefore invalid because the IRS knew of the conflict. Because the extensions were invalid, the court held that the limitations period had run and the taxes for 1987 to 1989 were not properly assessable after Martinez filed the bankruptcy petition and were discharged.
Martinez and the Government cross appealed to the district court, which affirmed the bankruptcy court's decision. Both parties now cross appeal to this court.
II.
We review a district court's affirmance of a bankruptcy court decision by applying the same standard of review to the bankruptcy court decision that the district *726 court applied. In re OCA, Inc.[5] "We thus generally review factual findings for clear error and conclusions of law de novo."[6]
Ordinarily, a discharge in bankruptcy does not apply to certain specified tax debts.[7] The bankruptcy court held, and we agree, that these non-dischargeable tax debts include taxes that are still assessable after the commencement of the bankruptcy petition, including those taxes for which a tax court case was pending at the time of the bankruptcy filing.[8] The question therefore is whether Martinez's tax liabilities for all years at issue, 1987 to 1993, were still assessable at the time he filed his bankruptcy petition in 2002. That question requires reference to the tax laws governing partnerships.
The partnerships at issue are subject to the Tax Equity Fiscal Responsibility Act of 1982 (TEFRA), which prescribes the administrative and litigation procedures for addressing partnership tax issues.[9] Under TEFRA, partnerships file informational returns showing partnership income, gains, losses, deductions, and credits, while individual partners report their pro rata share of tax on individual returns. Weiner v. United States.[10] Items which are more appropriately determined at the partnership level than at the individual partner level are treated as "partnership items" for tax treatment at the partnership level, and all other items are treated as nonpartnership items.[11]
While dealing with partnership items, the IRS generally consults with the partnership's tax manager, who is typically designated by the partners and has the authority in most instances to bind the partnership.[12] When proposing adjustments to taxes at the partnership level as a result of an audit, the IRS issues a notice of adjustment, which is the equivalent of a statutory notice of deficiency given to an individual.[13] The IRS has three years from the later of (1) the date the partnership return is filed or (2) the date that the partnership return is due, to issue an adjustment for a given tax year.[14] This *727 three-year period may be extended, however, by agreement between the IRS and the tax matters partner.[15]
After the IRS issues an adjustment, the tax matters partner has 90 days to seek a readjustment by filing a petition in the tax court, the Court of Federal Claims, or a United States district court.[16] When a petition is filed in tax court, the limitations period for assessing a tax is suspended until the decision of the tax court becomes final and for one year thereafter.[17]
III.
With these background principles in mind, we address first Martinez's appeal before turning to the Government's cross appeal. Martinez appeals the district court's decision to affirm the bankruptcy court concerning the tax years 1990 to 1993. He contends that although Hoyt filed tax court petitions challenging the IRS's adjustments for 1990 to 1993, Hoyt had a serious conflict of interest with his partners that barred him from acting on behalf of the partnership. He reasons that the 1990 to 1993 petitions were therefore invalid and did not toll the limitations period for assessing taxes for those years. Because the limitations period had run by the time he filed his bankruptcy petition, Martinez contends that his tax liability for those years was discharged. We have little trouble disposing of this part of the case.
As noted above, the three-year statute of limitations for assessing a tax attributable to partnership items is suspended when a tax court petition is filed.[18] What is more, once a tax court proceeding has begun the IRS is expressly prohibited by statute from assessing a tax until the decision of the tax court becomes final.[19] This statutory scheme provides no room for Martinez's argument, as he does not contest that the IRS issued timely adjustments or that Hoyt filed timely challenges in the tax court. Once Hoyt invoked the tax court process to contest the adjustments, the limitation period was suspended until that process was concluded, regardless of the validity of Hoyt's status as tax matters partner or the existence of any deficiency in the petitions. We are not the first court to so hold.
The Ninth Circuit has similarly held that a tax assessment was not barred by the limitations period where a tax matters *728 partner filed a tax petition on behalf of a partnership at the time that his status was a legal nullity due to his previously filing a personal bankruptcy petition. O'Neill v. United States.[20] Although the tax court later dismissed the petition for lack of jurisdiction, the Ninth Circuit held that the petition "served to suspend the limitation period because there was an existing unresolved matter before the Tax Court."[21] The Ninth Circuit followed the reasoning of a Second Circuit case that addressed a predecessor tax provision and concluded that a petition placed on the docket of the Board of Tax Appeals suspended the limitations period even though the petition was later determined to have a jurisdictional defect. See Am. Equitable Assurance Co. v. Helvering.[22]
Although Martinez argues that O'Neill and American Equitable are distinguishable because they did not involve a tax manager's alleged conflict of interest, their reasoning is applicable. Whether a tax matters partner actually has a disabling conflict of interest when he files tax petitions would by necessity be an issue addressable by the tax court when considering the petitions. But because the IRS may not assess a tax while the tax court proceedings are pending, see § 6225(a), under Martinez's theory, the IRS could be barred from assessing a properly owed tax merely if the tax court is fortuitously unable to adjudicate the petition before the limitations period has run. We agree with the Ninth Circuit that "this is not what Congress intended."[23] We therefore conclude that the bankruptcy court and the district court properly determined that the limitations period was tolled for the 1990 to 1993 tax years, and Martinez's tax liability for those years was therefore not discharged in the bankruptcy proceeding.
IV.
We turn now to the Government's cross appeal. The Government challenges the determination below that Hoyt was acting under a disabling conflict of interest that rendered invalid the extensions for the limitations period on the 1987 to 1989 tax years. We have not previously addressed whether a conflict between a tax matters partner and the remaining partners may disable the tax manager's actions with respect to the partnership and, if so, the parameters of such a conflict. We agree with other circuits that have addressed the matter and determine that there may be times when a tax matters partner's actions beneficial to himself are so contrary to the interests of the partnership that they are rendered null with respect to the partners. But we hold that under the circumstances present the court should not burden the IRS with a decision so as to nullify actions taken with the tax matters partner.
It is settled law that a tax matters partner owes a fiduciary duty to his partners.[24] In light of this fiduciary duty, *729 other circuits have held that when he has a severe conflict of interest with his partners that is known to the IRS, he may not bind the individual partners and the partnership by his dealings with the Government.[25]
The tax matters partner "is the central figure of partnership proceedings" and "serves as the focal point for service of all notices, documents and orders on the partnership."[26] He is required to keep the remaining partners informed of administrative and judicial proceedings, and his actions may be binding on the partnership.[27] He serves as the representative of all partners vis-á-vis the IRS.[28] As explained by the tax court, "[t]he detailed statutory procedures for partnership level audits and litigation contemplate the continual presence of one tax matters partner, and the procedures cannot operate unless the tax matters partner is capable of acting on the partnership's behalf regardless of his personal tax posture."[29] If the tax manager's fiduciary duty to his partners is compromised by a conflict with his own tax situation, his actions are properly voided in order to protect those partner and partnership interests otherwise served by him.[30]
We are unpersuaded by the Government's contention that because Treasury regulations governing the designation and removal of a tax matters partner do not specify that a conflict of interest is a reason for removing him, deference to the regulations makes it improper to hold that the IRS may not rely on a conflicted tax manager's grant of an extension of the limitations period.[31] The Internal Revenue Code grants the Secretary authority to promulgate regulations that serve the efficient administration of the tax laws.[32] But the absence of a specific regulation addressing conflicts of interest does not mean that a tax matters partner's actions may bind the partnership irrespective of a conflict. We agree with the Second Circuit that "[t]he elimination of conflicts, even if not addressed in the existing regulations, is surely an appropriate concern to the effective and efficient administration of the tax laws."[33] Thus, "where serious conflicts exist, a [tax matters partner] may be barred from acting on behalf of the *730 partnership,"[34] and we may not ignore an egregious situation and defer to the IRS the discretion to choose whether to rely on a tax matters partner's position that is known to be adverse to that of the partnership.
The Second Circuit was addressing such a conflict in Transpac Drilling. The court there found that a disabling conflict of interest invalidated three tax managers' consents to extend the limitations period even though the IRS chose not to exercise its regulatory authority to remove the tax matters partners. In that case, the IRS was conducting civil audits of multiple partnerships as illegitimate tax shelters at the same time that there were ongoing criminal investigations of the partnerships' promoter and three tax matters partners.[35] The IRS initially sought extensions of the statute of limitations for the civil audits from the limited partners, who refused to grant the extensions.[36] The IRS then requested the extensions from the tax managers, who knew that they were being investigated and who were also cooperating with the Government in its case against the promoter.[37] The tax managers granted the extensions. The Second Circuit held that the extensions were invalid because the criminal investigations gave the tax matters partners "powerful incentive to ingratiate themselves to the government" and created "overwhelming pressure... to ignore their fiduciary duties to the limited partners."[38] The court found "especially disquieting" the fact that the IRS knew the limited partners did not want to grant extensions before it asked the tax managers to give it what the partners had already denied.[39]
The Second Circuit subsequently clarified that its holding in Transpac Drilling was based on the presence of a clear and actual conflict. Madison Recycling Assocs. v. Comm'r.[40] In Madison Recycling, the court found no disabling conflict of interest where there was no evidence that the tax matters partner had incentive to ingratiate himself to the IRS, either because he was a prospective witness seeking immunity or was a known target of a criminal investigation.[41] The court concluded that unless the tax matters partner was aware of the existence or prospect of a criminal investigation, it could not see how his personal concerns could have influenced him and prevented the proper discharge of his fiduciary duties to the limited partners.[42] Thus, a disabling conflict of interest will be shown only when the tax matters partner has cause to prefer his own interests above his fiduciary duties, and the IRS knows that his actions are more than likely contrary to the wishes and interests of the limited partners.
In the instant case, we find that the circumstances do not support a similar finding that Hoyt acted under a disabling conflict when he granted the extensions to the IRS. Unlike Transpac Drilling, where the "facts of the matter [spoke] for themselves," here the same sort of overwhelming circumstances and knowledge by the IRS that made inescapable a finding of *731 a conflict are absent.[43] There is no indication that the IRS attempted to obtain extensions from the partners before turning to Hoyt, or that the partners were opposed to the extensions. Hoyt was also not under criminal investigation at the time that he executed the extensions of the limitations period. Although he had been under criminal investigation earlier, that fact alone does not create a disabling conflict.[44] Moreover, there is no indication that when he granted the extensions Hoyt feared another criminal investigation, and there is no evidence of Hoyt's thought process that would indicate a desire to "ingratiate [himself] to the government."[45]
The bankruptcy court held that Hoyt was operating under a disabling conflict of interest for three reasons. It inferred from each that Hoyt was not acting in the interests of his partners when dealing with the IRS and that the IRS knew this fact. First, the court found that Hoyt was defrauding his partners. The court cited internal IRS memoranda detailing Hoyt's fraudulent accounting practices, including the overvaluation of cattle and over counting of the livestock. The documentation does show that the IRS viewed Hoyt's partnerships and accounting practices as mere shams to perpetuate his cattle operations and fraudulently avoid taxes. Many of the documents cited by the court, however, predated or were close in time to the tax court's decision in Bales. In that case, the IRS challenged, inter alia, Hoyt's depreciation methods and his valuation of cattle, as well as the partners' ability to claim deductions for partnership losses on their returns.[46] The tax court rejected the IRS's position and concluded that the cattle partnerships were profit-seeking businesses rather than economic shams and that the partners were permitted their allowable share of partnership items and losses.[47] Although Hoyt may ultimately have defrauded his partners and the IRS in connection with the partnerships, at the time that the IRS was seeking the extensions in this case, it had already been rebuffed in its effort to prove this fact. Testimony at trial revealed that the IRS believed the Bales case had partly legitimized Hoyt's operations and affected how it viewed the case. Although it believed the partnerships were shams, the IRS also believed as a direct result of Bales that it had to obtain much stronger evidence to perform a successful audit. It is therefore not obvious that the IRS should have known at the time of the extensions that Hoyt had a disabling conflict with respect to the partnerships at issue in this case.
The bankruptcy court noted that on December 12, 1991, the IRS notified Hoyt that it was considering imposing return preparer penalties for willful or reckless conduct. This notice to Hoyt concerned returns for the 1989 and 1990 tax years and was almost two years after the Bales decision. It is not clear, however, that the potential for assessment of preparer penalties on Hoyt tainted Hoyt's grant of an extension of the limitations period. We do not think the mere risk of preparer penalties in this case, unlike say an indictment, provided the kind of "powerful incentive" for Hoyt to act contrary to his partners' *732 interest. We do not hold that a threat of penalties may never cause a conflict between a TMP and his partners. But here Hoyt had been battling the IRS for over a decade and had previously prevailed in Bales. It is therefore not apparent that the IRS viewed its threat of penalties, apart from a criminal investigation, as causing overwhelming pressure for Hoyt to ignore his fiduciary duties.
The bankruptcy court's second basis for finding a disabling conflict was that Hoyt attempted to extract a quid pro quo from the IRS in connection with the preparer penalties. Hoyt agreed to extensions of the limitations period for the 1987 to 1989 tax years in February 1991, July 1992, and March 1993. The extension that was eventually granted in July 1992 originated with the IRS's request in December 1991, at the same time that the IRS had threatened to impose the preparer penalties for 1989 and 1990. Hoyt said he would not agree to an extension unless the IRS agreed to extend the limitations period for assessing preparer penalties against him and other preparers who worked for him, including his brother-in-law Henry Nathaniel. On its face, this request made little sense because, if granted, it would merely give the IRS more time to assess penalties against Hoyt. Nevertheless, the IRS refused to connect an extension of the limitations period for issuing the adjustments for 1987 to 1989 with an extension on the time for assessing preparer penalties.[48] Subsequently, however, in June 1992 the IRS agreed to forbear assessing penalties until the time for issuing the adjustments, and Hoyt signed the extensions in July 1992.
We find this purported quid pro quo insufficient to substantiate a conflict under the facts of this case. IRS revenue agent Norm Johnson testified that at the time the IRS agreed to Hoyt's request it had already determined that it would not seek preparer penalties against Hoyt. Agent Johnson testified that it therefore did not matter to the IRS whether to extend the preparer penalties because it believed they were not worth pursuing. He also explained that in July 1992 the IRS could not have assessed preparer penalties against Hoyt because the audits upon which the penalties would have been based were incomplete. In other words, under the normal process for assessing preparer penalties it would be premature to seek penalties before the audits were sufficiently complete to know that penalties were appropriate. In order for there to be a true quid pro quo, the parties must each exchange valuable concessions. See United States v. Robertson.[49] There must be a mutuality of advantage and a mutuality of disadvantage.[50] That did not exist here because the IRS essentially gave up nothing, and Hoyt obtained nothing of true value.
The bankruptcy court correctly noted that Hoyt apparently believed he was receiving something of value, but Hoyt's perception does not necessarily mean that he was acting in conflict with his partners. Agent Johnson testified that although the partnerships derived no benefit from delaying preparer penalties against Hoyt, there was also no harm, and Martinez fails to identify sufficiently a detriment to the partnerships.[51] Given that Hoyt obtained *733 nothing of true value and that what he did obtain was not contrary to the interests of the partnerships, we think the alleged quid pro quo is too slender a reed to support a conclusion that the IRS knew Hoyt was placing his interests above those of his partners.
The final basis for the bankruptcy court's finding of a conflict was that Hoyt was attempting to stall the IRS and delay the issuance of the final adjustments. This finding was based on the conclusion that it was in Hoyt's interest to delay the issuance of the adjustments as long as possible, but it was in the partners' interest to have the proceedings completed quickly. The court relied in part on a Ninth Circuit decision that also involved Hoyt and allegedly invalid extensions on the limitations period for issuing adjustments. See River City Ranches # 1 Ltd. v. Comm'r.[52]
That case, known as River City Ranches II, concerned similar extensions that Hoyt granted to the IRS but for different partnerships. The Ninth Circuit remanded to the tax court for discovery on whether Hoyt acted under a disabling conflict.[53] Although it did not hold that there was a conflict, the Ninth Circuit speculated that the partners might have opposed an extension on the limitations period and preferred quickly issued adjustments because the sooner the IRS issued them, the more difficult it would be for the IRS to defend them.[54] It also noted that even if the IRS was able to defend the adjustments, it would be in the partners' interest to avoid delay in order to minimize penalties and interest.[55] Finally, the court reasoned that it would be in the partners' interest to learn from the adjustments that Hoyt was "looting the partnerships," noting that adjustments issued for other partnerships had prompted partners to withdraw and initiate civil suits against Hoyt.[56] In contrast, the court noted that Hoyt's preference would be to delay the issuance of adjustments in order to avoid tension with his partners and perpetuate his fraud for as long as possible.[57] Here, the bankruptcy court found this reasoning persuasive and held that Hoyt's pattern of delay and non-cooperation with the IRS indicated a disabling conflict of interest in granting the extensions.
Although in hindsight Hoyt may have wanted to delay the adjustments for his own reasons, we think that in light of all the circumstances the grant of the extensions was not the kind of action that should have prompted the IRS to believe that Hoyt's interests were contrary to those of his partners. We think it is incorrect to say categorically that the partners and Hoyt had divergent interests as to when the adjustments were issued. Any difficulty that the IRS might have had in subsequent tax court proceedings in defending adjustments issued without an extension could have benefitted both Hoyt and the partners because, as in the Bales case, a loss by the IRS would allow Hoyt's business to continue and allow the partners to take their deductions. Furthermore, both Hoyt and the partners would still risk losing any subsequent tax court proceedings because the IRS could have continued to press the adjustments and *734 urge the tax court to determine partnership items. See PAA Mgmt., Ltd. v. United States.[58] But Agent Johnson testified that the extensions for the adjustments could have been beneficial to the partners (as well as Hoyt) because they could have given the partnerships more time to document and support any legitimate deductions. In short, we think the speculation about the effect of the adjustments cuts both ways, and we are not willing to hold as a matter of law that there was a disabling conflict.
We are also not persuaded that the adjustments necessarily would have given the partners notice of Hoyt's fraud so as to influence a decision to take protective action. In this case, the IRS sent numerous notices to Martinez informing him of its view that Hoyt had taken improper deductions in preparing the partnership returns. Martinez contends that there was no specific notice of Hoyt's lying about the value and number of cattle. Beginning in 1988, however, the IRS informed Martinez that it believed Hoyt's claimed deductions and credits were not allowable, and it referred to penalties for overvaluation. It also advised Martinez that he may wish to seek his own adjustment or to consult with an accountant or attorney. The record contains an affidavit from Martinez showing that as late as September 1993 Martinez maintained, based in part on the Bales case, that the partnerships were not abusive tax shelters. He specifically referred to his belief that the cattle had not been overvalued. Martinez also testified before the bankruptcy court that he was aware the IRS took the position that there was a problem with the size of the cattle herd. Yet Martinez took no action of his own to address these matters. We therefore do not see that the IRS knew Martinez's interests diverged from those of Hoyt or that he had a significant conflict with Hoyt over adjustments issued without an extension.[59]
The evidence here showed that the IRS firmly believed Hoyt was dishonest and *735 held that belief almost from the time it began auditing him in 1980. But the IRS's ability to deal with a tax matters partner and rely on his actions on behalf of the partnership is critical for the effective operation of the current tax system. The circumstances here did not reveal to the IRS a substantial gulf between the tax matters partner's interests and the interests of the partners. The grant of an extension on the limitations period is often "a routine accommodationsigning a waiver in order to avoid immediate assessment by the IRS."[60] We do not think the totality of the circumstances in this case clearly revealed to the IRS the tax matters partner's inherent conflict and incentive to breach his fiduciary duty to the partnership.
For the foregoing reasons we AFFIRM the district court's affirmance of the bankruptcy court's holding that Martinez's tax liabilities were not discharged for the years 1990 to 1993. We REVERSE the court's holding that the tax matters partner's grant of extensions of the limitations period were invalid and that Martinez's tax liabilities were discharged for the years 1987 to 1989. It is the judgment of this court that none of these tax liabilities has been discharged.
NOTES
[1] 58 T.C.M. 431, 1989 WL 123005 (1989).
[2] See 26 U.S.C. § 6231(a)(7); 26 C.F.R. § 301.6231(a)(7)-1.
[3] See 26 U.S.C. § 6229(a).
[4] See 26 U.S.C. § 6229(a) & (d).
[5] 551 F.3d 359, 366 (5th Cir.2008).
[6] Id.
[7] See 11 U.S.C. § 523(a)(1)(A).
[8] See 11 U.S.C. § 507(a)(8); Matter of Johnson, 146 F.3d 252, 256-57 & n. 9 (5th Cir. 1998). Section 523(a)(1)(A) of the bankruptcy code excludes from discharge taxes specified in § 507(a)(8), which includes "allowed unsecured claims of governmental units, only to the extent that such claims are for... (A) a tax on or measured by income or gross receipts ... (iii) other than a tax ... not assessed before, but assessable, under applicable law or by agreement, after, the commencement of the case."
[9] See Pub.L. No. 97-248, § 402(a), 96 Stat. 648, 653 (1982) (codified as amended at 26 U.S.C. §§ 6221-23).
[10] 389 F.3d 152, 154 (5th Cir.2004).
[11] Id.; see also 26 U.S.C. §§ 6221, 6231(a)(3) & (a)(4).
[12] See 26 U.S.C. § 6224(c)(3). The tax matters partner is generally defined as "the general partner designated as the tax matters partner as provided in regulations" or, if no general partner has been so designated, as "the general partner having the largest profits interest in the partnership at the close of the taxable year involved." 26 U.S.C. § 6231(a)(7).
[13] 26 U.S.C. § 6223(a); see PAA Mgmt., Ltd. v. United States, 962 F.2d 212, 214 (2d Cir. 1992).
[14] 26 U.S.C. § 6229(a). The statute provides:
General rule.Except as otherwise provided in this section, the period for assessing any tax imposed by subtitle A with respect to any person which is attributable to any partnership item (or affected item) for a partnership taxable year shall not expire before the date which is 3 years after the later of
(1) the date on which the partnership return for such taxable year was filed, or
(2) the last day for filing such return for such year (determined without regard to extensions).
Id.
[15] 26 U.S.C. § 6229(b).
[16] 26 U.S.C. § 6226(a).
[17] 26 U.S.C. § 6229(d).
[18] Id.
[19] 26 U.S.C. § 6225(a). The statute provides in relevant part:
Restriction on assessment and collection. Except as otherwise provided in this subchapter, no assessment of a deficiency attributable to any partnership item may be made (and no levy or proceeding in any court for the collection of any such deficiency may be made, begun, or prosecuted) before
(1) the close of the 150th day after the day on which a notice of a final partnership administrative adjustment was mailed to the tax matters partner, and
(2) if a proceeding is begun in the Tax Court under section 6226 during such 150-day period, the decision of the court in such proceeding has become final.
Id.
[20] 44 F.3d 803, 805-06 (9th Cir.1995).
[21] Id. at 806.
[22] 68 F.2d 46, 47 (2d Cir. 1933).
[23] O'Neill, 44 F.3d at 806. See also Martin v. Comm'r, 436 F.3d 1216, 1223-24 (10th Cir. 2006) (addressing tolling under 26 U.S.C. § 6503, the analogous statute applicable to the limitations period as applied to an individual taxpayer, and holding that "the placing of a proceeding on the docket of the tax court, not the manner in which such a proceeding is resolved, is key to tolling the running of the statute of limitations").
[24] See Phillips v. Comm'r, 272 F.3d 1172, 1175 (9th Cir.2002); Transpac Drilling Venture 1982-12 v. Comm'r, 147 F.3d 221, 225 (2d Cir. 1998); Computer Programs Lambda, Ltd. v. Comm'r, 89 T.C. 198, 205, 1987 WL 42563 (1987).
[25] See Phillips, 272 F.3d at 1175; Transpac Drilling, 147 F.3d at 227-28.
[26] Lambda, 89 T.C. 205.
[27] Id.; see also 26 U.S.C. § 6229(b)(1)(B) (providing that the limitations period for assessing a tax attributable to partnership items may be extended "with respect to all partners, by an agreement entered into by the Secretary and the tax matters partner").
[28] See Transpac Drilling, 147 F.3d at 225 ("By centralizing tax-related proceedings of the partnership in one person or entity, Congress created a statutory analogue of the class representative in class action proceedings.").
[29] Lambda, 89 T.C. 205.
[30] See Phillips, 272 F.3d at 1175 ("Trust law, generally, invalidates the transaction of a trustee who is breaching his trust in a transaction in which the other party is aware of the breach." (citing RESTATEMENT OF TRUSTS §§ 288-297)); Transpac Drilling, 147 F.3d at 225 (noting that "limited partners secure their due process protection as a result of the fact that the TMP stands in a fiduciary relationship toward them").
[31] See Treas. Reg. § 301.6231(a)(7)-1 (providing for designation and termination of a tax matters partner).
[32] See Transpac Drilling, 147 F.3d at 227; see also 26 U.S.C. § 6231(c) (authorizing the Secretary to determine areas of "special enforcement consideration[].")
[33] Transpac Drilling, 147 F.3d at 228 n. 9.
[34] Id. at 227.
[35] Id. at 223-24.
[36] Id. at 224.
[37] Id. at 223-24.
[38] Id. at 227.
[39] Id.
[40] 295 F.3d 280, 288 (2d Cir.2002).
[41] Id. at 289.
[42] Id.
[43] See Transpac Drilling, 147 F.3d at 227 ("That the TMPs' interests and those of the ones who would be bound by their actions were in severe conflict cannot be doubted.").
[44] See River City Ranches # 1 Ltd. v. Comm'r, 401 F.3d 1136, 1142 (9th Cir.2005) (River City Ranches II); Phillips, 272 F.3d at 1174.
[45] Transpac Drilling, 147 F.3d at 227.
[46] See Bales, 1989 WL 123005, at *1.
[47] Id. at *27-29.
[48] In fact, according to the trial testimony, the IRS went forward and assessed certain penalties against Nathaniel.
[49] 582 F.2d 1356, 1366 (5th Cir.1978) (en banc).
[50] Id.
[51] See Madison Recycling, 295 F.3d at 288 (noting that the tax payer must show that an extension of the limitations period is invalid and that the burden of persuasion "remains always with the taxpayer").
[52] 401 F.3d 1136 (9th Cir.2005).
[53] Id. at 1143.
[54] Id.
[55] Id.
[56] Id.
[57] Id.
[58] 962 F.2d 212, 218-19 (2d Cir.1992) ("The FPAA is not `final' in the sense that its issuance necessarily obviates the need for further information, brings the curtain down on the IRS's administrative or investigative role, or muzzles the IRS from requesting that the court invoke its authority finally to determine partnership items.").
[59] Following the Ninth Circuit's remand in River City Ranches II, the tax court found that Hoyt had a disabling conflict when granting extensions on the limitations period but ruled in favor of the Government on other grounds. See River City Ranches #1 Ltd. v. Comm'r, 94 T.C.M. 1, 2007 WL 1891595 (2007) (River City Ranches III). The tax court found a conflict essentially by adopting the reasoning upon which the Ninth Circuit had speculated in River City Ranches II, i.e. that it was in the partners' interest to have the adjustments issued sooner rather than later. The tax court cited the cattle headcount as evidence of the IRS's knowledge of Hoyt's fraud but cited no evidence establishing what was in the partners' interest. See id. at *13-14. In this case, as noted above, Agent Johnson testified that the extensions on the adjustments could have benefitted the partners by giving the partnerships a chance to document legitimate deductions. He also testified that matters are typically settled at the administrative level faster than if a case proceeds to tax court. That being so, it could have been in the partners interest to extend the audits and adjustments because they might reach a quicker settlement and thereby realize savings of interest and penalties. It is not so speculative to think the extension of the adjustments potentially could have resulted in this benefit to the partners given that the tax court cases for the 1987 to 1989 tax years were still pending when Martinez filed the instant adversary action in 2003. In any event, we note that the Ninth Circuit recently affirmed the tax court's decision in River City Ranches III but did not reach the question of Hoyt's conflict of interest. River City Ranches v. Comm'r, 2009 WL 498662, at *2 n. 6 (9th Cir. Feb.26, 2009) (unpublished).
[60] Phillips, 272 F.3d at 1175. | 01-03-2023 | 04-26-2010 |
https://www.courtlistener.com/api/rest/v3/opinions/65357/ | 566 F.3d 483 (2009)
AUBRIS RESOURCES LP, formerly known as United Resources LP, formerly known as United Oil and Minerals Limited Partnership, Plaintiff-Appellant,
v.
ST. PAUL FIRE AND MARINE INSURANCE CO., Defendant-Appellee.
No. 07-41272.
United States Court of Appeals, Fifth Circuit.
April 23, 2009.
*484 David W. Green (argued), Darrell L. Barger, Kathryn F. Green, Hartline, Dacus, Barger, Dryer & Kern, LLP, Corpus Christi, TX, for Plaintiff-Appellant.
Levon G. Hovnatanian (argued), Kennetha Waynne Lucas, Christopher Weldon Martin, Diana Perez, Martin, Disiere, Jefferson & Wisdom, Joseph Anthony Ziemianski, Cozen O'Connor, Houston, TX, for Defendant-Appellee.
*485 Before JOLLY, DAVIS and DeMOSS, Circuit Judges.
E. GRADY JOLLY, Circuit Judge:
In this appeal we decide what effect a general indemnity provision in an oilfield services agreement has on the scope of additional insured coverage required by the same agreement. United Oil and Minerals filed this action in federal court, seeking a declaratory judgment that St. Paul Fire and Marine Insurance Company has a duty to defend United in state court lawsuits arising from an explosion at an oilfield that was serviced by St. Paul's insured, J&R Valley Oil Services. Under its services agreement with J&R Valley, United was J&R Valley's additional insured. St. Paul, however, denied additional insured coverage, citing a general indemnity provision in the services agreement whereby United agreed to indemnify J&R Valley for causes of action arising from United's own negligence. St. Paul argued, and the district court agreed, that the general indemnity provision necessarily limited the scope of United's additional insured coverage under the services agreement. We conclude, however, that Texas case law instructs otherwise and construe the services agreement in favor of coverage. Accordingly, we vacate summary judgment for St. Paul and render judgment in favor of United.
I.
We begin with the relevant facts.
United hired J&R Valley to service its oilfield properties in April 2002. Their services agreement required that J&R Valley carry commercial general liability insurance and name United an additional insured under that policy. The agreement also contained a general indemnity provision, whereby United agreed to indemnify J&R Valley for causes of action arising from United's own negligence.
On October 20, 2003, an explosion at one of United's oilfields severely injured two J&R Valley employees, Ernesto Garza and Carlos Figueroa. Garza later died from his injuries. Thereafter Garza's estate and Figueroa sued both J&R Valley and United in a Texas state court, alleging negligence. J&R Valley was dismissed from the lawsuits because under the Texas Workers' Compensation Act neither employee could recover from J&R Valley under a theory of simple negligence.[1] The lawsuits against United, however, proceeded.
The practical question here is who will pay for United's expense in the Garza litigation. J&R Valley purchased its commercial general liability insurance policy from St. Paul Fire and Marine Insurance Company. That policy covers additional insureds, but only where specifically required in a written agreement. United contends that under its services agreement with J&R Valley it is an additional insured, and therefore St. Paul had a duty to defend it in the Garza litigation. St. Paul counters that United is not an additional insured for causes of action arising from United's own negligence.
United and St. Paul dispute whether two of the services agreement's provisions the additional insured provision and the general indemnity provisioninterrelate. The additional insured provision states that United is an additional insured except *486 with respect "to any obligations for which UNITED has specifically agreed to indemnify" J&R Valley; the general indemnity provision states that United will indemnify J&R Valley for causes of action arising from United's own negligence. St. Paul reads the two provisions together, such that there is no coverage in causes of action arising from United's own negligence. United, on the other hand, argues there is no relationship between the two provisions, and coverage is determined by reference only to the additional insured provision. United reads the additional insured provision to provide that United is an additional insured unless it separately and extra-contractually agrees to indemnify J&R Valley. Because it has not separately agreed to indemnify J&R Valley in connection with the Garza litigation, United insists the Garza litigation is covered under the St. Paul policy.
The district court, in granting summary judgment for St. Paul, rejected United's interpretation as unreasonable because it agreed with St. Paul that the general indemnity provision necessarily limited additional insured coverage. We conclude, however, that in the light of recent Texas case law United's interpretation is at least reasonable and therefore construe the disputed provisions in favor of coverage.
II.
We review the district court's grant of summary judgment de novo, applying the same legal standards as the district court. United States v. Corpus, 491 F.3d 205, 209 (5th Cir.2007). Summary judgment is appropriate only "if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." FED. R. CIV. P. 56(c).
Where federal jurisdiction is based on diversity of citizenship, a federal court applies the substantive law of the forum state. See Foradori v. Harris, 523 F.3d 477, 486 (5th Cir.2008) (citing Erie R.R. v. Tompkins, 304 U.S. 64, 78-79, 58 S. Ct. 817, 82 L. Ed. 1188 (1938)); see also Empire Fire & Marine Ins. Co. v. Brantley Trucking, Inc., 220 F.3d 679, 680-81 (5th Cir.2000). The parties agree that the substantive law of Texas applies in this case.
Under Texas law, the same general rules apply to the interpretation of contracts and insurance policies. See, e.g., Am. Mfrs. Mut. Ins. Co. v. Schaefer, 124 S.W.3d 154, 157 (Tex.2003). The contract should be "considered as a whole" and "each part of the contract should be given effect." Forbau v. Aetna Life Ins. Co., 876 S.W.2d 132, 133 (Tex.1994). Our primary concern is to ascertain the parties' true intent, as expressed in the language of the policy. Kelley-Coppedge, Inc. v. Highlands Ins. Co., 980 S.W.2d 462, 464 (Tex. 1998). "We cannot adopt a construction that renders any portion of a policy meaningless, useless, or inexplicable." Evanston Ins. Co. v. ATOFINA Petrochemicals, Inc., 256 S.W.3d 660, 668 (Tex.2008).
If a provision has more than one reasonable interpretation, a court must interpret it in favor of the insured, provided that interpretation is not unreasonable, and even if the insurer's interpretation is more reasonable. Nat'l Union Fire Ins. Co. of Pittsburgh, Pa. v. Hudson Energy Co., 811 S.W.2d 552, 555 (Tex.1991). "In particular, exceptions or limitations on liability are strictly construed against the insurer and in favor of the insured." Id. We therefore adopt United's interpretation in this case if in our review we conclude it is at least reasonable.
*487 III.
A.
Our starting point is the insurance policy itself. The St. Paul insurance policy is a standard commercial general liability policy that includes the following additional insured endorsement:
Any person or organization that you agree in a written contract for insurance to add as an additional protected person under this agreement is also a protected person for the following if that written contract for insurance specifically requires such coverages for that person or organization....
(Emphasis added.)
We then turn to the services agreement with United, i.e., the "written contract for insurance," and ask whether it requires coverage in the underlying Garza litigation. We look to the services agreement's additional insured provision, which appears in section 10.2. That provision states, in relevant part:
UNITED and its subsidiaries, affiliated companies, co-owners, partners and joint venturers (if any), and their respective members, managers, officers, directors, agents, and employees shall be named as additional insureds in each of Contractor's policies, except Workers' Compensation; however, such extension of coverage shall not apply with respect to any obligations for which UNITED has specifically agreed to indemnify Contractor.
(Emphasis added.)
Section 10.2 plainly requires that J&R Valley name United an additional insured. The present dispute, however, arises from section 10.2's stipulation that there will be no additional insured coverage for "any obligations for which UNITED has specifically agreed to indemnify [J&R Valley]." St. Paul argues this exclusionary language in section 10.2 refers to United's agreement, in section 11.1, to indemnify J&R Valley for causes of action arising from its own negligence. Section 11.1, which is titled "GENERAL INDEMNITY," states, in relevant part:
UNITED SHALL PROTECT, DEFEND, INDEMNIFY, AND HOLD HARMLESS J&R AND ITS OFFICERS, DIRECTORS, AGENTS, AND EMPLOYEES FROM AND AGAINST ALL CLAIMS, DEMANDS, AND CAUSES OF ACTION ASSERTED BY ANY PERSON (INCLUDING BUT NOT LIMITED TO EMPLOYEES OF J&R AND UNITED) THAT ARISE OUT OF OR ARE RELATED TO WORK AND ARE CAUSED BY OR ARISE OUT OF UNITED'S NEGLIGENT ACTS OR OMISSIONS ....
B.
Thus, to determine the additional insurance coverage question presented in this appeal, we now turn to consider the relationship between and among the policy, the additional insured provision in the services agreement, and the indemnity provision in the services agreement.
St. Paul argues that because in section 11.1 United agreed to indemnify J&R Valley for causes of action arising out of its own negligence, United is not an additional insured in the Garza litigation under the terms of section 10.2, which excepts from such coverage United's obligations to indemnify J&R Valley.
United, however, disputes any relationship between sections 10.2 and 11.1. It argues that under Texas case law section 11.1's indemnity provision does not operate to limit additional insured coverage under section 10.2. United relies primarily on Evanston Insurance Company v. ATOFINA Petrochemicals, Inc., 256 S.W.3d 660 *488 (Tex.2008), a recent opinion of the Texas Supreme Court, which United argues requires us to apply only section 10.2and not section 11.1in determining coverage here. Furthermore, United reads section 10.2 not to apply because it excludes coverage only in the event United separately and extra-contractually agrees to indemnify J&R Valley, and it has not agreed to indemnify J&R Valley in connection with the Garza litigation.
We agree that Evanston Insurance is instructive and that, in the light it provides, we must look only to section 10.2, the additional insured provision itself, as to whether there is coverage in this case. We also agree with United that, relatedly, section 10.2 reasonably can be construed as providing additional insured coverage, where there is no specific indemnity agreement relating to the Garza litigation.
Evanston Insurance is instructive because in many respects it is indistinguishable from the case before us. In particular, its underlying facts mirror those at hand: ATOFINA Petrochemicals hired Triple S to perform maintenance at an ATOFINA oil refinery. ATOFINA was made an additional insured under Triple S's policy with Evanston Insurance Co. A Triple S employee drowned while servicing an ATOFINA refinery, and his estate sued both Triple S and ATOFINA. Triple S was dismissed from the lawsuit, consistent with the Texas Workers' Compensation Act. ATOFINA and Triple S's insurer, Evanston, then disputed who would pay for the expense of the remaining litigation. ATOFINA argued that it was an additional insured; Evanston, citing ATOFINA's agreement to indemnify Triple S for ATOFINA's own negligence, denied that its policy covered ATOFINA for the remaining litigation.
The issue presented the Texas Supreme Court was virtually the same as presented us: whether the parties' indemnity agreement operated to limit the scope of ATOFINA's additional insured coverage. As here, in the parties' service contract ATOFINA had disclaimed any right of indemnity for losses caused by its own negligence; in the same contract, Triple S had agreed to name ATOFINA an additional insured in its policy with Evanston. On the basis of the policy's additional insured provision, ATOFINA claimed it was an additional insured for the purposes of the underlying litigation. The state trial court and court of appeals, however, agreed with Evanston that, because ATOFINA, in the service contract, had disclaimed any right of indemnity for losses caused by its own negligence, ATOFINA was not an additional insured for those losses.
The Texas Supreme Court reversed, holding in favor of coverage for ATOFINA. It pointed out that ATOFINA had not sought indemnity from Triple S. Instead, it had sought indemnification from Evanston on the basis that it was Triple S's additional insured. The Texas Supreme Court explained that, "[i]nstead of looking, as the court of appeals did, to the indemnity agreement in the service contract to determine the scope of any coverage, we base our decision on the terms of the umbrella insurance policy itself." Id. at 664. Because by its own terms that policy covered ATOFINA "with respect to operations performed by [Triple S]," ATOFINA was an additional insured covered by the Evanston policy for the purposes of the underlying litigation, notwithstanding any indemnity agreement with Triple S.
We take from Evanston Insurance that in determining whether there is coverage, a court looks only to the additional insured provision itself; that indemnity is a separate, and later arising, question from coverage. It is true that under the insurance policy in this case, unlike *489 Evanston Insurance, additional insured coverage must be specifically required by the services agreement, and there is no question but that the services agreement specifically states that United be named an additional insured under J&R Valley's policy. It also is true that, like Evanston Insurance, this agreement includes, in a separate section, a general indemnity provision.[2] Yet, it is not material to the Evanston rule whether the additional insured provision is finally determined in the policy or with the aid of the parties' service contract. The separate indemnity provision is not applied to limit the scope of coverage. Indeed, on this point the Texas Supreme Court could not have been clearer:
We have noted that where an additional insured provision is separate from and additional to an indemnity provision, the scope of the insurance requirement is not limited by the indemnity clause.
Id. at 664 (citing Getty Oil Co. v. Ins. Co. of N. Am., 845 S.W.2d 794, 804 (Tex.1992)).
Here, United is not seeking indemnity from J&R Valley. It instead seeks to enforce St. Paul's duty to defend it on the basis that it is J&R Valley's additional insured. As in Evanston Insurance, we have an additional insured provision that is separate from, and additional to, an indemnity provision. As Evanston Insurance makes clear, the scope of additional insured coverage here is not limited by the separate general indemnity provision found in section 11.1.
C.
Thus, by excluding section 11.1 as a factor, we have determined that coverage here depends upon section 10.2, as it stands by itself. We now must ask whether this section reasonably can be construed as requiring additional insured coverage.[3] United reads section 10.2 to exclude coverage only in the event United separately and extra-contractually agrees to indemnify J&R Valley. The question we now must ask is whether that interpretation is at least reasonable. We conclude that it is.
In reaching this conclusion, we acknowledge that section 10.2 itself stipulated that there will be no additional insured coverage for "any obligations for which UNITED has specifically agreed to indemnify [J&R Valley]." However, we do not think that this exclusionary language reasonably can be read to exclude from coverage all incidents for which United could possibly owe J&R Valley indemnity. We note that section 10.2 excludes obligations for which United has specifically, not generally, agreed to indemnify J&R Valley. The *490 qualifier "specifically" reasonably can be read to indicate that United intended to forego additional insured coverage only in the event United makes a separately considered and extra-contractual decision, i.e., to specifically agree to indemnify J&R Valley.
This reading is not inconsistent with the oilfield services agreement as a whole, an important purpose of which was to secure insurance coverage for United during the course of the contract's performance. Section 10.2 unequivocally states that United and its affiliates "shall be named as additional insureds." When United bargained to be J&R Valley's additional insured, it is reasonable to assume that neither party intended the requirement to be a virtual cipher, excluding from additional insured coverage all incidents for which it could possibly owe J&R Valley indemnity under a general indemnity provision. It is also improbable the parties intended that the general indemnity provision of the oil services agreement would determine an additional insured obligation. To hold otherwise arguably would ignore the parties' true intent in negotiating insurance coverage for the operations performed under the oilfield services agreement, Kelley-Coppedge, Inc. v. Highlands Ins. Co., 980 S.W.2d 462, 464 (Tex.1998) (court's primary concern is to ascertain the parties' true intent), or would risk rendering the additional insured requirement meaningless. See Evanston Insurance, 256 S.W.3d at 668 n. 27 ("We cannot adopt a construction that renders any portion of a policy meaningless, useless, or inexplicable.") (citing ATOFINA Petrochemicals, Inc. v. Cont'l Cas. Co., 185 S.W.3d 440, 444 (Tex. 2005) (per curiam)).
We conclude, then, that because United's argument is not unreasonable, United was an additional insured under the circumstances presented. The general indemnity provision in United's services agreement with J&R Valley does not itself limit the scope of United's additional insured coverage. The services agreement's additional insured provision reasonably can be read to require coverage unless United separately and extra-contractually agrees to indemnify J&R Valley. Because United has not separately agreed to indemnify J&R Valley in connection with the Garza litigation, it is a covered insured under the St. Paul policy.
IV.
For the reasons we have explained, we vacate the summary judgment for St. Paul and render judgment for United.
We remand to the district court to enter judgment not inconsistent with this opinion and for further proceedings, if any, it considers appropriate.
VACATED, RENDERED, and REMANDED.
NOTES
[1] Garza's estate also asserted a wrongful death claim against J&R Valley, alleging gross negligence. That claim was not barred by the Texas Workers' Compensation Act. J&R Valley ultimately settled that claim with the Garza estate.
[2] It is also true that the agreement's additional insured provision in section 10.2 stipulates that there will be no coverage for "any obligations for which UNITED has specifically agreed to indemnify [J&R Valley]." We address the effect of that language when we interpret section 10.2 itself.
[3] St. Paul points out that we are interpreting a services agreement, not an insurance policy; we therefore should apply the general rules of contract interpretation, not the special rules of insurance policy interpretation. Consequently, we should not adopt an interpretation of section 10.2 in favor of coverage merely because we conclude United's interpretation is at least reasonable. However, we see no reason why the special rules of insurance policy interpretation should not apply where, as here, the insurance policy's additional insured endorsement incorporates section 10.2 by reference. The endorsement extends policy coverage to parties with whom J&R Valley agrees "in a written contract for insurance" to add as an additional insured. The endorsement thus incorporates a separate "written contract for insurance"here, section 10.2 of the services agreement. See, e.g., Tribble & Stephens Co. v. RGM Constructors, LP, 154 S.W.3d 639, 663 (Tex.App.2004, pet.denied) (separate agreements may be incorporated by reference). | 01-03-2023 | 04-26-2010 |
https://www.courtlistener.com/api/rest/v3/opinions/2861687/ | TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-96-00541-CR
Hollis Glen Belcher Jr., Appellant
v.
The State of Texas, Appellee
FROM THE DISTRICT COURT OF COMAL COUNTY, 22ND JUDICIAL DISTRICT
NO. CR96-027, HONORABLE CHARLES RAMSAY, JUDGE PRESIDING
Hollis Glen Belcher, appellant, was convicted of the state jail felony offense of criminal
nonsupport. Tex. Penal Code Ann. § 25.05 (West 1994). He received a sentence of two years'
confinement, probated for four years, and a fine. As a condition of community supervision, the trial court
required appellant to perform community service and to make restitution of the delinquent child support.
Appellant challenges both the legal and factual sufficiency of the evidence to support the jury's verdict. We
will affirm the conviction.
FACTUAL AND PROCEDURAL BACKGROUND
After several years of marriage and the birth of two daughters, Hollis and Trisha Belcher
entered into an agreed Final Decree of Divorce. On the same day this decree was signed, the court also
signed an Order Withholding From Earnings for Child Support (to Employer). In relevant part both the
decree and the withholding order stated:
IT IS ORDERED AND DECREED that HOLLIS G. BELCHER, JR. is
obligated to pay and, subject to the provisions for withholding from earnings for child
support specified below, shall pay to TRISHA BELCHER child support of $303.33 per
month, with the first payment being due and payable on May 15, 1994, and a like payment
being due and payable on the same day of each month thereafter . . .
IT IS ORDERED AND DECREED that any employer of HOLLIS G.
BELCHER, JR. shall be ordered to withhold from earnings for child support from the
disposable earnings of HOLLIS G. BELCHER, JR. for the support of BRITTANY
BELCHER and KELSEY BELCHER . . . Depending on the regularly scheduled wage
and salary payments established by the employer, the employer shall be ordered to
withhold from earnings for child support on the schedule appropriate to the
employer's payroll period, as follows: $303.33 monthly, $151.67 semimonthly,
$140.00 biweekly, or $70.00 weekly, provided that the amount of the income withheld
for any pay period shall not exceed fifty (50%) percent of HOLLIS G. BELCHER, JR.'s
disposable earnings . . .
IT IS FURTHER ORDERED AND DECREED that all amounts withheld
from the disposable earnings of HOLLIS G. BELCHER, JR. by the employer and paid
in accordance with the order to that employer shall constitute a credit against the child
support obligation. Payment of the full amount of child support ordered paid by this
decree through the means of withholding from earnings shall discharge the child support
obligation. If the amount withheld from earnings and credited against the child support
obligation is less than one hundred (100%) percent of the amount ordered to be paid by
this decree, the balance due remains an obligation of HOLLIS G. BELCHER, JR., and it
is hereby ORDERED AND DECREED that HOLLIS G. BELCHER, JR. pay the balance
due directly to the registry of the court specified below.
(Emphasis added.)
Nearly two years later, appellant was charged with failing to provide support for his
daughters. At trial, the court's charge instructed the jury to find appellant guilty if they believed beyond a
reasonable doubt that:
the defendant . . . intentionally and knowingly (1) fail[ed] to provide support for Brittany
Belcher and Kelsey Belcher, on the dates listed below with the respective amounts being
past due, and the defendant was then and there subject of a court order requiring him to
support said children, to-wit:
September 1 THRU September 30, 1994 $233.33
October 1 THRU October 31, 1994 23.33
November 1 THRU November 30, 1994 93.33
December 1 THRU December 31, 1994 23.33
January 1 THRU January 31, 1995 23.33
February 1 THRU February 28, 1995 23.33
March 1 THRU March 31, 1995 23.33
April 1 THRU April 30, 1995 23.33
June 1 THRU June 30, 1995 23.33
July 1 THRU July 31, 1995 23.33
August 1 THRU August 31, 1995 163.33
September 1 THRU September 30, 1995 93.33
October 1 THRU October 31, 1995 303.33
During most of the thirteen months listed, appellant was employed as a construction worker, and his
employer withheld child support of $70 from his weekly paycheck. A jury convicted appellant as charged,
and the judge assessed punishment at two years' imprisonment, probated for four years, as well as 150
hours of community service, restitution of $3,906.57, and a fine of $500.00.
DISCUSSION
In his first point of error, appellant complains that the evidence presented is legally
insufficient to support a verdict of guilty. In conducting a legal sufficiency review, we determine whether,
after viewing the evidence in the light most favorable to the verdict, any rational trier of fact could have
found the essential elements of the crime beyond a reasonable doubt. Jackson v. Virginia, 443 U.S. 307,
319 (1979); Griffin v. State, 614 S.W.2d 155, 159 (Tex. Crim. App. 1981). The statutory elements of
the offense of criminal nonsupport are that the defendant (1) intentionally or knowingly (2) "fails to provide
support for his child younger than 18 years of age, or for his child who is the subject of a court order
requiring the individual to support the child." Penal Code § 25.05(a). Some of the difficulty in dealing with
the definition of criminal nonsupport originates from its status as a "continuing offense" committed not by
any overt act but by omission or neglect and continuing so long as the neglect continues without excuse.
See Ex parte Beeth, 154 S.W.2d 484, 485 (Tex. Crim. App. 1941).
Statutory Background
While the Penal Code defines both intentionally (2) and knowingly, (3) it does not define the term
"support." In attempting to determine what meaning to afford the phrase "fails to provide support," it is
helpful to examine recent amendments to the statute. In 1985, the Texas Court of Criminal Appeals ruled
a portion of the previous criminal nonsupport statute unconstitutional. See Lowry v. State, 692 S.W.2d
86, 87 (Tex. Crim. App. 1985). The earlier statute defined the offense as follows: "intentionally or
knowingly fails to provide support that he can provide and that he was legally obligated to provide for his
children younger than 18 years . . . ." Penal Code, 63d Leg., R.S., ch. 399, § 1, 1973 Tex. Gen. Laws
883, 922 (Penal Code § 25.05(a), since amended) (emphasis added). Because the statute also contained
an affirmative defense of inability to pay, the court decided that the combination of the two provisions
impermissibly shifted the burden of proof of an essential element onto the defendant. Lowry, 692 S.W.2d
at 87. To remedy this problem, the court struck down the affirmative defense of inability to pay, thereby
placing the entire burden of proof on the element of ability to pay onto the state. Id. at 88. In response,
the legislature in 1987 completely removed the defendant's ability to pay as an element of the offense and
reinstated the affirmative defense of inability to pay. (4) Act of July 20, 1987, 70th Leg., 2d C.S., ch. 73, §
13, 1987 Tex. Gen. Laws 225, 231-32. Additionally, the legislature deleted from the statute a section that
defined "insufficient support" as "support less than the support needed by a child . . . to meet the minimum
requirements of the child . . . necessary for food, clothing, shelter, and medical care." Id. This provision
was not replaced. Thus, while the previous statute contained an express standard for the extent of support
required, the current standard is not specifically defined. (5)
The Texarkana Court of Appeals has decided that the question of what constitutes a
"fail[ure] to provide support" is wholly evidentiary. See Lyons v. State, 835 S.W.2d 715, 718 (Tex.
App.--Texarkana 1992, pet. ref'd). "Support" is commonly defined as a means of livelihood, sustenance,
or existence. Webster's Third New International Dictionary 2297 (Philip B. Gove ed., 1986). Another
source defines "support" as "that which furnishes a livelihood; a source or means of living; subsistence,
sustenance, maintenance, or living. In a broad sense the term includes all such means of living as would
enable one to live in the degree of comfort suitable and becoming to his station in life." Black's Law
Dictionary 1439 (6th ed. 1990).
It has been suggested that the criminal nonsupport statute is meant to automatically impose
a criminal sanction on any parent who violates the terms of a child support order. See 6 Michael Charleton,
Texas Criminal Law § 14.5 at 177 (Texas Practice 1994). Under this analysis, the 1987 amendment's
addition of the language "for his child who is the subject of a court order" not only extended the duty of
support to that child, but also incorporated the order itself as the standard against which to measure the
parent's support. A comparison with other statutes involving offenses against the family casts doubt on this
construction. Under Penal Code § 25.03(a)(1), it is an offense to take or retain a child when one "knows
that his taking or retention violates the express terms of a judgment or order of a court disposing of the
child's custody." (Emphasis added.) Under Penal Code § 25.07(a)(1), a person commits an offense "if,
in violation of an order issued under Section 3.581, Section 71.11, or Section 71.12, Family Code, the
person knowingly or intentionally: . . . commits family violence." (Emphasis added.) Considering how
explicitly the Legislature incorporates violations of court orders into such statutes when it wants to, it does
not appear to us that the legislature intended to adopt child support orders as the sole standard of "support"
in the criminal nonsupport statute. This does not mean, of course, that a child support order is not relevant
evidence of what the appropriate level of support is, but only that such an order is not conclusive
evidence. (6) In consideration of all of the foregoing, we must now review whether the jury's decision was
rational in light of the evidence presented at trial.
Points of Error
Appellant complains of the sufficiency of the evidence in two groups: (1) the eight months
in which the delinquency was alleged to be $23.33 for each month, and (2) the five months in which the
delinquency was greater than $23.33. (7) To support the charge of nonsupport, the prosecutor introduced
into evidence the "Child Support Module," which is a record maintained by the Comal County District
Clerk's Office showing each payment of child support made by appellant. The divorce decree, which
states the amount appellant was required to pay each month, was also introduced into evidence. The
evidence showed substantial delinquencies in the five months in which the deficiency was alleged to be
greater than $23.33. Thus, even if the violation of a child support order does not automatically translate
into a violation of Penal Code § 25.05(a), we conclude that, in light of this evidence, a rational trier of fact
could have found that appellant "fail[ed] to provide support" for his children during at least some of the five
months in question.
Additionally, there was evidence that appellant had received letters notifying him of his
arrearage in child support. Further, appellant's ex-wife testified that she had brought other charges against
appellant, and that he had responded by threatening to retaliate by withholding support payments: "[H]e
told me that, if I didn't drop the charges, that I would not be getting child support." From this evidence,
we believe a rational jury could have found beyond a reasonable doubt that appellant's failure to support
his children during the months in question was intentional or knowing.
Appellant asserts that for eight of the thirteen months of nonsupport, the deficiency of
$23.33 for each of those months is merely the result of the difference between the allowed withholding
pattern of $70 a week and the monthly obligation of $303.33 per month. Because the court authorized the
employer to remit payments of $70 a week toward appellant's obligation in both the decree and the
withholding order, appellant asserts that the discrepancy is not a violation of the decree, let alone a knowing
or intentional failure to provide support. More importantly, appellant contends the State's failure to prove
eight of the thirteen alleged incidents of nonsupport requires reversal of the entire conviction. He argues
the State must prove that appellant failed to make the child support payments for each and every one of
the periods stated in the indictment. We disagree. Even assuming that appellant is correct that he was not
delinquent during the eight months in which the alleged deficiency was $23.33 per month, we conclude that
under the circumstances present here the conviction need not be reversed.
A line of cases superficially supports appellant's position, holding that when a charging
instrument describes an essential element of an offense with unnecessary specificity, the state must prove
all details of the specific description. See Wray v. State, 711 S.W.2d 631, 634 (Tex. Crim. App. 1986)
(where allegation described assault by pointing gun at victim, proof that gun was pointed at different person
requires acquittal); Weaver v. State, 551 S.W.2d 419, 421 (Tex. Crim App. 1977) (where allegation
described use of "Ruger" pistol, proof of use of "Luger" pistol requires acquittal). In these cases, the
charging instrument described an essential element of the offense charged with unnecessary detail.
However, the purpose behind that line of cases is to ensure that the defendant has adequate notice of the
crime with which he has been charged, so he can prepare his defense effectively. See Worsham v. State,
120 S.W. 439, 444 (Tex. Crim. App. 1909); George E. Dix, Texas Charging Instrument Law: The
1985 Revisions and the Continuing Need for Reform, 38 Baylor L. Rev. 1, 97 (1986). For that purpose
to be so thwarted as to require reversal and acquittal in the present case, we would have to conclude that
appellant was surprised by the presentation of evidence of nonsupport for the five months in which the
alleged deficiency was greater than $23.33 each month. Because those five months were specifically
alleged in the indictment, however, the evidence of nonsupport during those months could not have come
as a surprise to appellant.
In cases where notice was not an issue, proof of less than all facts alleged in the charging
instrument has not required reversal. For example, in discussing notice of a string of alleged thefts, the court
of criminal appeals stated:
[O]nce a defendant has been given proper notice that he must prepare to defend himself
against a charge that he has stolen a certain "bundle" of property, there is no reason that
he should be acquitted if the evidence shows him guilty of stealing enough of the "bundle"
to make him guilty of the offense charged.
Lehman v. State, 792 S.W.2d 82, 84 (Tex. Crim. App. 1990). In cases before and after Lehman, courts
have held evidence sufficient to support a conviction even though it was insufficient to support all criminal
incidents charged, as long as the incidents that were proved were enough to make the defendant guilty on
the offense charged. See, e.g., Cook v. State, 488 S.W.2d 822, 824 (Tex. Crim. App. 1972) (evidence
supporting theft of one of four animals charged is sufficient to support conviction); State v. Weaver, 945
S.W.2d 334, 335 (Tex. App.--Houston [1st Dist.] 1997, pet. granted) (lack of sufficient evidence to
support each of thirty-two complaints of theft does not override other evidence sufficient to support
conviction); Harrell v. State, 834 S.W.2d 540, 543 (Tex. App.--Houston [14th Dist.] 1992, pet. ref'd)
(evidence supports conviction for theft of aggregate amount even though evidence is not sufficient to
support theft of each of eighty-three checks charged stolen). (8)
We recognize that a theft conviction cannot rest in whole or in part on the theft of property
not alleged in the indictment. Lehman, 792 S.W.2d at 84. That was not the situation in Lehman,
however, nor is it the situation in the present case. In Lehman, six incidents of theft were alleged, but the
evidence was sufficient to support only four of the incidents. Id. at 83. Nevertheless, the court concluded
that because the four incidents proved would support conviction of the offense, the state's failure to prove
the other two incidents did not require reversal of the entire conviction. Id. at 84. We find the reasoning
of Lehman applicable in the present case. Even if eight of the thirteen months of nonsupport for which
appellant was charged were not proved, appellant was also on notice of allegations of nonsupport during
the other five months and had no reason to be surprised by evidence presented to support those allegations.
Because the evidence is sufficient to support appellant's failure to provide support for his minor children
in at least some of the remaining five months, the evidence is sufficient to support the conviction. We
overrule point of error one. (9)
In his second point of error, appellant challenges the factual sufficiency of the evidence to
support the jury's verdict. When the court conducts a factual-sufficiency review, it views all the evidence,
including the testimony of defense witnesses, and sets aside the verdict only if it is so contrary to the
overwhelming weight of the evidence as to be clearly wrong and unjust. Jones v. State, 944 S.W.2d 642,
647 (Tex. Crim. App. 1996). The court should be appropriately deferential so as to avoid substituting its
own judgment for that of the fact-finder. Id. at 648; see Clewis v. State, 922 S.W.2d 126, 134-35 (Tex.
Crim. App. 1996); Stone v. State, 823 S.W.2d 375, 381 (Tex. App.--Austin 1992, pet. ref'd untimely
filed). The court is authorized to set aside the jury's determination, even if supported by some probative
evidence, when the jury finding is "manifestly unjust." Jones, 944 S.W.2d at 647-48.
In the present case, appellant offered no proof controverting the child support order as the
appropriate level of support, nor contesting the amounts or the delinquency of the five months still in
question, but contends only that there was confusion with regard to the amount owed. Appellant asserts
that notification letters he received from the District Attorney's office stated amounts in arrearage that were
less than the amount shown on the Child Support Module. However, the nonsupport statute does not
require that the person know the exact amount of the nonsupport, only that he know he is not providing all
support required. See Penal Code § 25.05(a). What is clear from appellant's testimony is that he admits
receiving the letters informing him of an arrearage and that these letters gave him notice that he was behind
in his child support payments. We conclude, therefore, that the jury's finding that appellant knowingly failed
to support his children was not "clearly wrong and unjust."
Appellant also challenges the factual sufficiency of the evidence to support the jury's failure
to find the affirmative defense that appellant was unable to pay. See Penal Code § 25.05(d). At trial,
appellant testified concerning his current living conditions, stating that he was living in a two-bedroom trailer
and owned a 1977 pickup truck, without insurance. Appellant further testified that he was working part-time and trying to find additional work by looking in the paper every day and contacting people. He stated
that his current income was barely enough to cover his food and shelter. On cross-examination, appellant
admitted he had not applied for employment at various local employers including a local cement company,
amusement park, and several fast-food restaurants, nor had he applied for work with the Texas
Employment Commission. In addition, appellant raised the issue of his expected tax return for the previous
year, yet failed to bring his W-2 income tax form to show what his income had been. The State offered
testimony from Trisha Belcher that appellant was capable of sufficient employment to pay the child support
and that he was refusing to pay full support because of his resentment due to previous charges she had filed
against him. The record thus contains some evidence on each side of the question of appellant's inability
to pay. In consideration of all relevant evidence, we conclude that the judgment is not so against the great
weight and preponderance of the evidence as to be manifestly unjust. See Patel v. State, 787 S.W.2d
410, 411 (Tex. Crim. App. 1990). Appellant's second point of error is overruled.
CONCLUSION
We overrule appellant's points of error challenging the legal and factual sufficiency of the
evidence and affirm the conviction.
J. Woodfin Jones, Justice
Before Chief Justice Carroll, Justices Jones and Kidd
Affirmed
Filed: January 23, 1998
Publish
1. While both the jury charge and the indictment allege appellant's mental state in the conjunctive "and,"
the nonsupport statute allows the stated mental states to be proven in the disjunctive "or." See Penal Code
§ 25.05(a). The State is allowed to anticipate variances in the proof by pleading alternative "manner and
means" in the conjunctive when the proof of any one of the "manner and means" will support a guilty
verdict. See Zangheti v. State, 618 S.W.2d 383, 387-88 (Tex. Crim. App. 1981).
2. A person acts intentionally when it is his conscious objective or desire to engage in the conduct or
cause the result. Penal Code § 6.03(a).
3. A person acts knowingly when he is aware of the nature of his conduct or that the circumstances exist.
Penal Code § 6.03(b).
4. In the 1987 amendments, the legislature also expanded the duty of support to include "his child who
is the subject of a court order requiring the individual to support the child." Act of July 20, 1987, 70th
Leg., 2d C.S., ch 73, § 13, 1987 Tex. Gen. Laws 225, 231. In the same bill, the legislature also amended
section 14.05 of the Family Code to allow for child support beyond the child's eighteenth birthday, if the
child is still in high school. Id. § 4 at 226. This is consistent with the foregoing amendment to section
25.05(a) of the Penal Code, because otherwise the Penal Code section would have left a gap for children
over 18 who were still in high school.
5. In the present case, appellant did not present a vagueness challenge to the constitutionality of the
statute. Accordingly, although we have grave concerns, we take no position on the question. We note that
one court of appeals has decided that the statute is not unconstitutionally vague. See Lyons v. State, 835
S.W.2d 715, 719 (Tex. App.--Texarkana 1992, pet. ref'd).
6. For a nonexclusive list of seventeen factors that may be used in determining the appropriate amount
of child support in the Family Code, see Tex. Fam. Code Ann. § 154.123 (West 1996).
7. These five months (September 1994; November 1994; August 1995; September 1995; and October
1995) account monetarily for more than eighty percent of the arrearages charged.
8. In Hernandez v. State, 841 S.W.2d 569 (Tex. App.--Eastland 1992, pet. ref'd), the Eastland Court
of Appeals attempted to distinguish Lehman by limiting it to situations in which the incidents of theft are
charged in the disjunctive. Id. at 571. However, Lehman itself points out that the state is allowed to
anticipate variances in the proof by pleading alternative "manner and means" in the conjunctive when proof
of any one of the "manner and means" will support a guilty verdict. Lehman, 792 S.W.2d at 84 (citing
Zangheti, 618 S.W.2d at 387-88). Furthermore, the Eastland court used the instructions in the jury charge
as the standard against which it measured the sufficiency of the evidence. Hernandez, 841 S.W.2d at 571
(citing Nickerson v. State, 782 S.W.2d 887, 891 (Tex. Crim. App. 1990)). However, the court of
criminal appeals recently rejected the use of the wording of a particular jury charge to measure sufficiency
of the evidence. See Malik v. State, 953 S.W.2d 234, 239-40 (Tex. Crim. App. 1997). Accordingly,
we decline to adopt the Hernandez court's limitation of Lehman.
9. Although the court's charge included in the list of delinquencies the months of December 1994 and
January 1995, the indictment did not. Appellant did not complain of this inconsistency in the district court,
however, and does not raise it on appeal. For those reasons, and for the additional reason that the two
extra months in the charge were both months in which we have assumed without deciding there was no
evidence of any delinquency, we conclude that the variance between the indictment and the charge does
not require reversal.
sufficiency of the
evidence and affirm the conviction.
J. Woodfin Jones, Justice
Before Chief Justice Carroll, Justices Jones and Kidd
Affirmed
Filed: January 23, 1998
Publish
1. While both the jury charge and the indictment allege appellant's mental state in the conjunctive "and,"
the nonsupport statute allows the stated mental states to be proven in the disjunctive "or." See Penal Code
§ 25.05(a). The State is allowed to anticipate variances in the proof by pleading alternative "manner and
means" in the conjunctive when the proof of any one of the "manner and means" will support a guilty
verdict. See Zangheti v. State, 618 S.W.2d 383, 387-88 (Tex. Crim. App. 1981).
2. A person acts intentionally when it is his conscious objective or desire to engage in the conduct or
cause the result. Penal Code § 6.03(a).
3. A person acts knowingly when he is aware of the nature of his conduct or that the circumstances exist.
Penal Code § 6.03(b).
4. In the 1987 amendments, the legislature also expanded the duty of support to include "his child who
is the subject of a court order requiring the individual to support the child." Act of July 20, 1987, 70th
Leg., 2d C.S., ch 73, § 13, 1987 Tex. Gen. Laws 225, 231. In the same bill, the legislature also amended
section 14.05 of the Family Code to allow for child support beyond the child's eighteenth birthday, if the
child is still in high school. Id. § 4 at 226. This is consistent with the foregoing amendment to section
25.05(a) of the Penal Code, because otherwise the Penal Code section would have left a gap for children
over 18 who were still in high school.
5. In the present case, appellant did not present a vagueness challenge to the constitutionality of the
statute. Accordingly, although we have grave concerns, we take no position on the question. We note that
one court of appeals has decided that the statute is not unconstitutionally vague. See Lyons v. State, 835
S.W.2d 715, 719 (Tex. App.--Texarkana 1992, pet. ref'd).
6. For a nonexclusive list of seventeen factors that may be used in determining the appropriate amount
of child support in the Family Code, see Tex. Fam. Code Ann. § 154.123 (West 1996).
7. These five months (September 1994; November 1994; August 1995; September 1995; and October
1995) account monetarily for more than eighty percent of the arrearages charged.
8. In Hernandez v. State, 841 S.W.2d 569 (Tex. App.--Eastland 1992, pet. ref'd), the Eastland Court
of Appeals attempted to distinguish Lehman by limiting it to situations in which the incidents of theft are
charged in the disjunctive. Id. at 571. However, Lehman itself points out that the state is allowed to
anticipate variances in the proof by pleading alternative "manner and means" in the conjunctive when proof
of any one of the "manner and means" will support a guilty verdict. Lehman, 792 S.W.2d at 84 (citing
Zangheti, 618 S.W.2d at 387-88). Furthermore, the Eastland court used the instructions in the jury charge
as the standard against which it measured the sufficiency of the evidence. Hernandez, 841 S.W.2d at 571
(citing | 01-03-2023 | 09-05-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/1622877/ | 569 So. 2d 1310 (1990)
L.D.L., a Child, Appellant,
v.
STATE of Florida, Appellee.
No. 89-2102.
District Court of Appeal of Florida, First District.
November 6, 1990.
*1311 Michael E. Allen, Public Defender, David A. Davis, Asst. Public Defender, for appellant.
Robert A. Butterworth, Atty. Gen., Laura Rush, Asst. Atty. Gen., for appellee.
SHIVERS, Chief Judge.
Defendant L.D.L., a child, appeals final judgment and sentence finding him guilty of trespass after warning in violation of section 810.09(1), Florida Statutes (1987), and placing him on community control. At issue is whether the evidence was sufficient to warrant a finding of guilty on the charge of trespass. We reverse.
The Griffin Heights Apartments on Basin Street in Tallahassee is a low-rent federally subsidized housing project. By letter dated August 3, 1988, WWH Realty Investors 3G, Ltd., d/b/a Griffin Heights Apartments advised the Tallahassee Police Department that it "gave authority to the Tallahassee Police Department to issue no trespass warnings and/or to arrest any persons loitering on the property who are not residents."
Acting upon their authority, the police, on November 21, 1988, issued a trespass warning to the appellant for loitering around the laundry area of the apartment complex. Appellant at that time indicated that he lived near Arkansas or California Streets.
Four and one half months later, on March 30, 1989, Officers Coleman and Goldwick were patrolling through the Basin Street Project between 9 and 11 p.m. They saw a large group of juveniles gathered on the east side of the "H" building. Officer Coleman testified that it is not unusual at all for many of the teenagers who live in the complex to hang around the "H" building/laundry room area at night. The officers observed that every time they drove past this group, one juvenile in particular the appellant would run northbound toward the laundry room area. Both officers testified that it was obvious appellant was leaving the area due to their presence, since appellant would literally run in the opposite direction every time the officers drove by.
Because of appellant's "suspicious" behavior, the police decided to pursue appellant on foot. Officer Coleman testified that he observed appellant run north through the laundry room area, through the complex, and eventually stop on the second-floor balcony of the "C" building, in front of Linda Rollins' apartment, where appellant was finally apprehended. When the police questioned appellant after apprehending him, appellant did not say he was visiting Linda Rollins. Appellant instead stated that he "stayed" at Rollins' apartment.
Officer Goldwick testified that when appellant first saw Goldwick coming toward him, he ran past the "C" building, where Rollins' apartment was located. Officer Goldwick also indicated that he could not recall if there was anyone else with appellant at the time he first came on the scene at Rollins' apartment, but stated that "[t]here could have been."
Linda Rollins testified that appellant, a good friend of the family, is allowed to be a visitor to her apartment. Ms. Rollins stated that her son was on the porch with appellant outside her apartment when appellant was arrested.
Appellant's friend testified that around 10:30 p.m. he ran into appellant while he was on his way back from the convenience store. He and appellant then walked to his apartment. His friend testified that he did not see appellant run away from the police.
Appellant testified that his friends, grandmother and brother lived at the complex. Appellant testified that he was not visiting at Ms. Rollins' apartment on the night of his arrest, but he was with his brother. He stated that his brother lived in Apt. 246-L. Appellant further testified *1312 that he was with his brother when the police arrived, and everyone including his brother had left upon seeing the police. Appellant stated that he knew he had been given a trespass warning, and that was one reason he ran when he saw the police.
Appellant, a juvenile, was charged by petition filed in the circuit court with one count of trespass on property after warning in violation of section 810.09(1), Florida Statutes. He was tried and found guilty as charged. Adjudication of delinquency was withheld and appellant was placed on community control.
Section 810.09(1), Florida Statutes, reads:
810.09 Trespass on property other than structure or conveyance.
(1) Whoever, without being authorized, licensed, or invited, willfully enters upon or remains in any property other than a structure or conveyance as to which notice against entering or remaining is given, either by actual communication to the offender or by posting, fencing, or cultivation as described in s. 810.011, commits the offense of trespass on property other than a structure or conveyance.
In order to be found guilty of the crime of trespass on property other than a structure or conveyance, the State is required to prove the following four elements beyond a reasonable doubt:
(1) that the defendant willfully entered the property alleged;
(2) the property was owned by or lawfully in possession of the person alleged;
(3) notice not to enter had been given by actual communication to the defendant; and
(4) that defendant's entering the property was without permission.
See R.C.W. v. State, 507 So. 2d 700, 701-702 (Fla. 1st DCA 1987); Florida Standard Jury Instruction (Criminal) "Trespass On Property Other Than a Structure or Conveyance."
The State did not prove each element of the offense of trespass violation of section 810.09(1), Florida Statutes beyond a reasonable doubt. Under the evidence presented it appears that the trier of fact could not reasonably conclude the evidence was inconsistent with every reasonable hypothesis of the defendant's innocence. The appellant presented a reasonable hypothesis of his innocence. Appellant testified that he was visiting his brother at the complex. He testified that he was with his brother at the time the officers first spotted him, and that his brother lived at the complex. Not only did appellant's brother live at the complex but so did appellant's grandmother and appellant's friend. The mother of appellant's friend testified that appellant is a good friend of the family and is allowed to be a visitor at their apartment. An examination of Linda Rollins' lease in the record did not reveal a prohibition against having visitors.
At the end of the hearing the trial judge announced that it was not proven beyond a reasonable doubt that L.D.L. wasn't there by invitation or by implied invitation of the lessee. She stated that he certainly was not there by invitation or permission of the owner. The trial court announced and ruled that the owner's rights are not superseded by the lessee's rights, and that there are remedies other than just by violating the trespass warning, if they wanted that trespass warning removed.
We find the trial court applied an erroneous standard. A landlord generally does not have the right to deny entry to persons a tenant has invited to come onto his property. This law also applies to the common areas of the premises. Right of third person to enter premises against objection of the landlord, 6 A.L.R. 465. See also 49 Am.Jur.2d, Landlord and Tenant, sections 228, 235.
In the absence of any restriction in the agreement between the landlord and his tenant, the tenant, when in possession of the demised premises, has the right to invite or permit such persons as his business interests or pleasure may suggest to come upon the premises so in his possession, for any lawful purpose, and the landlord has no right to prohibit such persons from coming on the demised premises. One who thus comes upon the *1313 premises upon the invitation of the tenant, although expressly forbidden to do so by the landlord, is not guilty of criminal trespass. 49 Am.Jur.2d, Landlord and Tenant, section 235.
REVERSED.
ERVIN, J., concurs.
NIMMONS, J., dissents. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1622874/ | 609 S.W.2d 826 (1980)
Cecil WHEELER, Guardian of the Estate of Edward N. Prince, Jr., NCM, Appellant,
v.
EMPLOYERS MUTUAL LIABILITY INSURANCE COMPANY OF WISCONSIN, Appellee.
No. 1458.
Court of Civil Appeals of Texas, Tyler.
November 20, 1980.
*827 Guy W. Griffin, Bill F. Griffin, Jr., Center, for appellant.
Robert Fairchild, Fairchild, Price & Russell, Center, for appellee.
John O. Brentin, Houston, for intervenor.
PER CURIAM.
This is an appeal from an order of the trial court of Shelby County captioned "Order Denying Summary Judgment and Abating said cause" dated June 6, 1980.
Edward N. Prince was injured in an automobile accident in Madison County, Texas, on November 11, 1977, following which a claim for worker's compensation benefits was filed with the Industrial Accident Board of the State of Texas (the IAB). On December 8, 1978, the IAB entered its final award concerning Prince's claim. After proper and timely notice of appeal, the insurance carrier, Employers Mutual Liability Insurance Company of Wisconsin, appellee here (Employers), filed suit in the District Court of Madison County to set aside the award; service was perfected upon Prince and his guardian; an answer and cross-action was filed by the appellant; and appellant's motion to dismiss the Madison County suit for want of jurisdiction was overruled. As of this date, the Madison County suit is still pending final determination.
Subsequent to the filing of the Madison County suit, appellant herein filed suit in the District Court of Shelby County seeking to mature the same award of the IAB which was the basis of the Madison County suit. In that suit, both parties filed pleadings entitled Motion for Summary Judgment. Following a hearing upon both matters, the District Court of Shelby County on June 6, 1980, denied Appellant's Motion for Summary Judgment and abated said cause pending final determination of the Madison County suit.
Thereafter, on June 13th, the appellant filed an instrument with the Shelby County court entitled "Motion for New Trial" which was overruled by order of the court on July 28th. On August 14th, appellant filed a cost bond attempting to appeal the matter to this court which states, in part:
COST BOND
Whereas, in the above-entitled and numbered cause pending in the District *828 Court of Shelby County, Texas, and at a regular term thereof, on the 6th day of June, 1980, a judgment was rendered in favor of Employers Mutual Liability Insurance Company of Wisconsin, Defendant, and against Cecil Wheeler, Guardian of the Estate of Edward N. Prince, Jr., Plaintiff, denying said plaintiff's Motion for Summary Judgment, from which judgment Cecil Wheeler, Guardian, desires to appeal to the Court of Civil Appeals for the Twelfth Supreme Judicial District of Texas.... (Emphasis supplied.)
Employers has filed with this court a Motion to Dismiss for Want of Jurisdiction stating in support thereof that no final judgment has been entered in this cause by the trial court and the order of the trial court is an interlocutory order from which no appeal lies. We agree for several reasons.
In response to Employers' motion, appellant asserts that he is entitled to perfect his appeal for the reason that while there is ordinarily no appeal from an interlocutory order, the rule is different with respect to an order which is void because of lack of jurisdiction or power of the trial court to act. In support of the appealability of his claim, appellant contends that since appellee did not file a Plea in Abatement, the order of the trial court abating the cause on its own motion was void, thus allowing him to appeal.
While we are cognizant of the general rule proffered by appellant, we find that its attempted application to the case at hand is misplaced. The order of the trial court abating the action was not void merely because it was entered upon its own motion. Instead, as in Campbell Ins. Agency v. Commercial Standard Insurance Company, 502 S.W.2d 232, 236 (Tex.Civ.App.-Fort Worth 1973, writ ref'd n.r.e.), we hold that the fact that no plea in abatement was filed by Employers is of no import. The authority of the court to abate trial of a case does not depend upon such a plea, the plea being only a vehicle by which there is shown to exist a circumstance justifying abatement by the court. In order to serve the public interest in the orderly disposition of litigation and to prevent a multiplicity of suits, a court may, where it is made aware of circumstances justifying it, abate an action upon its own motion. Courts are erected to settle controversies, not to multiply them.
Here, the trial court was made aware of the pendency of the prior action by Employers' pleadings as well as evidence adduced at the hearing on both parties' Motions for Summary Judgment. At that time, appellant himself introduced certified copies of all pleadings and orders which had been filed in the Madison County suit. Thus, this case is distinguishable from that line of authorities which holds that a plea in abatement may be waived where not properly pled. Such cases hold that if facts are not seasonably alleged and proof of the pendency of the prior suit is not made by competent evidence, abatement is waived. Cleveland v. Ward, 116 Tex. 1, 285 S.W. 1063, 1071-72 (1926).
At oral argument before the trial court, Employers clarified its position relative to its Motion for Summary Judgment to disclose that the crux of its contention was that the cause was improperly before the court due to the pending Madison County suit. Rather than dismissing the suit as prayed, the court chose to abate the action. Clearly, facts were seasonably proven at the hearing that revealed to the court that the prior Madison County suit involved identical parties and issues and that that court had acquired dominant jurisdiction. In fact, we fail to see how an abatement of the suit resulted in harm to appellant.
Furthermore, it appears that there are further grounds to support our judgment that this court lacks jurisdiction. As stated in the aforementioned quotation from appellant's cost bond, it appears that he is attempting to appeal from an order overruling his Motion for Summary Judgment. Such interlocutory appeals have long been verboten in this state. Ackermann v. Vordenbaum, 403 S.W.2d 362, 365 *829 (Tex.1966); Brazoria County v. Radtke, 566 S.W.2d 326, 327 (Tex.Civ.App.-Beaumont 19, writ ref'd n.r.e.); Haynes v. Dunn, 518 S.W.2d 880, 886 (Tex.Civ.App.-Waco 1975, writ ref'd n.r.e.).
Accordingly, for the reasons stated above, Employers' Motion is granted and the appeal is dismissed for want of jurisdiction. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1622862/ | 609 S.W.2d 541 (1980)
Ex parte Jerry Stephen HOLBROOK.
No. 64979.
Court of Criminal Appeals of Texas, En Banc.
December 23, 1980.
*542 Henry Wade, Dist. Atty. and Karen Chilton Beverly, Asst. Dist. Atty., Dallas, Robert Huttash, State's Atty., Austin, for the State.
Before the court en banc.
OPINION ON STATE'S MOTION FOR REHEARING
CLINTON, Judge.
On original submission of this case, relief under the post-conviction provisions of Article 11.07, V.A.C.C.P., was granted in full. Subsequently, leave was granted for the filing of the State's motion for rehearing. Our original opinion is hereby withdrawn, and this opinion will be substituted therefor.
In the original opinion, the Court found that the indictment in Cause No. F-79-6693-HJ, returned in the Criminal District Court of Dallas County, was fundamentally defective. The opinion followed the reasoning of Ex parte Russell, 561 S.W.2d 844 (Tex.Cr.App.1978), which in turn relied on Moore v. State, 545 S.W.2d 140 (Tex.Cr.App.1978). Moore held that the criminal attempt provisions of V.T.C.A. Penal Code, § 15.01, do not apply to the Controlled Substances Act, Article 4476-15, V.A.C.S. (hereafter, the Act). But, as the State's motion points out, § 4.09(a)(3) of the Act was amended in 1979 to specifically include the "attempt to acquire or obtain possession of a controlled substance" in the description of offenses under that section. Acts 1979, 66th Leg., ch. 90, pp. 163, 165. This amendment was effective May 2, 1979, and the date of commission of the alleged offense is June 7, 1979. Therefore, the indictment in Cause No. F-79-6693-HJ was not fundamentally defective for the reason stated in the original opinion.
We conclude, however, that the indictment is fundamentally defective for another reason. To identify the substance sought to be acquired, the indictment alleges that petitioner fraudulently attempted to obtain possession of "a controlled substance, namely: Preludin." It is contended by petitioner and conceded by the State that Preludin is not expressly listed in the schedules and penalty groups of the Act. The State nevertheless argues that Preludin is a commercial name for phenmetrazine hydrochloride, a salt of phenmetrazine, and that phenmetrazine and its salts are contained in Schedule II [§ 2.04(e)(4)] and Penalty Group 3 [§ 4.02(d)(1)(D)] of the Act. Therefore, the State contends, an offense was alleged.
The State's contention is without merit for the reasons stated in Ex parte Wilson, 588 S.W.2d 905 (Tex.Cr.App.1979). In that case the indictment was for possession of phentermine, which was not named in a penalty group but was subject to regulation because it appeared in the schedules of the Act. The State's contention, that the indictment *543 was sufficient to state an offense because phentermine is an isomer of methamphetamine and thus within a penalty group, was rejected. It was held that this is an essential fact the State must prove to achieve a conviction. So it had to be alleged in the indictment. The same principle was applied to an indictment naming only "Tuinal," an unlisted substance said to be a preparation containing a derivative of listed barbitonic acid, in Morrell v. State, 598 S.W.2d 298 (Tex.Cr.App.1980). We decline the State's invitation to overrule Wilson. The instant indictment should have alleged what facts must be proved about Preludin that make it a controlled substance, and the failure to do so rendered the indictment fundamentally defective.
Regarding the indictment in Cause No. F-79-12148-RJ, the opinion on original submission held that a variance between the allegations of the purport and tenor clauses caused the indictment to be fundamentally defective. The variance seen was between the allegation in the purport clause that petitioner had unlawfully acquired "a controlled substance, namely Amphetamine," and the tenor clause showing that the forged prescription was for "Biphetamine." Yet, the indictment in the latter cause is not fundamentally defective in light of the most basic standard for testing it, as restated in American Plant Food Corp. v. State, 508 S.W.2d 598, 603 (Tex.Cr. App.1974):
"If the charge alleges an offense was committed by the defendant, then it is sufficient in law to support a verdict of guilty if one be rendered thereon. If it does not so allege, then it is utterly insufficient and any conviction based thereon is void. A void conviction may be challenged at any time ..."
In order to provide a clearer understanding of what the argument is about in this cause, we set out the pertinent parts of the indictment (without editing several instances of questionable punctuation):
"... that one Jerry Stephen Holbrook... did then and there unlawfully, knowingly and intentionally acquire and obtain possession of a controlled substance, namely: Amphetamine, by misrepresentation, fraud, forgery, deception and subterfuge, in that said defendant, did then and there present to Nancy Starnes, a prescription for said controlled substance, said prescription purporting to prescribe said controlled substance for Carol Sewell, but which said prescription was then and there forged, in that it then and there purported to be but had not been written and signed by Bobby M. Via, M.D., which the said defendant well knew, and the said prescription was then and there of the tenor following:
(here the face of a printed form prescription with handwritten data thereon is set out, the principal germane material being:
`Rx
Biphetamine 20 mg
#60')"[1]These allegations were made by a scrivener who sought to state an offense under Section 4.09(a)(3) of the Act, supra, reading as follows:
"(a) It is unlawful for any person knowingly or intentionally:
* * * * * *
(3) to acquire [or] obtain ... possession of a controlled substance by misrepresentation, fraud, forgery, deception, or subterfuge; ..."
The question is whether an offense denounced by Section 4.09(a)(3) is stated by the instant indictment. We are convinced it does, without any fatal defect, by its language that is underscored ante.
Though not absolute, the general rule is that an indictment which tracks the statutory language proscribing conduct as penal is sufficient to charge an offense, Clark v. State, 577 S.W.2d 238, 240 (Tex.Cr. App.1979); but if the manner or means of doing an act makes otherwise innocent conduct a criminal offense, facts showing the offensive manner and means must be alleged, Posey v. State, 545 S.W.2d 162, 163 (Tex.Cr.App.1977). Thus, in this type of case the Court held in Posey that it is not enough to allege the statutory language *544 and an act of presenting to a named pharmacist a prescription purporting to prescribe a controlled substance for another person, since the latter act is not a criminal offense.[2] Additional facts leading to the legal conclusion that the accused knowingly and intentionally acquired and obtained possession of a controlled substance by misrepresentation, fraud, deception or subterfuge are required, Posey, supra, at 163.
Still, it has been held that allegations of the statutory language coupled with an averment of the means used, the passing of a forged prescription, is sufficient, and "it was unnecessary for the indictment to aver the elements of passing a forged writing in a case of obtaining a controlled substance by `misrepresentation, fraud, forgery, deception, or subterfuge'," Graham v. State, 546 S.W.2d 605, 607 (Tex.Cr.App.1977). With that rationale the Graham court held it need not determine whether knowledge that the prescription was forged is an essential averment in this kind of casein the instant case, of course, that knowledge is alleged. Graham v. State, supra, is, therefore, direct and controlling authority for upholding the indictment before us against the contention that it is fundamentally defective.[3]
Section 4.09(a)(3) does not require, as an element of its offenses, such purport and tenor clauses, as in a forgery indictment. No doubt George v. State, 560 S.W.2d 93 (Tex.Cr.App.1978) has provoked much of the difficulty. There in both causes under submission the "purport" clause of each indictment alleged one drug but the attached copy of the prescription named "a different drug," and without noticing as a guidepost the holding of Graham v. State, supra, that "it was unnecessary for the indictment to aver the elements of passing a forged writing" in such a case, the George opinion struck right off into principles of forgery cases; it cited only Rhudy v. State, 42 Tex. Crim. 225, 58 S.W. 1007 (1900), which examined "our system of pleading" a forgery offense extant eighty years ago to uphold the charge then under consideration,[4] and a section from Texas Jurisprudence Second Edition that addresses purport and tenor clauses in an indictment for forgery.[5] But neither the rule concerning setting out the tenor of the instrument in an indictment for forgery nor its rationale pertains to the gravamen of the offenses denounced by Article 4.09(a)(3) of the Act. In the latter the vice is obtaining possession of a controlled substance, the legislative *545 effort being to proscribe every possession of controlled substances unless authorized by the Act. Sections 4.03 and 4.04; see Bailey v. State, 559 S.W.2d 957 (Tex.Cr.App.1978). Thus, once it is alleged that a named controlled substance was acquired or obtained by misrepresentation, et cetera, by using a forged prescription, an offense is charged, and neither the purport nor the tenor of that prescription is of any consequence in alleging the offense.[6]
For these reasons an offense is alleged by the indictment in Cause No. F-79-12148-RJ.[7] Ground of error two is overruled.
The application for relief as to Cause No. F-79-6693-HJ is granted, and the application relating to Cause No. F-79-12148-RJ is denied. A copy of this opinion will be sent to the Sheriff of Dallas County, as well as to the Texas Department of Corrections.
ODOM, Judge, concurring in part and dissenting in part on State's Motion for rehearing.
I concur in the decision to grant relief in cause F79-6693-HJ. I dissent to the decision to deny relief in cause F79-12148-RJ.
In reaching its decision to deny relief, the majority hold that "amphetamine" and "biphetamine" in the indictment do not present a variance. The majority says:
"They [the State] allege, and we agree, that biphetamine is a commercial drug containing one half dextroamphetamine and one half amphetamine ... This, of course, would be subject to proof of these facts at trial."
The majority overlooks the rule that the place for the State to make its allegations is in the indictment, not in the brief on motion for rehearing.
The majority erroneously suppose that any allegation other than the one in this indictment would have violated Ex parte Wilson, Tex.Cr.App., 588 S.W.2d 905. In truth the opposite is the case. The majority reaffirm Wilson, in the first part of the opinion and violate it in the second. If the fact that biphetamine contains amphetamine is a matter for proof at trial rather than for allegation in the indictment, as the majority asserts, then why is the fact that phentermine is an isomer of methamphetamine not subject to the same rule? The majority admits the latter fact be alleged, as held in Wilson, but contrariwise holds the former need not be alleged.
The indictment presents a variance on its face, and is to be judged on its face, not by what may be proven later. The indictment in cause F79-12148-RJ should have alleged that petitioner unlawfully required "a controlled substance, namely biphetamine, containing the controlled substance amphetamine." Such an allegation would have eliminated the fatal variance between the tenor and purport clauses and would not have run afoul of Ex parte Wilson, supra.
For these reasons I dissent to the second part of the majority opinion.
ROBERTS, PHILLIPS and TOM G. DAVIS, JJ., join this opinion.
NOTES
[1] All emphasis is supplied throughout by the writer of this opinion unless otherwise indicated.
[2] "It is not a criminal offense to obtain a controlled substance for a friend or family member by presenting to a pharmacist a prescription prescribing a controlled substance for that friend or family member which had been properly obtained," Posey, supra, at 164.
[3] Though in Posey v. State, supra, the Court went on to contrast the indictment allegations in two similar other causes against the accused with the one held insufficient, it is not to be taken as dictating that to be sufficient every indictment under Section 4.09(a)(3) of the Act alleging a forged writing must conform to the content and format of the indictments Posey upheld. Indeed, the current successor to one of the form books referred to in Posey, 7 Tex. Practice 130, Criminal Forms Annotated, Morrison and Blackwell, § 23.06, indicates in this sort of case that it is enough to specify the means as "using a forged instrument."
Thus reconciled, Graham and Posey do not teach different lessons for drafting a Section 4.09(a)(3) indictment.
[4] The conclusion of the Court is expressed at 58 S.W. 1008:
"... If, under our system of pleading, it is not necessary to set out in an indictment for forgery the name of the party intended to be injured or defrauded, and if it is not necessary to set out the purport clause, but merely to set out the instrument according to its tenor, then it would follow that it is not necessary to charge the name of the party forged to the instrument, but only necessary to allege, in accordance with the statute, as was done in this case, that the instrument was made by the defendant without lawful authority, and with intent to injure or defraud, and that said instrument purported to be the act of another than the defendant, the instrument then being set out according to its tenor,would be sufficient. We accordingly hold that the indictment in this case is good."
[5] 25 Tex.Jur.2d 560-562, "Forgery" § 46 states the basic rule drawing a forgery indictment:
"... With respect to an indictment based on a forged instrument, the rule is that, where possible, the instrument must be set out according to its tenor, or in haec verba, and that it is not enough to describe the instrument by its purport."
But one must resort to the earliest authority cited in support of this statement of the rule, Thomas v. State, 18 White & W. 213 (Ct.App. 1885) for an approved explanation of the rationale behind it, as given by Mr. Bishop, 2 Bish.Crim.Proc. (3rd Ed.) § 403, viz: "The object of such requirement is, as commonly stated, to enable the court to judge whether or not it is an instrument whereof forgery may be committed." And, it is significant to note, in his opinion in Thomas v. State, supra, Presiding Judge White took pains to point out that the rule in forgery cases is distinguishable from other offenses in which a written instrument might be involved, id., at 221.
[6] Merely making an unauthorized writing or possessing it with intent to utter it, as well as actually uttering a forged writing, is proscribed by V.T.C.A. Penal Code, § 32.21, and the indictment must aver that the writing purports to be the act of another who did not authorize that act. Minix v. State, 579 S.W.2d 466 (Tex.Cr. App.1979); Landry v. State, 583 S.W.2d 620, 625 (Tex.Cr.App.1979, Opinion on Rehearing) and Ex parte Huff, 583 S.W.2d 774 (Tex.Cr. App.1979).
[7] However, in this case, a better form of descriptive pleading is to allege that the accused acquired or obtained possession of "a controlled substance, namely: Amphetamine, contained in a preparation called Biphetamine...," etc. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1622860/ | 190 F. Supp. 10 (1960)
RISS & COMPANY, Inc., Plaintiff,
v.
ASSOCIATION OF AMERICAN RAILROADS et al., Defendants.
Civ. A. No. 4056-54.
United States District Court District of Columbia.
December 9, 1960.
*11 Counsel for plaintiff
Riss & Company, Inc.; A. Alvis Layne, Robert L. Wright, Lester M. Bridgeman, Morton A. Brody, Washington, D. C.
Counsel for defendants
1. Association of American Railroads; William E. Miller, Stephen Ailes, Richard A. Whiting, Gregory S. Prince, Philip F. Welsh, Washington, D. C.
*12 2. Association of Western Railways; Stuart S. Ball, Richard J. Flynn, J. H. Hays, Amos M. Mathews, J. W. Nisbet, Chicago, Ill., Lawrence Cake, John Guandolo, Washington, D. C.
3. Traffic Executive Association Eastern Railroads; Samuel E. Gates, New York City, Chisman Hanes, James L. Kaler, Washington, D. C.
4. Eastern Railroad Presidents Conference; C. Brewster Rhoads, Joseph W. Swain, Jr., Philadelphia, Pa.
5. Carl Byoir & Associates, Inc.; Francis C. Reed, Powell Pierpoint, New York City, Robert M. Gray, Washington, D. C.
7. Atlantic Coast Line Railroad Company; Francis M. Shea, New York City, Prime F. Osborn, Louisville, Ky.
[*]8. Atchison, Topeka & Santa Fe Railway Company; Stuart S. Ball, J. H. Hays, Amos M. Mathews, J. W. Nisbet, Chicago, Ill.
11. Baltimore and Ohio Railroad Company; Hugh B. Cox, James H. McGlothlin, James C. McKay, Washington, D. C., Edwin H. Burgess, John L. Rogers, Jr., Baltimore, Md.
15. Chesapeake and Ohio Railway Company; Edward K. Wheeler, Robert G. Seaks, Washington, D. C.
[*]16. Chicago, Burlington & Quincy Railroad Company, [*]21. Chicago, Milwaukee, St. Paul & Pacific Railroad Company, [*]22. Chicago and Northwestern Railway Company, [*]23. Chicago, Rock Island & Pacific Railroad Company; Stuart S. Ball, J. H. Hays, Amos M. Mathews, J. W. Nisbet, Chicago, Ill.
29. Erie Railroad Company; Hugh B. Cox, James H. McGlothlin, James C. McKay, W. T. Pierson, Washington, D. C., P. H. Donovan, Cleveland, Ohio.
31. Great Northern Railway Company; Stuart S. Ball, J. H. Hays, Amos M. Mathews, J. W. Nisbet, Chicago, Ill.
[*]33. Illinois Central Railroad Company, [*]40. Missouri-Kansas-Texas Railroad Company, [*]41. Missouri Pacific Railroad Company; Stuart S. Ball, J. H. Hays, Amos M. Mathews, J. W. Nisbet, Chicago, Ill.
58. New York Central Railroad Company; Edward K. Wheeler, Robert G. Seaks, Washington, D. C., Gerald E. Dwyer, New York City.
65. Northern Pacific Railway Company; Stuart S. Ball, J. H. Hays, Amos M. Mathews, J. W. Nisbet, Chicago, Ill.
[*]66. Pennsylvania Railroad Company; Hugh B. Cox, James H. McGlothlin, James C. McKay, Washington, D. C., John B. Prizer, Carl Helmetag, Jr., Lewin W. Wickes, Philadelphia, Pa.
[*]70. St. Louis-San Francisco Railway Company, [*]72. Southern Pacific Company, [*]76. Union Pacific Railroad Company, [*]78. Wabash Railroad Company, 80. Minneapolis, St. Paul & Sault Ste. Marie Railroad Company; Stuart S. Ball, J. H. Hays, Amos M. Mathews, J. W. Nisbet, Chicago, Ill.
81. Southern Railway Company; Francis M. Shea, New York City, Henry L. Walker, Washington, D. C.
88. Seaboard Air Line Railroad Company; Francis M. Shea, New York City, Harold J. Gallagher, New York City, Charles T. Abeles, Richmond, Va.
SIRICA, District Judge.
On February 17, 1958 defendant (66), the Pennsylvania Railroad Company, filed a counterclaim in this action which reads as follows:
"Commencing prior to January 1, 1954 and at all times since that date Riss has unlawfully combined and conspired with other motor carriers (a) to injure and destroy the competition of this defendant and other rail carriers in the transportation of property in interstate commerce for the United States, (b) to monopolize such transportation and (c) to fix prices for such transportation. In furtherance of this combination and conspiracy Riss and other motor carriers have acted jointly to establish uniform rates over competing routes for the transportation of *13 property in interstate commerce for the United States, and particularly for the transportation of ammunition and explosives, at unreasonably low levels. Riss participated in such joint action for the establishment of uniform rates for the purpose of diverting to itself and other motor carriers all such transportation for the United States." (Emphasis added.)
On February 18, 1958 defendant (72), Southern Pacific Company, filed a similar counterclaim in paragraphs 9 and 10 of its counterclaims, as did defendants (8), The Atchison, Topeka & Santa Fe Railway Company; (16), Chicago, Burlington & Quincy Railroad Company; (21), Chicago, Milwaukee, St. Paul & Pacific Railroad Company; (22), Chicago and Northwestern Railway Company; (23), Chicago, Rock Island and Pacific Railroad Company; (33), Illinois Central Railroad Company; (40), Missouri-Kansas-Texas Railroad Company; (41), Missouri Pacific Railroad Company; (70), St. Louis-San Francisco Railway Company; (76), Union Pacific Railroad Company; and (78), Wabash Railroad Company, in Count II of their counter-claims. On August 25, 1960, by order of the Court, the first so-called "pre-trial" conference on these counterclaims was called for September 17, 1960. This order directed each counterclaimant:
"[To] be prepared to state * * the specific evidence by which it proposes to show (a) the plaintiff's intent to exclude the counterclaimant from competing for government explosives traffic, (b) the conspiratorial conduct intended to accomplish such an injury and (c) the actual impact of this conduct upon the counterclaimant's ability to compete for such traffic."
This conference was held on September 17, and after considering all memoranda submitted by the parties, the proffered evidence of counterclaimants and the arguments, the Court, by Order of September 21, 1960, directed a separate trial of said counterclaims while retaining jurisdiction to consider any matters relating to the counterclaims which might be made a matter of record prior or subsequent to the conclusion of the trial of the case in chief. On September 23, 1960, plaintiff filed a motion for a summary judgment or a directed verdict which was briefed and argued on October 7, 1960. (On November 5, 1960, the jury returned a verdict for plaintiff against defendants (2), (3), (4), (5) and (66), in the case in chief.) This, then, is the history of and the present posture of these counterclaims, which are the only remaining counterclaims in this case.
At this pre-trial conference on the counterclaims, defendant-counterclaimants, while declining to formally amend their counterclaims, orally restricted their claim to that contained in subsection (c) of Count II, i. e.:
"Commencing prior to January 1, 1954 and at all times since that date Riss has unlawfully combined and conspired with other motor carriers * * * (c) to fix prices for [such] transportation. In furtherance of this combination and conspiracy Riss and other motor carriers have acted jointly to establish uniform rates over competing routes for the transportation of property in interstate commerce for the United States and particularly for the transportation of ammunition and explosives at unreasonably low levels. Riss participated in such joint action for the establishment of uniform rates for the purpose of diverting to itself and other motor carriers all such transportation for the United States." (Emphasis added.)
Counsel disagree as to whether the above counterclaim as restricted states a price-fixing conspiracy with a monopolistic purpose or whether it states only a pure price-fixing conspiracy in violation of section 1. For reasons which will appear later in this opinion, the Court does not reach this question, or the question of the sufficiency of proof of liability under either theory.
*14 It has, on occasion, been the practice of this and other Courts to require counsel to first offer proof on the question of liability so that if, in the opinion of the Court, no case of liability has been established, the question of the sufficiency of damage proof need not be reached. In this instance, the Court feels it advisable to reverse this procedure and examine, in the light of a motion for summary judgment, defendant-counterclaimants' proof of damages. In protracted antitrust cases it is not unusual for courts to refrain from passing on the evidentiary basis of a conspiracy charge when they have determined that insufficient evidence existed to support the damage claim. See: Wolfe v. National Lead Co., 9 Cir., 1955, 225 F.2d 427, 429; Delaware Valley Marine Supply Co. v. American Tobacco Co., D.C.E.D.Pa.1960, 184 F. Supp. 440.
For all practical purposes these counterclaims, insofar as the damage aspect is concerned, are at the same stage as if they had been actually tried. Counsel for counterclaimants have indicated that as far as their damage proof is concerned, they intend to rely on the record of the case in chief. On Saturday, September 17, the following discussion occurred between Court and counsel:
"The Court: As I understand that, that means to me that you are not going to show what all these other alleged co-conspirators did or transported; you are going to show what Riss did.
"Mr. McGlothlin: Yes, sir. (Transcript, p. 17,401.)
"The Court: Now let me ask you this question, and maybe you have an answer to it:
"Even though you are not going to show what all of these alleged conspirators haul or how much traffic they hauled, you have got this information which you are going to rely on, 37 to 37-C.
"Why should not the Court and the jury have the benefit, at least, of knowing exactly how much you hauled between the points set forth in 37 to 37-C by the plaintiff, the cost, the profits, et cetera?
"That would not be a Herculean job. I mean, they did it, and I don't know why the railroads couldn't do it.
"Mr. McGlothlin: Because it is immaterial.
"The Court: I think it might be material.
"How do we know that you didn't get a lot more tonnage than you indicate you would have gotten. How do we know that unless we have those figures?
"Mr. McGlothlin: You don't know it, but again it's immaterial. (Transcript, p. 17,405.)
* * * * * *
"Mr. Flynn: * * * Once we have established the fact of damages, that, I think, or I would almost be willing to rest on on the record that we have now as to the fact of the damage as the bulk of the proof on that subject is in the record. * * *. (Transcript, pp. 17,448-449.)"
Counterclaimants' Memorandum in opposition to Plaintiff's Motion for Summary Judgment or a Directed Verdict states, in regard to the amount of injury: "The basic facts are now of record for purposes of this motion." (Memorandum, October 6, 1960, p. 13.)
Plaintiff's exhibits 37 to 37-C ("revised schedule `B'") indicate the specific shipments, by quantity, rate, and origin and destination points, transported by Riss & Company during the alleged damage period, of ammunition and explosives for the United States Government. Defendant-counterclaimants revised memorandum setting forth the proffered materials dealing with the fact and amount of damages, a document of 236 pages, indicates that by using plaintiff's exhibits 37 to 37-C, counterclaimants have determined the rates applicable to Riss and other motor carriers with respect to points between which Riss transported *15 a substantial amount of government munitions traffic. Counterclaimants then set forth, for each of these specific points, the authority for such motor carrier rates and the competing routes over which such rates were applicable. Where a counterclaimant offiered to perform service between the same points as an originating or destination carrier, the counterclaimants have determined the portion that such counterclaimants would have obtained of the gross revenues which would have resulted had the railroads transported the tonnage carried by Riss according to plaintiff's exhibits 37 to 37-C, allegedly pursuant to the price-fixing conspiracy. (See appendix A of this opinion for an example of defendant-counterclaimants' method of proving the fact and amount of damage between two specific points.) Defendant-counterclaimants then determine their net profit from such diverted traffic by a costing procedure based on defendant the Chesapeake and Ohio Railroad's exhibits 29 to 39. (See appendix B of this opinion for an example of counterclaimants' method of determining net profit.)
The affidavit of Earnest C. Pierre, filed October 6, 1960, indicates that the evidentiary basis of defendant counterclaimants' proof of damages is a matter of record in this proceeding. That affidavit states:
"7. The information concerning the Riss movements of ammunition and explosives was obtained from plaintiff's exhibits 37, 37A, 37B and 37C. The information concerning Riss rates and routes was obtained from copies of Riss section 22 quotations and from motor carrier rate bureau quotations in which Riss participated. These documents were furnished by Riss from its files. The information concerning the rates and routes of other motor carriers was obtained from the motor carrier rate bureau quotations furnished by Riss and from the public files of the Military Traffic Management Agency. The rail rates were secured from the section 22 quotations set out in plaintiff's Exhibits 219B through 219K and from the rail tarriffs referred to therein. The rail routes were secured from the applicable tarriffs or quotations, and the rail divisions from the applicable division sheets or agreements."
Counterclaimants have filed a number of affidavits in connection with this matter, all of which are substantially identical in substance. These affidavits recite in summary that each counterclaimant, during the damage period, was ready, willing and able to transport the government munitions traffic in question, and had in effect rates which would have enabled the counterclaimants to transport such traffic over the points in question and that but for the rates quoted by motor carriers during the period, the counterclaimants would have transported "substantial additional" quantities of munitions from and to the points specified.
Basically then, defendant-counterclaimants' proof of damages is as follows: On certain identified routes Riss agreed with other motor carriers to charge the same rate at a particular period of time; that Riss did transport a specific amount of tonnage pursuant to such rate; that because of the general policy of the Defense Department, the counterclaimants would have received the specific individual shipments that Riss transported, but for the agreement between Riss and other motor carriers to quote the rate in question. There is ample testimony in this case concerning the routing policies of the military traffic agencies. At pages 11,770-73 of the transcript of trial, appears the following deposition testimony of Major General Paul F. Yount, who was Deputy Chief and Chief of Transportation for the United States Army, during part of the damage period.
"Q. Now, to the best of your recollection, what was the policy with respect to allocating and routing of military traffic between different *16 carriers? A. Basically, the controlling policy in all cases is economy of movement. (Transcript, p. 11,770.)
"Q. * * * Let us suppose that you had a shipment to run between a series of shipments between two specified points. There might be available two railroads and two trucklines to carry that transportation. How would that policy be applied in the allocation of the transportation assuming that their rates were exactly the same? A. If their rates and service were exactly the same, the railroads would have gotten essentially half the traffic. The division between those two railroads would be predicated upon their proportion of the rail capability in the area they serve. The truck lines would have also had a division of the traffic in relation to their capability * * * it is a little easier to administer and it is a little easier to describe with respect to the railroads * * * and that is kept on a carload basis in which they attempt to balance off over a period of quarters and a period of the year * * *."
"Q. The approximations would be rough, however, would they not? A. Of course, they are. In the administration of it, you can never be exact in the thing. It is merely, I think, in all good conscience, a honest attempt to obtain an equitable, not an equal division of traffic.
"Q. And the longer the period of time, the more equitable the distribution would be because of the ability to make the adjustments from time to time? A. That is correct. You could never do it in a short time such as a month. You have to do it on a longer period.
"Q. How would the division be made? A. The rail carrier would have had half of the business and the truck lines would have had the remaining half divided amongst them to their capabilities. Now, there again, you must go back to the service, the question of the destination, the terms under which it originates, so that there is no exact distribution or division of this traffic that you can claim. It isn't an exact science by any means.
"Q. No, but the effort would be that over a period of, say, a year, under those circumstances, the divisions would be approximately 50 per cent between the railroad and 50 per cent between the trucking concerns? A. That was the general attempt. (Transcript, pp. 11,772-773)" (Emphasis added.)
Page 5338 of the transcript of trial indicates that the following deposition testimony of Colonel F. T. Edson, Chief of Army Freight Traffic Division during part of the damage period, was read into evidence:
"Q. Now, addressing yourself to the kind of traffic for which railroads compete with motor carriers, did you have any policy of dividing that traffic in any particular way? A. Let me think. I don't recall what policy we followed. There were many, many times though on big movements that we deliberately rates and services being equalsplit movements up between modes of transportation. If we had some tremendous big piecegoods movement or something like that, or movement between manufacturing or weaving plants and finishing plants, and that sort of business, lots of times we split that between modes of transportation.
"Q. Your remarks to this point have been addressed to all kinds of traffic I take it?
* * * * * *
"A. Yes.
* * * * * *
"A. You've got to consider all of the various elements in your whole transportation operation, service, cost, your requirement, the rate of flow that you have to have, *17 and the size of units that you must have going in to your production schedules. All those things have to be considered when you go to route that kind of traffic.
* * * * * *
"A. * * * You would use the carrier that gave youthat would give you the nearest to what your customers say they need. * * *
"Q. Did I understand you correctly to say that, in fact, where rail and motor carrier rates were equal you had divided traffic between them, but you didn't know of a policy that required you to do that? A. I don't recall any specific policy on that. (Deposition of Col. Edson, pp. 41-43.)"
Thus, it would appear that the policy of the military routing officers called for an "equitable" (not equal) division of traffic between the competing modes of transportation; such division to be made over an extended period of time and not on the basis of specific individual shipments. Further, even if costs were equal, the ability of a specific carrier to provide the kind of service needed for the individual shipment was in the last analysis the determining factor. Examining the above testimony in the light most favorable to defendant-counterclaimants, the most that can be said of the military routing policies is that over an extended period of time all things being equal, including costs and all manner of service considerations, the military did its best to "equitably" divide the traffic between competing modes of transportation.
The Court feels strongly that all facts which defendant-counterclaimants purpose to offer on their proof of the fact and amount of damage in regard to these counterclaims are already a matter of record in this case and that in view of its earlier remarks in this opinion on the procedure which has been followed in cases of this type, this matter is properly the subject of a Motion for a Summary Judgment. The Court will, therefore, examine the legal sufficiency of defendant-counterclaimants' proffered proof of damage in the light of the principles applicable to motions for summary judgment and the principles applicable to the sufficiency of damage proof in antitrust suits.
In practice, the theory underlying summary judgment is the same as that underlying a motion for a directed verdict. In this circuit, summary judgment may be granted on evidence that would require direction of a verdict. Vale v. Bonnett, 1951, 89 U.S.App.D.C. 116, 118, 191 F.2d 334, 336; Dewey v. Clark, 1950, 86 U.S.App.D.C. 137, 143, 180 F.2d 766, 772. It has been said that this formula permits what amounts to the direction of a verdict without the necessity or technical formality of empaneling a jury. Holtzoff, Two Years Experience Under the Federal Rules of Civil Procedure, 21 B.U.L.Rev. 33, 35 (1941). Statements in affidavits as to opinion or belief are of no effect. Jameson v. Jameson, 1949, 85 U.S.App.D.C. 176, 178, 176 F.2d 58, 60. It is of course true that merely because a court surmises that the adverse party is unlikely to prevail at trial, it is not justified in authorizing summary judgment against it. However, genuine issues under the rule are issues which can be sustained by substantial evidence. The moving party has the burden of showing that at trial there will be no evidence competent or sufficient to support a finding for the opposite party.
Decisions of the Supreme Court in recent years have liberalized the proof of the fact and amount of damages in treble-damage suits. Bigelow v. RKO Radio Pictures, 1946, 327 U.S. 251, 66 S. Ct. 574, 90 L. Ed. 652; Story Parchment Co. v. Paterson Parchment Paper Co., 1931, 282 U.S. 555, 51 S. Ct. 248, 75 L. Ed. 544. But there must still be a reasonable basis in the evidence from which the jury may draw a reasonable estimate of the amount of damages. The jury still cannot be allowed to speculate. Bigelow v. RKO Radio Pictures, supra.
Counterclaimants have not offered and do not propose to offer any *18 evidence of what each counterclaimant's volume of business was between any of the specified points during the relevant period. Counterclaimants have not offered and do not propose to offer any evidence of the relationship of the shipments transported by Riss to the total government explosives traffic of any counterclaimant between the relevant points. Counterclaimants have not offered and do not propose to offer any evidence on the various "service" considerations (e. g., the need for fast service on a particular shipment or the need for "door-to-door" service on a particular shipment) which military representatives have testified is often determinative as to which mode of transportation receives the business, costs being equal. The counterclaimants have not offered and do not propose to offer any evidence relating to the volume transported by competing railroad carriers between the specific points during the relevant period.
Thus it is evident to the Court that on the basis of the proffered evidence of counterclaimants relating to the fact and amount of damages, a jury could only speculate as to the impact of the alleged diversion of traffic upon the individual counterclaimants. They would not know how much traffic the counterclaimant actually received, how much its competitor railroads actually received, how many individual shipments would have gone to other carriers because of certain service disabilities of the counterclaimant in regard to a particular shipment. In other words, since the basis of the claim is that because of the defense department policy the individual counterclaimant would have received the specific shipments diverted by the allegedly unlawful rates of the motor carriers, the jury has no way of knowing whether the counterclaimant had already received its "equitable" share of the traffic or ten times its equitable share, and in no event even conceding the unlawful diversion, would have received any of the tonnage transported by Riss.
Further, there is no showing of the absence of any counterclaimant service disability on the shipments which would have allowed them to transport the traffic.
In antitrust cases, a party has the burden of furnishing the best available evidence that the subject matter permits, as to what the impact of the claimed illegal conduct was on its business. Rankin Co. v. Associated Bill Posters, 2 Cir., 1930, 42 F.2d 152, 155-156. Defendants cite Atchison, Topeka & Santa Fe Ry. Co. v. Aircoach Transport Ass'n, 1958, 102 U.S.App.D.C. 355, 253 F.2d 877, in support of their contention that they only need prove what traffic their unlawful rate-quoting competitor carried in order to recover damages. The Aircoach case contains no discussion of the quantum of damage proof required and, in fact, the Court in Aircoach was not presented with the question of proof of fact or amount of damage.
In Delaware Valley Marine Supply Co. v. American Tobacco Co., D.C.E.D.Pa. 1960, 184 F. Supp. 440, a case involving the claim that absent a concerted refusal to sell by defendants, the plaintiff would have been able to sell a certain quantity of "sea-store" cigarettes to a specified number of vessels, Judge Steel commented at length on the various assumptions which the plaintiff claimed arose from his damage proof and then stated:
"But despite judicial liberality in accepting minimal proof of damages in an anti-trust case, the rule persists that any damage estimate by a jury must be `just and reasonable' and not based on `speculation or guesswork.'" 184 F.Supp. at page 449.
Defendant-counterclaimants' proffered proof of the fact and amount of their damages from Riss & Co.'s alleged price-fixing conspiracy gives rise only to speculation.
The motion of plaintiff for summary judgment on the counterclaims of defendants (8), (16), (21), (22), (23), (33), (40), (41), (66), (70), (72), (76) and (78) is granted. Counsel for plaintiff will prepare an appropriate order.
*19 Exhibit "A"
Excerpt from Revised Memorandum of Counterclaimants with
Respect to Count II of their Counterclaims, pp. 46, 47
Joliet Arsenal, Joliet, Illinois
to
Ravenna Arsenal, Atlas, Ohio
Shipments per Revised Schedule B.
Date Quantity Rate
May 5, 6, 7 1954 357,500 122
May 11, 12, 13 1954 357,500 122
May 17, 18, 19 1954 357,500 122
May 21 1954 165,000 122
May 25 1954 275,500 122
May 27 1954 137,500 122
June 3, 4 1954 110,000 122
June 9, 10 1954 385,000 122
June 14 1954 165,000 122
June 16, 17, 18 1954 247,500 122
June 21, 22, 23 1954 165,000 122
Aug. 19 1954 165,000 122
Sept. 2 1954 82,500 122
Sept. 7, 8, 9 1954 467,500 122
Oct. 29 1954 165,000 122
May 2, 3, 4, 5, 6 1955 468,500 122
May 9, 10, 11, 12, 13 1955 440,500 122
May 16, 17, 18, 19, 20 1955 412,500 122
May 23, 24, 25, 26, 27 1955 412,500 122
June 1, 2, 3 1955 273,580 122
June 6, 7, 8, 9, 10 1955 496,490 122
June 13, 14, 15, 16, 17 1955 468,500 122
June 20, 21, 22, 23, 24 1955 414,960 122
June 27, 28 1955 247,500 122
June 30 1955 51,105 122
The Riss rate was established in Riss Section 22 quotation Nos. 498-54, AEF-1, and AEF-3-ECD via the following route:
(1) Riss & Co. to Akron, Ohio; M. & M. Trucking Co. The identical rate was established in Hayes Freight Lines Section 22 Quotation No. 844 via the following competing route:
(2) Hayes Frt. Lines, to Cleveland, Ohio; Wells Truck Lines.
The following counterclaimants participated in routes which would have enabled them to perform the service, and offered to perform such service at a through rate of $1.5065 per 100 pounds (AAR No. 14-A):
Atchison, Topeka & Santa Fe
Chicago, Milwaukee, St. Paul and Pacific
Wabash
Pennsylvania Railroad
*20 Under the existing policies of the military establishment and the then applicable division agreements between rail carriers, each would have received the following revenues from the traffic transported by Riss:
Atchison, Topeka & Santa Fe $ 6,862.71
Chicago, Milwaukee, St. Paul and Pacific 6,862.70
Wabash 6,862.70
Pennsylvania Railroad 27,450.82
Exhibit "B"
Excerpt from Memorandum of Counterclaimants with Regard to Paragraph II, of the Court's Order of August 25, 1960, pp. 13, 16
1. Counterclaimants will establish that throughout the period in question the average weight of Government explosives loaded in rail cars was approximately 92,000 pounds. For each movement of ammunition and explosives, they will determine the nearest whole number of cars of that average weight necessary to transport the quantity of explosives moved. In making such computation, they will assume that where the result of their computation results in a fractional car, an additional car was used. This will have the effect of increasing their costs.
2. Counterclaimants will determine the miles each railroad transported ammunition and explosives between the point at which that railroad would receive it and the point at which it would deliver it or turn it over to another railroad.
3. Counterclaimants will determine the number of hundredweight in each movement of ammunition and explosives.
4. Using the number of cars, the number of car miles, the number of hundredweight, and the number of hundredweight miles for each movement, counterclaimants will apply the costs shown in the cost study, C & O Exhibits 29-39.
C.
Cost of Handling
CounterclaimantAtchison, Topeka and
Santa Fe Railway Company
Operating Units
Movement From Joliet Arsenal,
Illinois to Chicago,
Illinois
Distance (Miles) 49
Number Carloads[o] 21
Number of Hundred Weight 18,221.58
Number of Car Miles 1,029
Number of Hundred Weight Miles 892,857
*21
-----------------------------------------------------------------------
Estimated Cost of Handling
Out of Pocket Cents Total
Line Haul
1,029 Car Miles at 22.09142 $ 227.32
892,857 Cwt. Miles at .01039 92.77
Terminal
21 Carloads[o] at 6714.241 1,409.99
18,222 Cwt. at 1.11145 202.53
Constant
Line Haul
892,857 Cwt. Miles at .01735 154.91
Terminal
18,222 Cwt. at 3.268 595.49
__________
Total Cost $2,683.01
-----------------------------------------------------------------------
NOTES
[*] These defendants have filed counterclaims against the plaintiff.
[o] Originated. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1622887/ | 725 N.W.2d 375 (2006)
David GOEMAN, et al., Appellants,
v.
ALLSTATE INSURANCE COMPANY, Respondent.
No. A06-425.
Court of Appeals of Minnesota.
December 19, 2006.
Robert W. Kettering, Jr., Douglas D. McGhee, Arthur, Chapman, Kettering, Smetak & Pikala, P.A., Minneapolis, MN, for appellants.
Thomas D. McCormick, McCormick Law Office, P.A., Minneapolis, MN, for respondent.
*377 Considered and decided by MINGE, Presiding Judge, LANSING, Judge, and KLAPHAKE, Judge.
OPINION
KLAPHAKE, Judge.
Appellants David and Charlotte Goeman and Trade Lake Mutual Insurance Company (Trade Lake) challenge the grant of summary judgment to respondent Allstate Insurance Company (Allstate), determining that under the "closest to the risk" doctrine, Trade Lake was primarily liable for injuries sustained by a child guest who was bitten by the Goemans' dog while at their cabin. On appeal, Trade Lake argues that because both policies were equally close to the risk, the policies provide concurrent coverage. We agree, and reverse and remand. We further reject Allstate's claim that Trade Lake's reply brief inappropriately includes "new matters" and deny Allstate's motion to strike.
FACTS
In June 1998, an eight-year-old child was bitten by the Goemans' dog while in the living room of their cabin. This child was a guest at the cabin, which is located in Frederic, Wisconsin.
At the time of the incident, the Goemans also owned a primary residence in Richfield, Minnesota. The Goemans insured their cabin through Trade Lake and their primary residence through Allstate. Both homeowners' policies provided the Goemans with $100,000 in personal liability coverage; the Trade Lake policy, however, limited its coverage to occurrences within the state of Wisconsin.
In October 2001, the father of the child who was bitten sued the Goemans. Trade Lake assumed defense of the lawsuit. In October 2002, a jury awarded the child $34,209 in damages, and Trade Lake paid this amount, as well as an additional $2,807.34 in taxable costs and $19,055.73 in legal fees and costs. In total, Trade Lake paid out $54,272.07 on the claim.
Trade Lake and the Goemans thereafter brought this declaratory judgment action against Allstate, seeking a declaration that Allstate pay half of the damages or $27,136.04. On cross motions for summary judgment, the district court determined that the policies' excess coverage clauses were in conflict and that under the "closest to the risk" analysis, Trade Lake was primarily liable. The court further concluded that because the amount in controversy, $54,272.07, was "well under Trade Lake's policy limit of $100,000," there was "no excess for Allstate to pay in this case."
On appeal, Trade Lake argues that because the two policies are equally close to the risk, they provide concurrent personal liability coverage.
ISSUES
1. Should this court grant Allstate's motion to strike Trade Lake's reply brief?
2. Did the district court err in determining that the Trade Lake policy was "closest to the risk" and was therefore primarily liable?
ANALYSIS
I.
Allstate moved to strike Trade Lake's reply brief, claiming that the reply brief is not confined to new matters raised in respondent's brief and thus violates Minn. R. Civ.App. P. 128.02, subd. 3 (stating that "reply brief must be confined to new matter[s] raised in the brief of the respondent"). By order dated June 21, 2006, this court deferred Allstate's motion to this panel for a ruling.
*378 Allstate insists that the "geographic scope factor" discussed by Trade Lake in its reply brief is simply a re-argument of the same issue raised by Trade Lake in its initial brief. A reply brief should be limited to a "concise answer to new points" made by a respondent; it should not include a "repetition of arguments previously made [or] new matter not in response to points made by [the] respondent." Albert Lea Ice & Fuel Co. v. United States Fire Ins. Co., 239 Minn. 198, 205, 58 N.W.2d 614, 619 (1953). To the extent that Trade Lake's reply brief offers a rebuttal of the arguments raised by Allstate, however, we do not believe that it violates rule 128.02. See 3 Eric J. Magnuson & David F. Herr, Minnesota Practice § 128.8, at 606 (2006) (stating that reply briefs are "liberally construed to allow the appellant to respond to the arguments advanced by the respondent, even if they are not technically `new matter'"). We therefore deny Allstate's motion to strike.
II.
On appeal from a grant of summary judgment, this court must determine whether genuine issues of material fact remain for trial and whether the district court erred in applying the law. See State by Cooper v. French, 460 N.W.2d 2, 4 (Minn.1990); Minn. R. Civ. P. 56.03. Where, as here, the facts are undisputed, an appellate court "need only review the [district] court's application of the law in interpreting the language of the two insurance contracts." Interstate Fire & Cas. Co. v. Auto-Owners Ins. Co., 433 N.W.2d 82, 85 (Minn.1988). The interpretation of an insurance contract raises a question of law that is reviewed de novo. Garrick v. Northland Ins. Co., 469 N.W.2d 709, 711 (Minn.1991).
The parties agree that both of the Goemans' policies had "other insurance" clauses that provided excess coverage and that those clauses conflicted. The parties further agree that when faced with this type of conflicting coverage, Minnesota courts apply the "closest to the risk" analysis,[1] which is described as follows:
The nub of the Minnesota doctrine is that coverages of a given risk shall be "stacked" for payment in the order of their closeness to the risk. That is, the insurer whose coverage was effected for the primary purpose of insuring that risk will be liable first for payment, and the insurer whose coverage of the risk was the most incidental to the basic purpose of its insuring intent will be liable last. If two coverages contemplate the risk equally, then the two companies providing those coverages will prorate the liability between themselves on the basis of their respective limits of liability.
Integrity Mut. Ins. Co. v. State Auto. & Cas. Underwriters Ins. Co., 307 Minn. 173, 175-76, 239 N.W.2d 445, 447 (1976).
The following three-part test is used to determine which policy is closest to the risk:
*379 (1) Which policy specifically described the accident-causing instrumentality?
(2) Which premium is reflective of the greater contemplated exposure?
(3) Does one policy contemplate the risk and use of the accident-causing instrumentality with greater specificity than the other policy that is, is coverage of the risk primary in one policy and incidental to the other?
Auto Owners Ins. v. Northstar Mut. Ins., 281 N.W.2d 700, 704 (Minn.1979); see also Ill. Farmers Ins. v. Depositors Ins. Co., 480 N.W.2d 657, 660-61 (Minn.App.1992).
With respect to the first factor, the district court here concluded that "[b]oth policies provided broad personal liability coverage for a wide range of occurrences" and that neither policy more specifically described the accident-causing instrumentality, which was the Goemans' dog. The parties both agree with the district court's analysis on this first factor: neither policy specifically addressed the risk of an injury caused by a pet. Rather, the risk of a dog bite was merely one of many potential personal liabilities for a homeowner. Cf. Nat'l Union Fire Ins. Co. v. Republic Underwriters Ins. Co., 429 N.W.2d 695, 697 (Minn.App.1988) (in coverage dispute between day-care provider liability insurer and homeowners' insurer, day-care insurer closer to the risk partly because its policy specifically contemplated injury resulting from careless actions of young children in day-care setting, while homeowners' policy did not).
With respect to the second factor regarding which premium reflects the risk of exposure, the district court concluded:
Trade Lake charged a premium of $514 per year for $100,000 of comprehensive personal liability coverage for the Goemans' Frederic, Wisconsin property. It is unclear to the Court the amount that Allstate charged for a yearly . . . premium for coverage for the Goemans' Richfield, Minnesota property. However, [Allstate has] stipulated that [it] provided the same $100,000 in coverage that Trade Lake [did]. Again, the Court cannot answer the question as to primary and secondary liability using this prong of the "closeness to the risk" analysis.
Both parties also agree with the district court's analysis on this second factor: both insurers provided comprehensive personal liability coverage for the Goemans as part of their homeowners' insurance policy and neither contemplated greater exposure by an increased premium.
With respect to the third factor regarding whether one policy contemplates the risk with greater specificity, the district court determined that the Trade Lake policy more clearly contemplated the risk because it "more accurately cover[ed] the location where this tort occurred." In particular, the district court reasoned:
The Trade Lake policy does include geographic limitations for their policy. The "Seasonal Residence Endorsement Non-Wisconsin Resident" enclosure to the policy indicates that coverage "applies only to losses or occurrences that occur within the boundaries of the State of Wisconsin." The Trade Lake policy was specifically for the Goemans' Wisconsin property. Trade Lake's policy specifically describes the locale of the Goemans' cabin as being the location from where the insurance is based. It further explains that the coverage under this policy is only for incidents occurring within the State of Wisconsin. While both policies cover personal bodily injury, including the dog bite incident, it seems that the Trade Lake policy more accurately covers the location where this tort occurred. If this dog bite had occurred at the Goemans' Richfield, *380 Minnesota property, it is clear that Allstate would be exclusively liable.
We agree with Trade Lake that the district court erred in considering the "geographical scope of coverage" as the determinative factor here.
Allstate asserts that the Trade Lake policy was closest to the risk because its coverage was specifically limited to losses or occurrences in Wisconsin, which is where the dog bite occurred. While such a geographic restriction is not common, Allstate insists that an insurer with such a provision in its policy necessarily "accepts the primacy of its coverage" when the occurrence falls within that geographic restriction. We disagree and point out that the Allstate policy covered the Goemans in all 50 states, thus indicating that Allstate contemplated greater risks than Trade Lake, which sought to reduce its coverage by restricting liability to occurrences in Wisconsin.
We therefore conclude that both policies equally contemplated the risk of a dog bite injury and neither is closest to the risk. The location of the injury was merely fortuitous, and there is no language in either policy linking coverage for an injury caused by a pet to any particular place. While some types of risks may be dwelling specific, such as personal liability arising out of an accident in a swimming pool at a residence, the "accident-causing instrumentality" here was mobile and not limited to any particular residence. Thus, because both policies equally contemplate the risk of a dog bite injury, whether at the Wisconsin cabin or elsewhere, the district court erred in determining that the Trade Lake policy is closest to the risk.
DECISION
Because the district court erred in determining that the Trade Lake policy was closest to the risk and primarily liable, we reverse the grant of summary judgment to Allstate and remand with directions to enter judgment for Trade Lake on its cross motion for summary judgment.
Reversed and remanded; motion denied.
NOTES
[1] Minnesota courts sometimes apply the broader "total policy insuring intent" test when "other insurance" or "excess insurance" clauses conflict. See Interstate Fire & Cas. Co. v. Auto-Owners Ins. Co., 433 N.W.2d 82 (Minn.1988). The analyses are similar under the two tests and often lead to the same result. See U.S. Fidelity & Guarantee Ins. Co. v. Commercial Union Midwest Ins. Co., 430 F.3d 929, 934 (8th Cir.2005) ("Minnesota courts apply two different tests in apportioning liability between insurers when the other insurance clauses conflict: the `total policy insuring intent' analysis or the `closer to the risk' analysis. The `total policy insuring intent' analysis is a broader test and `examines the primary policy risks upon which each policy's premiums were based and the primary function of each policy.'"). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1622915/ | 609 S.W.2d 784 (1980)
Reginald P. McMILLAN, Sr., and Robert Taylor, Appellants,
v.
The STATE of Texas, Appellee.
No. 59529.
Court of Criminal Appeals of Texas, Panel No. 1.
November 19, 1980.
Rehearing Denied January 14, 1981.
*785 Robert J. Newton, Freeport, for McMillan.
Floyd Christian, Jr., Angleton, for Taylor.
Ogden Bass, Dist. Atty. and Doyle W. Neighbours, Asst. Dist. Atty., Angleton, Robert Huttash, State's Atty., Austin, for the State.
Before ONION, P. J., and ODOM and W. C. DAVIS, JJ.
OPINION
W. C. DAVIS, Judge.
Appellant McMillan and appellant Taylor were tried together and convicted of the offense of burglary of a vehicle and they now appeal from the convictions. The punishment imposed was imprisonment for four years for appellant McMillan and imprisonment for seven years for appellant Taylor.
The appellants contend that the trial court erred in admitting in evidence items seized pursuant to an unlawful search and seizure. The trial court conducted a pre-trial hearing to determine whether or not the questioned evidence should be suppressed. The court concluded that the items were admissible.
The testimony at the hearing reveals that on December 9, 1976, Officer Hackney and Officer Hughes of the Friendswood Police Department were on routine patrol. At 4:18 a.m., they received a call from their dispatcher to investigate a suspicious automobile seen driving slowly with its lights off in the Hut Mobile Home Park. The area was characterized as a high crime area by one of the officers. The only description of the car was that it was small and compact. On the way to the park the officers spotted an automobile near the intersection of two highways. The vehicle was about four blocks away and Officer Hackney testified, "All I could distinguish were the taillights when the brakes were placed on it." Officer Hughes stated he could not determine what color, size, or type of vehicle it was. The two officers proceeded to the Hut Mobile Home Park and failed to find the suspicious automobile. The officers then continued on their patrol and shortly thereafter, they observed an automobile driving with its lights off. The vehicle was 400 to 500 yards away and Officer Hackney stated that "[A]t that particular time it put its brakelights on where we *786 were able to distinguish the brakelights again. From that view we determined it was possibly the same vehicle we saw southbound on 518 we saw earlier, same vehicle along the taillights." Officer Hughes testified that he could not determine what color or kind of vehicle it was. The officers pursued the vehicle but it was able to elude them. The pair then returned to the intersection where they had seen the first vehicle. They parked their vehicle and waited. At approximately 4:55 a.m. the officers observed a maroon colored Camaro, driven by the appellants stop at the intersection. The automobile turned and the officers were able to see its taillights. The officers decided to stop the vehicle because they felt it was possibly the same vehicle they had seen earlier and also to make a "routine" driver's license check. The appellants were placed under arrest after it was determined that McMillan was wanted for a probation violation and Taylor was wanted for an outstanding traffic warrant. An inventory search revealed items stolen from a vehicle earlier that day. These items were later admitted in evidence at trial.
The appellants argue that the initial stop of their vehicle was not justified. Clearly, the evidence reflects that the officers were without probable cause to believe that a crime had been committed or was being committed and the officers saw the appellants commit no traffic offenses. However, circumstances short of probable cause for an arrest or a search may justify a temporary detention in order to preserve the status quo and allow further investigation. Shaffer v. State, 562 S.W.2d 853 (Tex.Cr.App.1978). For an investigative stop to be justified, the peace officer must have specific and articulable facts which, in the light of his experience and personal knowledge taken together with rational inferences from those facts, would reasonably warrant the intrusion of the freedom of a citizen. Hinson v. State, 547 S.W.2d 277 (Tex.Cr.App.1977).
In the present case, Officer Hughes stated he really had no idea if the appellants' vehicle was the same vehicle they had been chasing earlier. Officer Hackney testified that all he could see of the chased vehicle was its taillights. He stated that the taillights on the appellants' automobile were the "same type of lights" and "very similar" and that "it was probably the same vehicle." The inarticulate hunch, suspicion, or good faith in suspecting the appellants' vehicle to be the one the officers had seen earlier was insufficient to warrant the detention as an investigative stop. Benton v. State, 576 S.W.2d 374 (Tex.Cr.App.1978); Fatemi v. State, 558 S.W.2d 463 (Tex.Cr. App.1977); McDougald v. State, 547 S.W.2d 40 (Tex.Cr.App.1977); Scott v. State, 549 S.W.2d 170 (Tex.Cr.App.1976); Faulkner v. State, 549 S.W.2d 1 (Tex.Cr.App.1976); Hinson v. State, supra; Shaffer v. State, supra.
The State argues that the initial stop was justified as a driver's license check pursuant to Article 6687b, Sec. 13, V.T.C.S., which provides in part:
"Any peace officer may stop and detain any motor vehicle operator for the purpose of determining whether such person has a driver's license as required by this Section."
The continued viability of this section is in question, in light of the Supreme Court's decision in Delaware v. Prouse, 440 U.S. 648, 99 S. Ct. 1391, 59 L. Ed. 2d 660 (1979). In the decision, the Supreme Court held that:
"[E]xcept in those situations in which there is at least articulable and reasonable suspicion that a motorist is unlicensed or that an automobile is not registered, or that either the vehicle or an occupant is otherwise subject to seizure for violation of law, stopping an automobile and detaining the driver in order to check his driver's license and the registration of the automobile are unreasonable under the Fourth Amendment."
However, in Luckett v. State, 586 S.W.2d 524 (Tex.Cr.App.1979), this Court held that Delaware v. Prouse, supra, would not be given retroactive effect. Thus, we need not decide whether Article 6687b, Sec. 13, V.T. C.S., violates the Fourth Amendment prohibition against searches and seizures.
*787 Nonetheless, the stop was not justified as a check on the appellants' driver's licenses. A driver's license check may not be used as a subterfuge to cover up an unlawful stop based on mere suspicion. White v. State, 574 S.W.2d 546 (Tex.Cr.App. 1978). If a license check is not the sole reason for a detention, that detention is not authorized by the statute and cannot be upheld. Fatemi v. State, supra.
In the case at bar, both officers stated that the automobile was stopped because they thought it might be the suspicious vehicle they had seen earlier. The detention was not to merely check the driver's licenses of the appellants. The detention was not authorized and the evidence should have been suppressed. White v. State, supra; Fatemi v. State, supra; Faulkner v. State, supra; Hall v. State, 488 S.W.2d 788 (Tex.Cr.App.1973).
The judgments are reversed and the causes remanded. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1622857/ | 569 So. 2d 1206 (1990)
Frank Lamar HUDGINS
v.
STATE of Mississippi.
No. 89-KA-0664.
Supreme Court of Mississippi.
October 24, 1990.
Julie Ann Epps, Rienzi and W.S. Moore, Jackson, for appellant.
Mike C. Moore, Atty. Gen. and Charles W. Maris, Jr., Sp. Asst Atty. Gen., Jackson, for appellee.
Before HAWKINS, P.J., and SULLIVAN and PITTMAN, JJ.
PITTMAN, Justice, for the Court:
Appellant Frank Hudgins was convicted for the manufacture of marihuana in the Circuit Court of Carroll County, Second Judicial District, and sentenced to fifteen *1207 (15) years in the custody of the Mississippi Department of Corrections.
Hudgins appeals, assigning as error:
I. WHETHER APPELLANT WAS DENIED A FAIR TRIAL BY THE INTRODUCTION OF "OTHER OFFENSE" EVIDENCE WITHOUT A CAUTIONARY INSTRUCTION TO THE JURY?
II. APPELLANT'S CONVICTION MUST BE REVERSED BECAUSE THE CUMULATIVE PREJUDICIAL IMPACT OF THE INTERJECTION OF EXTRANEOUS INFLAMMATORY MATTERS DEPRIVED HIM OF DUE PROCESS OF LAW AND HIS RIGHT TO A FAIR TRIAL UNDER BOTH THE STATE AND FEDERAL CONSTITUTIONS.
In March of 1988, Richard Lehman, a landowner in Carroll County, observed a vehicle parked at the boundary of his rural property. Curious as to the whereabouts of the car's occupants, Mr. Lehman "kept an eye" on the vehicle as he worked on his adjacent tract of land. Around noon, Mr. Lehman noticed two men walking toward the parked automobile; one of the men, identified as Cornell Clark, was carrying a hoe; the other man, later identified as Frank Hudgins, possessed a handgun on his belt. Anxious to find out why these men were on his land, Mr. Lehman approached the men and inquired about their activities. According to Lehman, the men related that they were scouting the area for signs of turkeys because they were looking for a place to hunt. Mr. Lehman told the men that his land was posted against hunting and with that the men got into their vehicle and left.
Richard Lehman, not "feel[ing] good about the situation," went home for dinner and phoned Deputy Sheriff R.W. Miller. He explained the events of the morning to Deputy Miller and Miller agreed to come out to his place to look around. Upon arrival, Miller and Lehman went out to the rural property and walked in the direction that Clark and Hudgins had travelled. In a secluded area on Lehman's land, they discovered several patches where it appeared that marihuana was being grown.
Based on these findings, Deputy Miller returned to the patches periodically to check on the contents therein and in hopes of finding someone there caring for the plants. When the plants had reached a size suitable for harvest, Deputy Miller contacted the North Mississippi Narcotics Task force. On June 1, 1988, surveillance of the patches was begun as a joint effort between the task force and the local sheriff's office. On the morning of June 3, Deputy Miller had left his post at the marihuana patch when he saw Cornell Clark and Frank Hudgins heading in the direction of the patches. The two men were approximately one-eighth to one-fourth of a mile from the patches on a path that led from Clark's house to the Lehman property. Because Deputy Miller had been taken by surprise, he was not able to observe exactly where Clark and Hudgins were headed. As a result, he arrested the men while still some distance from the marihuana patches. Hudgins had a .44 caliber pistol in his possession.
Upon being arrested, Cornell Clark was interrogated in the courthouse in Vaiden, Mississippi. From this interrogation, Sheriff Whitfield and his deputies returned to the scene and seized the marihuana plants and also a whiskey still located on Clark's property. Later in the day, Cornell Clark was interrogated again; this time he gave a statement implicating Frank Hudgins in the growing of the marihuana in the patches.
At the trial of Frank Hudgins, Cornell Clark was called as a witness concerning his dealings with appellant. Over defense objection, Cornell Clark informed the jury that he and Hudgins had once before tried to grow marihuana, but that they had been unsuccessful in that attempt. Clark further informed the jury that Frank Hudgins, in the instant case, instigated the idea of growing marihuana. This testimony was followed by an explanation of Clark and Hudgins' activities in March of 1988. According to Clark, when the two men were observed by Richard Lehman, they had been to cultivate the marihuana patch.
*1208 After the State rested its case, Frank Hudgins took the stand in his own behalf. Hudgins testified that he was a forty-two (42) year old river boat engineer and that he was a life-long resident of Attala County. As to his dealings with Cornell Clark, Hudgins testified that he had met Clark a few years before and that he hunted and trapped on Clark's land. He stated that on the day that Richard Lehman had seen them in March, that he and Clark had gone out to check for turkey signs. He explained that Clark was carrying a hoe because he was "deathly afraid of snakes" and that he was carrying a .44 caliber pistol because of the coyotes and snakes in the area.
On June 3, 1988, Hudgins stated that he went to Clark's place to purchase moonshine whiskey from Clark's still as he had done in the past. (This fact is disputed by Clark although a still was found on the property that day). Hudgins testified that Clark told him that he had stopped keeping the whiskey at his house because people had been talking about it too much. According to Hudgins, Clark told him that the whiskey was hidden out near the fence row and that they would have to walk out there to get it. It was on this journey that the men ran into Deputy Miller and were arrested. Hudgins testified that he told Deputy Miller that they were out searching for muscadines or elderberries because he did not want to get Clark in trouble for selling moonshine. At trial, Hudgins denied having any knowledge of any marihuana being grown in the area.
I.
WHETHER APPELLANT WAS DENIED A FAIR TRIAL BY THE INTRODUCTION OF "OTHER OFFENSE" EVIDENCE WITHOUT A CAUTIONARY INSTRUCTION TO THE JURY?
At the trial of Appellant Frank Hudgins, Cornell Clark was called to testify concerning the various activities that he and Frank Hudgins had undertaken in the past. During this testimony, however, the following exchange took place between the prosecuting attorney and Cornell Clark:
Q. Whose idea was it to plant the marihuana?
A. Frank.
Q. You said that you first met him three years ago. When did he first discuss planting marihuana?
A. The first year I seen him. Second year after I met him.
Q. I beg your pardon?
A. I believe the first or second year after meeting him.
Q. All right. Was marihuana, in fact, planted?
A. We tried it but it didn't work.
Q. Where did you try to plant it?
A. That was on the place, first time.
Q. Whose place?
A. My daddy's.
Q. All right, where did
BY MR. MOORE: Your Honor, we're going to object to this. This is a surprise. We're not prepared for any sort of farming activities on his place, three years before this.
BY THE COURT: The objection is overruled.
BY MR. SNYDER: (To the witness)
Q. All right, after this did you try to plant some on Mr. Lehman's place?
Appellant maintains that the admission of the above "other offense" testimony without a limiting instruction to the jury constituted reversible error. Although not raised as a direct issue, this alleged erroneous admission of evidence invokes Rule 103 of the Mississippi Rules of Evidence. Rule 103 provides in pertinent part:
(a) Effect of Erroneous Ruling. Error may not be predicated upon a ruling which admits or excludes evidence unless a substantial right of the party is affected, and
(1) Objection. In case the ruling is one admitting evidence, a timely objection or motion to strike appears of record, stating the specific ground of objection, if *1209 the specific ground was not apparent from the context; ...
Miss.R.Evid. 103(a)(1).
Under Rule 103, an admission of improper evidence will lead to reversal only when: 1) it affects a substantial right of the party, and 2) when an objection to the evidence appears on the record. Considering these two factors, this Court has held that the receipt of improper evidence by the trial court is reversible error when it affects a defendant's right to a fair trial. See Hall v. State, 539 So. 2d 1338 (Miss. 1989); Darby v. State, 538 So. 2d 1168 (Miss. 1989). Under this proposition, this Court would show that when faced with the objection to improper evidence, the trial judge had two choices. First, he could have sustained the objection and admonished the jury accordingly, or next, he could have allowed the evidence and given a specific cautionary instruction to the jury at trial's end. The lower Court did neither. Consequently, Appellant was prejudiced by the introduction of the "other offense" testimony which resulted in the denial of a fair trial. See Tobias v. State, 472 So. 2d 398 (Miss. 1985). On these findings, the lower court must be reversed.
Appellant's first assignment of error has merit. Because reversal is required on this ground, appellant's second assignment of error is moot. This Court does, however, note that the opinions given by Deputy R.W. Miller in the initial trial were improper. As such, this Court is in hope that Deputy Miller will restrain his testimony to the facts in the future proceedings.
REVERSED AND REMANDED.
ROY NOBLE LEE, C.J., HAWKINS and DAN M. LEE, P.JJ., and PRATHER, ROBERTSON, SULLIVAN, ANDERSON and BLASS, JJ., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1622872/ | 569 So. 2d 1115 (1990)
Johnny BARNHILL, Plaintiff-Appellant,
v.
CONSOLIDATED MEDICAL, DISABILITY & LIFE TRUST, Defendant-Appellee.
No. 89-488.
Court of Appeal of Louisiana, Third Circuit.
November 7, 1990.
Writ Denied January 11, 1991.
Wm. Henry Sanders, Jena, for plaintiff-appellant.
Gaharan & Wilson, Joe Wilson, Jena, for defendant-appellee.
Before GUIDRY, LABORDE and KING, JJ.
GUIDRY, Judge.
Plaintiff-appellant, Johnny Barnhill, appeals a judgment of the trial court dismissing his suit for medical insurance benefits, penalties and attorney's fees.
Johnny Barnhill, a long time employee of Louisiana-Hunt Petroleum Corporation (hereafter Louisiana-Hunt) and its predecessor, Placid Oil, was injured during the course and scope of his employment on July 17, 1983. He subsequently sustained injuries in a non-job related automobile accident on January 24, 1985. One week later, on January 31, 1985, Barnhill was released to return to work by the doctor treating him for the July 1983 job-related accident. Barnhill never returned to work and, in April 1985, Hunt terminated Barnhill's employment.
In connection with the two accidents, Barnhill filed four separate law suits: Barnhill v. Louisiana-Hunt Petroleum Corporation; Barnhill v. Life Insurance Company of the Southwest; Barnhill et ux v. Continental Dredging Company; and, the instant suit. The three suits first referred to are not made a part of the record.
In addition to the mandated worker's compensation coverage, Hunt afforded its employees group hospitalization and long term disability coverages, both of which were administered by Consolidated Medical, Disability and Life Trust (hereafter Consolidated).
The suit against Louisiana-Hunt was for worker's compensation benefits and related medical expenses arising out of the July 1983 accident. The suit filed against Life Insurance Company of the Southwest sought disability benefits arising from both accidents. The suit filed against Continental Dredging Company was a tort suit in connection with the January 1985 accident. The latter suit was tried to a jury which returned a verdict in May 1985 in favor of the defendant. Plaintiff's suits against Louisiana-Hunt and Life Insurance Company of the Southwest were settled by a compromise agreement executed October 15, 1985. In his well written reasons for judgment, the trial judge observed:
"... The judgment in the Louisiana-Hunt case reads partially as follows:
`IT IS ORDERED, ADJUDGED AND DECREED that there be judgment herein in favor of Johnny Barnhill and against Louisiana-Hunt Petroleum Corporation in the full sum of $3,192.95, in addition to $14,201.00 in compensation and $8,843.92 in medical *1116 expenses heretofore paid, in full settlement, compromise and discharge of any and all liability which exists or which might exist by Louisiana-Hunt Petroleum Corporation, its insurers, its agents, representatives, officers, stock holders, directors, and employees whether by way of compensation, medical, surgical or hospital expenses, damages and all other amounts, if any, which might be due Johnny Barnhill by reason of the alleged accident of July 17, 1983 or any accident prior to the date hereof, whether the liability, if any, be in damages, tort, compensation or otherwise or whether the liability, if any, arose under the laws of the State of Louisiana, or any state of the United States or of the laws of the United States ...
Judgment-Barhill [sic] vs. Louisiana-Hunt Petroleum Corporation, Docket No. 21,157, 28th Judicial Distirct Court, LaSalle Parish, Louisiana, dated October 15, 1985. (Emphasis Added).'"
The trial judge further remarked:
"On the same date Johnny Barnhill executed a receipt and release which contained the following language:
`... the consideration being contractual and not merely recital, and there being no promise or agreement for future employment or for anything other than the consideration hereinabove stated, the aforesaid controversies and claims are hereby compromised and settled and appearer, for himself, his heirs and assigns, does expressly release and forever discharge Life Insurance Company of the Southwest, Consolidated Medical Disability and Life Trust, Louisiana-Hunt Petroleum Corporation, its agents, employees, assigns, insurers, and any and all other persons, firms or corporations obligated, directly or indirectly, for the payment of disability benefits under the long term disability plan provided by Consolidated Medical, Disability and Life Trust and Louisiana-Hunt Petroleum Corporation and damages, penalties, and attorney's fees arising out of or in any way connected with the disability alleged to result from the accidents of July 17, 1983 and/or January 24, 1985 and any and all other costs, expenses or damages received or sustained by Johnny Barnhill as a result thereof.... (Emphasis Added.)'"
Thereafter, on January 26, 1986, Barnhill was hospitalized incurring the $11,663.81 in medical expenses he seeks to recover in the present suit. Consolidated resisted his demand urging res judicata and release from any further liability by virtue of the compromise agreement of October 15, 1985. The trial judge sustained defendant's exception and dismissed plaintiff's suit. Barnhill appeals urging that he did not intend to release Consolidated from the obligation to pay medical expenses, but only to release defendant as to disability benefits. We affirm.
In Sauerwin v. State Farm Mutual Automobile Insurance Company, 490 So. 2d 449 (La.App. 5th Cir.1986), our brethren of the Fifth Circuit stated:
"Louisiana R.S. 13:4231, formerly Civil Code article 2286, states:
Res judicata, essential elements
The authority of the thing adjudged takes place only with respect to what was the object of the judgment. The thing demanded must be the same; the demand must be founded on the same cause of action; the demand must be between the same parties, and formed by them against each other in the same quality.
The First Circuit, in Higgins v. State of Louisiana, Department of Health and Human Resources, 451 So. 2d 142 (La.App. 1st Cir.1984), outlined the jurisprudence with respect to compromise and the exception of res judicata;
A compromise is an agreement between two or more persons, who, for preventing or putting an end to a lawsuit, adjust their differences by mutual consent. LSA C.C. art. 3071. As noted in the recent case of Smith v. Leger, *1117 439 So. 2d 1203, 1206 (La.App. 1st Cir.1983):
A compromise agreement extends only to those matters which the parties expressly intend to settle. La.C.C. art. 3073; Matthew v. Melton Truck Lines, Inc., 310 So. 2d 691 (La.App. 1st Cir. 1975). Ordinarily, the meaning and intent of the parties to a written contract (such as a written compromise agreement) must be sought within the four corners of the instrument and cannot be explained or contradicted by parol evidence. La.C.C. art. 2276; Tauzin v. Claitor, 417 So. 2d 1304 (La.App. 1st Cir.1982), writ denied, 422 So. 2d 423 (La.1982). An exception to this rule exists when there is a dispute between the parties as to exactly what matters were intended to be settled by the compromise agreement. La.C.C. art. 3079; Moak v. American Automobile Insurance Company, 242 La. 160, 134 So. 2d 911 (1961); Munna v. Mangano, 404 So. 2d 1008 (La.App. 4th Cir.1981).
A compromise or transaction has, between the parties, the effect of a thing adjudged. LSA C.C. art. 3078. A release of a claim in exchange for consideration received is, in effect, a compromise which can constitute the basis of a plea of res judicata. Matthew v. Melton Truck Lines, Inc., 310 So. 2d 691 (La. App. 1st Cir.1975).
The requisites necessary to sustain a plea of res judicata are enumerated in LSA C.C. art. 2286: "The authority of the thing adjudged takes place only with respect to what was the object of the judgment. The thing demanded must be the same: the demand must be founded on the same cause of action; the demand must be between the same parties, and formed by them against each other in the same quality." The absence of any one of these elements is fatal to an exception of res judicata; further, res judicata is stricti juris and a second suit is not barred where there is any doubt as to the applicability of Article 2286. First Guaranty Bank v. Durham, 409 So. 2d 380 (La.App. 4th Cir.1982).
The Fourth Circuit, in a similar case, Ellison v. Michelli, 513 So. 2d 336, at pg. 339 (La.App. 4th Cir.1987), concluded:
"Compromises are favored in the law and the burden of proving the invalidity of a compromise is on the party attacking the agreement. Saunders v. New Orleans Public Service, Inc., supra [387 So. 2d 603 (La.App. 4th Cir.1980)]. When there is evidence before the trier of fact which upon its reasonable evaluation of credibility, furnishes a reasonable factual basis for the trial court's finding, the appellate court should not disturb this factual finding on review in the absence of manifest error. Canter v. Koehring Co., 283 So. 2d 716 (La.1973); Arceneaux v. Domingue, 365 So. 2d 1330 (La.1979)."
The trial judge concluded in written reasons for judgment as follows:
"The Receipt and Release executed by Barnhill on October 15, 1985, released `... Consolidated Medical Disability and Life Trust, ... for the payment of disability benefits under the long term disability plan provided by Consolidated Medical, Disability and Life Trust ... and damages penalties, and attorney's fees arising out of or in any way connected with the disability alleged to result from the accidents of July 17, 1983 and/or January 24, 1985 and any and all other costs, expenses or damages received or sustained by Johnny Barnhill as a result thereof.' By his testimony, Barnhill has acknowledged that the claim sued upon arose as a result of the automobile accident of January 24, 1985.
The language of the release is so broad that it clearly covers the liability sued upon. Barnhill neither struck out the offensive language, nor did he attempt to limit its effect. Additionally, he was represented by the same counsel throughout all the proceedings. Whether he felt satisfied with the settlement, was not aware of the possible future medical expenses, or simply expected to recover them in the tort action does not matter. For whatever reason, he executed an undeniably plain language release and is bound thereby."
*1118 We find no clear error in the trial court's conclusion.
For the reasons stated, the judgment of the trial court is affirmed. Costs of this appeal are taxed against plaintiff-appellant.
AFFIRMED. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2721547/ | TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-12-00687-CR
David Malcolm Ransom, Appellant
v.
The State of Texas, Appellee
FROM THE DISTRICT COURT OF BELL COUNTY, 426TH JUDICIAL DISTRICT
NO. 69,677, HONORABLE FANCY H. JEZEK, JUDGE PRESIDING
MEMORANDUM OPINION
A jury convicted appellant David Malcolm Ransom of arson, including a deadly
weapon finding, and sentenced him to fifteen years’ imprisonment. On appeal, he argues that the
evidence is insufficient to support his conviction, that the trial court erred in its restitution order,
and that the jury charge was erroneous. We affirm the trial court’s judgment of conviction.
Factual Summary
Miriam Gonzalez testified that Ransom was her ex-boyfriend and she and her son
lived in a house that she rented from one of her brothers. On the day of the fire, Gonzalez and
Ransom had an argument, and Gonzalez told Ransom she wanted to end the relationship, but
Ransom told her they should try to work things out. Gonzalez drove her son to his father’s house,
and when she returned, she and Ransom spent the evening with her family. At about 11:30 p.m., she
and Ransom returned to her house, where they started arguing. Gonzalez asked Ransom to leave,
but he followed her into her bedroom and locked the door behind him, blocking her from leaving.
Ransom grabbed Gonzalez’s arms, pulled her hair, said he hated her, and told her he would “destroy
[her] house.” Ransom took out his lighter and told her “he was going to burn the house down, light
the house on fire.” Ransom lit some clothes on fire, then turned to open the door and throw
something out of the room. When he turned away, Gonzalez climbed out her bedroom window and
ran. Ransom chased her down, grabbed her by the hair, and pulled her to the ground. She started
to scream, and he let go, saying “he was going to burn the house down.” Gonzalez ran to her
brother’s house, taking a circuitous route in hopes that Ransom would not follow her, and returned
when a neighbor told her that her house was on fire and that her family thought she was inside.
Gonzalez initially feared that Ransom was still inside, and firefighters looked for him until he
walked up some time later. The fire destroyed the home and everything inside.
Deputy Sheriff Michael Pinkert testified that when he arrived at the scene, the fire
department was trying to put out the fire and Gonzalez was crying and very upset. Pinkert spoke
only briefly to Gonzalez and did not notice injuries to her face, body, or arms. About forty minutes
later, Ransom walked up. Asked what had happened, Ransom said he and Gonzalez “had gotten
into a discussion” while walking around the neighborhood and walked their separate ways. Ransom
was not belligerent or hostile and he did not make any statements related to having set the fire.
When Fire Marshal Steve Casey arrived at the house about an hour after the fire was
reported, the fire department was still trying to extinguish the flames. Gonzalez, whose pants Casey
noticed were “torn and tattered,” was initially upset because she believed that Ransom was in the
2
house, but Ransom appeared at the scene about fifteen minutes after Casey arrived. When Casey
asked Ransom if he was okay, Ransom got “agitated,” acted very upset, clenched his fists and jaw,
and swore. Ransom told Casey that he thought a candle in the house had started the fire.
Casey interviewed Gonzalez the next day, and she described the assault and said that
Ransom had ignited some clothing that had been lying on her bed. Although Casey did not do a full
investigation due to his involvement in another fire, he determined that the fire had started in the
bedroom and also had a “hot burning area” in the living room. Casey decided to allow the insurance
company’s arson inspector to do a more complete investigation of the cause of the fire. The
insurance company’s arson investigator testified that the fire was concentrated in the bedroom at the
front of the house and in the living room, that the fire was not accidental or caused by an electrical
or mechanical issue, and that it was intentionally set. A sample was taken in response to an alert by
a dog trained by the state fire marshal’s office, but tests on the sample were negative for ignitable
liquids. Several experts testified that it is not uncommon to find no ignitable liquid residue because
the liquids can evaporate, burn up in the fire, or be washed away by fire-fighting efforts.
Police Chief Eric Edwards also interviewed Gonzalez the day after the fire, and she
said that she and Ransom had fought and that Ransom grabbed her by her wrists and hair, flicked
a lighter “trying to get it to light,” and held the lighter to clothing on her bed. Gonzalez got out of
the house, and Ransom tackled her, grabbed her hair, and pulled her down the street. Edwards saw
bruises on her hip, both knees, right arm and wrist, and face, photographs of which were provided
to the jury, and said the waistband of her pants was stretched as if someone had tried to forcibly pull
them off, both knees had grass stains, and the back of her sweatshirt had a burn mark.
3
Sufficiency of the Evidence
The indictment charged Ransom with causing a fire in a habitation “by igniting
clothing or by igniting an unknown object inside said habitation” and alleged that he used a lighter
as a deadly weapon. Ransom contends that the evidence is insufficient to show that (1) he started
the fire, (2) that he ignited clothing or other items, or (3) that he intended to damage or destroy the
house. See Tex. Penal Code § 28.02(a)(2) (person commits arson if he starts fire with intent to
destroy or damage habitation). In evaluating the sufficiency of the evidence, we view the evidence
in the light most favorable to the verdict and ask whether any rational trier of fact could have found
the elements of the crime beyond a reasonable doubt. Brooks v. State, 323 S.W.3d 893, 902, 912
(Tex. Crim. App. 2010). The jury is the sole judge of witness credibility and the weight to be given
to the testimony. See id. at 902.
Ransom acknowledges that Gonzalez testified that he said he was going to burn
down the house and that she saw him flick the lighter and light clothing on fire and that fire
investigators testified that the fire was intentionally set and was concentrated in the bedroom and
living room. Despite that testimony, however, he argues that the evidence does not establish that
he had an intent to damage or destroy the house, that he actually started the fire, or that he started
the fire with the clothing. Ransom argues that his statements to Gonzalez “may have been nothing
more than threats to get her to stay” and that Gonzalez did not “testify whether the clothing actually
caught fire” or say exactly what it was Ransom had thrown out of the bedroom.1 He also asserts that
1
Ransom argues that it is clear that the jury struggled with this issue because the jury sent
out a note asking whether Gonzalez had testified that “there was ignition to the clothing on the bed
4
there is no evidence as to exactly what started the fire because there were no positive tests for
liquid ignitables and because, he alleges, there was evidence that a candle or the water heater might
have started the fire. However, the fire marshal and arson investigator both denied that the fire might
have started at the water heater, the only evidence about a candle was Ransom’s statement to that
effect the night of the fire, and there was explanatory testimony about why residue might not be
found after a fire.
The vast and overwhelming weight of the evidence supports the jury’s finding that
Ransom started the fire intentionally—he stated as much to Gonzalez while flicking a lighter; she
saw him light clothing on fire; she escaped from Ransom after a skirmish, returning a short while
later to find the house fully engulfed in flame, with the fire concentrated in her bedroom; she had
bruises on her body and face, torn and dirtied pants, and a burn mark on her sweatshirt; and
investigators determined that the fire had been intentionally started in the bedroom, with an
additional hot spot in the living room. We overrule Ransom’s first issue on appeal.
Restitution Award
Ransom next contends that the trial court erred in awarding $55,000 in restitution,
arguing that there was insufficient evidence to support the award.
when he was flickering the lighter.” The trial court instructed the jury that, if it was in disagreement
about a witness’s exact testimony, it was to specify what was in dispute so that the court reporter
could transcribe that portion of the testimony. The jury did not seek further clarification. Further,
Gonzalez’s testimony was that Ransom “starts lighting little articles of clothes on the bed” and that
she saw him “light things on fire.”
5
A trial court may order a criminal defendant to pay restitution for losses resulting
from the convicted offense. Tex. Code Crim. Proc. art. 42.037; Maloy v. State, 990 S.W.2d 442,
444 (Tex. App.—Waco 1999, no pet.). A restitution order will be reviewed for an abuse of discretion,
but the amount of restitution ordered must be just and supported by evidence. Maloy, 990 S.W.2d
at 444; Davis v. State, 757 S.W.2d 386, 389 (Tex. App.—Dallas 1988, no pet.).
Gonzalez’s house was completely gutted, and all of her and her son’s belongings that
were in the house were lost. Gonzalez’s brother, the owner of the house, testified that his insurance
company “wrote a check for 55,” and the trial court ordered Ransom to pay the insurance company
$55,000. We hold that sufficient evidence supports the trial court’s restitution order such that the
order was not an abuse of discretion. See Davis, 757 S.W.2d at 389 (victim’s mother’s testimony
of victim’s funeral expenses was sufficient to support restitution award of same amount). We
overrule Ransom’s second issue.
Error Related to Punishment Range
Finally, Ransom argues that the court incorrectly instructed the jury on the range of
punishment for the crime. Arson is a second-degree felony unless the building is a habitation, in
which case it is a first-degree felony. See Tex. Penal Code § 28.02. When the parties and trial court
began the trial, they operated under the belief that the offense was a second-degree felony, see id.
§ 12.33 (second-degree felony carries punishment range of two to twenty years), including asking
and during voir dire whether the panelists could consider the second-degree range. Not until the
punishment charge conference, after the jury had returned its guilty verdict and the punishment
6
evidence had been presented, did the error come to light. The trial court proposed a jury charge
authorizing the first-degree felony range, and Ransom objected and moved for a mistrial, accusing
the State of misleading the jury during voir dire and noting that some panelists had been struck
for saying they could not consider the full second-degree range.2 The trial court denied Ransom’s
motion for mistrial. Ransom also objected to the charge and asked the court to include the second-
degree range, but the trial court refused. In closing arguments on punishment, Ransom accused the
State of misleading the jury. The State responded in its closing arguments that both sides had made
an honest mistake and said, “It’s not a 99 or life kind of case. It’s honestly not. Twenty years [is]
an appropriate sentence in this case.” The jury returned a sentence of fifteen years’ imprisonment.
Ransom urges that the error should be considered constitutional but that even if we
determine it to be non-constitutional, we should hold the error to have been harmful and reverse his
conviction. We will assume without deciding that the error is constitutional, and, as instructed by
the court of criminal appeals, will consider the nature of the error, whether it was emphasized by the
State, its probable implications, and the weight a juror would probably have placed on it. Snowden
v. State, 353 S.W.3d 815, 822 (Tex. Crim. App. 2011). Those considerations are not the exclusive
factors to consider, and not every factor will apply to every error. Id.
The error, a misstatement of the punishment range made during voir dire, seems to
have been made by all parties, and when it was noted, the State admitted the error and urged the jury
2
The State observes that of the three jurors struck for cause, none of them truly stated they
could not consider the full range for a second-degree felony. All three of them basically said they
could not judge someone else’s guilt or innocence and, in addition, two of them indicated that they
did not think they could assess a twenty-year sentence.
7
not to consider the maximum first-degree punishment. The record does not give rise to a concern
that any of the jurors would have placed noticeable weight on the error or that the error had any
influence on the jurors’ deliberation or decision making.3 As we summarized earlier, the evidence
of Ransom’s guilt was significant. Finally, the sentence imposed by the jury fell within the range for
a second-degree felony. See Tex. Penal Code § 12.33 (second-degree felony punishable by sentence
of two to twenty years); see also id. § 12.32 (first-degree felony punishable by sentence of five to
ninety-nine years or life imprisonment). Cf. Martinez v. State, 981 S.W.2d 195, 197 (Tex. Crim.
App. 1998) (in entering guilty plea for third-degree felony, defendant was given admonishment that
included possibility of life sentence; court held that because sentence assessed fell within misstated
and actual ranges, admonishments substantially complied with code of criminal procedure). Having
reviewed the entire record, we conclude beyond a reasonable doubt that the error did not contribute
to Ransom’s conviction or punishment. See Snowden, 353 S.W.3d at 818. We overrule Ransom’s
third issue on appeal.
Conclusion
Having overruled Ransom’s issues on appeal, we affirm the judgment of conviction.
3
Ransom argues that “[b]ecause the jury understood this was a less serious offense than
it really was, in terms of punishment and level of offense, they may have returned a jury verdict
they would not otherwise have returned had [they] been properly instructed.” However, there is no
indication in the record that the jury might have acquitted Ransom of first-degree arson while it was
content to convict him of second-degree arson.
8
___________________________________________
David Puryear, Justice
Before Justices Puryear, Pemberton, and Rose
Affirmed
Filed: August 28 2014
Do Not Publish
9 | 01-03-2023 | 08-28-2014 |
https://www.courtlistener.com/api/rest/v3/opinions/1622945/ | 725 N.W.2d 660 (2006)
IN RE A.B.
No. 06-1282.
Court of Appeals of Iowa.
October 25, 2006.
Decision without published opinion. Affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623422/ | 126 S.W.3d 666 (2004)
TEXAS DEPARTMENT OF PUBLIC SAFETY, Appellant,
v.
Jesus Salvador RODRIGUEZ, Appellee.
No. 14-03-00174-CV.
Court of Appeals of Texas, Houston (14th Dist.).
January 27, 2004.
*667 David O. Wise, Austin, for appellant.
David Cunningham, Dick Psenda, Houston, for appellee.
Panel consists of Justices EDELMAN, FROST, and GUZMAN.
OPINION
RICHARD H. EDELMAN, Justice.
In this concealed handgun license revocation case, the Texas Department of Public Safety ("DPS") appeals a judgment in favor of Jesus Salvador Rodriguez on the ground that the trial court erred in reversing the DPS's revocation of Rodriguez's handgun license (the "license") after he was convicted of reckless driving. We reverse and render judgment in favor of DPS.
Rodriguez was convicted of reckless driving (the "conviction") pursuant to a no contest plea and assessed a fine of $500. Based on this conviction, DPS revoked Rodriguez's handgun license. Rodriguez successfully challenged this revocation in a justice court, and the county court below affirmed that decision on the ground that the conviction was for a class C misdemeanor, as reflected in the judgment, rather than a class A or B misdemeanor, as would be required to revoke the license.
DPS's sole issue argues that the trial court erred in upholding the reversal of the license revocation because the reckless driving offense for which Rodriguez was convicted constitutes a class A misdemeanor for purposes of the Concealed Handgun Act[1] (the "Act") and thus warranted the revocation.
We review matters of statutory construction de novo. City of San Antonio v. City of Boerne, 111 S.W.3d 22, 25 (Tex.2003). If a statute's meaning is unambiguous, we generally interpret the statute according to its plain meaning. Id.
With exceptions not applicable here, a concealed handgun license may be revoked *668 if the license holder becomes ineligible for a license. Tex. Gov't Code Ann. § 411.186(a)(3) (Vernon Supp.2004). A person is not eligible to obtain a license if, among other things, he has been convicted of a class A misdemeanor. See id. § 411.172(a)(8). For this purpose, an offense is a class A misdemeanor if it is not a felony and confinement in a jail other than a state jail felony facility is affixed as a possible punishment. See id. § 411.172(b)(2). The offense of reckless driving is punishable, among other things, by confinement in county jail. Tex. Transp. Code Ann. § 545.401(b)(2) (Vernon 1999). Therefore, it is a class A misdemeanor for purposes of the Act, the license was subject to revocation for Rodriguez's reckless driving conviction, and the revocation of the license should not have been reversed.
Rodriguez contends that the classification of his conviction as a misdemeanor is, in effect, controlled for all purposes by the "C" classification marked on the judgment and that failing to treat it as such would amount to a collateral attack on the judgment. We disagree.
First, reckless driving is defined in the Transportation Code as a single misdemeanor offense that has no further classifications. See Tex. Transp. Code Ann. § 545.401(b). Thus, it is an offense that is punishable by fine, jail confinement, or both for any conviction. See id. Therefore, it has no classification for purposes of the conviction itself.
To the extent this type of misdemeanor must be further classified for another purpose, such as the civil license revocation proceeding in this case, enhancement of a subsequent criminal offense, or otherwise, that classification must be determined under applicable law,[2] and we know of no authority allowing a trial court to override that law to prescribe an inapplicable classification for any other purposes (i.e., pursuant to a plea bargain) or to require the classification of a misdemeanor to necessarily be the same for every purpose, civil and criminal. In this case, because the Act expressly provides a definition of a class A misdemeanor for the specific question before us, we are not at liberty to depart from it or apply another definition that may pertain in a different context. Accordingly, we reverse the trial court's judgment and render judgment reinstating the revocation of Rodriguez's license to carry a concealed handgun.
NOTES
[1] See Tex. Gov't Code Ann. §§ 411.171-411.208 (Vernon 1998 & Supp.2004).
[2] See, e.g., TEX. PEN.CODE ANN. § 12.41 (Vernon 2003). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2491246/ | 79 So.3d 157 (2012)
J.C., A Child, Petitioner,
v.
STATE of Florida, Respondent.
Nos. 5D11-3970, 5D11-3971.
District Court of Appeal of Florida, Fifth District.
February 3, 2012.
Robert Wesley, Public Defender, Orlando, and Eileen Forrester, Chief Assistant Public Defender, Orlando, and Ronnie Syme, Assistant Public Defender, Orlando, for Petitioner.
Pamela Jo Bondi, Attorney General, Tallahassee, and Wesley Heidt, Assistant Attorney General, Daytona Beach, for Respondent.
PER CURIAM.
A copy of this opinion shall be filed with the trial court and be treated as the notice of appeal in case numbers 2010-CJ-1595-A-O and 2011-CJ-2320-A-O in the Circuit *158 Court in and for Orange County, Florida. See Fla. R.App. P. 9.141(c)(6)(D).
PETITION GRANTED.
ORFINGER, C.J., PALMER and TORPY, JJ., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2403374/ | 479 A.2d 708 (1984)
Roland A. FOURNIER et al.
v.
Paul J. FOURNIER et al.
No. 81-580 Appeal.
Supreme Court of Rhode Island.
June 25, 1984.
*709 James M. Sloan III/Michael J. Murray, Providence, for plaintiffs.
Joseph E. Marran, Jr., Pawtucket, for defendants.
OPINION
WEISBERGER, Justice.
Three brothers, all shareholders of the same corporation, brought this stockholders' action against the corporation and its majority stockholder, a fourth brother. The defendants appeal from a Superior Court judgment granting plaintiffs' petition to reinstate the assistant manager of E.P. Fournier Co., Inc., (E.P. Fournier Co.) following his employment termination by the president and manager of the company. The plaintiffs cross-appeal from that portion of the judgment which denies their petition for cancellation of stock certificates issued to the president and manager allegedly by fraud and in violation of a fiduciary duty. We affirm the judgment in both aspects.
The court is faced with what essentially amounts to a family dispute cloaked in corporate structure. Before us are four brothers and E.P. Fournier Co., a family-established business founded by their father, Ernest P. Fournier, and incorporated in 1953 under the general incorporation statutes of Rhode Island. The principal source of contention lies in the apparent breakdown of the combined business and fraternal relationships of two of the brothers, namely Paul J. Fournier and Roland A. Fournier. At the time of the events leading to this suit, Paul and Roland were members of a two-person board of directors. In addition, Roland served as vice president and secretary, and Paul served as president and treasurer. Pursuant to employment agreements, Roland was the assistant manager and Paul was the general manager. Additionally, Paul was the majority stockholder, owning 251 shares, and Roland owned 204 shares. Two other brothers, Bertrand and Alfred, each owning *710 15 shares, support Roland in this action against Paul and the corporation.[1]
E.P. Fournier Co. was and remains to this day a closely held corporation primarily engaged in the sale and servicing of new and used automobiles. Its original articles of association drawn in 1953 authorized 600 shares of no-par common stock, of which 501 were issued 426 shares to Ernest P. Fournier and 15 shares to each of his five sons.[2] Until his death in January 1965, Ernest P. Fournier operated and controlled the business. For several years prior to Ernest's death, Paul and Roland were the only sons actively engaged in the business with their father. Subsequent to their father's death, the company was operated by the two brothers in apparent harmony.
However, the relationship between them began to erode during the summer of 1980 to the extent that on or about October 6, 1980, Paul, then president and manager, unilaterally terminated Roland's employment. Testimony was presented at the trial that just prior to Roland's dismissal, the two brothers had argued about their respective sons who were also employed by the corporation. Evidence stipulated to also showed that in late September 1980, Paul prepared an agreement and advised Roland that if he refused to sign it, Roland's benefits and services with the company would be terminated. Provisions of the agreement stated among other things that Paul owned a majority of the issued and outstanding stock of the company, that all management decisions regarding the company were Paul's exclusive authority, that Paul could invoke his absolute legal right to dismiss Roland without cause, and that Roland's son would no longer be employed by the company. Roland did not sign the agreement. Several days later, Paul informed Roland that his services at the company would no longer be required. Paul terminated all benefits and salary Roland derived from his employment and in addition removed from Roland's garage two vehicles used by him but owned by the corporation.
Crucial to this controversy is an agreement entered into on December 31, 1962, by Ernest P. Fournier, Roland, and Paul. Several weeks prior to the agreement, Paul, after having worked for about two years as manager of the corporation, expressed his dissatisfaction with company operations, terminated his employment, and "walked out," whereupon his father sought him out and negotiated his return. The episode spurred the December 1962 agreement, of which two provisions are pertinent to this appeal:
"(a.) That Paul and Roland each shall have the right to purchase from Ernest one-half (½) of his total stock holdings in E.P. Fournier Co., Inc., now totalling four hundred twenty-six (426) shares as hereinafter set forth, at an agreed price of Sixty ($60.00) Dollars per share in minimum monthly purchases of one share each, with no limitation, however, on the maximum purchase they may make hereunder.
"* * *
"(d.) That Ernest hereby recognizes that Paul shall act as general manager of the Corporation with full authority to hire, approve sales and contribute to policy decisions affecting the interest of the Corporation."
Thereafter, Paul resumed as general manager of E.P. Fournier Co., and Roland undertook the smaller, used-car phase of the business. In accordance with provision (a) of the 1962 agreement, both Paul and Roland exercised the option to purchase Ernest's shares by having $60 deducted from their earnings each month for the purchase of one share. By the time of *711 Ernest's death, both brothers each had purchased thirty-three shares, bringing their total ownership to forty-eight shares each.
On appeal, plaintiffs claim that Paul's acquisition of Ernest's shares, making him majority stockholder, was accomplished by fraud and in violation of his fiduciary duty as executor of their father's estate. The defendant also appeals and challenges the trial judge's holding that because Roland was under an employment agreement as assistant manager with the board of directors, Paul lacked the power to terminate him unilaterally without authorization of the board of directors. Having provided the background for this dispute, we shall address each claim, supplying additional facts as they may be necessary for our discussion.
I
We hold that the authority to remove Roland from his position as assistant manager of the E.P. Fournier Co., as well as from the offices of vice president and secretary, lies with the board of directors and not with Paul pursuant to any of his individual, corporate capacities. The power of removal is often explicitly conferred by a corporation's own law in its charter or bylaws, or by statute. Neither the charter of E.P. Fournier Co. nor its bylaws contain provisions in respect to the removal of officers or agents. General Laws 1956 (1969 Reenactment) § 7-1.1-45 of the Rhode Island Business Corporation Act states:
"Removal of officers. Any officer or agent may be removed by the board of directors whenever in its judgment the best interests of the corporation will be served thereby, but such removal shall be without prejudice to the contract rights, if any, of the person so removed. Election or appointment of an officer or agent shall not of itself create contract rights."
However, we find that § 7-1.1-45 does not by its language grant exclusive power of removal in the board of directors. For that reason, we do not rely completely on this section in determining where lies the authority to remove corporate officers and agents.
It is the prevailing view that the power to remove officers and agents of a corporation resides in the body that appointed or elected them. American Center For Education, Inc. v. Cavnar, 80 Cal. App. 3d 476, 492, 145 Cal. Rptr. 736, 746-47 (1978). See Stott v. Stott Realty Co., 246 Mich. 267, 270, 224 N.W. 623, 624 (1929); Brindley v. Walker, 221 Pa. 287, 292, 70 A. 794, 795 (1908). See generally 2 Fletcher, Cyc. Corp. § 357 (Perm rev. ed. (1982). The authority to remove is inherent in and incident to the authority to select. They are corollary powers.
The bylaws of E.P. Fournier Co. imposed on its board of directors the duty to manage the business and affairs of the corporation. On June 1, 1960, the shareholders added a provision to the bylaws which authorized the board of directors to enter into agreements for management of the business with any individuals it deemed necessary as manager or assistant manager. Those agreements were not in evidence. Indeed, on the same day, the board entered into such contracts employing Paul as manager and Roland as assistant manager. By means of its employment contract with Roland, the board delegated to him some of the powers, duties, and liabilities imposed on it under its bylaws. Having charged Roland to act for it in the first instance, the board of directors possessed the inherent right and authority to remove from him such aspects of managerial authority as it has bestowed on him. This we find is consistent with general principles of agency which give a principal the right to revoke the agency. See 1 Restatement (Second) Agency § 118 at 300 (1958).
Paul asserts that his employment agreement with the board of directors making him manager of the corporation in 1960 effectively conferred on him all of the board's authority to manage the corporation, including its power to remove Roland. In short, he asserts that by the agreement, *712 the board of directors stripped itself of all managerial and decision-making functions. This we find contravenes both the theory inherent in the corporate structure and our corporate statutes.
Section 7-1.1-33 provides that "[t]he business and affairs of a corporation shall be managed by a board of directors." Although this section grants to the board sole original power to manage the affairs of the corporation, the authority of corporate directors may be limited by other statutory provisions or by the corporation's own law through its charter or bylaws. Under the authority of the bylaws of E.P. Fournier Co., the board of directors entered into management contracts with Paul and Roland, thereby delegating in part its authority to manage the corporation. Although we recognize that in Paul's appointment as manager the board delegated the authority to carry on the day-to-day business of the corporation, we do not believe that the board completely abdicated its power, as Paul suggests. The duties and powers of a general manager, while extensive, do not result in the deprivation of all statutory authority and responsibilities of the directors.
"[T]he general rule is that, in the absence of express restrictions on his powers, with actual or constructive notice thereof to persons dealing with him, an officer or agent of a corporation, entrusted with the general management and control of its business, has implied authority to make any contract or do any other act which is necessary or appropriate to the conduct of the ordinary business of the corporation." (Emphasis added.) 2A Fletcher, Cyc. Corp. § 667 at 239 (Perm rev. ed. 1982)
Too broad a delegation of powers, either express or implied, may be interpreted as an unlawful abdication by the board of directors of its management functions. See Henn, Law of Corporations, § 212 at 573 (3d ed. 1983). Moreover, this aspect of Paul's argument is not supported by the facts. Subsequent to Paul's assuming the position of manager, the board-of-directors continued to function as a body. Many affairs of the corporation requiring board action and approval were conducted by the directors. There were board-of-directors meetings. The directors entered into the December 1962 agreement. Directors met to select new officers after the death of Ernest P. Fournier. We believe, therefore, that Paul's claim that he has effectively been the board of directors of E.P. Fournier Co. since 1960 has no basis in law or in fact. That being so, a formal board meeting should have been called for the purpose of terminating Roland. It is noteworthy in this instance that a meeting of the board of directors comprised of Paul and Roland would probably lead to deadlock on this matter. Nothing short of a stockholders' meeting could accomplish Roland's removal. These procedural obstacles, however, cannot justify Paul's unilateral action. The formalities of board-of-director or stockholder action were required.
We recognize that the unique set of circumstances presented by closely held corporations often warrants a relaxation of strict adherence to the corporate statutory scheme. In Baker v. Smith, 41 R.I. 17, 102 A. 721 (1918) we stated, "Formal meetings of directors are not necessary where their usual course of business is to act informally." Id. at 32, 102 A. at 727. Paul relies on Baker to persuade us that in the instant case no directors' meeting was required to terminate Roland. We distinguish Baker from the case before us by noting that in Baker, both directors met informally and conferred on the transaction of business. Thus they "accomplish[ed] the same result which would have attended a more ceremonious attitude." Id., 102 A. at 727. No such contention could be made in the instant case.
The Rhode Island General Assembly has recognized the special problems relating to closely held corporations. The governing corporate statute, § 7-1.1-51, entitled "Special Provisions Relating to Close Corporations," permits close corporations to *713 operate essentially in the manner Paul has suggested. However, to benefit by the section, a corporation must meet its requirements. Section 7-1.1-51 reads in pertinent part:
"(a) Provisions of the articles of incorporation or by-laws of a corporation organized under this chapter, or provisions of an agreement relating to such a corporation, which would otherwise be invalid because they (i) restrict, or assign to one or more shareholders or other persons, any or all of the powers normally vested in the board of directors or provide that there shall be no board of directors, * * * shall nevertheless be valid if such provisions have been approved by all the shareholders of the corporation and if the corporation's original or amended articles of incorporation contain a heading immediately after the name of the corporation stating that it is a close corporation pursuant to § 7-1.1-51. This subsection shall not be deemed to invalidate any provision in articles of incorporation, by-laws or agreements that would otherwise be valid. A provision authorized by clause (i) of this subsection may include a provision that there shall be no board of directors." (Emphasis added.)
Paul's employment agreement of 1960, by which he claims he derived all the powers of the board of directors, does not meet the requirements of this section.
Finally, we comment briefly on the December 1962 contract that expressly provided that Paul had the power to hire. The provision relating to Paul did nothing more than reinstate him as manager after he left the corporation for a brief time. His authority to hire and therefore to fire refers only to subordinates, clerks, salespersons, and others who would assist in the carrying out of ordinary business operations. We do not characterize Roland's position as coming within that category of personnel.
We agree with the decision of the trial justice that Roland's termination was ineffective and improper and that he should be reinstated to the active position of assistant manager "with the salary and all other benefits to which that position entitles him."[3]
II
The trial justice was correct in holding that Paul neither committed fraud nor violated his fiduciary duty as executor or as majority shareholder in acquiring such portion of his father's stock as made him majority stockholder. Therefore, we affirm his denial of plaintiffs' petition for cancellation of that stock.
In support of their appeal, plaintiffs advance the following contentions: (1) under provision (a) of the December 1962 agreement, Roland and Paul could each purchase up to, but not more than, one-half of the outstanding shares owned by Ernest P. Fournier, and their stock ownership was intended to be equal; (2) Paul acquired twenty-three shares by fraud; and (3) Paul breached his fiduciary duties as executor as well as majority shareholder and director by purchasing the additional twenty-three shares. The following facts are pertinent to our discussion.
The original articles of E.P. Fournier Co. provided that before any stockholder sells or otherwise disposes of his shares in the corporation, he shall first offer them to the corporation in writing. In December 1962 the shareholders approved a waiver of E.P. Fournier Co.'s right pursuant to the articles with respect to the stock that was the subject of the December 1962 agreement. The agreement recited that Ernest P. Fournier was the owner of 426 shares of E.P. Fournier Co. stock. In actuality, on December 31, 1962, Ernest owned 255 shares, and Fournier Realty, Inc., owned 170 *714 shares. The shares of the latter corporation were totally owned by Ernest.
On January 6, 1965, the day before he died, Ernest P. Fournier duly executed a will in which he nominated Paul J. Fournier as his executor. The second clause of the will incorporated by reference provision (a) of the December 1962 agreement that gave equally to Paul and Roland an option to purchase one-half of Ernest's stock in E.P. Fournier Co. The clause directed the executor to carry out the terms of the agreement. The third clause of the will directed the executor
"to give to my said sons, Paul J. Fournier and Roland A. Fournier, the right to purchase at any time within one (1) year from the date of my death, all or any portion of my common stock in Fournier Realty Inc. at a price to be determined by an independent appraiser selected by the attorney who shall represent the Executor of my estate, and that the proceeds from the exercise of said option shall be added to the residue of my estate."
At the time of Ernest's death, Fournier Realty, Inc., owned 146 shares of E.P. Fournier Co. stock.[4]
The administration of Ernest P. Fournier's estate was complicated both by a will contest pitting Ernest's widow and three of her sons against Roland and Paul, and also by a lack of liquidity needed to meet estate taxes and various loan obligations. Paul and Roland attempted to solve this problem through a somewhat complex stock-redemption and refinancing plan. At the core of this plan was their decision to purchase Ernest's stock pursuant to the rights conferred on them by the December 1962 agreement. On July 12, 1965, a directors' meeting was called at which two pertinent transactions occurred. First, the 146 shares owned by Fournier Realty, Inc. were canceled and transferred to the estate of Ernest P. Fournier, bringing the total shares owned by the estate to 359. Second, 203 shares of the corporate stock were purchased by Paul (bringing his total shares to 251), and 156 shares were purchased by Roland (bringing his total shares to 204). To meet the cost of their stock purchases, both brothers executed various loan documents, mortgages, and guarantees, as well as assigning their respective interests in Ernest's estate. Roland's promised purchase price was approximately $2,800 less than the amount promised by Paul.
Rejecting plaintiffs' position that Roland and Paul should currently have equal ownership of the corporation's stock, to wit 228 shares each, the trial justice found that Paul's acquisition of an additional 23 shares was consonant with the terms of the 1962 agreement as well as those of Ernest P. Fournier's will. We summarize his findings.
The trial justice held that plaintiffs failed to establish two of the elements of fraud or deceit, namely a false representation made by defendant and justifiable reliance by plaintiff. See East Providence Loan Co. v. Ernest, 103 R.I. 259, 263, 236 A.2d 639, 642 (1968). The trial justice relied heavily on the testimony of the corporation's attorney, who stated that Roland had been apprised of the disproportionate-ownership plan prior to the closing on July 12, 1965. The attorney's testimony was corroborated by various documents that Roland had signed which referred to the amount of *715 Roland's and Paul's shares as 156 and 203 respectively.
In respect to plaintiff's argument that the December 1962 agreement limited Paul and Roland to equal ownership status, the trial judge stated:
"It is not reasonable to conclude either from the wording of the Agreement or the circumstances surrounding its execution that Mr. Fournier wanted to force his sons to be equal owners even against their wishes or to penalize one son for the other's lack of interest in buying the full fifty percent to which he was entitled by prohibiting the first son from purchasing more than one-half of the stock.
"In short, the Court finds that in granting each son the right to purchase one-half of his stock, Mr. Fournier intended only to give each an equal opportunity to purchase stock and did not intend to foreclose Paul and Roland from agreeing to a disproportionate purchase."
The trial justice also found that E.P. Fournier Co.'s preemptive right to purchase its own shares was duly waived and that the waiver encompassed the aggregate number of shares owned by Ernest (255 shares) and by Fournier Realty, Inc. (170 shares), being controlled by Ernest. That being so, Paul did not usurp the corporation's opportunity to purchase the number of shares in excess of the 156 which Roland did not choose to purchase on July 12, 1965.
Finally, the trial justice ruled that Paul did not violate his fiduciary duty to other legatees as executor of his father's will. He found that the December 1962 agreement gave Paul a right to purchase the subject shares and that the will directed him as executor to honor the terms of the agreement. The evidence clearly indicates that the estate received full value for these shares purchased by Paul and Roland. There is no indication that any other persons were interested in purchasing this stock at the same or greater price. Both of these issues depend upon resolution of mixed questions of law and fact. See DeNardo v. Fairmount Foundries Cranston, Inc., 121 R.I. 440, 445-49, 399 A.2d 1229, 1232-34 (1979).
This court has consistently held that the findings of the trial judge will be given great weight on appeal and will not be disturbed unless it can be shown that such findings are clearly wrong or that the trial justice misconceived or overlooked relevant evidence on a crucial issue. See Traversa v. Smith, R.I., 437 A.2d 1358, 1360 (1981); In re Armand, R.I., 433 A.2d 957, 962 (1981); Citizens for Preservation of Waterman Lake v. Davis, R.I., 420 A.2d 53, 59 (1980); Milliken v. Milliken, 120 R.I. 762, 764, 390 A.2d 934, 935 (1978). In the absence of extraordinary circumstances (wherein only one conclusion is possible and thus a question of law is presented), the conclusions reached by a trial justice in mixed questions of law and fact are entitled to the same weight as are his factual findings. See DeNardo, 121 R.I. at 448, 399 A.2d at 1234. We have reviewed the record, and we conclude that the trial justice neither misconceived nor overlooked material evidence, nor was he otherwise clearly wrong in finding that Paul did not acquire majority stockholder status by fraud or in violation of his fiduciary duty as executor. The evidence fully supported the determination by the trial justice that none of the stock certificates standing in Paul's name warranted cancellation.
For the reasons stated, the defendants' appeal is denied and dismissed; the plaintiffs' cross-appeal is denied and dismissed, and the judgment is affirmed. The papers in the case may be remanded to the Superior Court.
SHEA, J., did not participate.
NOTES
[1] Another brother, Ernest O. Fournier, now deceased, initially owned 15 shares. Pauline Fournier, his widow, held his fifteen shares at the time of this action.
[2] Some question exists whether the amount of outstanding stock was 500 or 501. The parties have not made this discrepancy an issue. Therefore, we shall assume that the correct number is 501.
[3] It may well be that it will be necessary for a trial justice of the Superior Court to resolve any dispute that may arise between the parties concerning the exact dollar amount to which Roland may be entitled under this judgment. We shall leave that determination to such justice in the event that the parties are unable to agree regarding this aspect of the judgment.
[4] During the interim between the execution of the December 1962 agreement and the death of Ernest P. Fournier in 1965, Paul and Roland each purchased 33 shares of E.P. Fournier Co. stock. Twenty-one of those shares were purchased from Ernest P. Fournier, and 12 were purchased from Fournier Realty Co. Thus, at Ernest's death, his estate owned 213 shares of the company's stock, and Fournier Realty Co. owned 146 shares.
New stock certificates for the shares purchased from Ernest P. Fournier were never issued in the names of Paul and Roland. Therefore, at his death Ernest P. Fournier was still the record owner of 255 shares. On July 12, 1965, directors of the E.P. Fournier Co. voted to correct the corporate records regarding stock ownership. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2403377/ | 195 N.J. Super. 354 (1984)
479 A.2d 425
STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT, CROSS-APPELLANT,
v.
BRUCE CURTIS, DEFENDANT-APPELLANT, CROSS-RESPONDENT.
Superior Court of New Jersey, Appellate Division.
Argued June 6, 1984.
Decided July 18, 1984.
*359 Before Judges MATTHEWS, J.H. COLEMAN and GAULKIN.
Michael D. Schottland argued the cause for appellant-cross-respondent (Chamlin, Schottland, Rosen, Cavanagh & Uliano, attorneys; Michael D. Schottland and Charles J. Uliano, on the brief).
Paul F. Chaiet, First Assistant Prosecutor, argued for respondent-cross-appellant (John A. Kaye, Prosecutor of Monmouth County, attorney; Paul F. Chaiet, of counsel, and on the brief).
Arlene R. Weiss, Deputy Attorney General, argued the constitutionality of N.J.S.A. 2C:11-4 (Irwin I. Kimmelman, Attorney General of New Jersey, Amicus Curiae, attorney; Arlene *360 R. Weiss, of counsel; Arlene R. Weiss and Jane A. Grall, Deputy Attorneys General, on the brief).
The opinion of the court was delivered by COLEMAN, J.H., J.A.D.
This appeal requires us to decide what if any difference exists between aggravated manslaughter and reckless manslaughter. Defendant was tried to a jury for the murder of Rosemary Podgis, contrary to N.J.S.A. 2C:11-3, and theft of a van, contrary to N.J.S.A. 2C:20-3a. The jury was instructed on reckless manslaughter and aggravated manslaughter as lesser included offenses of the murder. He was acquitted of murder and the theft, but he was found guilty of aggravated manslaughter. The court imposed a custodial sentence of 20 years with 10 years of parole ineligibility. We now affirm.
Scott Franz was indicted for the murder of his stepfather, Alfred Podgis, on July 5, 1982. Defendant was indicted for the murder of Rosemary Podgis, Scott Franz's mother, on the same date. Franz pled guilty to murder and testified for the State while he was waiting to be sentenced. Defendant elected not to testify.
Franz and defendant graduated from Kings Edgehill School, a private boarding school in Nova Scotia, on June 18, 1982. Defendant resided in Canada while Franz resided in the Podgis home located at 401 Euclid Avenue, Loch Arbor, Allenhurst, New Jersey, where the homicides occurred over the July 4, 1982 weekend. Franz's stepfather and mother invited defendant to New Jersey to visit with Franz. Franz and defendant had been friends for two years.
The events in the Podgis household during the week preceding the homicides are highly relevant. Franz regarded his stepfather as physically abusive. He apparently loved his mother. On June 29, 1982, Franz and his stepfather went to the Newark Airport to pick up defendant who was flying in from Canada. The plane was late arriving. Franz and his *361 stepfather became embroiled in a heated argument because the stepfather thought the lateness of the plane would cost additional parking fees and would also interfere with a baseball date. Defendant was eventually transported from the airport to the Podgis home where he spent the next day uneventfully.
Franz testified that on July 1, he worked for a few hours and then went to the Englishtown Post Office to visit his mother at her job. His mother asked him to put gas in her car and to purchase a box of .30 caliber ammunition. Franz purchased the ammunition in the presence of defendant. The ammunition was brought to the Podgis home where it was placed on a table. Later that day Franz and his stepfather had an argument over a $389 Social Security check which Franz received monthly because of the death of his natural father.
Franz further testified that on July 2 there was another argument between him and his stepfather because Mr. Podgis left for work without taking Franz. Mr. Podgis punched Franz as Mrs. Podgis, defendant and Franz were leaving the house to go out for dinner.
On July 3, while Franz and defendant were cutting the lawn at about 11:30 a.m., they observed Mr. Podgis place some boxes containing rifles into one of the motor vehicles, cover them with towels and then lock the motor vehicle. Franz described his stepfather as being "hyper" because his face was totally red and he was walking in an unusual manner. Franz and defendant then went to the Seaview Square Mall where they remained until 9:30 p.m. When they returned home, Franz overheard his parents arguing. He heard Mr. Podgis say he never should have married Mrs. Podgis because some of her children are too much trouble. Later that night when Mr. Podgis came outside to take Franz's moped inside, defendant and Franz heard him say, "If I get my hands on that son-of-a-bitching kid, I'll kill him." He was referring to Franz. Defendant and Franz were afraid to enter the house that night until very late.
*362 Franz also testified that on Sunday morning, July 4, he went upstairs to get his checkbook and to obtain defendant's travel checks. While upstairs Mr. Podgis fired a rifle shot at Franz. Franz dropped a tote bag he was carrying, which contained the belongings of defendant, and ran out of the house. Defendant and Franz spent the remainder of the day in Asbury Park. They returned home very late that night. Defendant indicated to Franz that Mr. Podgis "was a total pain and that we have to pay him back for making us stay outside." Later that Sunday evening, Mrs. Podgis indicated to Franz that her husband had found two of his collector guns underneath the mattress in the bedroom where defendant had been staying.
Significantly, before Franz and defendant entered the house late Sunday night, Franz broke into the locked motor vehicle containing the box of rifles and took two rifles and a box of bullets. These guns were to be used as protection by Franz and defendant whenever they would try to get back into the house to collect their personal belongings before leaving town. They felt they needed protection since Mr. Podgis had shot at Franz that morning. One of the guns removed from the locked vehicle was loaded. Franz unloaded that gun by ejecting the shells. He then loaded one-half of the shells into each of the two rifles. Defendant said he did not know how to load the rifle. Franz handed one of the loaded rifles to defendant with shells in the magazine, but no shell was in the firing chamber. The hammer was in the safety position. Defendant and Franz slept Sunday night on the sofa in the living room with the rifles on or underneath the sofa.
On Monday morning, July 5, defendant and Franz got up at approximately 7:30 a.m. Mrs. Podgis went into the kitchen to prepare french toast for breakfast. Defendant remained in the living room on the sofa with his loaded rifle on or underneath the sofa. Franz decided that he wanted to go upstairs to take a shower. However, before leaving to go upstairs, Franz told defendant "If Al [Alfred Podgis] tries anything, like shooting at me, then I am going to shoot him, and if you have to go out of *363 the house shooting, go ahead." Franz took with him a loaded .30 caliber rifle upstairs to take his shower.
Franz and his stepfather had an argument in the master bedroom as to why the stepfather had shot at Franz on Sunday. Mr. Podgis also accused Franz of stealing everything in the house and pawning it like his brother Mark. During the argument, Mr. Podgis held a .22 caliber rifle. Franz said Mr. Podgis then fired shots at him. Neither struck Franz. He fired from a leaning up position on the bed. Franz levered his rifle to move a shell from the magazine into the firing chamber. Franz fired a single shot that struck Mr. Podgis in the head blowing out most of his brain. Less than a minute after Franz fired his weapon, he heard a weapon discharge downstairs. Mrs. Podgis was killed downstairs by defendant with a rifle blast into her abdomen. The bodies were stuffed into a steamer trunk and a sleeping bag and dumped down an embankment in Pennsylvania. Franz and defendant then fled to Texas where they were arrested.
I
First we address defendant's contention that the court erred in failing to properly instruct the jury on the difference between reckless manslaughter and aggravated manslaughter. The statutory definition of manslaughter is found in N.J.S.A. 2C:11-4. Subsection a. provides "Criminal homicide constitutes aggravated manslaughter when the actor recklessly causes death under circumstances manifesting extreme indifference to human life." Subsection b. provides "Criminal homicide constitutes manslaughter when: (1) it is committed recklessly; ...."
The Legislature thus enumerated two elements for aggravated manslaughter, a first degree crime: (1) a reckless causing of death by the actor and (2) circumstances manifesting extreme indifference to human life. Reckless manslaughter is a second degree crime and requires only proof that the actor recklessly caused the death of another human being. The *364 definition of recklessness applicable to both forms of manslaughter is found in N.J.S.A. 2C:2-2b.(3). That definition requires a showing that the actor "consciously disregarded a substantial and unjustifiable risk" that death "will result from his conduct" and further specifies that "the risk must be of such a nature and degree that, considering the nature and purpose of the actor's conduct and the circumstances known to him, its disregard involves a gross deviation from the standard of conduct that a reasonable person would observe in the actor's situation."
The second and distinguishing element of aggravated manslaughter is not defined in the Code. We perceive, however, that the Legislature intended for this second element to require that the recklessness must involve a higher degree of probability that death will result from the actor's conduct because it made aggravated manslaughter a first degree crime and reckless manslaughter only a second degree crime.
We are persuaded that the difference between aggravated manslaughter and reckless manslaughter is the difference in the degree of the risk that death will result from defendant's conduct. This difference in degree is to be established by the second element in aggravated manslaughter which is not required in a reckless manslaughter case. We envision that the Legislature intended that the degree of risk in reckless manslaughter be a mere possibility of death. In aggravated manslaughter, however, the additional element that death be caused "under circumstances manifesting extreme indifference to human life" elevates the risk level from a mere possibility to a probability.
Hence, the Legislature intended for the higher degree of recklessness to distinguish aggravated manslaughter from reckless manslaughter. It is that risk which, the Legislature has found, warrants grading aggravated manslaughter as a first degree crime. The relevant "circumstances" are objective and do not depend on defendant's state of mind. The degree of *365 recklessness must be determined from all the surrounding circumstances. The ultimate question for the factfinder is whether the homicide was committed under circumstances involving a mere possibility of death or did the circumstances involve a probability of death. If the former, the verdict must be reckless manslaughter, but if the latter the verdict must be aggravated manslaughter.
II
When the trial judge charged the jury in this case on aggravated manslaughter, he stated that the recklessness meant the same in both reckless manslaughter and in aggravated manslaughter. As to the second element under aggravated manslaughter, he told the jury that "under circumstances manifesting extreme indifference to human life" meant that defendant must have been aware that the risk of death or serious bodily injury is very great and that defendant conducted himself with no regard for that risk. The judge further explained that causing death under circumstances manifesting extreme indifference to human life meant "in other words, the State must prove the defendant acted in a way that showed he was indifferent to whether or not the victim or anyone else involved in the situation lived or died, that is, the defendant acted in a way which showed that he did not care that someone will be killed."
In response to a question from the jury, the judge reinstructed the jury on aggravated manslaughter. He told the jury that the difference between reckless manslaughter and aggravated manslaughter is a matter of the degree of recklessness. He stated that in aggravated manslaughter the recklessness had to demonstrate "an extreme indifference to the value of human life." He instructed that if the jury found a degree of recklessness that was less than "an extreme indifference to the value of human life" the verdict could only be reckless manslaughter.
*366 The judge defined reckless manslaughter as requiring a conscious disregard of a significant and unjustifiable risk that death would result from the actor's conduct. The jury was told that the degree of the recklessness was less than that required for aggravated manslaughter. He specifically stated "If you find that the defendant acted recklessly, but that his recklessness was not so extreme as to evidence an indifference to the value of human life, the homicide is reckless manslaughter rather than aggravated manslaughter."
When passing upon the propriety of a trial court's instruction to the jury, we must examine the entire charge rather than isolated parts thereof. This is so because it is impossible for a judge to state all of the law in one simple concise sentence. See State v. Hipplewith, 33 N.J. 300, 317 (1960). We have, therefore, examined the charge in its entirety to determine the existence of any impropriety or prejudicial effect upon defendant. State v. Wilbely, 63 N.J. 420, 422 (1973). While the judge did not define the degree of recklessness in terms of possibilities or probabilities that death would result from defendant's conduct, the instruction as a whole informed the jury that in order to return a verdict for reckless manslaughter, it had to be convinced beyond a reasonable doubt that defendant's conduct in the circumstances was reckless and that the risk of death resulting from that recklessness was only possible. We therefore conclude that the jury was properly instructed on the reckless manslaughter charge.
We have also examined the entire charge to determine if the jury was properly instructed on the difference between aggravated manslaughter and reckless manslaughter. Although the charge was not "a paragon of clarity," State v. Masino, 94 N.J. 436, 477 (1983), we are satisfied that the charge as a whole properly instructed the jury on the difference between aggravated manslaughter and reckless manslaughter. Although the trial judge did not instruct on the difference in terms of "probabilities," he made clear that the difference was the degree of the recklessness. Both the words used and the *367 illustration given pointed out that the degree of recklessness in aggravated manslaughter was significantly greater than the degree of recklessness in reckless manslaughter. The instruction informed the jury that defendant could be convicted of first degree manslaughter only if defendant's recklessness toward Mrs. Podgis was such that the defendant did not care whether she lived or died. Recklessness which must be so extreme as to demonstrate an indifference to human life or is so indifferent to human life that the actor does not care whether the victim lives or dies is a degree of recklessness which is functionally equivalent to a high probability that the actor's conduct would cause the death of Mrs. Podgis. Given this understanding of the charges on reckless and aggravated manslaughter, we are completely satisfied that the evidence sufficiently established defendant's guilt on aggravated manslaughter in view of all the circumstances.
III
We next consider whether the statute as interpreted by us is unconstitutionally vague or overbroad. As we have interpreted N.J.S.A. 2C:11-4, it gives a person of ordinary intelligence a reasonable opportunity to know what is prohibited so that he may conform his acts to the law. Town Tobacconist v. Kimmelman, 94 N.J. 85, 118 (1983). Simply because the prohibited behaviour is not susceptible to precise definition need not lead to legislative paralysis. State v. Lee, 96 N.J. 156, 165 (1984). Based on our interpretation, we are satisfied that the statute is not constitutionally vague.
The contention that the statute is overbroad posts the question of whether the reach of the law extends too far in fulfilling the State's interest. Town Tobacconist v. Kimmelman, 94 N.J. at 125 n. 21. Generally, overbreadth arguments relate to first amendment rights which are not involved here. In re Hinds, 90 N.J. 604, 617-619 (1982). Moreover, the statute in question does not reach any constitutionally protected conduct.
*368 IV
Defendant further contends that a directed verdict of acquittal should have been granted on the murder charge. He contends that the evidence was insufficient to submit the charge of murder to the jury. We disagree. When Scott Franz left the living room to go upstairs to take a shower, Mrs. Podgis was in the kitchen preparing french toast for breakfast. Up to that point there had been no discussion between Scott Franz and defendant about causing any possible harm to Mrs. Podgis. On the contrary, her role had been that of a loving mother who wanted to make peace and harmony between her husband and her son Scott Franz. The evidence in its totality permitted the jury to infer that defendant knowingly or purposely shot Mrs. Podgis in the abdomen. The autopsy revealed she was shot from a distance of two to three feet. The autopsy also revealed antemortem bruising of her scalp in the left frontal area, left temporal region and left occipatal area. Those injuries were caused by three blunt impacts to her head. Moreover, Franz heard the shot fired downstairs about sixteen seconds after Franz shot Mr. Podgis upstairs. Franz came downstairs and found defendant standing in the living room with the rifle in his hand. Defendant said "What are we going to do?" When Scott Franz asked defendant what happened, defendant responded "I shot your mother."
Additionally, the jury was free to determine from the evidence that defendant deliberately armed the rifle by the lever action to prepare it for firing. We are therefore satisfied that the evidence was sufficient to permit submission of the charge of murder to the jury. State v. Reyes, 50 N.J. 454 (1967); R. 3:18-1.
V
Defendant further contends that the court erred in not charging the jury on negligent homicide or the meaning of an *369 accidental killing. The history of the Criminal Code makes clear that the judge was not required to charge negligent homicide. As originally proposed, the Criminal Code contained a crime designated as negligent homicide. (See the proposed 1971 Code, Vol. I, § 2C:11-5). Instead of adopting negligent homicide, causing death by auto was enacted as N.J.S.A. 2C:11-5 after certain modifications. Consequently, the judge properly refused to instruct the jury on a nonexistent crime. This is so irrespective of whether the negligence is designated as ordinary negligence or gross negligence.
Defendant further contends that the court erred in not defining an accidental killing. We disagree. The trial judge gave the normal instruction that defendant is presumed innocent and that the burden of proof is on the State throughout the trial. The jury was told that if the killing of Mrs. Podgis did not come within the court's instructions on murder, aggravated manslaughter or reckless manslaughter, defendant must then be acquitted. The jury was further instructed that if the killing of Mrs. Podgis was accidental, obviously meaning that if the killing was not murder, aggravated manslaughter or reckless manslaughter, then defendant must be acquitted. Furthermore, the jury was told that if the contention that the shooting was accidental caused the jury to have a reasonable doubt then the only verdict would be not guilty.
The identical argument was advanced and rejected in State v. Reyes, 50 N.J. at 464-465. The observations of our Supreme Court are germane here. It stated
Defendant's requests to charge on the subject of misadventure were designed to call to the special attention of the jury that if the decedent had been shot accidentally, he should be found not guilty.... We do not see how defendant suffered any "wrong or injury" thereby. R.R. 1:5-1(a). It is evident to us that the jury could not fail to realize, without any specific instruction on the subject, that if it should believe defendant's tale of an accidental shooting, it was bound to return a not guilty verdict. It knew this was the defense and the contention had been fully discussed in the summations. Moreover, the court did instruct that, in order for the jury to find defendant guilty of any of the offenses specified, the State had to prove beyond a reasonable doubt all of the essential elements thereof, which were spelled out in detail. It would be obvious to the *370 jury that "accident" was the exact opposite of these necessary elements. In addition, the court said that the verdict would be not guilty if the State had not proved its charge beyond a reasonable doubt. All of this was adequate under the circumstances.
VI
We find defendant's contention that the prosecutor's comments during summation infringed upon his constitutional right of silence is clearly devoid of merit. The prosecutor stated that "[M]aybe all of the facts, all the true facts in this case have not come out." When ruling on the objection to the comment, the trial judge stated emphatically that he did not regard the comment to be related to defendant's election not to testify. We agree with the trial judge's perception since he had a real feel of the case. We have no doubt that the prosecutor was referring to the discrepancies in the testimony of Scott Franz, a key witness for the State, when compared to the testimony of other witnesses such as Dr. Halbert Fillinger who performed the autopsies on both Alfred and Rosemary Podgis. Scott Franz testified that Alfred Podgis took about three shots at him on Monday morning. Ballistic tests showed the rifle that fired the shot into the wall was the same rifle used to kill Alfred Podgis. Also, the rifle was directed upward and was touching the victim's head when fired rather than being fired downward from some distance as testified to by Franz. Consequently, the prosecutor's comments were entirely proper comments on the evidence in the case.
We also reject defendant's contention that the prosecutor had to vouch for the credibility of the witnesses he called. See State v. Ross, 80 N.J. 239, 252-253 (1979). We find no indication that the prosecutor knowingly produced fabricated or falsified evidence. The prosecutor was duty bound to present evidence that would assist the jury in ascertaining the truth.
*371 Defendant also contends that the sentence is excessive. We disagree. Aggravated manslaughter is a crime of the first degree which carries a maximum ordinary sentence of 20 years. N.J.S.A. 2C:43-6a.(1). There is a presumption of incarceration for first degree crimes. N.J.S.A. 2C:44-1d. The presumptive sentence for a first degree crime is 15 years. N.J.S.A. 2C:44-1f. Where the aggravating factors, however, outweigh the mitigating factors found in N.J.S.A. 2C:44-1a. and b., a sentence greater than the presumptive sentence may be imposed. We are satisfied from our independent study of the record that aggravating factors were established under N.J.S.A. 2C:44-1a.(1)(2) and (9). The mitigating factors were established under N.J.S.A. 2C:44-1b.(7)(8) and possibly (10). But more than a quantitative analysis of the aggravating and mitigating factors is required. "The factors are not interchangeable on a one-to-one basis. The proper weight to be given to each is a function of its gravity in relation to the severity of the offense." State v. Roth, 95 N.J. 334, 368 (1984). The sentence for "a crime must reflect primarily the severity of that crime." State v. Hodge, 95 N.J. 369, 377 (1984). We are satisfied from our study of the record that the mitigating factors do not outweigh the severity of the crime and the character of defendant that was also reflected in his efforts to dispose of the body. All of the mitigating factors pale in comparison to the gravity of the offense.
We have also considered defendant's contention that the parole ineligibility is excessive. We disagree. Since this was a Graves Act offense, the 10 years of parole ineligibility is imposable without reference to aggravating and mitigating factors. N.J.S.A. 2C:43-6c. Moreover, for reasons stated in the preceding paragraph, the term of parole ineligibility is not improper under N.J.S.A. 2C:43-6b. Consequently, we hold that the sentence is in accordance with the sentencing guidelines, *372 and it is neither unreasonable nor shocking to the judicial conscience. State v. Roth, 95 N.J. 334 (1984); State v. Hodge, 95 N.J. 369 (1984).
Finally, defendant contends that "it was error to charge flight" and that "the plea agreement and the charge of the court regarding accomplice/plea agreement, was improper and prejudiced the rights of the defendant." We have carefully considered these and all other remaining contentions and the arguments advanced in support of them and find they are clearly without merit. R. 2:11-3(e)(2). We add simply that defendant's conduct in disposing of the bodies and then fleeing to Texas created factual circumstances which clearly warranted a charge of flight. State v. Centalonza, 18 N.J. Super. 154, 161 (App.Div. 1952).
The judgment of conviction is accordingly affirmed. The State's cross-appeal on an evidentiary ruling is dismissed in light of our affirmance. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2442377/ | 3 A.3d 1096 (2009)
EPPERSON
v.
STATE.
No. 509, 2009.
Supreme Court of Delaware.
October 14, 2009.
Decision Without Published Opinion Appeal Dismissed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2452412/ | 258 P.3d 537 (2011)
244 Or. App. 456
STATE
v.
THOMAS.
No. A143227.
Court of Appeals of Oregon.
July 20, 2011.
Affirmed Without Opinion. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1622992/ | 211 Wis. 2d 296 (1997)
564 N.W.2d 766
Patricia S. MAGYAR, Individually, and As Special Administrator of the Estate of Anthony F. Magyar, Deceased, Plaintiffs-Respondents,
CITY OF MILWAUKEE, Involuntary-Plaintiff,
v.
WISCONSIN HEALTH CARE LIABILITY INSURANCE PLAN, and Lawrence J. Frazin, M.D., Defendants-Appellants-Petitioners,
WISCONSIN PATIENTS COMPENSATION FUND, Defendant-Co-Appellant-Petitioner.
NEUROLOGICAL SURGERY OF MILWAUKEE, S.C., Defendant-Intervenor.
No. 95-0972.
Supreme Court of Wisconsin.
Oral argument April 30, 1997.
Decided June 27, 1997.
*298 For the defendants-appellants-petitioners there were briefs by Michael P. Malone, Susan R. Tyndall and Hinshaw & Culbertson, Milwaukee and oral argument by Susan R. Tyndall.
For the defendant-co-appellant-petitioner there were briefs by James M. Fergal, Linda V. Meagher and Schellinger & Doyle, S.C., Brookfield and oral argument by James M. Fergal.
For the plaintiffs-respondents there was a brief by William M. Cannon, Mark L. Thomsen and Cannon & *299 Dunphy, S.C., Brookfield and oral argument by William M. Cannon.
For the defendant-intervenor there was a brief by Todd M. Weir and Otjen, Van Ert, Stangle, Lieb & Weir, S.C., Milwaukee.
¶ 1. WILLIAM A. BABLITCH, J.
On the day trial commenced in Patricia Magyar's medical malpractice action against numerous defendants, Ms. Magyar and one of the defendants, Neurological Surgery of Milwaukee (NSM), asked the circuit court to approve a settlement agreement between them dismissing NSM from the lawsuit. The settlement was contingent on a ruling by the circuit court excluding an expert witness named only by NSM, Dr. Proctor, from testifying at trial. The non-settling defendants objected, but the circuit court approved the settlement and ordered that the non-settling defendants could not call Dr. Proctor as a witness. The non-settling defendants contend that the exclusion of Dr. Proctor's testimony was an erroneous exercise of discretion by the circuit court. We agree. Accordingly, we reverse and, inasmuch as this evidence went solely to the issue of liability, we remand to the circuit court for a new trial to determine liability.
¶ 2. The relevant facts are as follows: On December 13, 1990, Dr. Frazin performed surgery on Anthony Magyar. Nine days later, Mr. Magyar died. His widow, Patricia Magyar, filed a medical malpractice action against Dr. Lawrence Frazin, Wisconsin Health Care Liability Insurance Plan (WHCLIP), Wisconsin Patients Compensation Fund (the Fund), and NSM alleging that Dr. Frazin's negligence caused Mr. Magyar's death. Specifically, Ms. Magyar alleged that Dr. *300 Frazin's failure to order peri-operative antibiotics for Mr. Magyar led to the infection which caused his death.
¶ 3. Pursuant to Wis. Stat. §§ 802.10(3)(b) and 802.11, the Milwaukee County Circuit Court, Judge Thomas P. Doherty, presiding, issued a scheduling order establishing the deadlines by which the parties were required to serve each other with a complete list of witnesses. Ms. Magyar identified Dr. Butler, a neurosurgeon, and Dr. Buggy, an infectious disease expert and one of Mr. Magyar's treating physicians, as the expert witnesses she planned to call at trial. Dr. Frazin named himself and Dr. Sypert, neither of whom was an infectious disease expert.
¶ 4. During discovery depositions, Dr. Buggy testified that Mr. Magyar should have received antibiotics at the beginning of the operative procedure, i.e., on December 13, 1990. After Dr. Buggy's deposition, NSM filed a motion to adjourn the trial and amend the scheduling order so that it might have additional time to name an infectious disease specialist to respond to Dr. Buggy's testimony. NSM's motion was granted. Although the other defendants had reserved the right to supplement their witness lists upon completion of the discovery depositions of plaintiffs' expert witnesses, neither the Fund, WHCLIP, nor Dr. Frazin did so.
¶ 5. The amended scheduling order required NSM to advise Ms. Magyar of the general nature of the testimony of its expert witnesses. NSM named Dr. Jerva, the Fund's neurosurgical expert and Dr. Proctor, an infectious disease specialist. As to the general nature of Dr. Proctor's testimony, on May 31, 1994, NSM stated that Dr. Proctor believed that commencing antibiotics on December 15, 1990 or later probably would not have altered the outcome in this case.
*301 ¶ 6. On Wednesday, November 23, 1994, the day before Thanksgiving and 5 days before the trial was scheduled to begin, NSM sent Ms. Magyar and the defendants a letter by fax clarifying Dr. Proctor's opinions. This letter revealed that Dr. Proctor disagreed with "Dr. Buggy's contention that antibiotics at any time ... would have altered the outcome of this case."
¶ 7. On the morning trial was to commence, Ms. Magyar and NSM informed the circuit court and the other defendants that they had reached an agreement to dismiss NSM as a party. NSM's dismissal was contingent on a ruling by the circuit court that Dr. Proctor, NSM's witness, could not testify at trial. The other defendants had not named Dr. Proctor or any other infectious disease expert as a trial witness. The non-settling defendants objected to the exclusion of Dr. Proctor's testimony. The circuit court rejected their objections and approved the settlement. Dr. Proctor did not testify at the trial.
¶ 8. The court of appeals affirmed, concluding that WHCLIP, Dr. Frazin, and the Fund (the non-settling defendants) were required by the scheduling order to name the witnesses they intended to call at trial. Because the non-settling defendants neither named Dr. Proctor, nor included a provision in their witness lists "to call any witness named by any other party," the court of appeals resolved that it could not conclude that the circuit court's decision to exclude Dr. Proctor was an erroneous exercise of discretion. The court of appeals further concluded that it was not erroneous for the circuit court to deny the non-settling defendants' motion for a continuance to enable them to secure another infectious disease expert because the trial had already been adjourned on four separate occasions *302 and another adjournment would result in another year's delay.
¶ 9. This case presents a single issue for review: whether the circuit court erroneously exercised its discretion when it excluded Dr. Proctor's testimony from the trial.
[1, 2]
¶ 10. The circuit court has the discretion to exclude the testimony of a witness if a party is prejudiced by opposing counsel's failure to name that witness. Milw. Rescue Mission v. Milw. Redev. Auth., 161 Wis. 2d 472, 490, 468 N.W.2d 663 (1991); Fredrickson v. Louisville Ladder Co., 52 Wis. 2d 776, 782, 191 N.W.2d 193 (1971). The circuit court's exercise of discretion will be upheld absent an erroneous exercise of discretion. Milwaukee Rescue Mission, 161 Wis. 2d at 490.
[3]
¶ 11. The court properly exercises its discretion when it examines the relevant facts, applies a proper standard of law, and reaches a reasonable conclusion using a demonstrated rational process. Id. If the circuit court bases the exercise of its discretion upon an error of law, its conduct is beyond the limits of discretion. State v. Hutnik, 39 Wis. 2d 754, 763, 159 N.W.2d 733 (1968).
¶ 12. The non-settling defendants contend that the circuit court erroneously exercised its discretion by applying the wrong legal standard to the facts. Dr. Proctor is an infectious disease specialist, and the theory of Ms. Magyar's case was that Dr. Frazin's failure to order peri-operative antibiotics resulted in an infection which caused Mr. Magyar's death. Thus, they argue, Dr. Proctor's testimony was highly relevant to the issue of liability.
*303 ¶ 13. In support of their argument, the non-settling defendants point to the legal standard governing the circuit court's power to exclude relevant evidence, Wis. Stat. § 904.03:
Although relevant, evidence may be excluded if its probative value is substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence.
They argue that this highly probative evidence was not outweighed by any of the statutory considerations.
¶ 14. Ms. Magyar argues that the probative value of Dr. Proctor's testimony was outweighed by her surprise in learning, just five days before trial, that the general nature of Dr. Proctor's testimony had significantly changed. Ms. Magyar contends that unless Dr. Proctor was excluded from testifying, she would have been unfairly prejudiced by having to respond to a different defense than that which she had anticipated and for which she had prepared.
[4]
¶ 15. Although Wis. Stat. § 904.03 does not list "surprise" as a specific ground for excluding evidence, a witness whose testimony results in surprise to the opposing counsel may be excluded if the surprise would require a continuance causing undue delay or if surprise is coupled with the danger of prejudice and confusion of issues. Lease America Corp. v. Ins. Co. of N. America, 88 Wis. 2d 395, 400, 276 N.W.2d 767 (1979).
[5]
¶ 16. Fredrickson suggests that the drastic measure of excluding a witness should be avoided by giving *304 the surprised party more time to prepare, if possible. Fredrickson, 52 Wis. 2d at 784. See also, Judicial Council Committee's and the Federal Advisory Committee's Notes pertaining to § 904.08, 59 Wis. 2d at R73-R75. This suggestion is based on "the policy of discovering all of the truth." Fredrickson, 52 Wis. 2d at 784 (citation omitted). Accordingly, continuance is usually the more appropriate remedy for surprise; exclusion should be considered only if a continuance would result in a long delay. State v. O'Connor, 77 Wis. 2d 261, 287-88, 252 N.W.2d 671 (1977). Ms. Magyar did not raise the issue of a continuance before the circuit court.
¶ 17. The question then becomes whether the surprise was unfair, and, if so, whether the unfair surprise outweighed the probative value of the evidence. Jenzake v. City of Brookfield, 108 Wis. 2d 537, 543, 322 N.W.2d 516 (Ct. App. 1982).
[6]
¶ 18. Upon review of a discretionary decision, the test is not whether this court as an original matter would have denied the motion; it is whether the circuit court erroneously exercised its discretion in doing so. Schneller v. St. Mary's Hospital, 162 Wis. 2d 296, 306, 455 N.W.2d 250 (1991). Thus, our purpose upon review is not to decide the merits of Ms. Magyar's arguments, but rather to determine whether the circuit court applied the proper legal standard to the facts of this case. Accordingly, we turn to the transcript of the November 28th hearing in which the circuit court issued its order to determine whether the circuit court's analysis was guided by Wis. Stat. § 904.03:
THE COURT: All right. The court has heard no argument to the contrary and will proceed under the assumption that it has the discretion to rule *305 either way in this matter. And I am prepared to do so.
But to put it in the context of what is going through my mind, it is this:
That with regard to Dr. Proctor, he was available insofar as, I assume, that he was subject to depositions by any party in this lawsuit. His identity was disclosed fairly earlyfairly early in the sense of after theMr. Weir [NSM's counsel]Mr. Weir's appearance in the case. He was the first expert on behalf of any defendant in the area of infectious disease.
Plaintiff apparently had already disclosed that they had one and, in fact, he had been deposed, Dr. Buggy.
So it is apparent at that time or should be apparent to all concerned that infectious disease or that subject was going to be-was going to be the subject mattera subject matter in this lawsuit as well as the fact that cause of deathas pointed out by Mr. Cannonalso alluded to that.
So the significance of infectious disease testimony was or should have been apparent to all parties at the time of Dr. Buggy's deposition and certainly when Dr. Proctor is identified as an expert on behalf of NSM.
R.166:109-10 (emphasis added). As we review the record, we look for reasons to sustain the circuit court's discretionary decision. In re Paternity of Dustine R.P., 185 Wis. 2d 452, 463, 518 N.W.2d 270 (Ct. App. 1994). From the circuit court's discussion of the significance of infectious disease testimony, we conclude that the court considered the probative value of Dr. Proctor's testimony and found that it was significant to the issue of liability.
¶ 19. Next, we consider whether the circuit court considered the element of surprise to the plaintiff. The *306 circuit court concluded that the significance of infectious disease testimony was or should have been "apparent to all," i.e., none of the parties should have been surprised that infectious disease testimony was going to be offered at trial. The court's discussion suggests that since the significance of Dr. Proctor's testimony was apparent to all, and Dr. Proctor was available for deposition, that if a party was surprised by the content of his testimony, it should not have been. In other words, even if the plaintiff was "surprised" by the nature of Dr. Proctor's testimony, the surprise was not "unfair."
[7]
¶ 20. However, the next step the circuit court should have taken in its analysis was to weigh the probative value of Dr. Proctor's testimony, which it found "significant," against the danger of unfair surprise, which it found nonexistent. Under Wis. Stat. § 904.03, relevant evidence is excluded only if the probative value of the evidence is outweighed by, inter alia, unfair surprise. The only reasonable conclusion that can be reached when weighing no danger of unfair surprise against a significant probative value is that the evidence must be admitted. The circuit court reached the opposite conclusion. The circuit court concluded that despite the highly probative value of the evidence and the lack of unfair surprise, the evidence would nonetheless be excluded. This was not a reasonable conclusion and, hence, was an erroneous exercise of discretion. See Milwaukee Rescue Mission, 161 Wis. 2d at 490 (stating that the circuit court "properly exercises its discretion when it examines the relevant facts, applies a proper standard of law and reaches a reasonable conclusion") (emphasis added).
*307 ¶ 21. Further review of the record illuminates the circuit court's rationale for its erroneous conclusion:
I am always kind of reluctant to preclude legitimate evidence from coming in before a jury, but that's not an absolute.
And I am satisfied that in this situation, that there are ways for counsel for the two other defendants to protect themselves insofar as this type of potential. And II don't know that it's a very extraordinary situation at all.
As I indicated in my opening remarks here, that settlements, arrangements and compromises that others may consider conspiracies, if you will between certain parties of the lawsuit occur and, often times, on the day of trial or, for that matter, in the course of trial.
I In weighing the equities in this situation, it seems to me that they weigh towards theMr. Weir and his client [NSM] and at least vicariously, Mr. Cannon [Ms. Magyar's attorney], and that since the production of Dr. Proctor by anyone other than Mr. Weir who has named him would be outside the scheduling order and the anticipationwell, was only named as a witness byby Mr. Weir, and that it was an accommodation, as a matter of fact, limited to Mr. Weir to make himselfmake a witness available such as Dr. Proctor.
I think the equities weigh on that side of the issue, and the court will, in effect, grant the request of Mr. Weir and Mr. Cannon and preclude the testimony of Dr. Proctor on behalf of either of the two defendants or, for that matter, the plaintiff should that unlikely situation occur at the trial.
R.166:113-14. The equities, the circuit court concluded, weighed heavily in favor of allowing NSM to be dismissed from the lawsuit. By focusing on the equity *308 to NSM, the circuit court interjected an improper legal standard into its analysis. This was an erroneous exercise of discretion that resulted in the improper exclusion of evidence that was highly relevant to the issue of the defendants' liability.[1]
[8-10]
¶ 22. In sum, in determining whether to exclude Dr. Proctor from testifying at trial, the circuit court properly considered the factors of probative value and unfair surprise. Having determined that the evidence was highly probative and that there was not unfair surprise to the plaintiff, on its face, the court could have reasonably reached only one conclusion: the evidence would not be excluded. However, the court reached the opposite result, based largely if not entirely on an improper legal standard, namely the equities to the settling defendant. When a circuit court applies the proper legal standard to the relevant facts but arrives at an unreasonable conclusion, it goes beyond the limits of discretion. Similarly, the application of an improper legal standard is an erroneous *309 exercise of discretion. Hutnik, 39 Wis. 2d at 763. We conclude that the circuit court's order to exclude Dr. Proctor from testifying at trial was an erroneous exercise of discretion. Accordingly, we reverse and, inasmuch as this evidence went solely to the issue of liability, remand for a new trial to determine liability.
By the Court.The decision of the court of appeals is reversed and the cause is remanded to the circuit court for further proceedings consistent with this opinion.
¶ 23. SHIRLEY S. ABRAHAMSON, CHIEF JUSTICE (concurring).
I join both the majority opinion reversing the court of appeals' affirmance of the order of the circuit court and Justice Geske's concurrence. I write separately to point out only what I believe are some troubling aspects of the circuit court's ruling in this case.
¶ 24. On the morning of trial, the circuit court agreed to a settlement between one defendant, NSM, and the plaintiff, Ms. Magyar. The settlement was contingent on the exclusion of Dr. Proctor as a witness for any party at trial. The result of the circuit court's accession to this settlement was that the remaining defendants were made to go to trial without an infectious disease expert, contrary to their expectations.
¶ 25. I believe that absent extraordinary circumstances not present in this case, a circuit court should not agree to a settlement without giving the remaining parties ample opportunity to meet any surprises caused by the settlement.
¶ 26. I also note that our cases (some of which I authored for the court) may injudiciously read unfair surprise into § 904.03 as an element against which probative value is to be measured for exclusion of *310 evidence.[1] The present case points out how unfair surprise arises preliminarily to questions of weighing the admissibility of evidence for purposes of submission to the fact finder. In an appropriate case we may wish to reconsider our analyses of unfair surprise as an element of § 904.03.
¶ 27. I am authorized to state the Justice Janine P. Geske joins this concurrence.
¶ 28. JANINE P. GESKE, J. (concurring).
I join the majority opinion. I write separately only to comment on why I believe the circuit court erroneously considered the "equity" of allowing the dismissal of NSM when deciding whether to exclude Dr. Proctor as a witness. When asked to give Ms. Magyar an advisory ruling on whether the other defendants might be allowed to call Dr. Proctor once NSM was no longer a party, the circuit court should have refused.
¶ 29. While NSM remained a party to this litigation, Dr. Proctor could have and would have been called as a witness. NSM had properly listed Dr. Proctor on its witness list. Ms. Magyar neither filed nor argued a motion in limine requesting that Dr. Proctor's testimony be limited to only those opinions he expressed in his earlier report. She never moved to strike Dr. Proctor as a witness for NSM based on prejudicial surprise of his new opinions.
*311 ¶ 30. Instead, Ms. Magyar and NSM worked out a dismissal agreement conditioned upon an advisory opinion by the trial court. At the time Ms. Magyar requested the court's ruling, there was no issue to decide. NSM was still a party and Dr. Proctor was a properly scheduled witness. If NSM had ceased to be a party to the lawsuit, then the issue of whether another defendant could call Dr. Proctor as a witness would have been ripe for determination.
¶ 31. Because the trial court did not wait until the issue was properly presented, it inappropriately became distracted by considering the equities of a dismissal of NSM rather than simply weighing the factors described in Fredrickson v. Louisville Ladder, 52 Wis. 2d 776, 783 (1971). As a result, the court "erroneously excluded evidence that was highly relevant to the issue of the defendant's liability" (Majority op. at 307-08).
¶ 32. I am authorized to state that Chief Justice Shirley S. Abrahamson, Justice Donald W. Steinmetz, Justice William A. Bablitch, Justice Jon P. Wilcox, Justice Ann Walsh Bradley and Justice N. Patrick Crooks join this concurring opinion.
NOTES
[1] The parties also suggest that the circuit court may have been sanctioning the non-settling defendants for their failure to comply with the scheduling order. Exclusion of a witness is, under the appropriate circumstances, a means of sanctioning a party for its failure to comply with a scheduling order, Schneller, 162 Wis. 2d 296. However, exclusion of a witness is an extreme sanction for egregious noncompliance that lacks a clear and justifiable excuse. Id. at 311. Neither the circuit court's ruling, nor the record suggests that Dr. Proctor's exclusion was a sanction for the non-settling defendants' failure to comply with the scheduling order.
Furthermore, the circuit court rejected Ms. Magyar's contention that she was prejudiced by the non-settling defendants' failure to inform her of their intent to call Dr. Proctor as a trial witness. See Milw. Rescue Mission, 161 Wis. 2d at 490.
[1] See Thomas H. Barland, Michael J. Brose & Susan R. Steingass, The Wisconsin Rules of Evidence: A Courtroom Handbook, pp. 8-1 to 8-10 (April 1997) (State Bar of Wisconsin) (discussing cases considering surprise in context of § 904.03). See also Judicial Council Committee's Note and Federal Advisory Committee's Note to § 904.03, 59 Wis. 2d R73-R75 (1973) (discussing surprise in context of Wisconsin and federal rules). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1622995/ | 15 So. 3d 371 (2009)
STATE of Louisiana, Appellee
v.
Brian Rudell JOHNSON, Appellant.
No. 44,220-KA.
Court of Appeal of Louisiana, Second Circuit.
June 24, 2009.
Rehearing Denied August 13, 2009.
Rick Lane Candler, for Appellant.
Paul J. Carmouche, District Attorney, Tommy J. Johnson, Geya Williams Prudhomme, Assistant District Attorneys, for Appellee.
Before BROWN, STEWART, and MOORE, JJ.
BROWN, Chief Judge.
Arguments between two local rap artists escalated into the death of 26-year-old Kiran Pierson and the second degree murder indictment of 27-year-old Brian Johnson. Claiming justification/self-defense, Johnson waived a jury and elected to have a bench trial. After considering the evidence, the judge found Johnson guilty of manslaughter, a lesser and responsive crime, and thereafter sentenced Johnson to 20 years at hard labor, the minimum term required by the Firearm Enhancement Statute, La. C. Cr. P. art. 893.3 E(1)(a). A timely motion for reconsideration of sentence was denied, and this appeal ensued. We affirm.
*372 Discussion
Sufficiency of the Evidence/Self-Defense
On July 5, 2005, shortly before three o'clock in the afternoon, defendant, Brian Johnson, shot Kiran Pierson multiple times with a .45 caliber pistol. Two days before the shooting, at a local skating rink in Shreveport, Louisiana, defendant had confronted the victim's brother, Kevin Pierson ("KP"). Defendant believed that KP's rap lyrics about defendant's brother, another local rap artist, were disrespectful. KP and defendant's discussion became heated. Both summoned friends. Defendant pulled a gun. KP and his group ran back inside the skating rink. KP began performing, but the police closed the event. Later, KP told his brother, Kiran, about the incident. Kiran was upset and decided to confront defendant.
The afternoon of July 5, 2005, Kiran and KP went to defendant's place of employment, Fat Boyz Barber Shop, in Shreveport. Kiran called defendant outside. They bumped chests and got in each other's faces. Kiran was 6 foot 6 inches tall and weighed about 260 pounds. Defendant was 5 foot 8 inches tall and weighed about 180 pounds.[1] Others in the barber shop rushed outside.
Lawrence Sonnier, Jr., was working at the barber shop on the day of the shooting. Lawrence worked with defendant and had been friends with Kiran and KP for a long time. Lawrence said that KP came to his house the morning of the shooting and told him about the skating rink incident. KP told Lawrence, "Your boy got to go, man," and Lawrence took that to mean defendant was to be killed. Lawrence told KP, "You need to chill out on that there, man." When KP left his home, Lawrence believed that the issue was "squashed."
Later, Lawrence saw KP, Kiran, and Chauncey Broadway[2] come to the barber shop. Kiran opened the door and called defendant to step outside. Lawrence knew defendant was armed. Lawrence said that the shop was in a rough neighborhood, and they all carried guns. Lawrence wanted to stop the trouble. Lawrence grabbed Kiran's arm but was pushed away. Lawrence attempted to get KP to intervene. KP told Lawrence that the matter did not involve Lawrence and pushed him back through the barber shop door. Lawrence went back outside and saw defendant pull an "iron" and turned to run but was hit by a bullet in the leg. Lawrence went back into the shop and called 9-1-1 and heard several more shots as he made the call. After Lawrence placed the call, he went back outside where he saw Kiran lying face down on the ground. Lawrence tired to help Kiran. Everyone else had fled the scene.
Deshawn Vallet was also a barber who worked with defendant at the Fat Boyz shop. He was working on the day of the shooting. According to Deshawn, Kiran and KP came to the barber shop and confronted defendant. Kiran asked defendant to step outside the shop. Deshawn was inside the shop when he saw that Kiran had defendant "pinned up" against the brick wall by placing his hands on the wall and standing with his chest against defendant's chest. Deshawn did not see any fighting nor did he see any weapons. Deshawn went outside to break up the trouble, then defendant pulled a gun and shots were fired. Kiran fell to the ground. Deshawn realized that he had been "hit" and ran across the street to where his *373 mother worked. Deshawn believed that Kiran had brass knuckles on his left hand but did not see Kiran hit anyone. Deshawn testified that defendant attempted to get away from Kiran but "he was just steady on [defendant]."
KP, the victim's brother, a local rapper, testified about the incident at the skating rink. Later, KP told his brother Kiran what happened, and Kiran was upset. Kiran told KP he wanted to talk to defendant. On the day of the shooting, Kiran asked KP to go with him to the barber shop where defendant worked. It was Kiran's intent to confront defendant about the incident at the skating rink. Once they arrived at the barber shop, Kiran told KP to wait in the car; however, KP got out and walked toward the barber shop where his brother and defendant were arguing. Several others came outside the barber shop to stop the trouble.
KP recalled Marcus Frederick coming out of the shop and getting between defendant and Kiran.[3] Then shots rang out, prompting KP to move behind a nearby car. KP saw defendant firing the gun. KP saw defendant walk over to his brother, who was on the ground face down, and shoot him three more times. Defendant then ran around the building. KP testified that he did not see his brother with a gun or any other weapon. After the shooting, KP left the scene without checking on his brother. KP admitted to prior convictions for possession of marijuana.
On cross-examination, KP stated that he told Lawrence Sonnier about the incident at the skating rink but denied talking about killing defendant. When KP denied telling police that his brother was mad prior to going to the barber shop, the defense played KP's recorded statement to police wherein he told officers that "[Kiran] was mad already [before going to the barber shop]." KP denied seeing Kiran with brass knuckles or a gun. KP stated that he did not see Kiran touch defendant or see Kiran "pin" defendant against the outside wall of the barber shop. KP told the prosecutor that Chauncey Broadway, who came to the shop with Kiran, was in the vehicle with him as he drove away after his brother was shot.
Corporal S.T. McKenna of the Shreveport Police Department testified that he was one of the first officers on the scene, and he observed the victim lying face down on the ground. Corporal McKenna did not see any brass knuckles at the scene. A gun in Kiran's pocket was found as paramedics were administering aid to the victim. Corporal McKenna used scissors to cut the pocket out of the pants so he would not disturb the weapon. Corporal McKenna stated that he was not aware of the weapon before being alerted to it by the paramedics.
Sergeant Danny Duddy of the Shreveport Police Department processed the crime scene including collecting evidence and taking photographs. Sergeant Duddy collected the weapon from the pocket which had been cut from the victim's pants. Sergeant Duddy noted that the weapon, which was a .9mm pistol, had a loaded magazine but that it was not ready to fire as there was nothing in the slide. Eight .45-caliber cartridge casings and one .9mm cartridge casing were found at the scene. Sergeant Duddy did not find any brass knuckles at the scene.
Richard Beighley, the firearms section supervisor with the North Louisiana Crime Lab, was qualified as an expert in firearms identification. Beighley opined that the .9mm gun recovered from Kiran's pants pocket had not been fired or cleaned *374 in quite some time. After photographing the inside of the barrel, he test-fired the weapon, and it was functional. Beighley said that the .9mm casing found at the scene was not fired from the gun recovered from the victim.
The coroner, Dr. George McCormick, suddenly died before he could complete his report. A forensic pathologist helped write the report from Dr. McCormick's notes. The report was filed into evidence. The report showed that the victim was shot seven times, all left to right. Three times were posterior to anterior (back to front), three times anterior to posterior (front to back), and once with no distinction as to front or back.
After the state concluded its case in chief, defendant presented several witnesses, including Joel Young, who worked at the barber shop with defendant and was present at the skating rink when defendant had the altercation with KP. Young is a rap artist also and was doing the show at the skating rink with KP. Young said that defendant pulled a weapon out but did not point it at anyone. A few days later while at the barber shop, Young saw Lawrence talk to someone, then have a conversation with defendant. Young feared that something was going to happen, so he left the shop and was not there when the shooting occurred.
Theodus "T.J." Douglas testified that he went to the barber shop to have his brother, Reginald, cut his hair. After finding out that his brother had gone to lunch, T.J. sat down to wait for him and talked to defendant. T.J. saw the victim, Kiran, and another man come to the door of the barber shop and demand that defendant come outside. Defendant went outside and was surrounded by the victim and the other man. Defendant appeared to be cowering down while the men pinned him against the window of the barber shop. Douglas could see Lawrence and Deshawn outside trying to defuse or stop the trouble. Douglas heard shots but was not sure where they were coming from or who was firing. Douglas ran toward the back door but then turned around and came back outside where he saw the victim lying on the ground. Douglas said he saw rings or brass knuckles on the victim's left hand. Douglas said he saw Quincy, the guy who owned the shop, drive up and jump out of his car and go over to Kiran.[4]
Defendant testified on his own behalf. Defendant said that the incident at the skating rink started when he attempted to talk to KP about his harassment of defendant's brother, Jamie. Both Jamie and KP were local rap artists who had become embroiled in "rap battling" that was turning personal. KP went inside the skating rink, and defendant went to his car. Shortly thereafter, KP returned with six or seven guys and started arguing with defendant. In response, defendant pulled his pistol and put it down by his side. The group ran, and defendant left the scene.
Two days later, on July 5, 2005, defendant was working at the barber shop when Lawrence asked him about the incident at the skating rink. Defendant replied that he had been trying to stop any potential conflict. Lawrence told him, "Man, they say you got to go, man." When asked what this meant, Lawrence said, "They said they put a hit out on you, brother." Defendant was frightened by this information. Defendant acknowledged that he always had a gun with him because of the high crime area where the shop was located.
Defendant saw Kiran's car pull into the parking lot and park down by the car *375 wash. Kiran walked to the barber shop and pushed the door open with one hand while his other hand was in his pocket. Defendant testified that he knew the victim had a gun in his pocket because he had his hand around the handle of the gun. Kiran told defendant, "Say player, come outside. I need to holler at you." Defendant stated that he told Kiran, "You can come inside if you want to talk to me. What you got your hand in your pocket for, man? I know you strapped, man. What you got your hand in your pocket for?" Kiran continued to tell defendant to come outside and began using profanity. Defendant then went outside, and Kiran pushed him against the window of the barber shop. Kiran told defendant, "You pull a gun on me. If you pull a gun on my brother, pull a gun on me." Defendant testified that he was scared, and everything was happening fast.
Defendant testified that the larger victim pushed him against the window again as he was trying to explain what happened at the skating rink. Defendant stated that he saw the victim "go for his pistol" so he went for his and, "I just went to shooting." Defendant could not recall how many shots were fired, but after he fired, he ran away because he was scared. "I had two more boys there, you know, wanting to kill me." As he was running, he threw away his gun and a jersey he was wearing. Defendant talked to various friends and acquaintances before finding someone to give him a ride. He went back and retrieved the gun, then went to his sister's house. He turned himself in the next day.
It is settled law that the state has the burden to prove beyond a reasonable doubt that defendant is guilty. That burden includes that the criminal action was not excusable (accidental) or justifiable (self-defense). In this case, the issue is whether the state proved beyond a reasonable doubt that defendant did not act with justification or in self-defense. State ex rel. D.P.B., 02-1742 (La.05/20/03), 846 So. 2d 753. Self-defense is justification for a killing only if the person committing the homicide reasonably believes that he is in imminent danger of losing his life or receiving great bodily harm and that deadly force is necessary to save his life. La. R.S. 14:20 B(1); State v. Dooley, 38,763 (La.App. 2d Cir.09/22/04), 882 So. 2d 731, writ denied, 04-2645 (La.02/18/05), 896 So. 2d 30.
An appellate court's standard of review is whether the evidence considered in the light most favorable to upholding the verdict is sufficient to convince a reasonable trier of fact that the essential elements of the crime were proven beyond a reasonable doubt. Jackson v. Virginia, 443 U.S. 307, 99 S. Ct. 2781, 61 L. Ed. 2d 560 (1979). An element of the crime, in this case, is that defendant did not act with justification.
Clearly, the victim, Kiran Pierson, was initially the aggressor. Kiran went to defendant's place of business. Kiran called defendant out. Kiran had a gun in his pocket. Kiran was bigger than defendant. Kiran bumped defendant with his chest. Kiran was threatening. On the other hand, Kiran never pulled out his gun and never hit defendant. Other parties who knew both Kiran and defendant got between the two and were pushing Kiran back when defendant started shooting. A total of eight shots were fired by defendant. Two of the intervening bystanders were hit. Kiran was shot seven times. Defendant walked over to Kiran while he was lying face down and shot him several times. Defendant claimed that he saw Kiran "go for his pistol." The physical evidence and all of the eyewitnesses' testimonies overwhelmingly showed that Kiran did not "go for his pistol."
*376 Viewing the evidence in the light most favorable to the prosecution, a rational or reasonable juror or judge could have found beyond a reasonable doubt that the shooting was not justifiable. Shooting the victim seven times, including while he lay prostrate on the ground, indicates anger not self-defense. Finding that the victim provoked that anger, the trial court correctly convicted defendant of manslaughter.[5]
Application of Firearm Enhancement Provision
The court imposed the minimum sentence required by the Firearm Enhancement Act. La. C. Cr. P. art. 893.3 provides in part:
(E) (1)(a) Notwithstanding any provision of the law to the contrary, if the defendant commits a felony with a firearm as provided for in this Article, and the crime is considered a violent felony as defined in this Paragraph, the court shall impose a minimum term of imprisonment of ten years. In addition, if the firearm is discharged during the commission of such a violent felony, the court shall impose a minimum term of imprisonment of twenty years. (Emphasis added).
(b) A "violent felony" for the purposes of this Paragraph is: second degree sexual battery, aggravated burglary, carjacking, armed robbery, second degree kidnapping, manslaughter, or forcible rape. (Emphasis added). (Note: murder not included.)
(2) A sentence imposed under this Paragraph shall be without benefit of parole, probation or suspension of sentence.
La. C. Cr. P. art. 893.1 provides a notice requirement as follows:
(A) If the district attorney intends to move for imposition of sentence under the provisions of Article 893.3, he shall file a motion within a reasonable period of time prior to commencement of trial of the felony or specifically enumerated misdemeanor in which the firearm was used.
During plea bargain discussions, the state informed defense counsel of its intent to implement the firearm enhancement provision if defendant pled to manslaughter. Defendant acknowledges that following these discussions a motion was filed into the record by the state prior to the commencement of trial; however, he contends that there was no service made upon him or his attorney. The motion in the record is stamped as filed on October 8, 2007, and the second page of the motion containing the certificate of service is unsigned.
In State v. Curtis, 04-111 (La.App. 3rd Cir.08/04/04), 880 So. 2d 112, writ denied, 04-2277 (La.01/28/05), 893 So. 2d 71, defendant was originally charged with second degree murder. On the day after a jury was empaneled, defendant pled guilty to manslaughter. The state's notice to seek sentencing under the firearm enhancement provision was filed on the day of defendant's sentencing. In that case, defendant's attorney had been informed in plea discussions that the state would seek the penalty enhancement if defendant pled to manslaughter. The court held that these acts were sufficient to inform defendant of the state's intent to envoke the penalty enhancement.
*377 It the instant case, defendant was informed prior to trial that the sentencing enhancement provision would be used in the event of a plea to manslaughter. At that time, the state actually filed a notice, even though the sentencing enhancement provision was not applicable in a second degree murder case. See State v. Curtis, supra. After defendant was convicted of manslaughter, the state reiterated its intent to proceed under the firearm enhancement act. There was no undue surprise or additional burden placed on defendant. In fact, defendant's attorney claims that he first learned about the notice during the January 28, 2008, hearing, and defendant's sentencing was held almost three months later on April 21, 2008.
Motion for New Trial
Defendant orally moved for a new trial after sentencing, and the court said it would hear the motion on May 12, 2008. No reasons for the motion were given. At that time, the defense attorney indicated that the motion would be put into writing.[6] No written motion was filed, and there is no indication in the record that the hearing was held. Considering the fact that defendant failed to follow up on the oral motion as required by statute, it is considered abandoned.
Conclusion
For the foregoing reasons, defendant's conviction and sentence are affirmed.
APPLICATION FOR REHEARING
Before BROWN, STEWART, DREW, MOORE and LOLLEY, JJ.
Rehearing denied.
NOTES
[1] The coroner measured Kiran. The police report said that defendant was 6 feet but defendant testified that he was 5'6" or 5'8".
[2] Chauncey Broadway died before the trial.
[3] Marcus Frederick did not testify.
[4] Quincy did not testify.
[5] For the same reasons, the trial court properly denied defendant's motion for post judgment verdict of acquittal.
[6] La. C. Cr. P. art. 852 provides, a motion for a new trial shall be in writing, shall state the grounds upon which it is based, and shall be tried contradictorily with the district attorney. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623008/ | 569 So. 2d 332 (1990)
RIME-SHATTEN DEVELOPMENT COMPANY
v.
BIRMINGHAM CABLE COMMUNICATIONS, INC.
88-927.
Supreme Court of Alabama.
September 21, 1990.
*333 F.A. Flowers III and John F. De Buys, Jr. of Burr & Forman, Birmingham, for appellant.
Jere F. White, Jr. and Adam K. Peck of Bradley, Arant, Rose & White, Birmingham, for appellee.
KENNEDY, Justice.
This is an appeal from a judgment entered on a jury verdict in favor of the defendant. We affirm.
The issue is whether the trial court, in interpreting a 1982 contract between the parties, properly excluded evidence of certain pre-contract negotiations that took place in connection with a 1977 contract between the parties.
FACTS
The plaintiff, Rime-Shatten Development Company, is an Alabama general partnership engaged in the business of constructing, leasing, and maintaining apartments. The defendant, Birmingham Cable Communications, Inc. (hereinafter "Birmingham Cable"), provides cable television services to the Birmingham area. Rime-Shatten constructed an apartment complex, Ski Lodge II, and wanted to provide cable television services to the tenants at a bulk rate, as part of the tenant's rent.
In 1977, Mr. Herbert Meisler, a partner in Rime-Shatten, entered into negotiations with Birmingham Cable for the installation and provision of cable television services for the residents of Ski Lodge II. The parties executed a contract on December 20, 1977. At that time, no cable services existed at Ski Lodge II; Birmingham Cable subsequently installed all of the equipment and wiring necessary to provide cable services to the apartments. The contract was to terminate two years after all the apartments in the complex had been available for occupancy for nine months.
The 1977 contract offered Birmingham Cable three options concerning the television equipment and cable wiring once the contract was terminated. Birmingham Cable could leave behind all of the cable television equipment, including the cable wiring installed in the ground and in the walls of each apartment; it could remove certain electronic equipment specified in the contract, but leave the cable wiring in the ground and in the walls; or it could continue to provide cable television services directly to the tenants of Ski Lodge II on an individual basis. The 1977 contract terminated in March 1982. The parties entered into a new contract that became effective immediately upon termination of the 1977 contract. Thus, Birmingham Cable never exercised any of its options under the 1977 contract.
The 1982 contract differed from the 1977 contract. The 1982 contract did not refer to or incorporate the 1977 contract. The 1982 contract provided that upon termination, Birmingham Cable could either remove all "equipment" related to the cable television service or abandon that "equipment" in place. The 1982 contract did not differentiate between the terms "equipment" and "cable wiring" as did the 1977 contract. The 1982 contract also provided that upon termination, if the parties were unable to reach a new agreement, Birmingham Cable could deal directly with the tenants.
In 1984, the parties attempted to negotiate a new contract. A dispute arose over the ownership of the cable wiring. Subsequently, Rime-Shatten placed its own cable wiring in the ground and in each apartment and Rime-Shatten began to supply the tenants of Ski Lodge II with cable services on an individual basis. The original cable wiring installed by Birmingham Cable remained intact. Birmingham Cable also began to furnish cable services to the tenants directly.
Rime-Shatten filed this suit on January 11, 1985, alleging a breach of the 1982 contract. Specifically, Rime-Shatten alleged that Birmingham Cable had breached the 1982 contract by failing either to remove or to abandon "all the equipment." Rime-Shatten contended that the term "equipment" in the 1982 contract did not *334 include cable wiring. Therefore, Rime-Shatten asserted that Birmingham Cable did not own the cable wiring under the 1982 contract but that the cable wiring belonged to Rime-Shatten. Rime-Shatten argued that Birmingham Cable also breached the 1982 contract by using the cable wiring (installed by Birmingham Cable but allegedly owned by Rime-Shatten) to serve the tenants directly without Rime-Shatten's authorization. Rime-Shatten also asserted a fraud claim against Birmingham Cable. Rime-Shatten requested a jury trial on both claims.
The circuit court entered a summary judgment in favor of Birmingham Cable on the fraud claim. The court denied Birmingham Cable's motion for summary judgment on the contract claim.
Before trial, Birmingham Cable filed two motions in limine, requesting, among other things, that the court, in determining ownership of the cable wiring, exclude all evidence of negotiations prior to the execution of the 1977 contract. Birmingham Cable contended that the 1977 contract was unambiguous. Birmingham Cable argued that the facts, circumstances, and negotiations surrounding the making of an unambiguous contract are merged into the written contract, leaving the written contract as evidence of the intent of the parties. Birmingham Cable alleged that both the 1977 contract and the 1982 contract specifically recognized that all of the "equipment" and "cable" wiring that Birmingham Cable had installed at Ski Lodge II belonged to Birmingham Cable.
Mr. Meisler, of Rime-Shatten, stated that in 1977 he objected to the terms of the original draft of the 1977 contract written by Birmingham Cable and that he expressed Rime-Shatten's desire to own the cable wiring at the termination of the contract. At the hearing on the motion in limine, Rime-Shatten argued that its intent to own the cable wiring was evidenced by the terms of the 1977 contract, which distinguished between "electronic equipment" and equipment other than "cable" wiring. Rime-Shatten asserted that representatives of Birmingham Cable had agreed with Mr. Meisler during negotiations that Birmingham Cable owned the "electronic equipment," but that Rime-Shatten owned the "cable" wiring. Rime Shatten asserted that the court should allow evidence of the negotiations prior to the 1977 contract to aid in interpreting the 1982 contract.
After hearing arguments from both parties, the court concluded that the 1982 contract was ambiguous. The ambiguity of the 1982 contract involved language that was included in the 1977 contract but was omitted from the 1982 contract. The court ruled that it would allow the parties to introduce evidence concerning the 1982 contract and any events or conversations occurring before or after the 1982 contract if the evidence was relevant to the intent of the parties regarding the 1982 contract. The court found the 1977 contract to be unambiguous and would not allow the introduction of evidence concerning pre-contract negotiations with respect to the 1977 contract.
The parties then tried their case to a jury. After closing arguments, the trial court submitted the case to the jury with one special interrogatory asking the jury to decide the ownership of the cable wiring at Ski Lodge II. The jury returned a verdict in favor of Birmingham Cable, specifically finding that Birmingham Cable owned the cable wiring at Ski Lodge II. Rime-Shatten appeals.
"The general rule of contract law is that, if a written contract exists, the rights of the parties are controlled by that contract, and parol evidence is not admissible to contradict, vary, add to, or subtract from its terms." Clark v. Albertville Nursing Home, Inc., 545 So. 2d 9, 11 (Ala.1989); citing Tyler v. Equitable Life Assur. Soc. of the United States, 512 So. 2d 55 (Ala.1987); Gunnels v. Jimmerson, 331 So. 2d 247 (Ala. 1976). The rule does allow the introduction of extrinsic evidence in the event of fraud, mistake, or ambiguity. League v. Giffin, 347 So. 2d 1332 (Ala.1977). The case at bar involves the issue of ambiguity in two separate contracts between the parties.
*335 Whether a contract is ambiguous is a question of law. Fouts v. Beall, 518 So. 2d 1236 (Ala.1987); Medical Clinic Bd. of City of Birmingham-Crestwood v. Smelley, 408 So. 2d 1203 (Ala.1981). If the court determines that a contract is ambiguous, extrinsic evidence will be allowed to clarify the contract. Cummings v. Hill, 518 So. 2d 1246 (Ala.1987). However, once a court determines that a contract is unambiguous, parol or extrinsic evidence will not be allowed as to that contract. Generally, once a court determines that no ambiguity exists in the basic contract, it cannot proceed to examine extrinsic evidence. Mass Appraisal Services, Inc. v. Carmichael, 404 So. 2d 666 (Ala.1981).
In the instant case, Birmingham Cable and Rime-Shatten had entered into two separate contracts. The first contract in 1977 was found by the trial court to be unambiguous and was deemed to be the sole expression of intent between the parties. We agree.
The parties agreed that the 1977 contract had no legal effect upon the parties after it terminated in 1982. The 1982 contract was a completely separate contract. The 1982 contract did not incorporate or refer to the 1977 contract, but there were similarities. The trial court found that the 1982 contract did not contain any clear clause discussing the ownership of the cable wiring, as did the 1977 contract. The trial court admitted the 1977 contract into evidence as the only evidence of the parties' intent prior to 1977.
When the parties evidence their agreement by a writing, all oral discussion, negotiations, or agreements had or made prior to the execution of the written contract are merged into the final written agreement. Smith v. Chase Manhattan Corp., 458 F. Supp. 740, 744 (M.D.Ala.1978). As this Court stated in Hibbett Sporting Goods, Inc. v. Biernbaum, 375 So. 2d 431, at 435 (Ala.1979), "once the parties have completed their negotiations and have agreed upon a contract as evidenced by a writing, we are no longer interested in the history of their negotiations for purpose of determining what their agreement might have been had their negotiations proceeded differently." This Court has also stated: "Although a contract can be discharged or modified by subsequent agreement of the parties, no contract can be varied, contradicted, or discharged by an antecedent agreement. Today may control the effect of what happened yesterday, but what happened yesterday cannot change the effect of what happens today." Id.
We agree with the trial court's exclusion of evidence of pre-contract negotiations regarding the 1977 contract. We affirm.
AFFIRMED.
HORNSBY, C.J., and JONES and SHORES, JJ., concur.
HOUSTON, J., concurs specially.
HOUSTON, Justice (concurring specially).
I concur with the majority opinion. I write specially only because I was the author of Clark v. Albertville Nursing Home, Inc., 545 So. 2d 9 (Ala.1989), a case relied on by Rime-Shatten Development Company in both of its briefs. In Clark, the clause at issue in the second lease that created an ambiguity was identical to the clause in the first lease. Both leases were ambiguous. In the present case, the trial court found that the first contract was unambiguous. To me, Clark is distinguishable from this case. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623005/ | 211 Wis. 2d 254 (1997)
564 N.W.2d 742
WISCONSIN DEPARTMENT OF CORRECTIONS, Plaintiff-Appellant,
v.
Robert B. KLIESMET, Sheriff of Milwaukee County and Milwaukee County, Defendants-Respondents.
No. 96-2292.
Supreme Court of Wisconsin.
Oral argument May 29, 1997.
Decided June 25, 1997.
*256 For the plaintiff-appellant the cause was argued by Robert D. Repasky, assistant attorney general, with whom on the brief was James E. Doyle, attorney general.
For the defendants-respondents there was a brief by John R. Decker and Decker & Gunta, S.C., Milwaukee, and Robert G. Ott, Corporation Counsel, Milwaukee, and oral argument by John R. Decker.
¶ 1. ANN WALSH BRADLEY, J.
The court of appeals, by certification, asks us to review an order of the circuit court[1] vacating a permanent injunction against the Sheriff of Milwaukee County (Sheriff). The issue presented is whether the Wisconsin Department of Corrections (DOC) can place its detainees in a county jail over the safety objection of the sheriff. The DOC asserts that it is statutorily authorized to place its detainees in the Milwaukee County Jail (Jail) and that the Sheriff cannot refuse such placement. Because we conclude that this authority of the DOC is limited by the Sheriff's duty and authority to preserve the safety of the Jail, we affirm the order of the circuit court. In addition, in order to allow sufficient time for our legislature to consider and allocate the cost of locally *257 incarcerating DOC detainees, we delay for one year the effect of today's decision.
¶ 2. At its core, this case presents a question of statutory interpretation. Wisconsin Stat. § 302.31 (1995-96)[2] provides in relevant part:
Use of jails. The county jail may be used...for the temporary detention of persons in the custody of the department.[3]
The authority under this section to detain alleged violators of probation or parole in the Milwaukee County Jail first became the subject of litigation over 20 years ago.
¶ 3. In 1975, Sheriff Michael S. Wolke announced that pursuant to his constitutional and statutory role as custodian of the Milwaukee County Jail, alleged violators of probation or parole in the custody of the Department of Health and Social Services (DHSS) would no longer be detained in the Jail for periods exceeding five days.[4] According to the Sheriff, this action was necessitated by the dangerous overcrowding situation then prevailing at the Jail. The DHSS commenced a declaratory judgment action in the Circuit Court for Dane County, which issued a temporary *258 injunction requiring the Sheriff to continue housing alleged violators of probation or parole.
¶ 4. In 1980, after a change in venue, the Circuit Court for Milwaukee County dissolved the temporary injunction. The court of appeals summarily reversed, reinstated the temporary injunction, and remanded to the circuit court for construction of the statutory phrase "temporary detention." See § 302.31.
¶ 5. After several years of inactivity, the circuit court again addressed the case in 1987. In its decision and order, the circuit court concluded that the detentions for alleged violation of probation or parole were "temporary," and that the Sheriff was therefore obligated to keep the detainees pursuant to § 302.31. On that basis, the court permanently enjoined the Sheriff from refusing to keep DOC detainees for longer than five days.
¶ 6. The permanent injunction stood unchallenged until 1995, when the circuit court denied the Sheriff's Wis. Stat. § 806.07(1)(g)[5] motion to vacate the 1987 permanent injunction. The circuit court reasoned that the Sheriff failed to demonstrate a change in law or circumstances which would justify lifting the injunction.[6] The Sheriff appealed, and the court of appeals reversed and remanded, determining that the passage *259 of time, among other things, warranted "a new and full airing of the facts underlying the controversy." Wisconsin Dep't of Corrections v. Artison, No. 95-1420, unpublished slip op. at 8 (Wis. Ct. App. Nov. 14, 1995).
¶ 7. On remand to the circuit court, the case was assigned to Judge John E. McCormick, who granted the Sheriff's motion for summary judgment, vacating the permanent injunction. The DOC appealed, and the court of appeals certified the following issues for our consideration:
1) Does § 302.31, Stats., which provides that a "county jail may be used for...the temporary detention of persons in the custody of the [Department of Corrections]" (DOC), give DOC sole discretion to determine if a county jail is to be used for the temporary detention of persons in its custody?
2) If so, are there nonetheless equitable principles grounded in a county sheriff's constitutional authority to control and maintain the jail that can override the authority afforded DOC by § 302.31, Stats.?
[1-3]
¶ 8. Our review of a circuit court's ruling on a motion for relief under § 806.07 is limited to whether the court erroneously exercised its discretion. Cynthia M.S. v. Michael F.C., 181 Wis. 2d 618, 624, 511 N.W.2d 868 (1994). The authority of the DOC to keep its detainees at the Jail presents a question of statutory interpretation, which we review de novo. State ex rel. Angela M.W. v. Kruzicki, 209 Wis. 2d 112, 121, 561 N.W.2d 729 (1997). Finally, we review summary judgment rulings de novo, Burkes v. Klauser, 185 Wis. 2d 308, 327, 517 N.W.2d 503 (1994), using the same methodology as that used by the circuit court. Grams v. *260 Boss, 97 Wis. 2d 332, 338-39, 294 N.W.2d 473 (1980); Wis. Stat. § 802.08(2).
¶ 9. A circuit court may grant relief from a judgment or order when "[i]t is no longer equitable that the judgment should have prospective application." § 806.07(1)(g). The DOC argues that there has not been a sufficient showing of changed circumstances justifying relief from the permanent injunction. According to the DOC, the present dangerous overcrowding at the Jail cannot support the Sheriff's § 806.07(1)(g) motion, because similar overcrowding existed at the time that the permanent injunction was issued. We disagree.
¶ 10. Section 806.07(1)(g) is the Wisconsin equivalent to Fed. R. Civ. P. 60(b)(5). Because the federal and state rules dealing with relief from judgments are analogous, we have relied in the past on federal case law as persuasive authority when interpreting § 806.07. See State ex rel. M.L.B. v. D.G.H., 122 Wis. 2d 536, 542, 363 N.W.2d 419 (1985). In surveying federal law, we find instructive the United States Supreme Court's decision in Rufo v. Inmates of the Suffolk County Jail, 502 U.S. 367 (1992).
¶ 11. The Rufo case arose from unconstitutional conditions prevailing in 1971 at the Suffolk County Jail in Massachusetts. As part of a consent decree, Suffolk County agreed to build a new jail facility with several hundred single-occupancy rooms. After inmate population increases outpaced projections, Suffolk County filed a Rule 60(b)(5) motion to modify the consent decree in order to allow double bunking of inmates.[7] The district court denied the motion, reasoning that *261 the increased inmate population was neither a new nor an unforeseen problem.
¶ 12. The United States Supreme Court reversed and remanded. Initially, the Court concluded that while Rule 60(b)(5) is traditionally applied to injunctions, the rule also applies to consent decrees. Under Rule 60(b)(5), the party seeking modification of the underlying order "bears the burden of establishing that a significant change in circumstances warrants revision of the decree." Rufo, 502 U.S. at 383. The court may consider granting a Rule 60(b)(5) motion "when changed factual circumstances make compliance [with the underlying order] substantially more onerous"; when the underlying order "proves to be unworkable due to unforeseen obstacles"; or when enforcement of the underlying order "would be detrimental to the public interest." Id. at 384.
¶ 13. We conclude that the present overcrowding situation at the Milwaukee County Jail constitutes a changed circumstance warranting renewed consideration of the permanent injunction. The present Jail was opened in 1993 and was completed at a cost in excess of $100 million. It was designed to provide 744 residential beds and 54 special use beds. A study conducted in 1994 concluded that double bunking would increase the Jail's capacity to a maximum of 1,032 inmates. Between 1993 and 1995 the average daily population of the Jail increased 42.5%, and the inmate population reached 1,448 in April 1996.[8]
*262 ¶ 14. The overcrowding which currently exists at the Jail is substantially greater in degree than that existing when this suit was commenced over 20 years ago. In 1975, Sheriff Wolke stated that the Jail at that time had a maximum capacity of 380 persons, and that it "has been daily at capacity, or even in excess of capacity." The overcrowding in 1975 pales in comparison to that currently experienced at the Jail. Not only is the design capacity of the new Jail twice that of the old Jail, but the number of inmates currently housed at the Jail stands at nearly 200% of design capacity.[9] We conclude that the increase in the degree of overcrowding at the Jail constitutes a substantial change in circumstances, and that the circuit court was therefore justified in reexamining the 1987 permanent injunction.
[4-7]
¶ 15. We turn next to a consideration of the circuit court's determination that § 302.31 "provides no authority for DOC to compel the Sheriff to keep probation and parole detainees where such action contributes to dangerous overcrowding of the jail." Our sole purpose when interpreting a statute is to give effect to the legislature's intent. Stockbridge School Dist. v. DPI, 202 Wis. 2d 214, 219, 550 N.W.2d 96 (1996). We first look to the language of the statute, and if the language is unambiguous, we need not look further. If the language of the statute is ambiguous, we will ascertain and carry out the legislature's intent by *263 examining the history, context, subject matter, scope, and object of the statute. Id. at 220.
Statutory language is ambiguous if reasonable minds could differ as to its meaning. Harnischfeger Corp. v. LIRC, 196 Wis. 2d 650, 662, 539 N.W.2d 98 (1995).
¶ 16. Section 302.31 provides that "[t]he county jail may be used... for the temporary detention of persons in the custody of the department." The use of the word "may" generally connotes a discretionary element. See Swatek v. County of Dane, 192 Wis. 2d 47, 59, 531 N.W.2d 45 (1995); Miller v. Smith, 100 Wis. 2d 609, 616, 302 N.W.2d 468 (1981). Thus, it is apparent from § 302.31 that the legislature has granted one or more entities the discretion to keep DOC detainees at the Jail. However, the statute is utterly silent as to the identity of the party or parties empowered with the authority to keep DOC detainees at the Jail. Because one might reasonably infer from § 302.31 that either or both the DOC and the Sheriff could exercise the discretion granted in the statute, we conclude that the statute is ambiguous.
¶ 17. We disagree with the DOC's assertion that even if § 302.31 is ambiguous, Wis. Stat. §§ 302.33 and 302.335 demonstrate a legislative intent to grant the DOC alone the discretion to keep its detainees at the Jail. Section 302.33 requires the DOC to reimburse counties for the costs of maintaining its detainees at the county jail. This requirement provides little, if any, assistance in our effort to ascertain the meaning of § 302.31. The fact that the DOC must pay for keeping its detainees at the Jail does not mean that the DOC has an absolute right to demand such detention. Similarly, § 302.335 fails to illuminate our inquiry, as it *264 merely provides time limits on the detention of DOC detainees at the Jail.
¶ 18. Our reading of § 302.31, in conjunction with statutory and common law authority, leads us to determine that while the DOC may be vested with authority to temporarily keep its detainees in the county jails, that authority is not without bounds. Instead, the DOC's ability to keep its detainees at the Jail is limited by the well-established duty of sheriffs to vigilantly guard the safety of the jail.
¶ 19. The sheriff is under a statutory duty to "[t]ake the charge and custody of the jail maintained by the county and the persons in the jail, and keep the persons in the jail personally or by a deputy or jailer." Wis. Stat. § 59.27; see also Wis. Stat. § 302.37 (describing sheriff's duty to maintain jail and care for prisoners). As custodian of the jail, the sheriff is under a duty to safely keep and protect the prisoners in his charge. See Walter H. Anderson, 1 A Treatise on the Law of Sheriffs Coroners and Constables §§ 269-271 (1946).
¶ 20. The duty of sheriffs to maintain a safe jail was recognized at common law. Blackstone noted that the sheriff "may, and is bound ex officio to pursue and take all traitors, murderers, felons, and other misdoers, and commit them to gaol for safe custody." 1 William Blackstone, Commentaries *343 (emphasis added). The sheriff is ultimately responsible for safely keeping all persons committed to the jail. Id. at *346; see also A.E. Gwynne, A Practical Treatise on the Law of Sheriff and Coroner 539 (1849) ("It is the duty of the sheriff to take charge of all persons committed to jail, and see that they are safely kept and supplied with necessary sustenance, according to law. He must, at all *265 times, by himself or deputy, attend to the jail of the county, for these purposes").
¶ 21. Sheriffs have a duty to provide reasonable protection to jailed persons, and that duty extends to protection from others in custody. Prosser and Keeton on the Law of Torts § 132, at 1063 (5th ed. 1984). Furthermore, "[t]he majority of courts hold that the sheriff or other officer, owes a duty to the prisoner to keep him safely and to protect him from unnecessary harm and it has also been held that the officer must exercise reasonable and ordinary care for the life and health of the prisoner." Annotation, Civil Liability of Sheriff or Other Officer Charged with Keeping Jail or Prison for Death or Injury of Prisoner, 14 A.L.R. 2d 353, 354 (1950). "Beyond statutory requirements a sheriff is bound to exercise in the control and management of the jail the degree of care requisite to the reasonably adequate protection of the prisoners or inmates." O'Dell v. Goodsell, 30 N.W.2d 906, 909 (Neb. 1948).
¶ 22. Overcrowded jails operate not only to the detriment of inmates, but also imperil the safety of deputies and jail staff. As the circuit court noted:
The current overcrowding threatens the safety of inmates and deputies in a direct supervision environment in numerous ways: (1) it threatens the ability to evacuate inmates in a safe area in the event of a fire or other emergency; (2) it increases tension and hostility in what is already an anxious environment, which can lead to fights or assaults on deputies; (3) it frustrates the ability to classify inmates, e.g., to avoid placing rival gang members in the same dayroom, and to separate inmates if there are signs of trouble brewing, or to classify inmates based upon the severity of their offenses; (4) it prevents deputies from getting to know and *266 establishing a rapport with inmates, which, under the direct supervision method, is critical to maintaining order and avoiding trouble; (5) it increases the likelihood that a deputy might be attacked and overpowered; (6) it increases the likelihood that an inmate might be injured in a fight or that stronger inmates may otherwise prey upon weaker inmates; and (7) it causes a processing backlog, resulting in dangerous overcrowding in less secure areas of the jail.
[8]
¶ 23. We conclude that the legislature intended by § 302.31 to grant the DOC discretion to keep alleged violators of probation or parole in jails. However, considering the statutory and common law authority establishing a sheriff's duty and authority to act in the interest of jail safety, we also discern a legislative intent to limit the DOC authority under § 302.31 in those instances in which a sheriff determines that taking additional DOC detainees would result in such overcrowding as to constitute an unacceptable risk of harm to inmates, deputies, and jail staff.[10]
¶ 24. The DOC notes the several difficulties that it will encounter in administering its probation and parole functions if its authority to keep its detainees in the Jail is limited. This court is aware of the administrative difficulties that the DOC faces. However, in the *267 absence of a clear directive to the contrary, we will not conclude that the legislature intended that the DOC's authority to keep its detainees should trump the Sheriff's duty to maintain safety at the Jail.
¶ 25. We recognize that there will be costs associated with the provision of additional facilities for the detention of alleged violators of probation or parole. However, the allocation of those costs between the DOC and local governments is an issue reserved to the sound discretion of our legislature. We are also mindful of the constitutional requirement under Morrissey v. Brewer, 408 U.S. 471 (1972), that persons accused of parole violations be detained in proximity to the alleged violation area. However, the local detention mandated by Morrissey does nothing to further our inquiry into the DOC's statutory authority to keep its detainees in the County Jail over the safety objections of the Sheriff. Rather, it is a consideration that the legislature must take into account when determining the best means of housing DOC detainees.
¶ 26. Because of the need to give the legislature sufficient time to address the administrative difficulties that the DOC would face if it were unable to utilize the Jail to house its detainees, we delay the effective date of today's decision by one year. See, e.g., Holytz v. City of Milwaukee, 17 Wis. 2d 26, 115 N.W.2d 618 (1962) (delaying for 40 days the effective date of this court's decision abrogating the doctrine of governmental tort immunity); Pascucci v. Vagott, 362 A.2d 566 (N.J. 1976) (delaying for 60 days the effective date of its decision invalidating a general assistance benefit schedule); Hellerstein v. Assessor of Town of Islip, 332 N.E.2d 279, 287 (N.Y. 1975) (delaying for 18 months the effective date of its decision invalidating real estate assessment technique); Bond v. Burrows, 690 P.2d *268 1168 (Wash. 1984) (delaying for 15 days the effective date of its decision invalidating a sales tax differential between counties).
[9]
¶ 27. In sum, the degree of the present overcrowding situation at the Milwaukee County Jail warrants a reconsideration of the permanent injunction requiring the Sheriff to keep DOC detainees. After considering the law and undisputed facts in this case, we conclude that the DOC has been granted the discretion under § 302.31 to keep its detainees in county jails. However, we also conclude that the legislature intended that the sheriffs, in their capacity as custodians of the jails, have the authority to refuse to keep DOC detainees when doing so would endanger jail safety. The circuit court therefore properly vacated the permanent injunction issued in 1987. Accordingly, we affirm.
By the Court.The order of the circuit court is affirmed.
NOTES
[1] Circuit Court for Milwaukee County, John E. McCormick, Judge.
[2] Unless otherwise indicated, all future references are to the 1995-96 volume.
[3] The "department" referred to is the Department of Corrections. See Wis. Stat. § 301.01(1). Section 302.31 is the statutory successor to Wis. Stat. § 53.31. For purposes of our inquiry, the language at issue is identical in both versions of the statute, and the statute will be cited throughout the opinion as "§ 302.31."
[4] The Department of Corrections has since succeeded the Department of Health and Social Services in the administration of the probation and parole programs.
[5] Section 806.07 provides in relevant part:
Relief from judgment or order. (1) On motion and upon such terms as are just, the court may relieve a party or legal representative from a judgment, order or stipulation for the following reasons...
(g) It is no longer equitable that the judgment should have prospective application....
[6] At the time of the circuit court's ruling in 1995, Richard E. Artison held the office of Sheriff. Artison was succeeded by the named defendant, Sheriff Robert B. Kliesmet.
[7] Double bunking is the practice of placing an additional bed and inmate in a cell that was designed for one bed and one inmate.
[8] Under Wis. Stat. § 302.315, Milwaukee County Jail inmates may be held at the County House of Correction (HOC). The HOC has received extensive use in an effort to alleviate overcrowding at the Jail. However, the HOC lacks sufficient bed space to accommodate enough Jail inmates to reduce the Jail population to a safe level.
[9] In May 1996, the average daily population of the Jail was 1,272. As of May 29, 1996, nearly 400 of the Jail's inmates were DOC detainees, with an additional 500 detained at the House of Correction. Approximately one-half of the 900 DOC detainees kept at Milwaukee County facilities did not have other criminal charges pending against them.
[10] Because we have determined from other sources that the legislature did not intend by § 302.31 to deprive sheriffs of the authority necessary to maintain a safe jail, we need not reach the issue whether the duty and authority to maintain a safe jail is of a constitutional dimension. See Ziegler Co. v. Rexnord, Inc., 139 Wis. 2d 593, 612, 407 N.W.2d 873 (1987); Labor and Farm Party v. Elections Bd., 117 Wis. 2d 351, 354, 344 N.W.2d 177 (1984). Furthermore, today's decision is strictly limited to the Sheriff's authority to refuse to keep DOC detainees. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623007/ | 15 So. 3d 728 (2009)
Lewis Clarence LESTER, Appellant,
v.
STATE of Florida, Appellee.
No. 4D07-4094.
District Court of Appeal of Florida, Fourth District.
July 15, 2009.
*729 Phillip Massa and Marrett W. Hanna, Office of Criminal Conflict and Regional Civil Counsel, West Palm Beach, for appellant.
Bill McCollum, Attorney General, Tallahassee, and Don M. Rogers, Assistant Attorney General, West Palm Beach, for appellee.
WARNER, J.
The issue we address in this case is whether a defendant who was convicted after trial has a remedy in postconviction relief where his counsel misadvised him of his potential sentence, leading him to reject a more favorable pretrial plea offer from the state. We hold that the defendant is not entitled to a new trial but to a sentence no harsher than the expected maximum sentence he would have received by proceeding to trial based upon his attorney's advice.
The state charged appellant Lester with robbery by sudden snatching and offered a 41.7-month sentence in return for a guilty plea. Lester rejected the offer. Immediately prior to the commencement of trial, the state amended the information to charge Lester with robbery by force. Lester proceeded to trial and was found guilty. Prior to sentencing, the state filed a notice of its intent to seek habitual violent felony offender (HVFO) status. The court found that Lester qualified for HVFO status and sentenced him to a mandatory minimum term of thirty years in prison.
After his conviction, sentence, and appeal, Lester moved for postconviction relief, claiming that his trial counsel had misadvised him of his potential sentence. Lester claimed that counsel did not inform him of the possibility of habitualization and a thirty-year mandatory sentence. Had he known of that possibility, he would have accepted the 41.7-month plea offer by the state. The trial court granted an evidentiary hearing on the claim.
At the hearing, Lester testified that counsel had advised him of the potential fifteen-year sentence but had not advised him of a possible habitual sentence of thirty years. He would have accepted the state's plea offer had he known of his exposure to a thirty-year sentence.
Lester's trial counsel testified to his conversations with Lester about the plea. When the state originally extended the plea offer of 41.7 months, trial counsel informed Lester that the charged crime was a third-degree felony and carried a maximum five-year penalty. Although counsel advised Lester to take the plea, Lester refused, wishing to go to trial. On the eve of trial the state increased the charge to robbery by force for which the maximum penalty would be fifteen years as a prison releasee reoffender (PRR). Counsel discussed this with Lester, and recommended acceptance, but Lester still desired to go to trial. Prior to trial, the state had not filed a notice of intent to seek habitualization as a violent felony offender, so counsel did not discuss any habitualization with Lester. Trial counsel admitted that in hindsight he should have advised Lester of the potential of an HVFO sentence, but the state had increased the charge only on the eve of trial and had not filed a notice to seek habitualization. *730 Counsel opined, however, that based on his dealing with Lester, Lester's position with respect to the plea would have been different if Lester had known about the HVFO exposure. Lester's counsel at sentencing also testified and agreed that Lester had not known about the exposure of thirty to forty years for the HVFO designation.
Following the evidentiary hearing, the trial court denied the motion. It found that "there is no evidence in the record that [Lester's trial attorney] failed to accurately advise his client of the State's plea offer nor is there any evidence to indicate that any of the information provided to the defendant was misleading or inaccurate." From the trial court's order, Lester appeals.
"The primary guide for ineffective assistance claims is the United States Supreme Court's hallmark opinion in Strickland v. Washington, 466 U.S. 668, 104 S. Ct. 2052, 80 L. Ed. 2d 674 (1984)." Cottle v. State, 733 So. 2d 963, 965 (Fla.1999). "First, the defendant must show that counsel's representation fell below an objective standard of reasonableness based on prevailing professional norms. Next, [t]he defendant must show that there is a reasonable probability that, but for counsel's unprofessional errors, the result of the proceeding would have been different." Beasley v. State, 964 So. 2d 213, 216 (Fla. 2d DCA 2007) (internal quotations and citation omitted). This court reviews the postconviction court's factual findings for competent, substantial evidence and its legal conclusions de novo. Id.
The supreme court addressed the requirements to allege ineffective assistance of counsel where counsel advises a defendant to reject a favorable plea offer in Morgan v. State, 991 So. 2d 835 (Fla.2008). The court said:
[We] reaffirm the requirements that a defendant must allege and prove in order to be entitled to relief based on ineffective assistance of counsel for advising a defendant to reject a plea offer. The defendant must allege and prove that (1) counsel failed to convey a plea offer or misinformed the defendant concerning the possible sentence he faced, (2) the defendant would have accepted the plea but for counsel's failures, and (3) acceptance of the plea would have resulted in a lesser sentence than was ultimately imposed.
Id. at 839-40 (emphasis added). Although in this case counsel actually recommended acceptance of the plea, we think that the Morgan factors apply, because the defendant testified that he would have accepted the plea had counsel advised him of a potential thirty to forty-year sentence as a HVFO. See also Jackson v. State, 987 So. 2d 233 (Fla. 4th DCA 2008).
This case is most closely analogous to Lewis v. State, 751 So. 2d 715 (Fla. 5th DCA 2000). In Lewis, the state charged the defendant with sale of cocaine. His attorney conveyed the state's offer of one year in prison. Although the attorney knew that Lewis could be habitualized, he did not think the state was requesting that and did not discuss with Lewis the potential of a thirty-year sentence. Counsel advised Lewis that if he were convicted he would most likely be facing a two to three-year sentence. Believing his innocence, Lewis rejected the plea and proceeded to trial where he was found guilty. After trial, the state moved to habitualize Lewis. Based upon the state's notice, the court found him to be a habitual offender and sentenced him to fifteen years in prison.
After an evidentiary hearing on his postconviction relief motion in which he alleged that he would have taken the plea had his attorney properly advised him of the potential *731 sentence as a habitual offender, the trial court denied relief. The Fifth District reversed because of counsel's failure to advise Lewis regarding the habitualization penalty. The court said:
We conclude that Lewis is entitled to relief because his trial counsel conceded that when the state's offer of one year was made, he failed to inform Lewis of a potential sentence of 30 years incarceration and consistently informed him, instead, that his maximum exposure of incarceration was two to three years. Even though the possibility of a much longer sentence seemed remote, the possibility became the reality. Lewis, in order to make an informed decision, needed to be aware of the possible penalties.
Id. at 718. The court reversed for a new trial but encouraged the "good faith resumption of plea negotiations." Id.
Similarly, in Revell v. State, 989 So. 2d 751 (Fla. 2d DCA 2008), the court reversed Revell's conviction based upon his postconviction claim of ineffective assistance of counsel "for failing to advise him of the possibility and consequences of being sentenced as a habitual felony offender." Id. at 751. At the evidentiary hearing, his counsel admitted that he was not aware of that possibility and therefore failed to inform the defendant of it. The Second District found that counsel's failure to advise the defendant of the potential habitual offender sentencing constituted ineffective assistance of counsel. The court reversed and remanded for a new trial, with the suggestion in Lewis that good faith plea negotiations be resumed.
In this case counsel admitted that he had not informed Lester of the potential of habitualization and the potential sentence of thirty to forty years. Based upon Lewis and Revell, Lester has shown that counsel was ineffective and that he would have taken the plea had counsel informed him of the consequences.
We diverge from Lewis and Revell regarding the proper remedy in this case. The proper remedy in such cases where a defendant rejects a plea offer and proceeds to trial has been debated in the courts.[1] Where the defendant rejects a *732 plea offer, which is not a constitutionally protected right, in favor of a fair trial, in which the state has been put to its burden of proof, a balancing of interests is required for any postconviction relief based upon that plea rejection. In United States v. Morrison, 449 U.S. 361, 364, 101 S. Ct. 665, 66 L. Ed. 2d 564 (1981), the Court said:
At the same time and without detracting from the fundamental importance of the right to counsel in criminal cases, we have implicitly recognized the necessity for preserving society's interest in the administration of criminal justice. Cases involving Sixth Amendment deprivations are subject to the general rule that remedies should be tailored to the injury suffered from the constitutional violation and should not unnecessarily infringe on competing interests.
(emphasis added). Taking to heart that admonition by the Supreme Court, we think that more narrowly tailored relief is warranted by the specific constitutional violation. Here, after the state increased the charges prior to trial, Lester still rejected his counsel's recommendation to accept the plea after having been advised of the potential PRR sentence of fifteen years. He proceeded to trial with the expectation that should he be convicted of the new charge, he would receive a fifteen-year sentence. Only after his conviction did the state file a notice of intent to seek HVFO sentencing.
The specific injury to Lester was the failure to inform him of the HVFO sentencing potential. Based upon the evidentiary hearing, Lester was fully aware of the potential for PRR sentencing if he were convicted at trial. The state, on the other hand, incurred the time and expense of a full trial and should not be compelled to retry the defendant if some other remedy would uphold both the defendant's constitutional rights and the state's right to finality with an appropriate sentence for the conviction obtained.
Under these circumstances, we think the more narrowly tailored remedy would permit the state to elect whether to retry Lester or to withdraw its notice of intent to seek HVFO sentencing. If it would withdraw that notice, the court could sentence Lester as a PRR to fifteen years. Lester would receive a sentence no greater than he anticipated when rejecting the plea offer of the state, and the state would not be required to retry him.
Based on the foregoing, we reverse the trial court's denial of appellant's motion for postconviction relief. We remand for a new trial unless, within the time prescribed by Florida Rule of Criminal Procedure 3.191(m), the state withdraws its notice of intent to seek HVFO sentencing, in which case the court shall sentence Lester as a PRR and no new trial shall be required.
HAZOURI, J., concurs.
GROSS, C.J., concurs specially.
GROSS, C.J., concurring specially.
This postconviction relief case concerns a defendant who was found guilty in a jury trial. His conviction was affirmed. He received what the constitution contemplateshe had a "speedy and public trial, by an impartial jury"; he was "informed of *733 the nature and cause of the accusation"; he "was confronted with the witnesses against him;" he had "compulsory process for obtaining witnesses in his favor"; and he had "the assistance of counsel for his defence." U.S. Const. Amend. VI. He was not "compelled ... to be a witness against himself"; he was not "deprived of life, liberty, or property, without due process of law." U.S. Const. Amend. V.
After the jury verdict, but before sentencing, the state filed a notice of its intent to have Lester classified as an habitual violent felony offender. The court found that he qualified for HVFO status and sentenced him to 30 years in prison.
Before trial, Lester rejected a plea offer for a 41.7 month sentence. He now claims that at the time he rejected the plea, he did not know that the state could seek to have him sentenced as an HVFO. He says that when he rejected the plea, he did not know that he faced 30 years in prison.
We are compelled to grant relief by Morgan v. State, 991 So. 2d 835 (Fla.2008).
This development in the law concerns me. It goes beyond the limits contemplated by the United States Supreme Court in Strickland v. Washington, 466 U.S. 668, 104 S. Ct. 2052, 80 L. Ed. 2d 674 (1984). The law now renders a jury trial, explicitly guaranteed by the Constitution, secondary to the right to get a plea bargain, which is found nowhere in the Constitution. At a trial, Lester had the chance of an outright acquittal. Going to trial is a gable involving risk for both sides. As a trial judge, I saw strong cases fail and weak cases prevail. It is destructive of the entire process to allow a defendant to enjoy all the benefits of a trial and then force the state into the position it was in before the trial occurred.
In the criminal justice system envisioned by the Constitution, there would be no plea bargains, only trials complete with all the attendant guarantees. Due to the crush of numbers, plea bargaining has come to be recognized as an integral component of the criminal justice system. There are too many cases to hold a trial in every one.
Postconviction relief makes constitutional sense where counsel's ineptitude impacted the trial or convinced a defendant to give up his right to a trial by pleading guilty. Different from these situations, Morgan concerned a situation where the defendant went to trial and lost, but counsel's ineffectiveness arose from the advice to reject a plea offer. In Morgan and Cottle v. State, 733 So. 2d 963 (Fla.1999), the Florida Supreme Court read Hill v. Lockhart, 474 U.S. 52, 106 S. Ct. 366, 88 L. Ed. 2d 203 (1985), as extending the Strickland "standard and analysis ... to claims of ineffective assistance that arise in the plea context." Morgan, 991 So.2d at 840. Morgan extended Strickland to every situation that arises from the plea bargaining process, including cases where defendants rejected plea offers and proceeded to trial.
Hill does not support the Florida Supreme Court's extension of it. Hill was a case where a defendant pleaded guilty and gave up his right to a trial. The analysis in Hill turns on obtaining the trial that was blocked by counsel's ineptitude. To satisfy Strickland's prejudice requirement, Hill holds that a "defendant must show that there is a reasonable probability that, but for counsel's errors, he would not have pleaded guilty and would have insisted on going to trial." 474 U.S. at 59, 106 S. Ct. 366. Hill describes the prejudice inquiry in "guilty plea" cases by comparing it to "ineffective-assistance challenges to convictions obtained through a trial." Id. Nothing in Hill suggests that the United States Supreme Court intended it to apply in "rejection of plea offer" cases.
*734 But for Morgan, I would hold that a defendant whose guilt is determined after a trial, conducted with all of the guarantees of the Constitution, has not suffered a constitutional deprivation, even where his lawyer's conduct prevented him from accepting a plea, which with the post-trial benefit of hindsight, turns out to have been a favorable one. The guilt of such a defendant has been established in the manner envisioned by the framers of the Constitution. To set aside the trial in this case elevates the constitutional importance of the plea bargaining process over that of the trial itself, which is at the heart of the Sixth Amendment. This is the case where the state should seek review in the United States Supreme Court to consider the extension of Hill v. Lockhart to "rejection of plea" cases.
NOTES
[1] A short synopsis of some positions various courts have taken is found in Riggs v. Fairman, 178 F. Supp. 2d 1141, 1151-52 (C.D.Cal. 2001):
When ineffective assistance of counsel has deprived a defendant of a favorable plea bargain, courts have not been consistent in the remedies afforded. Some courts vacate the conviction and return the parties to the plea bargaining stage, where the parties may negotiate, or decline to negotiate, as they see fit. See, e.g., United States v. Gordon, 156 F.3d 376, 381-82 (2nd Cir. 1998) (upholding district court's discretion to order retrial); People v. Curry, 178 Ill. 2d 509, 227 Ill. Dec. 395, 687 N.E.2d 877, 890-91 (1997) (new trial accompanied by resumption of plea bargaining process); In re Alvernaz, 2 Cal. 4th 924, 942-44, 8 Cal. Rptr. 2d 713, 724-26, 830 P.2d 747, 758-59 (1992) ("Most courts, in determining the remedy that should be afforded a defendant who establishes that he or she has been denied effective assistance of counsel with regard to an offered plea bargain, have vacated the judgment of conviction and remanded the case for a new trial"). Other courts force the prosecution to reinstate the lost plea offer. See, e.g., Alvernaz v. Ratelle, 831 F. Supp. 790, 797-99 (S.D.Cal.1993); Williams v. State, 326 Md. 367, 382-83, 605 A.2d 103, 110-11 (1992). Still other courts return the parties to the plea bargaining stage, but impose a rebuttable presumption of vindictiveness upon any prosecutorial refusal to reinstate the lost plea offer. See, e.g., Turner v. Tennessee, 940 F.2d 1000, 1001-02 (6th Cir.1991), cert. denied, 502 U.S. 1050, 112 S. Ct. 915, 116 L. Ed. 2d 815 (1992).
Depending upon the circumstances, each of these remedies can be inadequate or unfair. Vacation of the conviction sometimes is unfair to the state. Such a remedy reverses the result of an entirely fair trial, sometimes in situations where the passage of time would make retrial difficult or impossible. See State v. Donald, 198 Ariz. 406, 10 P.3d 1193, 1205 n. 7 (Ariz.App. 2000), cert. denied, 534 U.S. 825, 122 S. Ct. 63, 151 L. Ed. 2d 30 (2001). Mere vacation of the conviction also sometimes is unfair to the petitioner. The remedy does not restore the lost plea opportunity of which the petitioner was deprived, although it may, as a practical matter, induce the prosecution to bargain anew.
(Footnote omitted). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623025/ | 564 N.W.2d 560 (1997)
STATE of Minnesota, Respondent,
v.
Donn Harvey BEHL, II, petitioner, Appellant.
No. CX-96-84.
Supreme Court of Minnesota.
May 29, 1997.
*562 Thomas E. Gorman, Gorman & Gorman, Red Wing, for appellant.
Gary Fridell, Goodhue County Atty., Red Wing, for respondent.
Heard, considered and decided by the court en banc.
OPINION
TOMLJANOVICH, Justice.
The state on January 25, 1995 charged by delinquency petition Donn Harvey Behl, II, a minor born November 30, 1978, with five criminal counts including first-degree murder. Four days later, the state automatically certified Behl as an adult under Minnesota Statutes section 260.015, subdivision 5(b) by filing an adult criminal complaint containing those same five counts, and thus terminated all proceedings in juvenile court arising out of the same behavioral incident. See Minn. R. Juv. P. 18.08, subd. 1. Approximately two weeks later, a grand jury indicted Behl on six criminal counts, including first-degree murder. After a week-long trial, a jury acquitted Behl of first-degree murder, first-degree felony murder, second-degree murder, aggravated robbery and second-degree felony murder. The jury convicted Behl of possession or operation of a short-barrelled shotgun, theft of a motor vehicle and manslaughter in the second degree.
Behl moved the district court to return the case to the juvenile court for sentencing, but the court denied the motion and sentenced Behl to 12 months and 1 day for the shotgun conviction and a concurrent sentence of 72 months for the manslaughter conviction.[1] The court of appeals affirmed the denial of the motion and the sentencing order. State v. Behl, 547 N.W.2d 382 (Minn.App.1996). We also affirm the denial of the motion to return the defendant to juvenile court for sentencing, but we reverse that portion of the sentencing order based upon the shotgun conviction and remand the case to the district court for redetermination of the sentence in accordance with our ruling.
Although much of the testimony at trial was in conflict, the jury concluded that the following events occurred. Behl, who was 16 years old at the time, sawed off the barrel and stock of his father's 12-gauge shotgun and on January 20, 1995 took the gun to the home of his friend, Ryan Postier. Three days later, Behl and Postier skipped school and went to Postier's home in Pine Island, Minnesota. Ryan Postier's brother, Brad Postier, died at the home later that day after receiving a shotgun wound to the head from Behl's shotgun.
Behl and Ryan Postier were the only witnesses to the shooting. Behl and Ryan Postier then fled the scene in Brad Postier's truck. With Behl driving, the vehicle skidded out of control and ended up in a ditch. The two boys walked away from the crash and discarded certain items, including the shotgun, along the way. A Goodhue County sheriff's deputy picked up the boys later that day at approximately 3 p.m. He transported the boys to Pine Island and eventually released *563 them. The boys separated, each returning to his own home. After arriving home, Ryan Postier called 911 and informed the dispatcher that he found his brother in his bedroom, apparently dead. Later that evening, investigators arrived at Behl's home. A short time later, Behl confessed to shooting Brad Postier.
The Goodhue County Attorney filed a delinquency petition on January 25, 1995 that included a charge of first-degree murder. Once the county attorney realized that the matter fell within the exclusionary provisions of Minnesota Statutes section 260.015, subdivision 5(b) and section 260.111, a criminal complaint was filed on January 29, 1995, and the delinquency petition was dismissed. On February 9, 1995, a Goodhue County grand jury indicted Behl on six criminal counts, including first-degree murder.
At trial, Behl said he had not been in Brad Postier's bedroom on the day of the shooting and that it was Ryan Postier who shot his brother. Behl admitted to preparing the short-barrelled shotgun and bringing it to the Postier's home, as well as to participating in the theft of Brad Postier's truck, but he said he confessed to the shooting only because Ryan Postier threatened him. The jury found Behl not guilty of first-degree murder, but guilty of manslaughter in the second degree in violation of Minnesota Statutes section 609.205, possession or operation of a short-barrelled shotgun in violation of section 609.67, subdivision 2, and theft of a motor vehicle in violation of section 609.52, subdivision 2(17).
Sentencing was scheduled for November 17, 1995. The presentence investigation report recommended the presumptive sentence for each offense. Those presumptive sentences were 12 months and 1 day for the shotgun conviction, 58 months (based on one criminal history point for the shotgun conviction) for the manslaughter conviction, and 15 months (based on two criminal history points) for the motor vehicle theft conviction. Behl moved the court to return the case to the jurisdiction of the juvenile court for sentencing and a downward departure. The district court on November 20, 1995 denied both motions and proceeded to sentence Behl. The court found that Behl's possession of a short-barrelled shotgun was not part of a single course of conduct and therefore sentenced Behl to 12 months and 1 day for the shotgun conviction. The court sentenced Behl to 72 months for the manslaughter conviction, a 25 percent upward departure from 58 months the presumptive sentence based on one criminal history point for the shotgun conviction. The court ordered the two sentences to be served concurrently. The court also found that the motor vehicle theft was part of the same behavioral incident as the manslaughter and therefore imposed no sentence for that conviction.
Behl now raises two distinct issues: Whether the district court had jurisdiction to sentence the juvenile appellant for his convictions, and if it did, whether the sentences were appropriate.
I.
A statute provided the basis for the district court's jurisdiction over the juvenile. Consequently, the issue of the district court's jurisdiction is a question of law that is fully reviewable by this court. See Hibbing Educ. Ass'n v. Public Employment Relations Bd., 369 N.W.2d 527, 529 (Minn.1985) (stating that the construction of a statute is a question of law).
The legislature has conferred original and exclusive jurisdiction upon the juvenile court in proceedings concerning any "child" who is alleged to be delinquent. Minn.Stat. § 260.111, subd. 1 (1996). In 1994, however, the legislature withdrew the juvenile court's jurisdiction "over proceedings concerning a child excluded from the definition of delinquent child under section 260.015, subdivision 5, paragraph (b)." Minn.Stat. § 260.111, subd. 1a. Section 260.015, subdivision 5, paragraph (b) excludes from the definition of "delinquent child" any "child alleged to have committed murder in the first degree after becoming 16 years of age * * *." Under this statute commonly referred to as automatic waiver, automatic certification or legislative waiver "juvenile court jurisdiction terminates all proceedings arising out of the same behavioral incident." Minn. R. Juv. P. 18.08, subd. 1. Because Behl had turned 16 years of *564 age at the time he allegedly committed the acts that led to his indictment for first-degree murder,[2] the district court had original and exclusive jurisdiction over that portion of the case "arising out of the same behavioral incident" that led to the indictment for first-degree murder.
Although Behl does not dispute the district court's original jurisdiction over all allegations related to the "same behavioral incident" leading to his first-degree murder indictment, he contends that once the jury found him not guilty of the only allegation upon which the district court's jurisdiction was based, the district court no longer could sentence him as an adult without first granting him a hearing similar to those used to certify a "delinquent child" for district court. See Minn.Stat. § 260.125 (1996) (establishing system for certification of juvenile to district court).
Behl concedes that the legislature in passing section 260.015 did not specifically address the disposition of a juvenile acquitted of first-degree murder (the enumerated charge), but convicted of a lesser offense (non-enumerated charge). He argues, however, that the legislature never intended for automatic certification to result in automatic district court sentencing for juveniles acquitted of first-degree murder. And if this court concludes that the legislature did intend such a result, he argues that the automatic imposition of adult sentences for crimes other than those enumerated in the automatic-certification statute violates his procedural due process, substantive due process and equal protection rights. Before embarking on a constitutional analysis of Minn.Stat. § 260.015, therefore, we must determine whether the statute provides the district court with jurisdiction to sentence juveniles convicted exclusively of a crime, or crimes, other than those enumerated for automatic certification.
A. Statutory interpretation
It is undisputed that the legislature did not provide a mechanism to return to juvenile court those cases upon which district court jurisdiction has attached. But see Comment to Minn. R. Juv. P. 18.08 ("If [the first-degree murder] accusation is first made by complaint, and is followed by an indictment that does not accuse the child of first[-]degree murder but of some other crime, the proceedings come within the exclusive jurisdiction of the juvenile court * * *."). It also is undisputed that the automatic-certification statute is silent on the issue of disposition following a conviction for a crime other than first-degree murder. We must, therefore, start our analysis by considering the significance of this silence.
Behl characterizes as inadvertent, and therefore ambiguous, the legislature's failure to provide either a transferring mechanism or explicit authority to sentence as juveniles those defendants who have been acquitted of the only offense for which they were certified to district court. As a result, Behl essentially asks us to effectuate the legislature's hidden intent to provide the district court with the authority to sentence such offenders as juveniles. The state, on the other hand, classifies the legislature's silence as intentional, and therefore unambiguous. It contends that the automatic-certification provisions are clear in granting the district court exclusive jurisdiction over all charges arising out of the same behavioral incident as the charge upon which the juvenile was certified. Consequently, the state asks that we refuse to give the district court a power not expressly provided in the statute. See Minn. Stat. § 645.16 (1996) ("[T]he letter of the law shall not be disregarded under the pretext of pursuing the spirit.").
The constitution vests the judicial power of the state in "a district court and such other courts * * * as the legislature may establish." Minn. Const. art. VI, § 1. Any person specifically excluded from "such other *565 courts," therefore, is under the jurisdiction of the district court. Section 260.111 clearly states that "the juvenile court lacks jurisdiction over proceedings concerning a child excluded from the definition of delinquent child under section 260.015, subdivision 5, paragraph (b)." As was stated above, section 260.015, subdivision 5, paragraph (b) explicitly excludes any "child alleged to have committed murder in the first degree after becoming 16 years of age * * *." (Emphasis added). Section 260.111, meanwhile, grants the district court "original and exclusive jurisdiction in criminal proceedings concerning a child excluded from the definition of delinquent child under section 260.015, subdivision 5, paragraph (b)."
Other courts asked to interpret similar statutes have concluded that adult-court jurisdiction based upon the automatic certification of a juvenile charged or indicted for an enumerated offense necessarily reaches non-enumerated offenses arising from the same behavioral incident. See Tolbert v. State, 598 So. 2d 1011 (Ala.Crim.App.1991); Partlow v. United States, 673 A.2d 642, 645 (D.C.1996); Worthy v. State, 253 Ga. 661, 324 S.E.2d 431 (1985); People v. Veling, 443 Mich. 23, 504 N.W.2d 456 (1993); Carter v. State, 334 So. 2d 376 (Miss.1976). Such holdings typically are based upon double-jeopardy concerns.
[D]ouble jeopardy considerations arguably would prohibit the prosecutor from trying the defendant as an adult in circuit court for the enumerated offense and also trying him as a juvenile in probate court for the non[-]enumerated offenses. As a result, if he cannot obtain a waiver [or certification] for the non[-]enumerated offenses, the prosecutor must choose between trying him for the enumerated offense or for the non[-]enumerated offenses. Again, simple logic suggests that the Legislature did not intend to create an anomaly between the automatic waiver statute and the constitutional prohibition against double jeopardy.
Veling, 504 N.W.2d at 463 (footnote omitted); see also Minn.Stat. § 609.035, subd. 1 (1996) ("[I]f a person's conduct constitutes more than one offense under the laws of this state, the person may be punished for only one of the offenses and a conviction or acquittal of any one of them is a bar to prosecution for any other of them.").
Behl argues, however, that the purpose of section 260.015 requires a district court, upon a conviction for any crime other than first-degree murder, to either return the defendant to juvenile court for disposition or, in the alternative, give the defendant a hearing to determine whether the defendant should be sentenced as an adult or adjudicated as a juvenile. For support, Behl points to a similar statute in Oregon, whereby:
the trial court shall not sentence the defendant therein, but * * * shall order a presentence report to be made in the case, shall set forth in a memorandum such observations as the court may make regarding the case and shall then return the case to the juvenile court in order that the juvenile court make disposition in the case based upon the guilty finding in the court of waiver.
Or.Rev.Stat. § 419C.361 (1995).[3] In addition, Behl points to Minnesota's extended-jurisdiction juvenile statute ("EJJ") and its provision that
a child prosecuted as an extended jurisdiction juvenile after designation by the prosecutor in the delinquency petition is convicted of an offense after trial that is not an offense described in subdivision 1, clause (2) [presumptive commitment], the court shall adjudicate the child delinquent and order a disposition under section 260.185.
Minn.Stat. § 260.126, subd. 4(b) (1996).
We find neither of these arguments particularly persuasive, however. The fact that Oregon's legislature included within the statute a specific clause providing for a return to juvenile court of an automatically certified juvenile actually indicates that a lack of similar *566 language in the Minnesota statute prohibits such a return. Likewise, the explicit sentencing provisions in the EJJ statute, which was part of the same bill as Minnesota Statutes section 260.015,[4] indicate that the legislature's silence on the issue was intentional and unambiguous. Had the legislature intended the district court to adjudicate such defendants as juveniles, it is probable the legislature would have done as it did with the EJJ statute and explicitly provided for an adjudication.
Consequently, we hold that the legislature's failure to provide for a transferring mechanism was intentional and therefore unambiguous, and that the district court had no statutory authority either to transfer the case to juvenile court for disposition, or to give the defendant a hearing to determine whether the defendant should be sentenced as an adult or adjudicated as a juvenile.
B. Constitutional challenges
Conceding the legitimacy of district court jurisdiction for the purposes of determining guilt or innocence for both the enumerated charge and any other charges arising out of the same behavioral incident, Behl contends that the statute's imposition of the adult-sentencing mechanism following an acquittal of the enumerated offense violates his rights to procedural due process, substantive due process and equal protection. "In evaluating challenges to the constitutionality of statutes, this court recognizes that the interpretation of statutes is a question of law." In re Blilie, 494 N.W.2d 877, 881 (Minn.1993) (citation omitted). Accordingly, this court "`is not bound by the lower court's conclusions.'" Id. (quoting Sherek v. Independent Sch. Dist. No. 699, Gilbert, 449 N.W.2d 434, 436 (Minn.1990)). "Minnesota statutes are presumed constitutional, and our power to declare a statute unconstitutional should be exercised with extreme caution and only when absolutely necessary." In re Haggerty, 448 N.W.2d 363, 364 (Minn.1989) (citation omitted). "[T]o challenge successfully the constitutional validity of a statute, the challenger bears the very heavy burden of demonstrating beyond a reasonable doubt that the statute is unconstitutional." State v. Merrill, 450 N.W.2d 318, 321 (Minn.), cert. denied, 496 U.S. 931, 110 S. Ct. 2633, 110 L. Ed. 2d 653 (1990).
A federal appeals court concluded in 1972 that adult-court jurisdiction based upon the charging of specific enumerated offenses did not violate a juvenile's procedural due process, substantive due process or equal protection rights. United States v. Bland, 472 F.2d 1329 (D.C.Cir.1972), cert. denied, 412 U.S. 909, 93 S. Ct. 2294, 36 L. Ed. 2d 975 (1973); cf. In re Welfare of L.J.S. and J.T.K, 539 N.W.2d 408 (Minn.App.1995) (concluding that automatic certification as extended-jurisdiction juvenile did not violate due process or equal protection), pet. for rev. denied (Minn., Jan. 25, 1996). The basis for Behl's claims, however, is that automatic district court sentencing for non-enumerated crimes violates procedural due process, substantive due process and equal protection. As a result, the D.C. Circuit Court's decision in Bland, although helpful, is not persuasive.
1. Procedural due process
To successfully raise a claim that the state has denied a person procedural due process, the claimant must establish the loss of a protectable property or liberty interest. Ingraham v. Wright, 430 U.S. 651, 672, 97 S. Ct. 1401, 1413, 51 L. Ed. 2d 711 (1977); Snyder v. City of Minneapolis, 441 N.W.2d 781, 791 (Minn.1989). Although the imposition of the adult criminal sentence in the case at bar will deprive Behl of his liberty, this deprivation occurred only after he received a trial that provided him with the utmost procedural due process protections. See In re Gault, 387 U.S. 1, 29, 87 S. Ct. 1428, 1444-45, 18 L. Ed. 2d 527 (1967) (noting that the adult criminal process provides safeguards pursuant to rights afforded by the constitution). Because Behl failed to assert what additional liberty or property interest was denied, it must be assumed he was referring to his "right" or "interest" in receiving a juvenile disposition, rather than an adult sentence.
While it is true that the United States Supreme Court held that the imposition of *567 juvenile court jurisdiction provided a person with a protectable interest in a juvenile adjudication, Kent v. United States, 383 U.S. 541, 553-56, 86 S. Ct. 1045, 1053-55, 16 L. Ed. 2d 84 (1966), the D.C. Circuit Court concluded that this interest did not attach until the juvenile court attained jurisdiction. Bland, 472 F.2d at 1336 n. 26. Procedural due process, therefore, requires a juvenile court to grant a hearing before waiving its jurisdiction and certifying a juvenile to criminal court. Kent, 383 U.S. at 552-54, 86 S.Ct. at 1052-54; see also Minn.Stat. § 260.125 (establishing procedure for adult certification by the juvenile court). Procedural due process, however, requires no such hearing for automatic certification because the juvenile court never had jurisdiction over the juvenile. Bland, 472 F.2d at 1335.
We likewise conclude that a person does not acquire a protectable interest in a juvenile disposition until the juvenile court has asserted its jurisdiction over the case. Bland, 472 F.2d at 1348 (Skelly Wright, C.J., dissenting) (acknowledging that juvenile court "is another system of justice" that necessarily includes "a different penalty structure, and a different philosophy of rehabilitation"). Because the automatic-certification statute precludes juvenile court jurisdiction from attaching, we hold that Behl did not suffer the loss of a "right" or "interest" for which he was entitled to receive a fair hearing.
2. Substantive due process
Behl next contends that the automatic imposition of an adult sentence for a non-enumerated offense violates his substantive due process rights. Unless a fundamental right is at stake, judicial scrutiny of the substance of state legislation under the due process clause is not exacting. Bowers v. Hardwick, 478 U.S. 186, 191-96, 106 S. Ct. 2841, 2844-47, 92 L. Ed. 2d 140 (1986). Under this standard, substantive due process requires only that legislative enactments not be arbitrary or capricious or, stated another way, that they be a reasonable means to a permissive object. See Contos v. Herbst, 278 N.W.2d 732, 741 (Minn.1979). We hold that no person, regardless of age, has a fundamental right to juvenile adjudication, which necessarily would include a juvenile disposition. See Marine v. State, 607 A.2d 1185, 1207 (Del.1992) ("The distinction drawn by the statutory scheme, based on the crime with which a defendant is charged, is not a suspect classification, nor does it involve a fundamental right."); People v. Jiles, 43 Ill. 2d 145, 251 N.E.2d 529, 531 (1969) (stating that nothing in the federal constitution requires states to create a juvenile court); see also Barry C. Feld, Reference of Juvenile Offenders for Adult Prosecution: The Legislative Alternative to Asking Unanswerable Questions, 62 Minn. L.Rev. 515, 560-61 (1978) ("To the extent such a right exists, it exists because the legislature has created it, and what the legislature has created, it can take away."); but see Bland, 472 F.2d at 1348 (Skelly Wright, C.J., dissenting) (stating that even a "`guilty' child may, under certain circumstances, have a right to be charged as a juvenile"). Consequently, the statute's automatic imposition of a district court sentence on the basis of an enumerated charge would violate Behl's substantive due process rights only if it is not a reasonable means to a permissive object.
At the outset, we note that the Minnesota Court of Appeals has found that offense criteria used to establish presumptions for the judicial certification process are reasonable means to permissive ends. See L.J.S. and J.T.K., 539 N.W.2d at 412-13. Although instructive, this decision does not necessarily lead us to the conclusion that the use of an enumerated offense to establish district court jurisdiction for non-enumerated crimes is a reasonable means to a permissive end. Under Minnesota's judicial waiver statute, the enumerated charge is one of only six factors upon which a juvenile court can certify a juvenile for district court. Minn.Stat. § 260.125.[5] A dismissal or acquittal of the enumerated charge, therefore, does not necessarily *568 extinguish the entire basis upon which the court certified the juvenile. Under Minnesota's automatic-waiver statute, however, the enumerated charge is the only basis upon which the juvenile has been certified. Minn.Stat. § 260.015, subd. 5(b). Consequently, a dismissal or acquittal of that charge necessarily extinguishes the entire basis upon which the juvenile was certified.
[I]f the rationale of the [automatic] classification is that juvenile court treatment is inappropriate for those who commit certain offenses, then regardless of the initial charge, if an individual is subsequently found not to have committed one of the offenses excluded from juvenile court jurisdiction, he should be returned to that court. Return to juvenile court is certainly consistent with the statutory policies providing for differential treatment on the basis of offense committed.
Barry C. Feld, Reference of Juvenile Offenders for Adult Prosecution: The Legislative Alternative to Asking Unanswerable Questions, 62 Minn. L.Rev. 515, 563-64 (1978) (footnote omitted).
Such a connection becomes even more tenuous when we consider sentencing as opposed to jurisdiction. Unlike the defendants who argued that adult court jurisdiction based on enumerated charges violated their substantive due process rights, Behl argues that district court sentencing for non-enumerated crimes based only on charges of enumerated crimes violates his substantive due process rights. The consideration for this court, therefore, is whether district court sentencing of a juvenile who is indicted for, but not convicted of, the enumerated offense is arbitrary and capricious.
Although we might prefer that the legislature would have provided the district court with the option to adjudicate as juveniles those defendants in situations similar to Behl's, we hold that the failure to provide such an option is not arbitrary and capricious. The power to define appropriate punishment for criminal conduct rests with the legislature as a corollary to its broader power to define what acts constitute criminal conduct. State v. Osterloh, 275 N.W.2d 578, 580 (Minn.1978). It is at least rational to conclude that juveniles over the age of 16 who have undertaken conduct sufficient to invoke an indictment for first-degree murder, are more dangerous and less amenable to the treatment provided by the juvenile system.
3. Equal protection
The guarantee of equal protection of the laws requires that the state treat all similarly situated persons alike. State v. Northwestern Preparatory School, Inc., 228 Minn. 363, 365, 37 N.W.2d 370, 371 (1949). It does not require the state to treat things that are different in fact or opinion as though they were the same in law. Baker v. Nelson, 291 Minn. 310, 314 n. 4, 191 N.W.2d 185, 187 n. 4 (1971) (citations omitted). Facial distinctions based on age and charged offenses do not create suspect classifications. Bland, 472 F.2d at 1336-37. As a result, the automatic-certification statute violates equal protection of the laws only if its offense-based distinction is not rationally related to a legitimate government interest. Id. at 1333-34.
It is clear that the portion of the automatic-certification statute that creates adult-court jurisdiction based upon age and offense criteria is rationally related to the legitimate government interests of serving public safety and determining if the defendant is amenable to juvenile rehabilitation. Id. at 1334 (noting that definition of adult-court jurisdiction reflected legislative concern over rising juvenile crime rates and the growing juvenile recidivism rate). Unlike those defendants who challenged automatic adult-court jurisdiction based upon age and charged-offense criteria, however, Behl is challenging automatic district court sentencing that is based upon an offense for which Behl was indicted, but not convicted. More particularly, Behl is arguing that it is not rationally related to any legitimate government interest to subject two persons convicted of the same crime to completely different sentencing mechanisms simply because one person was indicted for first-degree murder and the other person was not. The state, on the other hand, argues only that such a distinction is rational because first-degree murder is the most serious criminal offense in Minnesota. Although this invariably is *569 true, the fact remains that Behl did not commit such an offense. Consequently this issue will turn on whether it is reasonable to sentence a juvenile who is merely indicted for first-degree murder much more harshly than a similarly convicted (or adjudicated delinquent) juvenile who was not indicted for first-degree murder.
Although the state failed at oral argument to assert a rational basis upon which to base this different treatment, we conclude that the grand jury's finding of probable cause necessary to automatically certify a juvenile provides such a basis. As it stands now, the state can automatically prosecute as adults only those juveniles who, after becoming 16 years of age, are alleged to have committed first-degree murder. Minn.Stat. § 260.015, subd. 5(b). Minnesota law, meanwhile, requires indictments before the state can prosecute any criminal defendant alleged to have committed first-degree murder. Minn. R.Crim. P. 17.01 (requiring indictments before the state can prosecute offenses punishable by life imprisonment); Minn.Stat. § 609.185 (1996) (requiring sentence of life imprisonment for those persons convicted of first-degree murder). While it is true that an indictment does not prove the juvenile committed first-degree murder, the indictment is proof that a grand jury found facts sufficient to furnish probable cause that the juvenile has committed first-degree murder. The dissent considers such a distinction to be unpersuasive, but it should be noted that no suspect classification is at issue in this case, and as such, we must analyze the constitutional validity of this statute under the most deferential of standards. As a result, we conclude that such a finding is at least a rational basis upon which to expose a juvenile who is within two years of becoming a legal adult to the more harsh sentences imposed in district court.
II.
We next consider whether the district court's imposition of a 72-month sentence was appropriate. The court concluded that Behl's possession of the short-barrelled shotgun was a separate behavioral incident. It, therefore, imposed a concurrent sentence for 12 months and 1 day and assessed Behl one criminal history point for the conviction. The court then departed 25 percent upward from the presumptive sentence of 58 months (based on one criminal history point) on the manslaughter conviction and sentenced Behl to 72 months. Behl contends the court erred in assessing him one criminal history point for the shotgun conviction, but does not appeal the subsequent 25 percent upward departure.
Behl concedes that possession of the short-barrelled shotgun was a separate behavioral incident, and that the state had the right to sentence him separately for that conviction. He asserts, however, that such a conclusion necessarily strips the district court of its jurisdiction to adjudicate the charge, and therefore renders the conviction, as well as any subsequent assessment of a criminal history point, invalid.
The district court's jurisdiction over the juvenile in this case was based exclusively on section 260.015, subdivision 5(b). As a result, the district court had jurisdiction over the first-degree murder charge and any other charges arising out of the same behavioral incident. See Minn. R. Juv. P. 18.08. Any other charges necessarily fell within the original and exclusive jurisdiction of the juvenile court. Minn.Stat. § 260.015, subd. 5(a)(1) (defining delinquent child as a child "who has violated any state or local law"). Both the trial court and court of appeals concluded, and Behl now concedes, that the shotgun charge was not based on the same behavioral incident as the first-degree murder charge. Consequently, the district court did not have jurisdiction to adjudicate this charge, and could not, a fortiori, convict, sentence and then assess a criminal history point based upon this charge.
We therefore reverse the conviction for possession of short-barrelled shotgun and remand to the district court for sentencing in accordance with this ruling. Although our decision precludes the assessment of a criminal history point for possession of a short-barrelled shotgun, we note that the district court in assessing its sentence can consider all the circumstances, including the fact that the defendant utilized a short-barrelled shotgun *570 in the killing and any other factors that would support either an upward or downward departure from the sentencing guidelines.[6]
KEITH, Chief Justice (dissenting).
After recognizing silence in the automatic certification statute and constitutional concerns with allowing adult-court sentencing, the court nevertheless concludes that Donn Behl was properly sentenced in district court. Because this interpretation of statutory silence conflicts with the overall statutory scheme and simple but fundamental notions of fairness, I dissent.
Unless express statutory language is free from ambiguity, our task is to determine the legislature's intent. Minn.Stat. § 645.16 (1996). In so doing, we may consider the legislative purpose and the consequences of a particular interpretation. Id. § 645.16(4), (6). This court has long held that statutes are to be given a sensible construction that avoids unreasonable, unjust, or absurd results. Thoresen v. Schmahl, 222 Minn. 304, 311, 24 N.W.2d 273, 277 (1946); see also Minn.Stat. § 645.17(1).
In this case, the question is the intended reach of the automatic certification statute. The relevant portions of the statute explain when a delinquent child who would ordinarily proceed through the juvenile justice system, Minn.Stat. § 260.111, subd. 1 is subject to adult-court jurisdiction. The statute states that juvenile courts "lack[] jurisdiction over proceedings concerning" children "alleged to have committed murder in the first degree after becoming 16 years of age." Id. §§ 260.111, subd. 1a, 260.015, subd. 5(b). When an allegation of first-degree murder is made by the state, the district courts assume "original and exclusive jurisdiction." Id. § 260.111, subd. 1a.
The key term to be interpreted is "alleged." In my view, the best reading of the statute, in light of its underlying purposes, is that a juvenile offender is no longer "alleged" to have committed first-degree murder once he or she is actually acquitted by a jury in a district court. This is the situation in which Behl found himself once the jury concluded that he was not guilty of the charge that served as the one and only basis for adult-court jurisdiction. There is no question that the state's allegation was sufficient to trigger adult-court jurisdiction. But after the jury rejected the state's allegation of first-degree murder, the statutory basis and rationale for adult-court jurisdiction was eliminated. Reading the statute as a whole, it is reasonable to conclude that the legislature intended that certain first-degree murder charges be removed from juvenile court based on the seriousness of the allegation, but that adult-court jurisdiction terminates when the allegation is not accepted by the jury. This interpretation preserves the integrity of the legislature's provision for juvenile-court dispositions.
The majority concludes that the statute is "silent" on the issue of whether adult-court jurisdiction ends when a child is acquitted of a first-degree murder charge, but convicted of other charges. Ante at 564-565. The court then proceeds to search for legislative intent. According to the majority, the sole reasons for sentencing Behl in an adult court are that Oregon law explicitly provides for a different and fairer result; and that an independent section of the Juvenile Code regarding "extended jurisdiction juvenile prosecutions" permits a court to impose a juvenile disposition when the child is convicted of an offense other than an enumerated criminal offense, Minn.Stat. § 260.126, subd. 4(b).
The majority's reasoning is unpersuasive. First of all, comparing Minnesota statutes to Oregon statutes gives little insight into the intent of the Minnesota legislature. Even more puzzling is the court's reference to extended jurisdiction juvenile (EJJ) prosecutions. The EJJ provisions simply do not create an avenue for "return to juvenile court" for sentencing, as the majority contends. Ante at 566. The court misunderstands the meaning of the EJJ provisions. *571 In essence, EJJ prosecutions are part of the juvenile court's extended jurisdiction; they are a hybrid alternative to adult certification that allows the juvenile court to retain the proceedings, with the possibility of imposing an adult criminal sentence.[1] EJJ provisions are no indication that silence in the automatic certification statute implies that Behl should receive an adult-court sentence. In fact, by the majority's own logic, the fact that the EJJ provisions actually allow a juvenile court to impose both a juvenile disposition and an adult sentence could be taken as a sign that the legislature knew how to express its preference for adult sentencing. In the case of juveniles acquitted after automatic certification, the legislature made no such expression. At best, the EJJ provisions which do not discuss or relate to district court sentencing jurisdiction in automatic certification cases, Minn.Stat. § 260.126, subd. 6 provide no support for the majority's conclusion.
The weakness of the majority's rationale would not be so troubling if the results seemed fair to juveniles like Behl.[2] But the unavoidable consequence of the court's reasoning is that a child who is indicted but acquitted of the enumerated offense (first-degree murder) faces the harsher sentencing regime that the legislature crafted for adult perpetrators, while a child who was fortunate enough not to be indicted for first-degree murder in the first place is sentenced according to the juvenile court rules. This is not a result that the legislature envisioned. In my opinion, the automatic certification statute establishes a simple and legitimate policy: anyone over the age of 16 who commits first-degree murder will receive a life sentence. The statute does not say that certain juveniles should be treated "much more harshly," ante at 569, simply because they have been indicted, and despite exoneration by a jury. To do so, it seems, is to punish the juvenile for a crime he or she did not commit. Rather than enter a constitutional thicket, and absent clear direction from the legislature, I would interpret the controlling statutory language to avoid this result.
If, as the majority concludes, the statute is silent and we must identify the legislature's intent, then I see no reason to prefer the more punitive result over a juvenile disposition. In fact, Behl's argument is only strengthened insofar as our general rules of statutory construction apply. This court has made clear that the ambit of an ambiguous criminal law should be construed narrowly according to the rule of lenity, State v. Orsello, 554 N.W.2d 70, 74 (Minn.1996); State v. Niska, 514 N.W.2d 260, 265 (Minn.1994), and we have applied this rule of construction to ambiguous minimum and extended adult sentencing provisions, State v. Lubitz, 472 N.W.2d 131, 133 (Minn.1991); State v. Simmons, 258 N.W.2d 908, 910 (Minn.1977). Faced with some uncertainty as to the proper scope of the automatic certification statute, I would apply this sensible and established rule and conclude that the district court lacked jurisdiction to sentence Behl.[3] Thus, if there is to be a presumption about *572 the legislature's intent regarding juvenile sentencing jurisdiction, the past interpretive practices of this court indicate that juvenile-court jurisdiction and its well-tailored dispositions should prevail. Cf. State v. Moseng, 254 Minn. 263, 269, 95 N.W.2d 6, 11 (1959) (in the absence of a clear statement from the legislature, a statute's penal features should be strictly construed and its remedial features liberally construed); State v. Shevlin-Carpenter Co., 99 Minn. 158, 162, 108 N.W. 935, 936 (1906) (same).[4]
An exception in our Juvenile Code defines certain children out of the juvenile justice system. When Donn Behl was acquitted of first-degree murder, the statutory exception no longer applied to him. He was entitled, therefore, to be sentenced for second-degree manslaughter according to the rules that the legislature intended to be used for juveniles. Any gap or ambiguity in the automatic certification provision should be interpreted in a way that makes sense in view of the entire juvenile justice system, avoids any constitutional infirmity, keeps faith with established rules of statutory construction, and comports with basic fairness in sentencing. See Minn. R. Juv. P. 1.02. The court fails to provide any convincing reason why we should conclude otherwise.
I dissent.
GARDEBRING, Justice (dissenting).
I join in the dissent of the Chief Justice.
STRINGER, Justice (dissenting).
I join in the dissent of the Chief Justice.
NOTES
[1] The court based the manslaughter sentence on a 25 percent upward departure and one criminal history point for the shotgun conviction. The court found that the theft of the motor vehicle was part of the same behavioral incident as the manslaughter conviction and consequently did not impose a sentence for that conviction as per Minn.Stat. § 609.035 (1996). Behl appealed only the assessment of the criminal history point.
[2] Behl was born on November 30, 1978. He, therefore, turned 16 on November 30, 1994. The alleged acts took place on January 23, 1995. He was charged by criminal complaint on January 26, 1995. See State v. Fleming, 302 Minn. 61, 223 N.W.2d 397, 400 (1974) (stating that essential question in determining which court has jurisdiction is age of individual when alleged violation took place).
[3] Likewise, the Michigan statute interpreted in People v. Veling, 443 Mich. 23, 504 N.W.2d 456 (1993), requires that the judge of the court with jurisdiction over a juvenile "shall conduct a hearing at the juvenile's sentencing to determine if the best interest of the public would be served by placing the juvenile on probation and committing the juvenile to a state institution or agency * * *." Mich. Comp. Laws 769.1 § 1(3) (Supp. 1997).
[4] Act of May 5, 1994, ch. 576, 1994 Minn. Laws 934, 939, 945-47.
[5] Those six factors are: seriousness of the alleged offense, the culpability of the child in committing the offense, the child's prior record of delinquency, the child's programming history, the adequacy of punishment or programming available, and the dispositional options available for the child. Minn.Stat. § 260.125, subd. 2b.
[6] Because the district court relied upon a criminal history point for the shotgun conviction, it intentionally did not consider the nature of the weapon in determining Behl's sentence. Now that the criminal history point has been removed, the court once again can consider this fact in its sentence determination.
[1] See, e.g., Minn.Stat. § 260.125, subds. 2(6)(ii), 5 (referring to retention of juvenile-court jurisdiction); id. § 260.126, subds. 4-5; In re K.M., 544 N.W.2d 781, 785 (Minn.App.1996); Barry C. Feld, Violent Youth and Public Policy: A Case Study of Juvenile Justice Law Reform, 79 Minn. L.Rev. 965, 1038-51 (1995) (quoting Minnesota Supreme Court Advisory Task Force on the Juvenile Justice System, Final Report 32-33 (1994) (the purpose behind EJJ is to give the juvenile "one last chance at success in the juvenile system, with the threat of adult sanctions as an incentive not to re-offend")).
[2] Instead of receiving a juvenile disposition for his second-degree manslaughter conviction, Behl was sentenced to 72 months in prison. No adult has received a longer sentence for this offense in recent reported cases.
[3] When there is ambiguity in a federal sentencing statute, the United States Supreme Court disagrees over the priority of the rule of lenity among various rules of construction. See United States v. R.L.C., 503 U.S. 291, 305-06 & n. 6, 112 S. Ct. 1329, 1338 & n. 6, 117 L. Ed. 2d 559 (1992) (Souter, J.) (plurality opinion) (adopting the more lenient interpretation of a sentencing provision in the federal Juvenile Delinquency Act, but concluding that the rule of lenity was unnecessary because it should only be invoked after considering the statutory language, structure, legislative history, and underlying policies); id. at 307-08, 112 S.Ct. at 1339-40 (Scalia, J, joined by Kennedy & Thomas, JJ., concurring) (agreeing with the result, but arguing that the rule of lenity should be the first and only rule of construction). But the Court agrees that the rule of lenity is relevant. The majority in this case fails to confront this basic rule of construction.
[4] It is always preferable for the legislature to deal directly with statutory issues such as this. But when a statute is not clear, this court should employ settled rules of interpretation as a guide to the legislature's intent; otherwise, we jeopardize clarity and predictability in our own decision-making process. If a different result is preferred by our legislators, it is for them to examine the issue and make their intent clear. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623338/ | 126 S.W.3d 97 (2003)
Russell WATTS, Patrick Nagler, Eric James, William Fenley, and George Nicaso, Appellants,
v.
The CITY OF HOUSTON and The Firemen's and Police Officers' Civil Service Commission of Houston, Texas, Appellees.
No. 01-02-00085-CV.
Court of Appeals of Texas, Houston (1st Dist.).
June 5, 2003.
*98 E. Troy Blakeney, E. Troy Blakeney, Jack Edward Little, Houston, TX, for Appellants.
*99 Carole Snyder, Assistant City Attorney, Timothy J. Higley, Assistant City Attorney, Houston, TX, for Appellees.
Panel consists of Justices TAFT, KEYES, and HIGLEY.
OPINION
EVELYN V. KEYES, Justice.
This is an appeal of a summary judgment rendered against appellants Russell Watts, Patrick Nagler, Eric James, William Fenley, and George Nicaso (the firefighters) affirming the decision of the Firemen's and Police Officers' Civil Service Commission of Houston, Texas (the commission) and the City of Houston (the City) that the firefighters were not entitled to receive additional pay after being transferred into new job positions. In three issues raised on appeal, the firefighters contend that the trial court improperly denied their motion for partial summary judgment and improperly granted the City's motion for summary judgment, because the commission's decision denying the firefighters' appeal was not supported by substantial evidence, and that the trial court erred by not issuing the declaratory judgment requested by the firefighters.
In an issue of first impression, the City contends that neither the district court nor this Court has jurisdiction to consider the merits of this appeal. We hold that we have jurisdiction to consider the appeal. We affirm.
Factual and Procedural Background
The Fire Department operates as a paramilitary organization with a hierarchical structure composed of classified positions. All employees are initially hired as firefighters and cannot be promoted until they have served at least two years in that classified position. Thereafter, promotions are based upon an employee's grades on civil service examinations, tenure, and performance.
The record shows that the firefighters completed their entrance-level cadet training in February 1999, began serving as probationary firefighters for the City, and achieved regular firefighter status in January 2000. Three months later, because of severe staffing shortages in the dispatch division, the firefighters were transferred to dispatch for one year's service as "telecommunicators." When the new firefighters began working for the dispatch division, they functioned as call takers, a duty previously performed only by junior alarm dispatchers. The junior alarm dispatchers were concurrently assigned new duties.
Junior alarm dispatchers are classified and paid at the rank of captain, two classifications higher than the entry-level firefighter class. The junior alarm dispatchers' revised duties included supervising the new firefighters, filling in as call takers when necessary, and dispatching personnel and equipment in response to incoming calls. The firefighters were paid the same salary they had been receiving when they worked in their respective fire stations. As a result, each filed a grievance contending that he was performing the duties of a junior alarm dispatcher and seeking to be paid a higher salary commensurate with his new assignmentspay equal to the pay received by the junior alarm dispatchers.
The firefighters exhausted the grievance procedure, appealed the grievance examiner's decision to the commission, then appealed the commission's decision to the district court. At each step, their request for higher pay was denied.
Jurisdiction
The City, relying on language in the Local Government Code specifying that the decision of the commission regarding *100 grievances is "final," contends that the district court lacked jurisdiction to hear the firefighters' appeal. See Tex. Loc. Gov't Code Ann. § 143.131(c) (Vernon 1999). Consequently, the City argues that this Court likewise has no jurisdiction. The City further challenges the jurisdiction of this Court to hear this appeal because it contends that the grievances of four of the firefighters were not timely filed.
Standard of Review
As a threshold matter, we first address the question of whether the firefighters were entitled to appeal the decision of the commission to district court. Matters of statutory construction are questions of law for the court to decide. Johnson v. City of Fort Worth, 774 S.W.2d 653, 656 (Tex.1989). Our objective in construing a statute is to determine and give effect to the intent of the lawmaking body. Liberty Mut. Ins. Co. v. Garrison Contractors, Inc., 966 S.W.2d 482, 484 (Tex.1998). In so doing, we look first to the plain and common meaning of the statute's words. Id. We look at the entire act, and not at a single section in isolation from others. Fitzgerald v. Advanced Spine Fixation Sys., Inc., 996 S.W.2d 864, 866 (Tex.1999). In construing a statute, we presume that the statute is constitutional, that the entire statute is intended to be effective, that a just and reasonable result is intended, that the result is feasible of execution, and that the public interest is favored. Tex. Gov't Code Ann. § 311.021 (Vernon 1998); Linick v. Employers Mut. Cas. Co., 822 S.W.2d 297, 301 (Tex.App.-San Antonio 1991, no pet.). We should not adopt a construction that would render a law or provision absurd or meaningless. See Chevron Corp. v. Redmon, 745 S.W.2d 314, 316 (Tex.1987); Mueller v. Beamalloy, Inc., 994 S.W.2d 855, 860 (Tex.App.-Houston [1st Dist.] 1999, no pet.).
Statutory Framework for Grievances
Determining whether the firefighters were entitled to appeal the commission's decision to district court requires us to examine several sections of the Local Government Code and harmonize these, not merely to examine in isolation the provision upon which the City relies. Section 143.015 of the Code permits any firefighter who is dissatisfied with any commission decision to file a petition in district court seeking to set aside the decision. Tex. Loc. Gov't Code Ann. § 143.015(a) (Vernon 1999). Despite this broad language, the City argues that section 143.015 does not apply to that portion of the statute which is applicable only to municipalities with a population of 1.5 million or more, which provides that the decision of the commission in a grievance proceeding is "final." Id. § 143.131(c). What we must determine is whether the word "final" in section 143.131(c) means that, in municipalities with a population of 1.5 million or more, the commission's final decisions are "unappealable."
The Texas Legislature has set out a statutory framework in Chapter 143 of the Local Government Code to handle grievances by municipal firefighters and police officers in a fair, consistent, and orderly fashion. See id. §§ 143.101-143.363 (Vernon 1999); City of Houston v. Williams, 99 S.W.3d 709, 713 (Tex.App.-Houston [14th Dist.] 2003, no pet.).
Subchapters A-F of Chapter 143 set out the rights and procedures that are applicable to all municipalities with a population of 10,000 or more, that have paid fire and police departments, and that establish a local civil service commission. Tex. Loc. Gov't Code Ann. §§ 143.001-143.089. Section 143.010 outlines the procedure a firefighter must use to appeal to the commission. Id. § 143.010. As noted above, section 143.015permitting an appeal *101 to district court of "any decision" by the commissionis included in these generally applicable subchapters. Id. § 143.015(a). Also included is a section providing specifically for the right to appeal an indefinite suspension, suspension, promotional pass over, or recommended demotion to an independent third-party hearing examiner rather than to the commission. See id. § 143.057(a).
Chapter 143 was revised, effective September 1, 1987, to add Subchapter G, sections 143.101 through 143.134 of the Code. Id. §§ 143.101-143.134. Subchapter G is applicable only to municipalities with a population of 1.5 million or greater. Id. § 143.101(a). Subchapter G opens with the provision, "Except as otherwise provided, the provisions of Subchapters A-F apply to each municipality covered under this subchapter." Id. § 143.101(b). The "Revisor's Note (2)" to section 143.101 explains: "The revised law adds subsection (b) of this section to clarify the fact that the provisions of Subchapters A-F of this chapter apply to each municipality covered under this subchapter unless application is specifically excluded." Id. § 143.101, "Revisor's Note (2)." Thus, subsection 143.015(a) in Subchapter Apermitting an appeal to district court of any commission decisionapplies unless "otherwise provided" in Subchapter G; and Subchapter G does not otherwise provide unless the application of a provision in Subchapters A-F is "specifically excluded." Id. § 143.101.
Subchapter G includes provisions that essentially mirror those in Subchapters A-F, including a commission appeal procedure; appeal of a disciplinary suspension; appeal of an indefinite suspension; and the right to appeal an indefinite suspension, suspension, promotional pass over or recommended demotion to an independent hearing examiner instead of to the commission. Id. §§ 143.1015, 143.1016, 143.118, 143.120.
Subchapter G Four-Step Grievance Procedure
What is unique to subchapter G is a four-step grievance resolution procedure that cannot be utilized to complain of an indefinite suspension, suspension, promotional pass over, recommended demotion, or an allegation of discrimination, but that may be used to challenge other department decisions, such as written or oral reprimands, transfers, job performance reviews, or job assignments. Id. § 143.127. In Step I, after an employee files a written grievance, the departmental grievance counselor arranges a meeting between the aggrieved employee and his immediate supervisor to discuss the grievance. Id. § 143.128. In Step II, if the employee is not satisfied with the outcome, the same procedure is followed and the department head or his representative joins the employee and supervisor for further discussion. Id. § 143.129. If the employee is still dissatisfied, he may elect either to appeal to an independent third-party hearing examiner under section 143.057 or to file a Step III grievance form with the director in accordance with section 143.130. Id. § 143.129(d). At this point, the rights and remedies afforded by the four-step grievance procedure diverge, according to the employee's election.
Appeal to Third-Party Hearing Examiner
Following Step II of the four-step grievance procedure, the employee may elect to proceed under section 143.057, which sets out a statutory arbitration process. See id. §§ 143.057, 143.129(d). Upon being informed of the Step II decision, the appealing firefighter or police officer may elect to submit a written request to the director stating his decision to appeal to a hearing examiner. Id. § 143.057(a), (j). The letter informing the employee of this option must *102 notify him that the decision of the hearing examiner is not appealable except in cases of fraud or bias. Id. § 143.057(b). If the employee chooses this option, he and the department head, or the department head's designee, must attempt to agree on an impartial hearing examiner; if they cannot, they must request a list of seven qualified neutral arbitrators from the American Arbitration Association or the Federal Mediation and Conciliation Service, or their successors in function, and they must follow the statutory procedures for selecting arbitrators, conducting the hearing, and sharing fees. Id. § 143.057(d)-(i). The hearing examiner's decision is final and binding. Id. § 143.057(c).
Section 143.057(c) specifies that an employee who appeals to an independent hearing examiner waives his right to appeal to district court unless he alleges that the arbitration panel was without jurisdiction, that it exceeded its jurisdiction, or that the order was procured by fraud, collusion, or other unlawful means. Id. §§ 143.057(c), (j). The Texas Supreme Court has upheld the constitutional validity of this arbitration process. Wilson v. Andrews, 10 S.W.3d 663, 669-70 (Tex. 1999); Proctor v. Andrews, 972 S.W.2d 729, 733-34 (Tex.1998).
Appeal to Commission
If the employee elects instead to file a Step III grievance form, rather than to appeal to an independent hearing examiner under section 143.057, the commission appoints a grievance examiner to conduct an informal administrative hearing. Id. § 143.130. If the employee or the department is dissatisfied with the outcome of the Step III hearing, either party may appeal the grievance examiner's decision to the commission in Step IV, the final step in this process. Id. § 143.130(e). Unlike appeals to the commission undertaken pursuant to other sections of the statute, Step IV of the grievance procedure is a review only of the transcript of the hearing before the grievance examiner and any other documents submitted by the parties; there is no hearing before the commission. See id. § 143.130; cf. §§ 143.131(c), 143.1015. The section setting out the process used in Step IV ends with the sentence, "The commission decision is final." Id. § 143.131(c).
There is no provision in section 143.131 or in any other section of Subchapter G that either specifically allows or specifically prohibits an appeal of a final Step IV commission decision to district court. We are persuaded, however, that the word "final" in section 143.131(c) means that the commission's decision is "final" for the purposes of appeal of the commission's administrative decision; it does not mean "unappealable."
In both section 143.057 (applicable to smaller municipalities) and section 143.129(d) (applicable to Houston under Subchapter G, and which expressly refers the employee who chooses an independent hearing examiner to section 143.057) a firefighter may appeal to an independent hearing examiner instead of to the commission. Id. §§ 143.057, 143.129(d). If he does, the decision of the hearing examiner is "final and binding" in both cases, and the firefighter "waives all rights to appeal to a district court," except in limited circumstances related primarily to challenging jurisdiction or alleging fraud. Id.
Similarly, like a firefighter whose grievance is governed by Subchapter G, a firefighter governed by Subchapters A-F may choose to appeal to the commission, instead of to an independent hearing examiner. Id. § 143.057(a). If he appeals to the commission, he may file a petition in district court "within 10 days after the date [of] the final commission decision" asking that the decision be set aside. Id. *103 § 143.015(a). Notably, the right of appeal from the final decision of the commission to district court does not appear in section 143.010, governing the commission appeal procedure for smaller municipalities, any more than it appears in section 143.131, governing the commission appeal procedure under Subchapter G. Id. §§ 143.010, 143.131. Section 143.010 is silent as to the procedure to be followed after appeal to the commission. Id. § 143.010. It is section 143.015 which specifies that an appeal to district court may be filed within 10 days of the date of the final commission decision. Id. § 143.015(a).
In effect, the default position for employees who appeal to the commission is the right to appeal the commission's decision to district court. There was no need for the legislature to articulate the right to appeal the commission's final decision in the four-step grievance procedure because this right had already been expressed in the opening section of Subchapter G, specifying that the provisions of Subchapters A-F apply unless otherwise provided. Without such an express prohibition, section 143.015, allowing the appeal of any commission decision to district court, applies. See id. § 143.101(b) "Revisor's Note (2)" (specifying that provisions of Subchapters A-F apply to subchapter G unless specifically excluded). Viewing the plain language of the statute as a whole, we conclude that employees subject to Subchapter G who choose to appeal a grievance to the commission, rather than to an independent hearing examiner, have a right to appeal the commission's final decision to district court.
Interpreting the word "final" in section 143.131(c) as "unappealable" rather than as "final for purposes of appeal" would lead to an unreasonable and unjust result, which we should not endorse. See Tex. Gov't Code Ann. § 311.021 (Vernon 1998); Linick, 822 S.W.2d at 301. By denying firefighters and police officers in municipalities with a population of 1.5 million or more the right to appeal commission decisions to district court, Subchapter G would deprive these public employees of the right to seek a legal determination of their rights under statutory principles applicable to their grievances in a court of law. It would also discriminate merely on the basis of the size of the municipality between firefighters and police officers in municipalities with populations of less than 1.5 million, who plainly have a right of appeal of "any" commission decision under section 143.015(a), and those in municipalities with populations of more than 1.5 million or more, without any statement in Subchapter G that appeal to district court of a final commission decision made under section 143.131(c) is specifically excluded. There is no indication in the plain language or the commentary to Subchapter G that the Legislature intended such a drastic curtailment of metropolitan firefighters' and police officers' legal rights when it promulgated the four-step grievance procedure in Subchapter G. Rather, both the plain language of section 143.101(b) and the Revisor's Note to that section indicate the contrary. Id. § 143.101 and "Revisor's Note (2)." We conclude, therefore, that the word "final" in section 143.131(c) means that the commission's decision in Step IV of the administrative grievance process is final for purposes of appeal to district court.
We hold that a firefighter who utilizes Step IV of the four-step grievance procedure set out in Subchapter G of the Local Government Code may appeal the commission's decision to district court, and that, consequently, we have jurisdiction to address the merits of the appeal.
Timeliness
The City contends that four of the five appealing firefighters did not timely *104 file their grievances. An employee must file a grievance within 30 days of the date he is aggrieved. Id. § 143.128(a). The record shows that Watts, Nagler, James, and Fenley were assigned to the dispatch division on March 18, 2000, but did not file grievances until May 17, 2000. The City contends this exceeded the time limit of 30 days by 29 days.
The grievance hearing examiner made a specific fact finding that the grievances were timely filed. However, the City contends that, because firefighters are paid every two weeks, the firefighters should have known after receiving the first paychecks after their transfer that they were not receiving higher pay. The City has provided no evidence to show when the firefighters officially began their new duties or the dates they were paid in March or April 2000. The record shows that the firefighters were trained for two weeks before undertaking their new duties; accordingly, the grievance hearing examiner may have concluded that the firefighters would not have known until mid-April that their pay was going to stay the same.
Because the agency itself is the primary fact-finding body, the questions to be determined by the trial court are strictly those of law. Firemen's & Policemen's Civil Serv. Comm'n v. Brinkmeyer, 662 S.W.2d 953, 956 (Tex.1984); City of Houston v. Richard, 21 S.W.3d 586, 588 (Tex. App.-Houston [1st Dist.] 2000, no pet.). Accordingly, we decline to disturb the trial court's adoption of the grievance hearing examiner's fact finding that the grievances were timely filed because the determination was one of fact, not law.
Summary Judgment
In issues one and two, the firefighters contend that the trial court erred in denying their motion for summary judgment and granting the City's, because the evidence to support the commission's decision was not "substantial." The firefighters summarize their argument on appeal as follows: (1) state law requires the City to classify all positions; (2) there is no "telecommunicator" position; thus, they cannot be placed in such a position; (3) because they are performing the job duties of junior dispatchers, not firefighters, they are entitled by law to the wages of the higher rank.
Standards of Review
When both sides move for summary judgment and the trial court grants one motion but denies the other, we review all of the evidence, determine all questions presented, and render the judgment the trial court should have rendered. Commissioners Court of Titus County v. Agan, 940 S.W.2d 77, 81 (Tex.1997); Richard, 21 S.W.3d at 588.
The trial court could have ruled in favor of the firefighters only if it determined that the commission's decision was not supported by "substantial evidence" or that there was no reasonable basis for the commission's decision. Brinkmeyer, 662 S.W.2d at 956. The record here reflects substantial evidence that provided a reasonable basis for the trial court's decision.
Evidence
First, the firefighters correctly contend that all positions within the department must be classified. However, their argument that the City agreed that there is not, and never has been, a "telecommunicator" position is not entirely accurate. The record shows that the department head testified that the department had created a job description showing the duties of a newly-created "telecommunicator/firefighter" classification, but that it was up to the commission to implement *105 and formalize the position. He did not, however, testify that the commission had refused to do so, as the firefighters assert. It is also evident that the department has subclassified a number of firefighter variations (firefighter/EMT, for example) and that such subclasses are routinely approved. In sum, there is no evidence in the record, aside from the firefighters' bare assertion, to show that a "telecommunicator" position does not exist.
A firefighter who is required to perform the duties of a particular classification is entitled to be paid the salary for that position. Id. § 141.033(b). A department head may designate a person from the next lower classification to temporarily fill a position in a higher classification. Tex. Loc. Gov't Code Ann. § 143.111(a). The designated person is entitled to the base salary of the higher position plus the person's longevity pay. Id. The firefighters argue that the City admitted that, had the firefighters been one class below the rank of junior alarm dispatchers, instead of two classes below, the City would have been obligated to pay them the higher salary. Again, the record does not exactly reflect this. Although the department head acknowledged that an employee one class below a particular position can be paid the higher wages for the position he fills, this can be true only if the employee is actually performing the same job; thus, it is immaterial that the firefighters are two classes below the dispatchersthis is not the factor that precludes them from receiving higher pay.
The firefighters contend that they are entitled to the same pay as junior alarm dispatchers because they perform almost all of the same functions. The key word here is "almost." The transfer documents in the record show that each of the firefighters was assigned to new duties as a "call taker," not a junior alarm dispatcher. It is the additional duties of supervision and dispatch performed by the junior alarm dispatchers that distinguish the two positions and entitle the dispatchers to higher pay.
Traditionally, whatever the employment context, supervisors are entitled to higher pay than the employees they supervise, and the firefighters have offered no reason why the fire department should be an exception to that general rule. In addition, the duties of a dispatcher are not merely functionally different; they have a more significant impact. A call taker must accurately obtain and convey basic facts and information to the dispatcher. The description of the duties of a junior alarm dispatcher, in contrast, show that the dispatcher must exercise discretion and judgment in deciding which fire fighting personnel and equipment should be directed to the scene. We note that such decisions are critical because personnel and equipment dispatched to deal with one emergency may not be available for dispatch to another.
We hold that there was substantial evidence underlying the commission's decision and that the trial court did not err in granting the City's motion for summary judgment while denying the firefighters' motion. We overrule issues one and two.
Declaratory Judgment
In their petition, the firefighters asked the trial court to issue a declaratory judgment finding that the City violated sections 141.033 and 143.111 of the Local Government Code by ordering them to perform the duties of a higher classified position but not paying them the wages of the higher classified position. See id. §§ 141.033(b), 143.111(a). In issue three, the firefighters argue that the trial court erred because it did not render a declaratory judgment.
The City contends that the firefighters were attempting to obtain a declaratory *106 judgment as an alternate ground for recovery, which is impermissible by law. We agree. See Republic Ins. Co. v. Davis, 856 S.W.2d 158, 164 (Tex.1993) (holding that declaratory judgment statute cannot be invoked as affirmative ground of recovery to revise or alter parties' rights or legal relationships).
We hold that the trial court did not err in refusing to enter a declaratory judgment. We overrule issue three.
We affirm the trial court's judgment. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1920587/ | 107 B.R. 770 (1989)
In re Robert Joseph WENANDE and Jean Marie Wenande, d/b/a Tabor Lake Inn, Debtors.
No. 86-00845-BA.
United States Bankruptcy Court, D. Wyoming.
October 20, 1989.
*771 Randy L. Royal, Greybull, Wyo., for movant.
Dan Gibbs of Ken McCartney, P.C., Cheyenne, Wyo., for respondent.
DECISION DENYING CLAIM OF EXEMPTIONS
HAROLD L. MAI, Bankruptcy Judge.
THIS MATTER came before the court on June 21, 1989, for hearing on the trustee's Objection to Claim of Exemptions.
The court having considered the Objection, the claim of exemptions, and the amended claim, all papers and pleadings filed herein, having heard argument of counsel, and upon its own review of the applicable statutes and authorities, does hereby render its Decision as follows:
On their Amended Schedule B-4, the debtors claimed the following property as exempt under applicable Wyoming Law as "entireties property":
All of the debtor's property that qualifies all, including but not limited to: Stock, mineral interests, real estate, accounts, intangibles and personal property, which includes, but would not necessarily be limited to the following: 1) all of the debtor's shares in the Wenande Land & Livestock Co. Inc., 2) all of the debtor's shares in the Trail Creek Grazing Assoc. (sic)
This cryptic description of the property claimed as exempt points out a serious and reoccurring problem with claims of exemptions commonly filed in this Districtit is impossible to clearly ascertain exactly what property is claimed as exempt.
The debtors' Amended Schedule B-4 was filed in response to this court's January 6, 1987 Order for More Specific Listing of Property for Which an Exemption is Claimed. The January 6, 1987 Order, directed the debtors to "specifically list" the entireties property in which they claim exemptions.
To serve the purpose of a claim of exemption, property must be separately listed on the debtors' Schedule B-4 with "sufficient detail to put the trustee on notice of questionable assertions." Payne v. Wood, 775 F.2d 202, 206 (7th Cir.1985) ("property passes to the estate automatically, and it is the debtor's burden to make out the claim of exemption with adequate specificity"). See 11 U.S.C. § 522(l).
As the Seventh Circuit has noted,
* * * The requirement that the debtor list the property serves at least two functions. One is to settle claims of title, so *772 that on the day of discharge everyone knows who owns what. The other is to allow the trustee to decide which claims to challenge. Debtors are not perfectly trustworthy, and unless the claim of exemption contains sufficient detail to put the trustee on notice of questionable assertions, it will not be possible to administer the statutory scheme.
Id.
Closer adherence to Schedule B-4 as set forth in Official Form 6 will benefit all parties. On Official Form 6, the Schedule B-4 lists headings for "type of Property," "location, description, and, so far as relevant to the claim of exemption, present use of property," "specify statute creating the exemption" and "value claimed as exempt."
In this District a regrettable practice of using a pre-printed "checklist" of exemptions has developed. The Schedule B-4 and the Amended Schedule B-4 filed in this case, attached hereto as Exhibits A and B, are examples of the checklist which has become widely used in this District.
This checklist substitutes a generic statement of a category of property for the "description, . . . present use of property" information required. It also substitutes a preselected dollar amount, or a preselected percentage for the required information on "value claimed."
For example, in the present case the Amended Schedule B-4 has a check mark for "Tools of the Trade" and a preprinted value shown as "$2,000." Exactly what property these debtors consider to be "tools of the trade," where the property is now located, and its present use, are unknown.
The debtors' cryptic reference to "personal property, which includes, but would not necessarily be limited to" certain specified shares of stock is another example. It is inconceivable that the debtors, or their counsel, believed this to be adequate notice to the trustee and creditors of a claim of exemption in personal property other than the specifically listed shares of stock. Similarly, such a reference does not serve the purpose of establishing "who owns what" on the date of discharge. Payne v. Wood, 775 F.2d at 206.
In view of its January 6, 1987 Order, the court must hold that the debtors' designations of property by only categories such as "stocks," "mineral interests," "accounts," "intangibles," and "personal property" are insufficient to constitute a listing of a claim of exemption within the meaning of Bankruptcy Rule 4003. Such a generic description simply does not provide the trustee with adequate notice of the property claimed.
If there are accounts claimed, at minimum they should be listed by institution on the B-4 Schedule. The official form requires that the value of the account also be set forth. Similarly, the "mineral interests" must be more specifically described in order to provide the trustee or creditors with inquiry notice of questionable assertions.[1] "Stocks" should be listed by setting forth the name of the company and the approximate number of shares claimed as exempt.
This court's position is that "value," as set forth on the official form, generally means an approximate dollar amount and not a percentage. Naturally, value is the type of information that is not always available on the date a petition is filed. Where it is not, an estimation, so designated, may serve the purpose of the B-4 Schedule, e.g., "approximately $1,500." If the value is unknown, a simple statement to that effect serves the purpose of the B-4 Schedule.
"Location" of the claimed property is a required item on the B-4 Schedule in Official Form 6, that is often simply omitted.
The better practice is to avoid a reference to another of the debtor's B Schedules *773 as a substitute for the listing required on the Schedule B-4. This practice of referring to the debtor's other B Schedules no doubt arises in a commendable attempt to eliminate duplicative lists. However, a problem arises because debtors usually list on their other B Schedules a mix of exempt and nonexempt property.
For example, debtors must list on their Schedule B-2(c) under "[h]ousehold goods, supplies and furnishings," items such as VCR's, power tools, and expensive art work that are not generally exempt under the Wyoming Statutes. Similarly, they must list many nonexempt and exempt items together under Schedule B-2(e), "[w]earing apparel, jewelry, firearms, sports equipment, and other personal possessions." When reference is later made to "see exhibit X" it often refers to the property already listed under B-2(c) or (d), some of which is not exempt, and which the debtors did not intend to claim as exempt.
As a result, the trustees have often been forced to file objections to claimed exemptions in certain property, described by reference to another schedule, when neither debtors nor their counsel intended that it all be claimed as exempt. Because of the confusion resulting from this practice, trustees, debtors and debtors' counsel have had to attend unnecessary hearings on objections to exemptions. Such attendance can be very burdensome in a large Federal Judicial District such as the District of Wyoming.[2]
In the present case, the only property which is described with sufficient clarity to constitute "listing" the property claimed as exempt as entireties property within the meaning of Bankruptcy Rule 4003, are the shares in Wenande Land and Livestock and in the Trail Creek Grazing Association. Once such property is properly listed as claimed, the burden shifts to the trustee to prove the property is not properly claimed as exempt. Bankruptcy Rule 4003(c). The trustee did not meet his burden of showing said stock is not properly claimed as exempt.[3]
There is nothing in the record to establish that the remaining property, vaguely alluded to in debtors' Amended Schedule B-4, is, in fact, entireties property. For example, from the generic listing of "real estate" it is not possible to ascertain to what property the debtors are referring. The debtors' Schedule B-1 ("Real Property") does list two (2) items. One (1) of these, a house trailer, appears to be personal property.[4] The other item appears to be real property located in another state. That other state does not provide for the creation of a tenancy by the entireties in real property. See 7 COLLIER ON BANKRUPTCY at 31 through 42.4 (15th ed.1989).
Having determined that the Wenande Land and Livestock stock and the Trail Creek stock are adequately claimed as exempt as entireties property, and that the trustee did not meet his burden of establishing that the property is not properly claimed as exempt, the court turns to the disposition of entireties property in a joint bankruptcy case of both spouses.
The present case was commenced by a joint voluntary petition for relief under Chapter 11 of the Bankruptcy Code on October 10, 1986. See 11 U.S.C. § 302. It was later converted to a case under Chapter 7. The status of entireties property in a bankruptcy case filed by only one of the spouses has been the subject of many recent cases. See, e.g., Matter of Geoghegan, 101 B.R. 329, 331 (Bkrtcy.M.D.Fla. 1989). However, there is very little case law on the status of entireties property in a bankruptcy case filed by both spouses. See, e.g., Ragsdale v. Genesco, Inc., 674 *774 F.2d 277 (4th Cir.1982) (debtors may not avoid lien on entireties property where lien creditor holds prebankruptcy judgment against both spouses).
The issue in this case is whether property held by the debtors as tenants by the entireties may be used to satisfy individual claims against either debtor or must, instead, be used solely to satisfy joint claims against both debtors.
A debtor's interest in property as tenants by the entireties in property of the bankruptcy estate under 11 U.S.C. § 541(a)(1). A debtor in Wyoming may then exempt, or take back from the estate, certain property, including property held as tenants by the entireties. 11 U.S.C. § 522(b); In re Amselmi, 52 B.R. 479, 483 (Bkrtcy.D.Wyo.1985).
However, tenancy by the entireties property may only be exempted, or taken back from the estate, to the extent it is "exempt from process" under Wyoming law. Entireties property is not exempt from process under Wyoming law from claims against both spouses. Peters v. Dona, 49 Wyo. 306, 54 P.2d 817 (1936).
Thus, once the entireties property is in the estate, the extent to which it may be exempted pursuant to 11 U.S.C. § 522(b)(2)(B) depends on the presence or absence of joint creditors.
* * * Since entireties are exempt under state law not in dollars but from a specific class of claimants, section 522(b)(2)(B) merely means to provide debtor(s) exemption of any equity remaining after the sum of the joint creditor claims. A complete denial of any exemption where the joint claims do not exceed the debtor's equity spoils the Code language. * * *
Kalevitch, "Some Thoughts on Entireties in Bankruptcy," 60 Am.Bankr.L.J. 141, 147 (Spring, 1986).
Therefore, to "the extent that joint creditors existed at the filing of the bankruptcy petition, the entireties share is not exempt." Id. at 150.
The amount of entireties property that these joint debtors may exempt out of their estate under § 522(b)(2)(B) is their equity in the entireties property, less the total sum of all joint claims against both debtors. If the sum of the total claims held by creditors with claims against both debtors exceeds the debtors' equity in their entireties property, then none of their entireties property may be exempted from the estate. If there were not a single creditor with a claim against both of the debtors, their entireties property would be totally exempt.
Once the entireties property is included in the estate of joint debtors, distribution of the proceeds must be made in accordance with 11 U.S.C. § 726. As one noted commentator has stated:
But the Code section granting the exemption says nothing about the proceeds distribution where the exemption is properly denied. What section 522(b)(2)(B) establishes is just what amount of the entireties property is exempt. The rest of the property is not exempt. The joint creditors may have produced the non-exemption in the sense that the interplay of federal and state law uses the presence or absence of such creditors to determine the exemptibility. But are such creditors thereby entitled to greater proceeds of the bankruptcy estate than other unsecured creditors?
If the non-exempt entireties property goes to the joint creditors, one may ask why one should not expect something in the Code to so indicate. But, the Code explicitly passes non-exempt property into the estate and explicitly lays forth distribution rules nowhere specially providing for the joint creditor. That is quite consistent with 522(b)(2)(B)'s clear statement that one looks to state law to determine the extent of the debtor's exemption no special favor to whomever or whatever led to the exemption or lack of exemption.
Id. at 148 (citations omitted).
The entireties property which is not exempt is property of the estate. Therefore, it may be used to satisfy all creditor's *775 claims, including claims against only one (1) of these two (2) joint debtors.
The court will enter an appropriate order.
ORDER SUSTAINING OBJECTION TO CLAIM OF EXEMPTIONS
Oct. 19, 1989
Now, the court having considered the Objection, having heard argument of counsel, neither party having filed a memorandum of law within the time set by the court pursuant to its September 13, 1989 Order, and for the reasons set forth in its simultaneous Decision Denying Claim of Exemptions, and it appearing that the following property
Stock, mineral interests, real estate, accounts, intangibles and personal property
is property of the estate, which the debtors may not exempt, and good cause appearing therefore, it is
ORDERED, ADJUDGED, AND DECREED that the above-described property be, and the same hereby is, property of the estate herein, and not exempt; and, it is further
ORDERED, ADJUDGED, AND DECREED that the debtors' shares of stock in Wenande Land & Livestock Co., Inc., and the debtors' shares in the Trail Creek Grazing Association be, and the same hereby are, exempt only to the extent that the debtors' equity therein exceeds the total amount of all debts owed jointly by debtors Robert Joseph Wenande and Jean Marie Wenande.
EXHIBIT A
SCHEDULE B-4 Property Claimed as Exempt
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Debtor selects the following property as exempt pursuant to 11 U.S.C. § 522(d) or the laws of the
State of Wyoming.
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LOCATION, DESCRIPTION STATUTE OF VALUE
PROPERTY AND USE OF PROPERTY EXEMPTION CLAIMED
--------------------------------------------------------------------------------------------------------
H W
(X) Wages Any wages due and owing at the W.S. § 40-14-505 75% (X) (X)
time of filing. 15 USC § 1673
(X) Homestead As Shown P. 16 W.S. § 1-20-101 $10,000.00 (X) (X)
(X) Wearing Apparel As Shown P. 17b W.S. § 1-20-105 $1,000.00 (X) (X)
( ) Family Bible, pictures and school books W.S. § 1-20-106(a)(i) 100%
( ) Burial lot W.S. 100%
§ 1-20-106(a)(ii)
(X) Household Goods As Shown P. 17a W.S. $2,000.00 (X) (X)
§ 1-20-106(a)(iii)
11 USC § 522(f)
( ) Motor Vehicle W.S. § 1-20-106(b) $2,000.00
( ) Tools of Trade W.S. § 1-20-106(b) $2,000.00
( ) Implements of Prof. Man W.S. § 1-20-106(b)
( ) Personal Service Earnings W.S. § 1-17-411 50%
( ) Life Insurance Benefits W.S. § 26-15-129 100%
( ) Disability Ins. Proceeds W.S. § 26-15-130 100%
( ) Group Life & Disability Proceeds W.S. § 26-15-131 100%
( ) Annuity Proceeds W.S. § 26-15-132
( ) Fraternal Benefit Society Benefits W.S. § 26-34-118 100%
( ) Unemployment Comp. Benefits W.S. § 27-3-116 100%
( ) Worker's Comp. W.S. § 27-12-708 100%
( ) Public Assistance W.S. § 42-1-114 100%
( ) Notary Seal W.S. § 32-1-106 100%
( ) Wyo. Retirement W.S. § 9-5-226 100%
( ) Highway Patrol, Game & Fish Retirement W.S. § 31-3-120 100%
(X) Entireties Property 11 USC 522(b)(2)(B) 100% (X) (X)
All of the debtor's property that qualifies all, including but not limited to: Stock, mineral
interests, real estate, accounts, intangibles and personal property.
*776
EXHIBIT B
AMENDED
SCHEDULE B-4 Property Claimed as Exempt
-------------------------------------------------------------------------------------------------------
Debtor selects the following property as exempt pursuant to 11 U.S.C. § 522(d) or the laws of the
State of Wyoming.
-------------------------------------------------------------------------------------------------------
LOCATION, DESCRIPTION STATUTE OF VALUE
PROPERTY AND USE OF PROPERTY EXEMPTION CLAIMED
-------------------------------------------------------------------------------------------------------
H W
(X) Wages Any wages due and owing at the W.S. § 40-14-505 75% (X) (X)
time of filing. 15 USC § 1673
(X) Homestead As Shown P. 16 W.S. § 1-20-101 $10,000.00 (X) (X)
(X) Wearing Apparel As Shown P. 17b W.S. § 1-20-105 $1,000.00 (X) (X)
( ) Family Bible, pictures and school books W.S. § 1-20-106(a)(i) 100%
( ) Burial lot W.S. 100%
§ 1-20-106(a)(ii)
(X) Household Goods As Shown P. 17a W.S. $2,000.00 (X) (X)
§ 1-20-106(a)(iii)
11 USC § 522(f)
( ) Motor Vehicle W.S. § 1-20-106(b) $2,000.00
(X) Tools of Trade W.S. § 1-20-106(b) $2,000.00
( ) Implements of Prof. Man W.S. § 1-20-106(b)
( ) Personal Service Earnings W.S. § 1-17-411 50%
( ) Life Insurance Benefits W.S. § 26-15-129 100%
( ) Disability Ins. Proceeds W.S. § 26-15-130 100%
( ) Group Life & Disability Proceeds W.S. § 26-15-131 100%
( ) Annuity Proceeds W.S. § 26-15-132
( ) Fraternal Benefit Society Benefits W.S. § 26-34-118 100%
( ) Unemployment Comp. Benefits W.S. § 27-3-116 100%
( ) Worker's Comp. W.S. § 27-12-708 100%
( ) Public Assistance W.S. § 42-1-114 100%
( ) Notary Seal W.S. § 32-1-106 100%
( ) Wyo. Retirement W.S. § 9-5-226 100%
( ) Highway Patrol, Game & Fish Retirement W.S. § 31-3-120 100%
(X) Entireties Property 11 USC 522(b)(2)(B) 100% (X) (X)
All of the debtor's property that qualifies all, including but not limited to: Stock, mineral
interests, real estate, accounts, intangibles and personal property, which includes, but would not
necessarily be limited to the following: 1) all of the debtor's shares in the Wenande Land &
Livestock Co., Inc. 2) all of the debtor's shares in the Trail Creek Grazing Assoc.
NOTES
[1] On their Schedule B-3(b), the debtors do more specifically describe certain mineral interests under the heading "property not otherwise scheduled." However, all of those mineral interests are described as "[a]ll titled in Mrs. Wenande's name." Presumably, if those interests are titled in the name of only one of the two debtor spouses, they are not the same "mineral interests" claimed as exempt as property held by tenants by the entireties.
[2] The District of Wyoming covers approximately 98,053 square miles.
[3] The creation of a tenancy by the entirety in shares of stock is examined in In re Anselmi, 52 B.R. 479, 489 (Bkrtcy.D.Wyo.1985).
[4] Elsewhere on their B-4 Schedule the debtors listed a "homestead" exemption described only as "[A]s shown P. 16." Page 16 of their schedules is their Schedule B-2 "real property." Presumably, the debtors intended to claim their homestead exemption in their house trailer under §§ 1-20-101 through 104, W.S. 1977 (June 1988 replacement) and Wyo.Const., art. 19, § 9. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2861663/ | TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-97-00024-CV
Southwestern Public Service Company/Public Utility Commission of Texas and
City of Amarillo, Appellants
v.
Public Utility Commission of Texas, City of Amarillo, ASARCO, Inc., and Texas Industrial
Energy Consumers/Southwestern Public Service Company, Appellees
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 98TH JUDICIAL DISTRICT
NO. 96-06109, HONORABLE MARGARET A. COOPER, JUDGE PRESIDING
The Public Utility Commission of Texas (the Commission) refused to allow Southwestern
Public Service Company (Southwestern), a utility company, to recover certain fuel costs from its customers
and required it to reimburse its opponent, the City of Amarillo, for costs the City incurred participating in
the proceeding. Southwestern sought judicial review of the order in district court. The district court
affirmed the order for the most part, but reversed the order on two points of law. Consequently, all three
parties appeal the district court's judgment. (1) We will affirm the district court's judgment in part and reverse
and render in part.
THE CONTROVERSY
The Public Utility Regulatory Act of 1995 (2) (PURA 1995) allows utility companies to seek
periodic review to reconcile their fuel expenses when their predetermined customer rates result in either
over- or under-recovery for fuel expenses. See PURA 1995 §§ 2.051(cc), 2.212(g); (3) see also 16 Tex.
Admin. Code § 23.23(b)(3) (1997). The administrative vehicle used to accomplish this result is called a
fuel reconciliation proceeding. A utility must file a petition with the Commission to institute a fuel
reconciliation proceeding. See 16 Tex. Admin. Code § 23.23(b)(3).
Southwestern petitioned the Commission to reconcile its fuel expenses incurred between
January 1, 1992 and December 31, 1994. The City of Amarillo, among others, opposed Southwestern's
petition. An administrative law judge (ALJ) from the State Office of Administrative Hearings (SOAH)
conducted an evidentiary hearing. Two issues at the hearing were: (1) the prudence of Southwestern's
choice of fuel during the reconciliation period, and (2) the accuracy of Southwestern's accounting for fuel
costs during that time period. The ALJ proposed a decision that Southwestern had met its burden of proof
on both issues. The Commission later rejected the ALJ's findings and conclusions on both issues and
adopted a final order containing findings and conclusions contrary to the ALJ's on those issues.
Furthermore, the Commission required Southwestern to reimburse the City for the reasonable expenses
the City incurred participating in the fuel reconciliation proceeding.
Southwestern filed a motion for rehearing arguing that the Commission erred in substituting
its judgment for the ALJ's on the fact issues. Southwestern cited Texas Government Code section
2003.049(g) as authority for this proposition. (4) The statute reads:
[T]he commission may change a finding of fact or conclusion of law made by the
administrative law judge or vacate or modify an order issued by the administrative law
judge only if the commission:
(1) determines that the administrative law judge:
(A) did not properly apply or interpret applicable law, commission rules or policies,
or prior administrative decisions; or
(B) issued a finding of fact that is not supported by a preponderance of the
evidence; or
(2) determines that a commission policy or a prior administrative decision on which the
administrative law judge relied is incorrect or should be changed.
See Tex. Gov't Code Ann. § 2003.049(g) (West 1998). On rehearing, the Commission issued an order
concluding that the statute did not apply and reiterating the other aspects of its previous order.
Southwestern sought judicial review in district court. See PURA 1995 § 1.301; (5) Tex.
Gov't Code Ann. § 2001.171 (West 1998). The district court reversed the Commission's order in two
respects. First, the court ruled the Commission erred in requiring Southwestern to reimburse the City for
its costs. Second, the court ruled the Commission erred in concluding section 2003.049(g) did not apply
to the administrative proceeding. The court affirmed the order in all other respects, implicitly finding that
the Commission had met the requisites of section 2003.049(g) even though the Commission did not
consider it applicable.
The Commission and the City each appeal the district court's decision in one point of error,
contending the court erred in denying the City reimbursement for its costs. Southwestern appeals the
district court's decision in a single point of error, arguing the court erred in affirming the Commission's
substitution of its own findings of fact for the ALJ's findings. We will address Southwestern's point first.
DISCUSSION
I. Southwestern's Appeal
Southwestern's point of error has three components. Southwestern first argues section
2003.049(g) applies to this proceeding. Second, Southwestern contends the Commission violated the
statute by substituting its judgment for the ALJ's on questions of fact. According to Southwestern, had the
Commission properly applied section 2003.049(g), it would have affirmed the ALJ's proposal because the
evidence supported the proposal. Finally, Southwestern argues the district court applied an incorrect scope
of review in determining whether the Commission properly applied section 2003.049(g).
A. Applicability of Section 2003.049(g) (6)
Before September 1, 1995, the Commission heard all its own contested cases and had
the discretion to delegate initial fact-finding and decision-making authority to hearing examiners employed
by the agency. See Act of May 26, 1991, 72d Leg., R.S., ch. 847, § 1, 1991 Tex. Gen. Laws 2917
(formerly Tex. Rev. Civ. Stat. Ann. art. 1446c, § 16(h)). Effective September 1, 1995, the legislature
created the utility division of SOAH, an independent state agency, and transferred Commission hearing
examiners to the employ of SOAH. See Act of May 27, 1995, 74th Leg., R.S., ch. 765, § 1.37, 1995
Tex. Gen. Laws 3972, 3987 (not codified). In so doing, the legislature did not divest the Commission of
the power to conduct its own hearings. See PURA 1995 § 1.101(e). Commission members may still
conduct their own evidentiary hearings, but in the event they choose to delegate their authority, they must
delegate it to the ALJs in the utility division of SOAH. Id.
The legislation transferring the Commission's hearings examiners to the utility division of
SOAH also added section 2003.049(g), the above-quoted statute that concerns Commission review of
ALJ findings and conclusions. See Act of May 27, 1995, 74th Leg., R.S., ch. 765, § 1.35, 1995 Tex.
Gen. Laws 3972, 3986. The legislation provided:
[C]hanges in law made by [this legislation] that relate to the procedures governing a hearing
before the utility division of the State Office of Administrative Hearings apply only to a case
that is filed on or after September 1, 1995. In addition, the procedures prescribed by the
provisions amended by [this legislation] shall continue to be used in a hearing as those
provisions existed on August 31, 1995. The former law is continued in effect for those
purposes.
Id. (not codified).
The Commission argues this saving clause renders section 2003.049(g) inapplicable to
cases filed before September 1, 1995, including this case. Southwestern, on the other hand, argues the
saving clause does not concern section 2003.049(g) and that 2003.049(g) applies to all cases heard by
SOAH, even those instituted at the Commission before September 1, 1995. The applicability and
interpretation of this statute is a question of law and we may decide the issue de novo. See In re
Humphreys, 880 S.W.2d 402, 404 (Tex. 1993); see also Firemen's Pension Comm'n v. Jones, 939
S.W.2d 730, 733, 735 (Tex. App.--Austin 1997, no writ) (court did not defer to agency's interpretation
of saving clause).
We agree with Southwestern. The saving clause pertains to changes in the law that are
procedural and that relate to hearings before the utility division of SOAH. Section 2003.049(g) is not a
procedural section and it does not pertain to hearings before SOAH. It concerns the substantive powers
of the Commission and relates to proceedings that take place after SOAH hearings. We, therefore, hold
that section 2003.049(g) applies to this case. The trial court properly reversed the Commission's order
on this issue.
B. Commission Review of Proposal for Decision under Section 2003.049(g)
Southwestern next contends the creation of the utility division at SOAH and the enactment
of section 2003.049(g) severely restrict the Commission's power to determine factual issues first addressed
by an ALJ at SOAH. According to Southwestern, the Legislature created SOAH to bifurcate
administrative proceedings and severely restrict agencies' power to decide disputed issues of fact and law.
For support, Southwestern cites a provision in the APA that generally restricts agencies' power to change
findings of fact and conclusions of law in proposals for decision. See Tex. Gov't Code Ann. § 2001.058(e)
(West 1998). (7)
Southwestern also cites several legal commentaries discussing that provision.
The legislature may have had that purpose in mind when it enacted APA section 2001.058.
The legislature clearly expressed a different intent, however, for Commission proceedings. Section
2003.049(g), a statute applicable only to Commission proceedings, expressly supercedes APA section
2001.058. Tex. Gov't Code Ann. § 2003.049(g). Consequently, the language of section 2001.058 and
the authorities discussing it are not relevant to the proper interpretation of section 2003.049(g).
The part of section 2003.049(g) at issue in this case is subsection (1)(B), which allows the
Commission to change an ALJ's finding of fact if the Commission determines it "is not supported by a
preponderance of the evidence." Southwestern urges us to interpret this provision as restricting the
Commission's review of an ALJ's fact-finding to a deferential, appellate type of review. We do not read
section 2003.049(g) as requiring the Commission to defer to an ALJ's findings.
Act of April 30, 1993, 73d Leg., R.S., ch. 268, § 1, 1993 Tex. Gen. Laws 583, 741 (Tex. Gov't Code
Ann. § 2001.058(e), since amended). It now reads:
A state agency may change a finding of fact or conclusion of law made by the
administrative law judge, or may vacate or modify an order issued by the
administrative judge, only if the agency determines:
(1) that the administrative law judge did not properly apply or interpret applicable
law, agency rules, written policies provided under Subsection (c), or prior
administrative decisions;
(2) that a prior administrative decision on which the administrative law judge relied
is incorrect or should be changed; or
(3) that a technical error in a finding of fact should be changed.
The agency shall state in writing the specific reason and legal basis for a change made
under this subsection.
Tex. Gov't Code Ann. § 2001.058(e) (West 1998).
To the contrary, we read the statute as giving the Commission authority to supplant the
ALJ's findings. Rather than imposing the general, restrictive APA section 2001.058 on Commission
proceedings heard by SOAH, the legislature created a specific provision for such proceedings. We
construe an unambiguous statute according to its commonly understood meaning. Cail v. Service Motors,
Inc., 660 S.W.2d 814, 815 (Tex. 1983). The statute imposes the classic "preponderance of the evidence"
evidentiary standard used by original fact-finders in most civil trials. See State v. Turner, 556 S.W.2d
563, 565 (Tex. 1977), cert. denied, 435 U.S. 929 (1978). Accordingly, section 2003.049(g) allows the
Commission to assume an original fact-finding role. Pursuant to the statute, the Commission may evaluate
the evidence put before the ALJ at a SOAH hearing and determine whether the ALJ's findings are
supported by a preponderance of the evidence.
In support of its contention that the statute imposes an appellate or deferential type of
review on the Commission, Southwestern cites our opinion in Hunter Industrial Facilities, Inc. v. Texas
Natural Resource Conservation Commission, 910 S.W.2d 96 (Tex. App.--Austin 1995, writ denied).
In Hunter, we interpreted a provision in the Solid Waste Disposal Act that appeared to restrict the Texas
Natural Resource Conservation Commission's (TNRCC's) ability to change an ALJ's finding of fact. The
statute read, "The commission may overturn an underlying finding of fact . . . only if the commission finds
that the finding was not supported by the great weight of the evidence." Tex. Health & Safety Code Ann.
§ 361.0832(c) (West 1992). We said this was a "significant" restriction on the agency's discretion to
overturn an ALJ's finding. Hunter, 910 S.W.2d at 103. We attempted to contrast this standard with the
one applicable to TNRCC proceedings before the enactment of section 361.08329(c). We said, "Before
the enactment of subsection (c), the Commission had broad discretion to reject an examiner's underlying
fact findings. This discretion was limited only by the requirement that an agency's final decision be
supported by substantial evidence in the record." Id. (citations omitted, emphasis added).
Southwestern seizes on this language and argues if section 361.0832 restricted the TNRCC's discretion,
surely section 2003.049 restricts the Commission's.
The above-quoted discussion in Hunter has apparently misled some readers. Some
construe it as suggesting that the preponderance of the evidence standard of proof was never applicable
to TNRCC proceedings, either before or after the enactment of section 361.0832(c). In other words, they
construe Hunter as allowing the agency to overturn an ALJ's finding just because it is not supported by
the great weight of the evidence, without regard to whether the contrary position is supported by a
preponderance of the evidence. This interpretation is reinforced by Hunter's characterization of section
361.0832(c) as a "significant" restriction on the agency's discretion to overturn an ALJ's finding. This
characterization might suggest to some that the agency, before section 361.0832(c), had the discretion to
overturn an ALJ's finding even if a huge amount of the evidence supported it, but a very small amount of
the evidence supported the opposite conclusion. That was never the case.
Hunter did not abrogate the well-established rule that the standard of proof for any
administrative agency finding can never be less than a preponderance of the evidence. We reiterated this
rule in Beaver Express Service, Inc. v. Railroad Commission of Texas and we have not since done
away with it, nor could we. See 727 S.W.2d 768, 775 n.3 (Tex. App.--Austin 1987, writ denied) (citing
3 Davis, Administrative Law Treatise, 255-56 (1980)). The preponderance of the evidence standard
of proof for agency findings is altogether different from the substantial-evidence scope of review applied
by reviewing courts to agency findings. See id.; Lewis v. Metropolitan Savings & Loan Ass'n, 550
S.W.2d 11, 15 (Tex. 1977); Charlton v. Federal Trade Comm'n, 543 F.2d 903, 907 (D.C. Cir. 1976);
Clark & Lynch, Findings of Fact and Conclusions of Law in Agency Adjudications of Contested Cases,
Texas Administrative Practice and Procedure at E-1--E-35 (State Bar of Texas, 1985). Hunter may
have inadvertently blurred the distinction between the two.
In any event, Hunter does not control this case. The statute at issue in Hunter dictated
a review by TNRRC that, while not the same as the review we conduct of trial-court findings, strongly
resembles an appellate scope of review. By contrast, the preponderance of the evidence standard in
section 2003.049(g)(1)(B) is not so deferential. It simply reiterates the principle that fact-finders must find
facts by a preponderance of the evidence in administrative proceedings. The language of section
2003.049(g)(1)(B) does not evidence an intent on the part of the legislature to change the way the
Commission reviewed ALJ findings after the creation of the utility division of SOAH.
The legislature's intent to grant the Commission more fact-finding power than some other
agencies is further evidenced by the fact that the legislature saw fit to allow the Commission to conduct its
own hearings and bypass SOAH altogether if the Commission so chooses. See PURA 1995 § 1.101(e).
Furthermore, the legislature did not revoke the Commission's express power to make findings of fact. See
PURA 1995 § 1.101(d). (8)
Allowing the Commission more control over the ultimate disposition of its cases makes
sense in the public utility arena. Public utility matters are typically complex. They often involve objective
evidence that is more conducive to review on the record than evidence such as live witness testimony,
which is subject to credibility concerns. Based on these observations and, most importantly, the language
of the statute, we hold section 2003.049(g) allows the Commission to reevaluate the evidence admitted at
a SOAH hearing to determine whether the ALJ's findings are supported by a preponderance of the
evidence. In other words, we hold that section 2003.049(g) allows the Commission to substitute its
judgment for the ALJ's on questions of fact.
We note the Commission does not go unchecked in its reevaluation of the evidence
supporting an ALJ's finding. Section 2003.049(h) requires the Commission to state in writing the specific
reason and legal basis for any changes made pursuant to section 2003.049(g). Tex. Gov't Code Ann. §
2003.049(h). PURA 1995, in turn, subjects the Commission's order to judicial review under the
"substantial evidence rule." PURA 1995 § 1.301; (9) see also Tex. Gov't Code Ann. § 2001.174 (West
1998).
C. Judicial Review of Commission Fact-Finding under Section 2003.049(g)
The district court ruled that substantial evidence supported the Commission's determination
that the ALJ's findings of fact were not supported by a preponderance of the evidence. Southwestern
characterizes the issue before the trial court as a legal issue. Southwestern then argues the district court
should have reviewed the Commission's determination for legal error (de novo), rather than for substantial-evidence support, citing Hunter, 910 S.W.2d at 105.
As discussed above, Hunter involved a statute that allowed the TNRCC to change a
hearing examiner's finding of fact only if it was not supported by the great weight of the evidence. That
standard restricted the TNRCC's ability to reject the examiner's fact-findings and essentially put the
TNRCC in an appellate role. See id. at 103. In essence, the TNRCC was, therefore, making a legal
determination when it reviewed the sufficiency of the evidence supporting the hearing examiner's finding.
For that reason, this Court determined that a reviewing court should review the TNRCC's rejection of an
examiner's findings for clear error. See id. at 105.
In contrast to the statute at issue in Hunter, section 2003.049(g) does not require the
Commission to give deference to the ALJ's findings. As discussed above, the statute allows the
Commission to weigh the evidence anew. The resulting findings are purely factual in nature.
This distinction dictates that a reviewing court review the Commission's decision for
substantial-evidence support, rather than for legal error. See Lauderdale v. Texas Dep't of Agriculture,
923 S.W.2d 834, 836-37 (Tex. App.--Austin 1996, no writ) (clarifying that reviewing court measures
agency findings of fact against evidence; court reviews agency's legal conclusions for legal error or for
statutory authority). In fact, the court is prohibited from substituting its judgment for the agency's as to the
weight of the evidence on questions committed to agency discretion. APA § 2001.174; Texas Health
Facilities Comm'n v. Charter Medical-Dallas, Inc., 665 S.W.2d 446, 452 (Tex. 1984); Railroad
Comm'n v. Shell Oil Co., 161 S.W.2d 1022, 1028-29 (Tex. 1942). In other words, the court may not
determine the correctness of the agency's finding. Charter Medical, 665 S.W.2d at 452. A court that
is reviewing purely factual administrative findings may determine only whether substantial evidence supports
those findings. Id. at 452-53. The evidence may actually preponderate against the agency's finding and
the court must still uphold it if enough evidence suggests the agency's determination was within the bounds
of reasonableness (i.e., if substantial evidence supports the agency's determination). See id. at 452-53.
These principles originate in the Texas Constitution and the doctrine of separation of powers. See Railroad
Comm'n v. Shell Oil Co., 161 S.W.2d at 1028-29. Nothing in section 2003.049(g)(1)(B) indicates the
legislature intended to transfer fact-finding power from the Commission to the judicial branch of
government. We, therefore, conclude the Commission's fact-findings were subject to substantial-evidence
review rather than "de novo" legal error review.
The district court clearly reviewed the Commission's factual determination for substantial-evidence support. We, therefore, hold that the district court applied the correct scope of review.
D. Evidence Supporting the Commission's Factual Determination
Southwestern contends in the remainder of its point of error that the Commission's factual
determination is not supported by substantial evidence. We have already set forth the particulars of
substantial-evidence review. We presume substantial evidence supports an agency's findings and the
contestant bears the burden of proving otherwise. Id.
A party may challenge a finding for lack of substantial evidentiary support in two ways.
First, the party may argue the findings of underlying fact stated in the order do not fairly support the
agency's ultimate finding of fact. See United Resource Recovery, Inc. v. Texas Water Comm'n, 815
S.W.2d 797, 801 (Tex. App.--Austin 1991, writ denied) (citing Charter Medical, 665 S.W.2d at 452).
Second, the party may argue the findings of underlying fact do not have reasonable support in the evidence
adduced at the evidentiary hearing. Id.
Southwestern challenges the ultimate determination that a preponderance of the evidence
supported the Commission's findings, as opposed to the ALJ's. This challenge necessarily calls into
question the Commission's underlying findings of fact pertaining to the two fuel reconciliation issues
mentioned previously: (1) the prudence of Southwestern's choice of fuel during the reconciliation period
and (2) the accuracy of Southwestern's accounting for fuel costs during that time. Southwestern does not
contend the underlying findings are unsupported by the record. Instead, Southwestern attacks the
Commission's reasoning and argues the underlying findings do not support the ultimate decision to reject
the ALJ's proposed findings. Consequently, we characterize Southwestern's argument as the first type of
substantial evidence challenge.
We will first address the Commission's findings concerning the prudence of Southwestern's
choice of fuel. (10) Utilities use coal, gas, or both to generate electricity. According to the Commission's
findings, Southwestern burned more coal and less gas than it should have in early 1992, resulting in
unreasonably high fuel costs. The findings explain the basis for the Commission's judgment. That is: (1)
Southwestern was obligated under take-or-pay contracts to purchase a certain amount of coal during 1992;
(2) the contracts would have allowed Southwestern to defer purchasing coal until later in the year; (3) gas
prices were unusually low in early 1992; (4) rather than use more gas and less coal, Southwestern
purchased more coal than its contracts required; (5) Southwestern's fuel planning scheme did not consider
all the options available and did not take into account the unusual market conditions in early 1992; and (6)
consequently, Southwestern should have saved money on its fuel expenses but did not. For these reasons,
the Commission found Southwestern had not proven by a preponderance of the evidence that its choice
of fuel was reasonable during this portion of the reconciliation period. The Commission's logic, as
explained in the underlying and ultimate findings of fact, is reasonable. We hold, therefore, that
Southwestern has failed to challenge successfully the findings pertaining to its choice of fuel.
The second set of findings Southwestern challenges are those pertaining to the accuracy
of Southwestern's accounting for certain fuel costs during the reconciliation period. (11) Utilities like
Southwestern that generate their own electricity sometimes generate more than their regular customers
consume. The utilities sometimes sell the excess in bulk to other consumers. The utilities must then allocate
their fuel costs between sales to their regular customers and sales to the purchasers of the excess electricity.
The Commission found Southwestern failed to prove the accuracy of its allocation method, noting: (1)
Southwestern used a new, unconventional program to allocate its fuel costs; (2) the new program indicated
a decrease of fuel costs associated with generation of excess electricity; (3) another expert performed his
own calculations using a more common method of analysis and determined that Southwestern had
underestimated the fuel costs associated with the sale of excess electricity; and (4) Southwestern refused
to disclose the algorithms used by its program. The Commission's findings that Southwestern failed to
prove the accuracy of its fuel-allocation program are, therefore, reasonable. Having considered and
rejected Southwestern's challenge to the Commission's findings, we overrule Southwestern's point of error.
II. The Commission's and the City's Appeal
The Commission and the City bring a point of error challenging the district court's reversal
of the Commission's order requiring Southwestern to reimburse the City for its costs.
Cities generally have standing to participate in Commission proceedings concerning utilities
serving their areas. PURA 1995 § 2.106(b). (12) In ratemaking proceedings, public utilities must reimburse
cities for their reasonable costs. Id. § 2.106(a). (13) The Commission determined that this fuel reconciliation
case was a ratemaking proceeding and, consequently, required Southwestern to pay the City's costs. The
district court reversed the Commission's decision and ordered the City to pay its own costs. We must
decide whether a fuel reconciliation proceeding is a ratemaking proceeding.
PURA 1995 defines a ratemaking proceeding as a proceeding "in which rates are changed,
except the term shall include proceedings initiated under Section 2.051 of [PURA 1995]." Id. §
1.003(13A). (14) "Rates" include "every compensation . . . charged, or collected whether directly or
indirectly by any public utility for [electricity] . . ." Id. §§ 1.003(14) & 2.0011(6). (15) The Commission
argues fuel reconciliation proceedings fall within these definitions because they result in an immediate change
in the utility customer's bill. Southwestern, on the other hand, argues: (1) fuel reconciliation proceedings
do not change "rates," (2) a provision in PURA 1995 takes fuel reconciliation proceedings out of the
ratemaking category, and (3) caselaw supports its argument. After reviewing the authorities cited by
Southwestern, we conclude fuel reconciliation proceedings are ratemaking proceedings.
First, we disagree with Southwestern's argument that fuel reconciliation proceedings do
not change rates. Southwestern suggests the result of a fuel reconciliation proceeding does not affect
"rates" because it usually consists of a one-time surcharge or refund on a customer's bill. The definition
of rate does not require the compensation charged to be periodic or repetitive in nature. The definition
includes every charge collected. Id.
Second, although Southwestern did not specify which PURA 1995 section it relied upon
when it filed its petition, Southwestern suggests this proceeding was initiated under section 2.212(g). See
PURA 1995 § 2.212. Section 2.212 is the vehicle utilities use to seek to change their preestablished rates
for a number of reasons. See PURA 1995 § 2.212. Section 2.212 first sets forth procedures, including
application requirements, notice requirements, and deadlines, generally applicable to proceedings brought
under the section. See, e.g., id. § 2.212(a), (c), (d), & (e). After a hearing is conducted pursuant to the
statute, the Commission sets the rates of the utility involved in the proceeding. Id. § 2.212(f).
Fuel reconciliation is mentioned in section 2.212(g). Id. § 2.212(g). Subsection (g)(2)(C)
contains language Southwestern contends supports its argument: "a proceeding under [subsection (g)] may
not be considered a rate case under [section 2.212]." Id. § 2.212(g)(2)(C) (emphasis added).
Southwestern argues this declaration means a fuel reconciliation proceeding brought under subsection (g)
is not a ratemaking proceeding.
We disagree. First, section 2.212(g) governs proceedings in which utilities seek to adjust
their fuel factors, a component of a utility's rate. Southwestern did not seek an adjustment of its fuel factor
in its petition for reconciliation. Therefore, it is not clear that this proceeding arose under section 2.212(g).
We will assume it did, however, for argument's sake and because section 2.212(g) does mention the
concept of fuel reconciliation.
Even if section 2.212(g) applies, the language of the statute does not support
Southwestern's argument. Had the legislature meant to exclude fuel reconciliation proceedings from the
ratemaking category, it could have said a proceeding under subsection (g) "may not be considered a
ratemaking proceeding under section 1.003(13A)." Better yet, the legislature might have excluded fuel
reconciliation proceedings in the very definition of ratemaking proceedings. The legislature did neither of
those things. The use of the term "rate case" instead of "ratemaking proceeding" and the limitation of the
provision to section 2.212 proceedings convinces us that the legislature did not intend to exclude fuel
reconciliation proceedings from the category of ratemaking proceedings.
The exact implications of subsection (g)(2)(C) are not entirely clear to us. The provision
clearly relates to the distinction between fuel-related proceedings and other types of section 2.212
proceedings. Subsection (g)(2)(C) is not the only provision that distinguishes between the two. Section
2.212(g)(2)(A) and the Commission's rules maintain a distinction between general "rate cases" or "rate
proceedings" under section 2.212 and fuel-related proceedings. See, e.g., PURA 1995 § 2.212(g)(2)(A);
16 Tex. Admin. Code § 23.23(b)(3). Perhaps the distinction reflects the legislature's intent that fuel-related
proceedings may be conducted separately from others that involve rate-changes and that they need not
satisfy the procedural requirements of other section 2.212 proceedings. This argument is bolstered by the
fact that the subsection directly preceding subsection (g)(2)(C) directs the Commission to implement rules
for the "timely" reconciliation of a utility's fuel expenses. Id. § 2.212(g)(2)(B). The Commission has in fact
promulgated procedural requirements, including application requirements, notice requirements, and
deadlines, for fuel reconciliation proceedings. See 16 T.A.C. § 23.23(b). Those procedures differ from
those generally applicable to other section 2.212 proceedings. The distinction between "rate cases" under
section 2.212 and fuel-related proceedings may have more implications than the procedural differences
noted. Any additional implications are material, however, only to the interplay between fuel-related
proceedings and other types of section 2.212 proceedings.
Finally, Southwestern contends two of our previous opinions exclude fuel reconciliation
proceedings from ratemaking proceedings: City of El Paso v. Public Utility Commission of Texas, 609
S.W.2d 574, 579 (Tex. App.--Austin 1980, writ ref'd n.r.e.) and El Paso Electric Co. v. Public Utility
Commission of Texas, 917 S.W.2d 846, 863 (Tex. App.--Austin 1995), judgm't withdrawn and
cause dism'd by agr., 917 S.W.2d 872 (Tex. App.--Austin 1996). We first note neither case involved
a fuel reconciliation proceeding.
In City of El Paso, the city sought reimbursement for its participation in a dispute over the
issuance of a certificate of convenience and necessity. We held the proceeding was not a ratemaking
proceeding. 609 S.W.2d at 579. We explained that ratemaking proceedings are those "held to set rates,
i.e., when acting upon a formally filed 'Statement of Intent' for a rate increase or decrease." Id.; see
PURA 1995 §§ 2.105(c) & 2.212(a) (16) (explaining purpose and requirements of "Statement of Intent").
We further discussed this requirement in El Paso Electric Company. 917 S.W.2d at 863.
In that case, a city sought reimbursement for its participation in dockets that were closely connected to rates
but that did not involve the actual setting of rates. We held those dockets were not ratemaking
proceedings. Id. We noted that no "Statement of Intent" to change rates had been filed in those dockets.
Id. We explained that although the result of a proceeding may eventually affect rates, the proceeding is not
a ratemaking proceeding unless it is exclusively devoted to rates.
Southwestern argues our opinions in City of El Paso and El Paso Electric Company limit
ratemaking proceedings to those initiated with a "Statement of Intent." Matters initiated with a "Statement
of Intent" clearly fall within the definition of ratemaking proceedings, but they are not the only matters that
involve the setting of rates. In fuel reconciliation proceedings, a utility does not file a "Statement of Intent,"
but it does file the functional equivalent of one, a "Petition to Reconcile Fuel Expenses." See 16 Tex.
Admin. Code § 23.23(b)(3)(A). The requirement that a ratemaking proceeding be the result of some sort
of application to change the amount of money a utility can charge its customers simply ensures that the
proceeding is one directly devoted to setting rates and is not one peripherally related to rates.
We hold that this proceeding falls within the definition of a ratemaking proceeding because
it changed the compensation Southwestern can charge its customers for the electricity it has provided. (17)
The result of this fuel reconciliation proceeding was to allow Southwestern to recoup some of its
unexpected fuel expenses, but not all of them, by increasing the amount of money it charged its customers.
The Commission rules concerning fuel reconciliation proceedings explain how a utility goes about
surcharging or refunding the money. See 16 Tex. Admin. Code § 23.23(b)(3)(C). That fuel reconciliation
proceedings begin with a "Petition to Reconcile Fuel Expenses" rather than a "Statement of Intent" is of
no consequence. Our holding is consistent with the reasoning in City of El Paso and El Paso Electric
Company. That is, not all matters that have a potential effect on rates are ratemaking proceedings. Only
matters directly resulting in changed rates constitute ratemaking proceedings. The trial court erred in
denying the City reimbursement for its costs under PURA 1995 section 2.106(a) and we sustain the City's
and the Commission's point of error.
CONCLUSION
We have determined that: (1) Texas Government Code section 2003.049(g) applies to
Commission proceedings pending before September 1, 1995; (2) section 2003.049(g) allows the
Commission to reevaluate the evidence supporting an ALJ's findings of fact and determine the factual issues
anew; (3) a reviewing court may not substitute its judgment for the Commission's on an issue of fact and
is limited to determining whether the finding of fact is supported by substantial evidence; and (4) the findings
Southwestern challenges meet the requirements of the substantial evidence test. We have also determined
that the Commission was correct in treating this fuel reconciliation as a ratemaking proceeding and requiring
Southwestern to reimburse the City for its costs.
Consequently, we reverse the district court's judgment insofar as it denies the City its
reasonable costs. We render judgment that Southwestern pay the City its reasonable costs. We affirm
the district court's judgment in all other respects.
_____________________________________________
Jimmy Carroll, Chief Justice
Before Chief Justice Carroll, Justices Jones and Kidd
Affirmed in Part; Reversed and Rendered in Part
Filed: January 29, 1998
Publish
1. Appellees ASARCO, Inc., and Texas Industrial Energy Consumers were intervenors in the
Commission and district court proceedings and are aligned with the City and the Commission with respect
to Southwestern's appeal. Neither ASARCO nor Texas Industrial Energy Consumers appealed the district
court's judgment; therefore, they do not join the Commission and the City in their appeal against
Southwestern.
2. The Public Utility Regulatory Act of 1995 was in effect when the Commission and the district
court heard this case and when the parties briefed their appeals. See Public Utility Regulatory Act of 1995,
74th Leg., R.S., ch. 9, § 1, 1995 Tex. Gen. Laws 31, amended by Act of May 16, 1995, 74th Leg., R.S.,
ch. 231, §§ 1 to 49, 1995 Tex. Gen. Laws 2017, Act of May 27, 1995, 74th Leg., R.S., ch. 260, §§ 49
& 50, 1995 Tex. Gen. Laws 2494, Act of May 27, 1995, 74th Leg., R.S., ch. 765, §§ 1.01 to 1.34, 2.01
to 2.23, 1995 Tex. Gen. Laws 3972, and Act of May 27, 1995, 74th Leg., R.S., ch. 1013, § 1, 1995 Tex.
Gen. Laws 5068 (formerly Tex. Rev. Civ. Stat. Ann. art. 1446c-0). The legislature has since codified and
renumbered the provisions of the Act in the Texas Utilities Code, effective September 1, 1997. See Act
of May 8, 1997, 75th Leg., R.S., ch. 166, § 1, 1997 Tex. Gen. Laws 713. We will discuss the case in
terms of PURA 1995, footnoting the analogous provisions in the Texas Utility Code.
3. See Tex. Util. Code Ann. §§ 34.171(1), 34.172, & 36.203(e) (West 1998).
4. At the time the case was before the Commission and the district court, the statute was codified
at Texas Government Code section 2003.047. See Act of May 27, 1995, 74th Leg., R.S., ch. 765, §
1.35, 1995 Tex. Gen. Laws 3986. The legislature also enacted a similar provision applicable to a different
agency under the same number. See Act of May 4, 1995, 74th Leg., R.S., ch. 106, § 1, 1995 Tex. Gen.
Laws 898. The legislature has since renumbered the statute applicable to the Commission as section
2003.049. See Act of May 8, 1997, 75th Leg., R.S., ch. 165, § 31.01(49), 1997 Tex. Sess. Law Serv.
710 (West). To avoid confusion, we will cite to the current code.
5. See Tex. Util. Code Ann. § 15.001 (West 1998).
6. The trial court ruled that section 2003.049(g) applies. Neither the City nor the Commission
challenges this ruling in a point of error. The Commission does, however, assert in response to
Southwestern's point of error that the district court erred in applying section 2003.049. We will not,
therefore, accept the ruling as unchallenged.
7. At the time Southwestern briefed this case, the section read:
A state agency may change a finding of fact or conclusion of law made by the
administrative law judge, or may vacate or modify an order issued by the
administrative law judge, only for reasons of policy. The agency shall state in writing
the reason and legal basis for a change made under this subsection.
8. See Tex. Util. Code Ann. § 14.051(5) (West 1998).
9. See Tex. Util. Code Ann. § 15.001 (West 1998).
10. In Findings of Fact 37 through 46(e), the Commission found:
37. The natural gas price delivered to utilities in West Texas dropped from
approximately $2.20 per MMBtu in December 1991 to less than $1.20 per
MMBtu by the end of January 1992.
38. Under the Tolk Agreement, Southwestern has to purchase a minimum of 46.59
Tbtu (46,590,000 MMBtu) per year plus any additional coal required to generate
power for on-system sales.
39(a). PROMOD is a production cost model used to simulate an electric system's
operation and is a common and efficient method of evaluating a utility's historical
performance.
39(b). At the request of Commission staff, Southwestern ran two modeled scenarios,
establishing a benchmark and a change case.
39(c). A comparison of the benchmark and the change case in the PROMOD runs
indicated that Southwestern could have realized $2,327,900 in fuel savings.
39(d). Commission staff ran a spreadsheet analysis which indicated a potential fuel
savings of $2,064,686, which translates to $1,243,057 on a Texas retail basis.
40. Southwestern bases its generation planning on its generation and Fuel Use
Schedule, which estimates the gas prices for the remainder of the year.
41. The historical data (years 1990 and 1991) indicated that natural gas prices peak
during the winter months (Nov.-Feb.), decrease during the spring (March-May),
remain flat during the summer months (June-Aug.), and increase again during the
fall months (Sept.-Oct.).
42. Based on the historical trends, Southwestern developed its Fuel Use Schedule for
the 1992 winter months.
43. In early 1992, the on-system coal prices were forecasted to be higher than the
natural gas prices; therefore, Southwestern planned to purchase only its take-or-pay quantity of contract coal, which would allow it to take advantage of the low
natural gas prices.
44(a). In early 1992, extremely low natural gas prices combined with low system demand
provided unique opportunities for Southwestern to displace a portion of its higher
priced on-system Tolk generation with lower priced natural gas-fired generation.
45. If Southwestern was to displace its entire take-or-pay coal obligations during the
winter months, those volumes would have to be made up in later months.
46(a). Southwestern's monthly fuel plans in early 1992 included minimum target volume
for coal usage at Tolk Station.
46(b). During the reconciliation period, Southwestern burned far in excess of its minimum
coal obligations under its take-or-pay contracts.
46(c). Southwestern had a high degree of flexibility to meet its coal contract obligations.
46(d). Southwestern failed to explore all of the reasonable fuel options available during
the reconciliation period.
46(e). Southwestern's modeling process did not consider the alternative of removing one
of the Tolk units from the generation mix.
11. The Commission found in Findings of Fact 63 to 70:
63. The heat rate of a generating unit is the thermal input divided by the electrical
output with a higher heat rate indicating that more fuel was used to produce the
electrical output, a lower heat rate indicating that less fuel was used.
64. During the reconciliation period, Southwestern used two different methods to
determine the fuel costs for off system sales.
64(a). Heat rates measure the efficiency of a generating unit to convert fuel into electricity.
65(a). During the reconciliation period, Southwestern switched its method for calculating
off-system sales heat rates from a batch program to a new economic dispatch
program (EDP) and did not institute a change in plant technology or operations.
After the conversion, Southwestern experienced (on paper) a decrease of 1,334
Btu/kWh in incremental heat rates for off-system sales.
66(a). Southwestern never disclosed the algorithms of its EDP due to the proprietary
nature of the software.
66(b). Because TIEC did not have access to the EDP, TIEC attempted to replicate the
EDP with a spreadsheet analysis, the results of which indicated that Southwestern
used more fuel to generate electricity for off-system sales and confirmed the
change in relationship between on-system and off-system incremental heat rates.
66(c). Southwestern's EDP is not a typical economic dispatch because it uses two
different sets of fuel prices for native load and off-system sales.
66(d). The accuracy of Southwestern's EDP is unverifiable.
66(e). Southwestern failed to prove that it properly allocated fuel costs to ratepayers with
its method of calculating off-system sale heat rates; therefore, the disallowance of
$624,000 advocated by TIEC is reasonable.
67. The actual incremental heat rate should be used to determine off-system sales.
68. Southwestern's dispatch system calculates the fuel usage and costs every 20
seconds.
69. The actual contract or spot fuel price more accurately reflects the cost of fuel for
off-system sales.
70. Southwestern dispatches off-system sales from all of its generating units.
12. See Tex. Util. Code Ann. § 33.025(a) (West 1998).
13. See Tex. Util. Code Ann. § 33.023(b) (West 1998).
14. See Tex. Util. Code Ann. § 11.003(16)(A) (West 1998).
15. See Tex. Util. Code Ann. §§ 11.003(15)(A) & 31.002(6) (West 1998).
16. See Tex. Util. Code Ann. §§ 33.024 & 36.102 (West 1998).
17. This proceeding might even fit under the definition as one instituted under PURA 1995 section
2.051. Section 2.051 provides for reconciliation proceedings in general, including those conducted to
reconcile purchased power costs. PURA 1995 § 2.051(cc). That section also requires the Commission
to promulgate rules for proceedings to reconcile all cost recovery factors, including purchased power costs.
Id. The Commission satisfied this requirement with respect to fuel reconciliation by promulgating Rule
23.23(b)(3). See 16 Tex. Admin. Code § 23.23(b)(3) (1997). Southwestern's Petition to Reconcile Fuel
Expenses does not cite any PURA 1995 provision as authority to initiate a fuel reconciliation proceeding.
It does, however, cite Rule 23.23 and seek to reconcile purchased power costs. It is arguable, therefore,
that this fuel reconciliation proceeding was initiated under section 2.051 and that it therefore qualifies as a
ratemaking proceeding for that reason alone. Because neither party argued this theory, we do not base
our holding upon it.
s of its minimum
coal obligations under its take-or-pay contracts.
46(c). Southwestern had a high degree of flexibility to meet its coal contract obligations.
46(d). Southwestern failed to explore all of the reasonable fuel options available during
the reconc | 01-03-2023 | 09-05-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/1623477/ | 126 S.W.3d 604 (2004)
Maureen Louise STAVINOHA, Appellant,
v.
Paul Anthony STAVINOHA, Appellee.
No. 14-02-01081-CV.
Court of Appeals of Texas, Houston (14th Dist.).
January 20, 2004.
*606 Lynn S. Kuriger, Houston, for appellant.
Kent W. Shriver, The Woodlands, Shawn Russel Casey, Houston, for appellee.
Panel consists of Justices FOWLER and EDELMAN. Former Chief Justice SCOTT BRISTER not participating.
OPINION
WANDA McKEE FOWLER, Justice.
In this case we are asked to decide the proper characterization of retirement benefits of a police officer who participated in the Houston Police Officer's Pension System Deferred Retirement Option Plan. Based on the facts of this case, we hold that all of the officer's benefits were fully vested and, to the extent they were earned during marriage, were community property.
I. FACTUAL AND PROCEDURAL BACKGROUND
Appellee Paul Anthony Stavinoha began working for the City of Houston as a police officer on January 20, 1975. He became a member of the Houston Police Officers Pension System ("HPOPS") on May 10, 1975. Four years after this, Paul and appellant, Maureen Louise Stavinoha, were married on June 9, 1979.
Paul became eligible to retire on May 10, 1995, but instead of retiring immediately, in November of 1995 he elected to participate in the HPOPS Deferred Retirement Option Plan ("DROP"). DROP is an optional method to receive benefits available to HPOPS members with 20 or more years of credited pension service with the City of Houston. Under DROP, the member continues working and receiving a salary, and the monthly retirement annuity the member could have received upon retirement is credited to a notional DROP account in the member's name. When the member retiresstops the DROP programhe or she is entitled to receive the amount accumulated in the DROP account in a lump sum, and is also entitled to receive payment of the monthly pension benefit.
In the summer of 2000, approximately four and one-half years after Paul began participating in the DROP, the parties petitioned for divorce. Issues concerning conservatorship, possession and access, and child support for their two minor children were resolved through mediation. Property issuesin large part dominated by whether Paul's retirement benefits paid into the DROP account were community or separate propertywere tried in a nine-day bench trial. The final decree of divorce was entered on June 21, 2002.
The decree provided that (1) the monthly benefit credited to the DROP account from 1995 until the date of divorce (June *607 21, 2002), was apportioned between the community and separate estates; (2) the monthly benefit credited into the DROP account after June 21, 2002, but prior to Paul's actual separation from service, was characterized as 100% Paul's separate property; and (3) the monthly benefit paid after Paul's actual separation from service was apportioned between the community and separate estates. Maureen was awarded 50% of the apportioned retirement benefits. The decree further provided that the community had no interest in annual cost-of-living adjustments (COLAs) and other benefits paid post-divorce.
At Maureen's requestand after Maureen filed a notice of past due findings and conclusionsthe trial court issued findings of fact and conclusions of law. This appeal followed.
II. CONTROLLING STATUTORY AND CASE-LAW RULES
On appeal, Maureen raises three issues in which she attacks specific findings of fact and conclusions of law. She complains that the trial court wrongly characterized community property as separate and that this mischaracterization caused a disproportionate division of her marital estate that was manifestly unfair and unjust. This claim requires us to apply a number of rules and some statutes.
A. Definitions and Rules Related to Property
Several special rules and standards govern our review of this judgment. We begin with the definitions and rules related to property. Separate property is defined in the Texas Constitution as "[a]ll property, both real and personal, of a spouse owned or claimed before marriage, and that acquired afterward by gift, devise or descent." Tex. Const. art. XVI, § 15. The Texas Family Code defines separate property as that property owned by a spouse before marriage, acquired during the marriage by gift, devise, or descent, or as a recovery for personal injuries sustained during the marriage. See Tex. Fam.Code § 3.001.
Community property consists of the property, other than separate property, acquired by either spouse during marriage. See Tex. Fam.Code § 3.002; Barnett v. Barnett, 67 S.W.3d 107, 111 (Tex. 2001). All property possessed by either spouse during or on dissolution of marriage is presumed to be community property. Tex. Fam.Code § 3.003(a); Barnett, 67 S.W.3d at 111.
To overcome the community property presumption, a spouse claiming assets as separate property is required to establish their separate character, not merely by a preponderance of the evidence, but by clear and convincing evidence. Tex. Fam. Code § 3.003(b); McElwee v. McElwee, 911 S.W.2d 182, 188 (Tex.App.-Houston [1st Dist.] 1995, writ denied). "Clear and convincing" evidence means the measure or degree of proof that 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 J.F.C., 96 S.W.3d 256, 264 (Tex.2002); Slaton v. Slaton, 987 S.W.2d 180, 182 (Tex.App.-Houston [14th Dist.] 1999, pet. denied); see also Tex. Fam.Code § 101.007.
B. STANDARD OF REVIEW WHEN AN ESTATE HAS BEEN DIVIDED
In a divorce decree, the trial court "shall order a division of the estate of the parties in a manner that the court deems just and right, having due regard for the rights of each party and any children of the marriage." Tex. Fam.Code § 7.001. To disturb a trial court's division of property, Maureen must show the trial court clearly abused its discretion by a division or an order that is manifestly unjust and unfair. *608 See Evans v. Evans, 14 S.W.3d 343, 345-46 (Tex.App.-Houston [14th Dist.] 2000, no pet.). Under this abuse of discretion standard, the legal and factual sufficiency of the evidence are not independent grounds of error, but are merely relevant factors in assessing whether the trial court abused its discretion. Zieba v. Martin, 928 S.W.2d 782, 790 (Tex.App.-Houston [14th Dist.] 1996, no writ). We must remand the entire community estate for a new division when we find reversible error that materially affects the trial court's "just and right" division of the property. See Jacobs v. Jacobs, 687 S.W.2d 731, 732 (Tex.1985).
We review the trial court's conclusions of law de novo. Smith v. Smith, 22 S.W.3d 140, 143-44 (Tex.App.-Houston [14th Dist.] 2000, no pet.). Conclusions of law may not be challenged for factual insufficiency. Zieba, 928 S.W.2d at 786 n. 3. The standard of review is whether the conclusions of law drawn from the facts are correct. Zieben v. Platt, 786 S.W.2d 797, 802 (Tex.App.-Houston [14th Dist.] 1990, no writ). We will uphold conclusions of law on appeal if the judgment can be sustained on any legal theory the evidence supports. Waggoner v. Morrow, 932 S.W.2d 627, 631 (Tex.App.-Houston [14th Dist.] 1996, no writ). Thus, incorrect conclusions of law do not require reversal if the controlling findings of fact support the judgment under a correct legal theory. Id.
C. HEIGHTENED REVIEW OF SEPARATE PROPERTY CLAIMS
Paul concedes he had the burden of proof to demonstrate by clear and convincing evidence that the disputed benefits are his separate property. Recently, the Texas Supreme Court, in a parental termination case, clarified our standard of review when a party challenges findings that must be supported by clear and convincing evidence. See In re C.H., 89 S.W.3d 17, 25 (Tex.2002) (discussing factual sufficiency review); In re J.F.C., 96 S.W.3d 256, 264-68 (Tex.2002) (discussing legal sufficiency review). In these cases, the Court reasoned that the traditional legal and factual sufficiency reviews were inadequate to accommodate the clear and convincing burden of proof in termination proceedings, concluding that "the burden of proof at trial necessarily affects appellate review of the evidence." J.F.C., 96 S.W.3d at 264 (quoting C.H., 89 S.W.3d at 25). In light of these comments in C.H. and J.F.C., that the burden of proof at trial necessarily affects appellate review of the evidence, we will apply the standard of review the Court articulated in these cases.
1. Legal Sufficiency Review with Heightened Standard
J.F.C. held that when we conduct a legal sufficiency review of a separate property finding, we are instructed to look at all the evidence in the light most favorable to the finding to determine whether a reasonable trier of fact could have formed a firm belief or conviction that its finding was true. See J.F.C., 96 S.W.3d at 266. Looking at the evidence in the light most favorable to the finding means that we must (1) assume that the fact finder resolved disputed facts in favor of its finding if a reasonable fact finder could do so, and (2) disregard all contrary evidence that a reasonable fact finder could have disbelieved or found to have been incredible. See id. However, we are not required to disregard undisputed facts that do not support the finding, because that might skew a clear and convincing analysis. See id. If we determine that no reasonable fact finder could form a firm belief or conviction of the truth of the matter to be proved, we must conclude that the evidence is legally insufficient. See id.
*609 2. Factual Sufficiency Review with Heightened Standard
Likewise, under C.H., a new factual sufficiency review applies. We must consider whether all of the evidence is such that a factfinder could reasonably form a firm belief or conviction about the truth of the allegations sought to be established. See C.H., 89 S.W.3d at 25; J.F.C., 96 S.W.3d at 266. We should consider whether disputed evidence is such that a reasonable fact finder could not have resolved that disputed evidence in favor of its finding. See J.F.C., 96 S.W.3d at 266 (citing C.H., 89 S.W.3d at 25). If, in light of the entire record, the disputed evidence that a reasonable fact finder could not have credited in favor of the finding is so significant that a fact finder could not reasonably have formed a firm belief or conviction, then the evidence is factually insufficient. See id. If we determine the evidence is factually insufficient, we are to detail in our opinion why we have concluded that a reasonable fact finder could not have credited disputed evidence in favor of the finding. See id. at 266-67.
III. MAUREEN'S ISSUES
In this matter of first impression in Texas, we are asked to determine whether, when a member of the HPOPS divorces after electing to enter its DROP program, the retirement benefits that are deferred because of DROP participation are (1) the member's separate property or (2) community property subject to a just and right division at divorce.
In her first and second issues, Maureen argues that the trial court abused its discretion because the evidence was legally and factually insufficient to support the court's characterization of the DROP benefits as separate property. Specifically, Maureen contends the following deferred retirement benefits were community property, not Paul's separate property:
1. the monthly retirement pension credited to the DROP account post-divorce;
2. the annual cost-of-living adjustments (COLAs);
3. the 13th annual payment benefit;[1]
4. the monthly benefit for defraying health insurance costs;[2] and
5. the one-time $5,000 lump sum payment.[3]
Collectively, we refer to these benefits as the "disputed benefits."[4] Maureen also challenges the following conclusions of law:
10. [Paul] is entitled to the confirmation as his separate property that property which he owned prior to his marriage and those pension benefits anticipated to accrue in the future through his employment but for which [Paul] has not yet received right, title or interest.
*610 11. The division of the property of [Paul] and [Maureen] as reflected in the Final Decree of Divorce signed in this cause on June 21, 2002 is just and right, having due regard for the rights of each party and the children of the marriage, irrespective of the characterization of any item of property as either community or separate.
Maureen argues that the trial court erred in distinguishing the benefits received before the divorce from those deferred until after the divorce because Paul chose to participate in DROP. She claims (1) the disputed benefits were vested and fixed as of the date he "retired" for purposes of entry into the DROP in 1995 (prior to the divorce), and (2) Paul's continuing employment and any possible increases in pay or promotions can have no effect on the amount of his pension benefits.[5] As we explain below, having reviewed the evidence presented at trial and the applicable statutory provisions, we agree.
IV. ANALYSIS
A. WHETHER RETIREMENT BENEFITS ARE COMMUNITY OR SEPARATE GENERALLY DEPENDS ON WHEN THEY WERE EARNED
Retirement benefits earned by the employee spouse during marriage are community propertysubject to division upon divorceeven though they are not immediately subject to possession and enjoyment at the time of divorce. See Cearley v. Cearley, 544 S.W.2d 661, 662 (Tex.1976); Herring v. Blakeley, 385 S.W.2d 843, 846 (Tex.1965); Hudson v. Hudson, 763 S.W.2d 603, 605 (Tex.App.-Houston [14th Dist.] 1989, no writ). However, post-divorce increases in an individual's retirement benefits that are attributable to the person's continued employment, such as raises, promotions, services rendered, or contributions, are not subject to community property division. See Berry v. Berry, 647 S.W.2d 945, 947 (Tex.1983); Boyd v. Boyd, 67 S.W.3d 398, 408 (Tex.App.-Fort Worth 2002, no pet.). Conversely, post-divorce increases in an employee spouse's retirement benefits that are not attributable to continued employment are subject to community property division. See Burchfield v. Finch, 968 S.W.2d 422, 424-25 (Tex.App.-Texarkana 1998, pet denied); Phillips v. Parrish, 814 S.W.2d 501, 505 (Tex.App.-Houston [1st Dist.] 1991, writ denied). With this framework in mind of how the law views retirement benefits, we turn to the pension plan at issue here.
B. ALL OF THE DISPUTED BENEFITS WERE EARNED DURING MARRIAGE; NONE WERE EARNED POST-DIVORCE
Maureen contends that the trial court should have recognized the community's apportionable interest in all of the retirement benefits, including those that are credited to DROP or received post-divorce. In support of her position, she emphasizes the following facts: (1) Paul was fully vested in the plan in 1995 after he completed twenty years of service, (2) Paul's monthly pension benefit was fixed and frozen in 1995, and additional service, raises, or promotions cannot change the basic benefit, (3) since 1995, Paul has been a "retiree" and his monthly pension benefit has been, and will continue to be, credited into a DROP account until he actually separates from service; and (4) Paul does not need to continue working to receive benefits. We agree.
HPOPS's pension plan is a defined benefit plan governed by article 6243g-4 of the *611 Texas Revised Civil Statutes. See Tex. Rev.Civ. Stat. art. 6243g-4, §§ 1-28. The basic retirement benefits administered through the pension system are set out in section 12 of article 6243g-4. The benefits are paid to every eligible member who separates from service[6] after earning twenty or more years of service. Id. § 12(a). Patrick Franey, HPOPS's Director of Administration, testified that the basic retirement benefit is a service-related benefit, which is based on years of service with a twenty-year vesting period; the member's interest in all of the above benefits is vested upon attaining twenty years of service.
The statutory provisions specific to DROP are located in section 14 of article 6243g-4. This section provides that an active member who has at least twenty years of service with the police department may elect to participate in DROP and receive a DROP benefit instead of the standard pension. Id. § 14(b).[7] The election may be made "by an active member who has attained the required years of service." Id. Thus, in order to participate in the DROP, a member must be eligible for retirement.
The statutory scheme expressly provides that, when a member of the HPOPS chooses to enter the DROP, all retirement benefits are set as if the member had actually retired and begun receiving his pension on the date the member elected to enter the DROP. A member who participates in the DROP cannot accrue additional service crediteven though he continues to workand any increases in pay that occur after entry into the DROP cannot be used in computing the monthly pension benefit. See id. § 14(c). The HPOPS information booklet confirms this. It explains that when a member decides to enter the DROP program, the member's pension benefits are frozen at the time of the election, regardless of how long the member may continue to be employed and regardless of any future increases in pay.[8] Franey also confirmed this. He testified that Paul's interest in the pension benefits was vested on May 10, 1995, and Paul could have elected to begin receiving his retirement benefits immediately. Franey also confirmed that, once the DROP election is made, neither pay raises nor additional years of service can be used to increase the monthly pension amount credited to *612 Paul's DROP account; it can be increased only by the annual COLAs.
In short, since his election to participate in the DROP, nothing that Paul has done or has failed to doeither pre-divorce or post-divorcecan affect the basic retirement benefits which were vested on May 10, 1995, and frozen on November 18, 1995. While Paul continues to work for the police department, the DROP election only means that Paul has deferred receipt of retirement benefits which he earned by virtue of his work from May 10, 1975 through November 18, 1995. The fact that Paul is currently deferring receipt of retirement benefits while they are credited into his DROP account does not alter the community property character of the retirement benefits, most of which were earned by virtue of work during the existence of the community, vested during the existence of the community, and were frozen in value when Paul "retired" in November 1995, prior to the divorce.
Therefore, we hold that Maureen is entitled to a percentage of the community interest in all of the disputed benefits credited to Paul's DROP account, including those credited post-divorce.[9] However, increases in the DROP account from Paul's contributions from his salary post-divorce remain his separate property.
We likewise hold that the annual COLAs, as part of the basic retirement benefits provided for in section 12 of article 6243g-4, were community property. See Tex.Rev.Civ. Stat. art. 6243g-4, § 12(c). Courts, including this court, have held that increases resulting from COLAs are subject to community property division because they are not attributable to raises, promotions, services rendered, or contributions. See, e.g, Burchfield v. Finch, 968 S.W.2d at 424-25; Phillips v. Parrish, 814 S.W.2d at 504-05; see also Sutherland v. Cobern, 843 S.W.2d 127, 131 (Tex.App.-Texarkana 1992, writ denied) (holding that COLAs are a means of offsetting otherwise declining value of retirement benefits during marriage and are, thus, community property subject to division); Taylor v. Taylor, No. 14-98-01284-CV, 2000 WL 1125540 (Tex.App.-Houston [14th Dist.] *613 August 10, 2000, pet. denied) (not designated for publication) (same).
The same reasoning applies to the 13th annual payment benefit, the monthly benefit for defraying health insurance costs, and the one-time $5,000 lump sum payment. As noted above, all of these benefits are provided for in section 12 of article 6243g-4, and all of them are available to a member who retires after earning twenty or more years of service. See Tex.Rev.Civ. Stat. art. 6243g-4, §§ 12(b)-(e). To be eligible to receive them, the DROP member is not required to do anything more than work for twenty years. The community character of these benefits is not altered merely because they may be deferred to a DROP account or received post-divorce. Indeed, Paul concedes that the $5,000 lump-sum payment is subject to division as a community asset; we see no reason to distinguish this benefit from the others Maureen contends are community assets to the extent they were earned during marriage.[10]
We hold that the trial court abused its discretion in ruling and making findings of fact that the disputed benefits are Paul's separate property. We also hold that the portion of the trial court's conclusion of law number 10, which states that "Husband is entitled to the confirmation as his separate property ... those pension benefits anticipated to accrue in the future through his employment but for which Husband has not yet received right, title, or interest" is incorrect insofar as it refers to the disputed benefits.
C. PAUL'S ARGUMENTS DO NOT CHANGE THE OUTCOME
Paul argues that the characterization of these benefits is governed by the inception of title doctrine; it states that inception of title occurs "when a party first has a right of claim to the property by virtue of which title is finally vested." See Wierzchula v. Wierzchula, 623 S.W.2d 730, 731-32 (Tex. Civ.App.-Houston [1st Dist.] 1981, no writ). He contends that he has overcome the community property presumption with clear and convincing evidence of tracing that the disputed benefits are the result of toil and funds expended at a time when Paul was no longer married to Maureen. See Tarver v. Tarver, 394 S.W.2d 780, 783 (Tex.1965) (stating general rule that to discharge the burden imposed by the statute, a spouse must trace and clearly identify property claimed as separate property); McKinley v. McKinley, 496 S.W.2d 540, 543 (Tex.1973) (same).
Paul points to the following in support of his position: (1) he is required to contribute monthly to the DROP account to qualify for DROP participation; (2) by enrolling in DROP, he bargained away the valuable consideration of his right to increase his pension benefits based on his continued post-divorce service; (3) his post-divorce benefits are contributed dollar-for-dollar to the notional account; (4) upon retirement, *614 HPOPS will only distribute to him that amount of post-divorce DROP benefits he actually made post-divorce; and (5) all the DROP contributions the trial court found were separate property are contributed post-divorce. Paul does not explain the significance of these factors, but merely asserts that they demonstrate that the portion of the DROP account that accumulates post-divorce is a benefit Paul earned when he was no longer married to Maureen. Therefore, Paul contends, that portion of the DROP account is his separate property. Additionally, Paul asserts that the testimony of Patrick Franey, HPOPS's Director of Administration, establishes that to treat the disputed DROP credits as community property would be to grant Maureen benefits not contemplated under the HPOPS pension plan, because plan administrators have never allowed these benefits to be divided by a qualified domestic relations order.
We do not find these arguments persuasive. First, Paul's argument that he must contribute monthly to the DROP account to qualify for DROP participation is misleading. The pension plan merely requires that active members of the pension system must pay into the system a portion of their direct pay. See Tex.Rev.Civ. Stat. art. 6243g-4, § 8(a). Paul has chosen to continue to work and receive a salary; therefore, he is required to pay into the pension system. There is no statutory requirement that he pay to participate in the DROP. Moreover, Maureen does not contend that any part of his post-divorce contribution from salary is community property.
As for Paul's argument that by enrolling in the DROP he bargained away the valuable consideration of his right to increase his pension benefits based on his continued post-divorce service, we do not see how this impacts the only relevant inquiry, which is whether the benefits were earned during the marriage. Moreover, although the parties did not develop evidence of the benefits of DROP participation, it appears that, by choosing to enter the DROP rather than simply retire and begin receiving pension payments, any "valuable consideration" Paul lost would be offset by the benefits of accumulating credits in the DROP account toward a lump sum payment of retirement benefits that earn interest and receive annual cost-of-living adjustments while he continues to work and receive a salary.
Paul's remaining arguments are based on the tautology that the post-divorce DROP credits are his separate property because they are made post-divorce. But, again, the mere fact that the DROP credits are made post-divorce does not mean they are benefits that are earned post-divorce. Paul points to no evidence that the DROP credits and the other benefits at issue were earned by him as a result of his continued employment, such as by raises, promotions, services rendered, or contributions. The assertion that Paul "must" work to participate in DROP is unpersuasive and unsupported by the evidence. As we noted above, Paul chose to enter the DROP and continue working instead of retiring and receiving retirement benefits immediately, and by participating in the DROP, he receives the benefits of that participation. Even Paul's witness, Patrick Franey, who administers the DROP, testified that there is no statutory provision that requires the member who has made a DROP election to continue working after the election, and it is simply a matter of choice on the part of the member.
Thus, whether we apply the law specifically applicable to retirement benefits or Paul's inception of title theory, the outcome remains the same. When Paul chose *615 to participate in the DROP, the amounts credited to his DROP account (or deferred until actual retirement) represented vested retirement benefits-not Paul's earnings after the termination of the community. Paul has failed to demonstrate, by clear and convincing evidence, that the disputed benefits are his separate property.
Paul advances one final argument that the disputed benefits are separate property. It is based on Franey's testimony that the HPOPS administrators do not recognize the post-divorce DROP credits and the other disputed benefits as community property, and have never allowed these benefits to be divided by a qualified domestic relations order. Paul argues that the board of directors of HPOPS is entitled to refuse to recognize the benefits as community property subject to division because they are authorized by statute to "establish the policies and procedures for disbursements from the fund it considers appropriate," see Tex.Rev.Civ. Stat. art. 6243g-4, § 6(b). Paul further suggests that Maureen's "real complaint" may not lie with the trial court but with HPOPS, which is not a party to the suit. We disagree.
The short answer to this claim is that our state constitution and our state legislaturenot the HPOPS administratorsdefine what is community property. And the courtsnot the HPOPS administrators-are the ultimate interpreters of these definitions. Under the Texas Family Code, state retirement plans are subject to division upon divorce. See Tex. Fam.Code § 7.003. All of the benefits Maureen seeks are part of the defined benefit plan administered by HPOPS, and section 28(e) of article 6243g4 provides that accrued benefits may be divided by a qualified domestic relations order and paid to an alternate payee in accordance with that order. See id. § 28(e). Furthermore, we have found that almost all of the benefits were earned pre-divorce and are, therefore, community property. At this point, it does not matter how the HPOPS administrators view these benefits; their interpretation is not binding on this Court.[11]
D. THE TAGGART APPORTIONMENT FORMULA APPLIES
Having determined that the disputed benefits, to the extent they were earned during the marriage, are community assets subject to division upon divorce, we next turn to the proper apportionment of the assets. Maureen argues that the apportionment formula of Taggart v. Taggart applies to determine the extent of the community interest in the disputed retirement benefits. See 552 S.W.2d 422, 423-24 (Tex.1977). Paul worked for the police department for 4.39 years before marriage and had worked almost 21 years when he elected to effectively "retire" by entering the DROP program. The trial court accepted Maureen's expert's calculation that the community's interest in the pension benefits was 80.11%, while Paul's separate property interest was 19.89%. Paul did not challenge this calculation below or on appeal. Therefore, we will not disturb this part of the trial court's ruling awarding *616 Maureen 50% of the community's interest. However, we must discuss Maureen's contention that the disputed benefits should be divided using the Texas Supreme Court's Taggart apportionment formula.
In Taggart, an ex-wife sued for a portion of her ex-husband's retirement benefits after he retired. The ex-husband had 360 months of active and retired naval service, with 246 months of those months earned during marriage. The Texas Supreme Court held that the ex-wife owned as her part of the community estate a share in the contingent right to the ex-husband's military retirement benefits even though that right had not matured at the time of the divorce. Taggart, 552 S.W.2d at 423. The Taggart court then awarded the ex-wife one-half of 246/360 of the ex-husband's total retirement pay. Id. at 424.
Later, in Berry v. Berry, the Supreme Court reaffirmed the Taggart apportionment formula for determining the extent of the community interest in retirement benefits, but instructed that when the value of such benefits is in issue, the benefits are to be apportioned to the spouses based upon the value of the community's interest at the time of divorce, not at the time of retirement. See Berry v. Berry, 647 S.W.2d 945, 947 (Tex.1983). In Berry, the husband did not retire until after the divorce, and the record showed that, after the divorce, the husband's retirement benefits increased as a result of twelve to fourteen pay raises and an improved benefit plan. The Berry court determined that to allow the wife to share in these post-divorce increases would impermissibly invade the husband's separate property. Id.
Since Berry, Texas courts have continued to apply the Taggart formula to determine the extent of the community's interest when the employee spouse's retirement is fully matured at the time of divorce. See Limbaugh v. Limbaugh, 71 S.W.3d 1, 16 (Tex.App.-Waco 2002, no pet); Hudson v. Hudson, 763 S.W.2d at 605; see also Harrell v. Harrell, 700 S.W.2d 645, 646, 648 (Tex.App.-Corpus Christi 1986, no writ) (applying Taggart formula to determine extent of community interest in retirement benefits); Workings v. Workings, 700 S.W.2d 251, 254 (Tex.App.-Dallas 1985, no writ) (same). We are therefore persuaded that cases involving the extent, as opposed to the value, of the community interest in retirement funds require application of the Taggart formula.
Here, Paul and Maureen were still married when Paul elected to participate in the DROP. If Paul had instead chosen to retire at that time, there would be no question that the Taggart formula would be applicable, because there could be no post-divorce labors that could increase the value of the retirement benefits. Because all of the benefits were vested at the time Paul entered the DROP, and because he is considered "retired" for purposes of determining his benefits under the DROP, Paul is likewise effectively retired for purposes of characterizing the retirement benefits. There is no danger that any post-divorce labors will increase the retirement benefits to implicate the application of the Berry valuation formula. We therefore hold that this situation is more analogous to Taggart than Berry, and thus the Taggart apportionment formula is applicable. See Shanks v. Treadway, 110 S.W.3d 444, 446 n. 3 (Tex.2003) (recognizing that serious concerns have been raised regarding the Berry formula's failure to account for post-divorce increases in the value of retirement benefits attributable to community property contributions to the plan).[12]
*617 E. THIS WAS NOT A JUST AND RIGHT PROPERTY DIVISION
Having determined that the evidence was legally and factually insufficient to support the trial court's characterization of the disputed DROP benefits as separate property and the proper method of apportionment, we must now consider whether the trial court's mischaracterization caused it to abuse its discretion in making its property division.
As noted above, we must remand the entire community estate for a new division when we find reversible error that materially affects the trial court's "just and right" division of the property. See Jacobs, 687 S.W.2d at 732. If, on the other hand, the mischaracterization of the property had only a de minimis effect on the trial court's just and right division, then the trial court did not abuse its discretion. See Robles v. Robles, 965 S.W.2d 605, 621 (Tex.App.-Houston [1st Dist.] 1998, pet. denied). When the court mistakenly characterizes property that constitutes the main asset of the parties, the error is of such a magnitude that it materially affects the just and right division of the community estate. See In re Marriage of Taylor, 992 S.W.2d 616, 621 (Tex.App.-Texarkana 1999, no pet.).
We conclude that the trial court's error in mischaracterizing the five disputed benefits as Paul's separate property had more than a de minimis effect on the trial court's just and right division. The net value of the community interest as determined by the trial courtwithout the mischaracterized benefitswas $478,631. The exact value of the post-divorce DROP credits, the largest of the mischaracterized benefits, is necessarily indeterminate because it depends on the length of time Paul chooses to continue participating in the DROP program, as well as other factors such as the accumulation of interest and annual COLAs. However, Maureen's expert testified that Paul's separate property interest in the DROP, pre-divorce, was approximately $28,000 out of a total value of over $259,000. Maureen also points out that, based on the current monthly pension benefit credit (without computing increases due to annual COLAs and interest earned on the balance), the community is deprived of no less than $20,927 for every year that Paul continues to defer his actual retirement.[13] There was also testimony from Maureen's expert that the present value of this asset was $442,303. In addition to the community's loss of the post-divorce monthly credits to the DROP account, COLAs, and earned interest, there was evidence that the community's 80.11% interest in the medical stipend, the 13th annual payment, and the $5,000 one-time lump sum payment was valued at $36,321.
Thus, Maureen has been deprived of any portion of the 80.11% community interest in these benefits, and the degree of harm increases for every year that Paul continues to defer his retirement and the monthly benefits are credited into his DROP account. Therefore, the loss to the community of an 80.11% community interest in the five mischaracterized benefits materially affects the equitable division made by the trial court and warrants remand to the trial court for a new division. To find otherwise would result in a division of *618 property that is neither just nor right. The trial court's conclusion of law that the property division is just and right irrespective of the characterization of any item of property as community or separate is erroneous as a matter of law.
We therefore sustain Maureen's first and second issues. Because of our resolution of theses issues, it is unnecessary for us to reach Maureen's third issue, that the trial court erred in failing to make findings of fact and conclusions of law regarding the values of the disputed retirement benefits.
CONCLUSION
In summary, we find that the trial court abused its discretion in finding that the post-divorce DROP credits and the other disputed benefits were Paul's separate property. All of these benefits, to the extent they were earned during the marriage, were community property and subject to division. However, increases in the DROP account from Paul's contributions from his current salary remain his separate property, which Maureen does not challenge. Finally, designating these retirement benefits as separate, rather than community, materially affected the property division, making it manifestly unfair and unjust.
For these reasons, the trial court's judgment is reversed and remanded for further proceedings in accordance with this opinion.
NOTES
[1] The retirement plan makes available a "13th annual payment" in an amount equal to "the last monthly payment received by the retiree or survivor before issuance of the payment," when the plan meets certain financial criteria. See Tex.Rev.Civ. Stat. art. 6243g-4, § 12(e).
[2] The retirement plan includes a provision for a monthly payment of a specified amount that is intended to defray the retired member's group medical insurance costs. See TEX.REV. CIV. STAT. art. 6243g-4, § 12(d).
[3] The retirement benefits include a "one-time lump-sum payment of $5,000 at the same time the first monthly pension payment is made" for eligible members. See TEX.REV.CIV. STAT. art. 6243g-4, § 12(b).
[4] Maureen makes no claim that the community has any interest in the contribution deducted from Paul's salary that is placed into the DROP account post-divorce.
[5] Maureen has a third issue that we do not reach because of our resolution of the first two issues.
[6] "Separation from service" is defined as "cessation of work for the police department of a city subject to this article, whether caused by death, discharge, resignation, or transfer to an unclassified position." TEX.REV.CIV. STAT. art. 6243g-4, § 2(20).
[7] The "DROP benefit" is defined as "the total amount credited to a member's notional DROP account, payable as described by this section, plus a monthly retirement pension." See id. § 14(a).
[8] The HPOPS booklet explains how DROP works as follows:
The DROP decision enables the member to receive a `reduced' annuity and a lump sum distribution at the time the member terminates employment as a classified police officer with the City of Houston Police Department. A `reduced annuity' means that the member's pension benefit is frozen at the time DROP is elected ... The member's monthly benefit is frozen as of his/her DROP entrance date, regardless of how long he/she continues to be employed as a classified police officer of the City of Houston Police Department. Following the DROP election, the member does not accrue additional service credit. Increases in pay that occur on or after the effective date of the DROP election may not be used in computing the member's monthly service pension. However, a member's monthly DROP benefit does receive cost of living adjustments that occur on or after the DROP date that would be applicable to pension payments.
(emphasis in original).
[9] Although this issue appears to be one of first impression in Texas, our conclusion is shared by at least one other state court. In Bailey v. Bailey, 708 So. 2d 354 (La.1998), the Louisiana Supreme Court held that the trial court erred in characterizing post-divorce DROP credits in the Louisiana State Employee's Retirement System (LASERS) as the husband's separate property. See id. at 358-59. There, as here, the husband was married when he entered the DROP program, and continued to be married during part, but not all, of his participation in the program. In reaching its conclusion that all of the funds credited into the husband's DROP account were apportionable between the community and separate estates, the court reasoned:
If Mr. Bailey had actually retired on the date he entered the DROP program, Mrs. Bailey clearly would have had the right to share, in the stipulated percentage, in the retirement benefits he would have received. The fact that the same amount of monthly retirement benefits was credited to a deferred-receipt account under a fictitious retirement for a specific temporary period should not change that result.
...
But just as Mrs. Bailey is entitled to her Sims [v. Sims, 358 So. 2d 919 (La.1978)] formula percentage of Mr. Bailey's base benefits he will receive upon retirement, she also is entitled to the same percentage of his DROP account, inasmuch as both the base retirement benefits and the funds in the DROP account are attributable to Mr. Bailey's employment and retirement contributions prior to the termination of the community.
Id. at 358. Although some aspects of the LASERS DROP program differ from the HPOPS DROP program, most notably that a member may not participate in DROP for more than three years, see id. at 356, the similarities of the plans render the Bailey court's reasoning persuasive.
[10] At oral argument, Paul explained that he conceded that the $5,000 lump-sum payment is not entirely his separate property because the only requirement to receive it is that the member have worked at least twenty years. However, this seems to be a distinction without a difference, because that appears to be the only requirement to be eligible to participate in the DROP as well. See TEX.REV.CIV. STAT. art. 6243g-4, § 14(b) ("An active member who has at least 20 years of service with the police department may file with the pension system an irrevocable election to participate in DROP and receive a DROP benefit instead of the standard form of pension provided by this article."). Nor do we think it is significant that section 14 does not mention the payment, because the statutory scheme specifically provides that the payment is made upon separation from service and at the same time the first monthly pension payment is made; thus, it is unnecessary to "park" the payment in a DROP account. See id. § 12(b).
[11] Although neither party addresses this in their briefs, it appears from our review of the record that the HPOPS administrators reject the disputed benefits on the basis of Government Code section 804.003(g)(7), which provides that a public retirement system may reject a domestic relations order as a qualified domestic relations order unless the order "does not purport to award any future benefit increases that are provided or required by the legislature." See Tex. Gov't Code § 803.003(g)(7). They apparently take the position that the disputed benefits are "future benefit increases," and, therefore, they have the discretion to refuse to qualify an order dividing them. We do not address this position.
[12] We further note that, although Maureen is entitled to her percentage of the community interest in the DROP, she is not entitled to actually receive the payments until Paul retires or otherwise separates from service. At that time, the balance of the DROP account (less Paul's separate contributions from his salary post-divorce and any earnings thereon) can be divided and distributed in accordance with HPOPS' procedures.
[13] This amount is determined by multiplying the current monthly pension amount of $2,177 by twelve for a total of $26,124 per year, and then multiplying $26,124 by the community's 80.11% interest for a total of $20,927. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623058/ | 569 So. 2d 1197 (1990)
James E. QUICK
v.
STATE of Mississippi.
No. 07-KA-59182.
Supreme Court of Mississippi.
October 24, 1990.
*1198 Michael W. Crosby, George F. Bloss, III, P.A., Gulfport, for appellant.
Mike C. Moore, Atty. Gen., Charles W. Maris, Jr., Sp. Asst. Atty. Gen., Jackson, for appellee.
Before HAWKINS, P.J., and ANDERSON and BLASS, JJ.
BLASS, Justice, for the Court:
In this case, the appellant, James E. Quick, was indicted in Pearl River County, Mississippi, in August of 1987, for aggravated assault, specifically charging the violation of Miss. Code Ann. § 97-3-7(2)(b) in that he
did willfully, unlawfully, feloniously, purposely and knowingly commit an aggravated assault upon one Gene Baker, a human being, with a deadly weapon, to-wit: a handgun, and did then and there wilfully, unlawfully, feloniously and knowingly cause bodily injury to the said Gene Baker, with the deadly weapon aforesaid, by then and there shooting and injuring the said Gene Baker with the said handgun, contrary to and in violation of § 97-3-7(2)(b) of Mississippi Code of 1972, as amended.
On the morning of the trial, the state moved to amend the indictment to charge, after the word "knowingly" the following:
intentionally or recklessly under circumstances manifesting extreme indifference to the value of human life contrary to § 97-3-7(2)(a) and (b) of Mississippi Code of 1972, as amended.
The record discloses no order allowing the amendment, but the jury instructions *1199 were changed by interlineation to reflect the language of the requested instruction. Having been convicted of aggravated assault, the defendant has appealed to this Court complaining, among other things, that he was convicted for an offense for which he had not been indicted. He phrases his complaint slightly differently, but that is its effect. We agree and reverse for that reason.
He complains, also, that his right to remain silent, after the Miranda warnings were given, was violated in that the prosecutor was allowed to ask him, during the trial, whether he made certain complaints or explanations to the officer who had arrested and brought him to the courthouse. The record does not disclose what was said at the bench conference at which this matter was discussed following the objection made by defense counsel, and we will not address the matter further than to say that an accused person who has been given the Miranda warnings is not obliged to answer any questions or to make any explanation. The accused need not invoke the presence of counsel in order to obtain the benefits of these rights. It is improper and, ordinarily, reversible error to comment on the accused's post-Miranda silence. The accused's right to be silent then is equally as strong as the right not to testify and it is error to comment on either. Certainly it is improper to inquire of the defendant as to whether he made any protest or explanation to the arresting officers. See e.g., Austin v. State, 384 So. 2d 600, 601 (Miss. 1980) (citing Miranda v. Arizona, 384 U.S. 436, 86 S. Ct. 1602, 16 L. Ed. 2d 694 (1966) and Doyle v. Ohio, 426 U.S. 610, 96 S. Ct. 2240, 49 L. Ed. 2d 91 (1976)).
The appellant's third point is that the verdict was against the overwhelming weight of the evidence. We will not go into that point in any detail except to say that it is certainly and clearly true that the evidence of any guilt on the part of the defendant was not overwhelming.
The facts in this case disclose a tragic, involved, and dramatic situation in the lives of the unfortunate families here involved. Inasmuch as the case must be reversed on purely legal grounds and inasmuch as the legal issues can be clearly understood without a recitation of the facts, we shall not record them here, but will proceed immediately to the decisive issues of the case.
Art. 3, sec. 27 of the Mississippi Constitution requires an indictment before the prosecution for felonies, except in cases arising in the land or Naval forces, or the military when in actual service. State v. Sansome, 133 Miss. 428, 97 So. 753 (1923). This provision has been in each of the constitutions which the people of the State of Mississippi have established. It is very clear that, from the beginning, the people of Mississippi have ordained that they not be prosecuted for felonies except upon the indictment by a grand jury. It has been the law since 1858 that the court has no power to amend an indictment as to the matter of substance without the concurrence of the grand jury by whom it was found, although amendments as to mere informalities may be made by the court. McGuire v. State, 35 Miss. 366 (1858). See also Miller v. State, 53 Miss. 403 (1876); Peebles v. State, 55 Miss. 434 (1877); Blumenberg v. State, 55 Miss. 528 (1878). It is refreshing to be able to cite authorities from the last century, and, indeed, from the annotations under the constitutional section and to experience the rare and unusual assurance that, in some ways, the law changes slowly or not at all. Later cases cited by the appellant include Van Norman v. State, 365 So. 2d 644 (Miss. 1978) and Kemp v. State, 121 Miss. 580, 83 So. 744 (1920). These cases clearly support the rule above quoted that the state can prosecute only on the indictment returned by the grand jury and that the court has no authority to modify or amend the indictment in any material respect.
We hold here that when the grand jury returned this indictment under subsection (b), requiring purposeful and wilfull and knowing actions, that stated the charge upon which this defendant could be tried. When the proposed amendment was offered to allow the jury to convict under section (a) of the statute to include recklessly *1200 causing serious bodily injury under circumstances manifesting extreme indifference to the value of human life, this proposed a change of substance and not of form. There can be no doubt that the jury acted under the language contained in the proposed amendment because it inquired of the court, after it had retired, as to the meaning of that language. Further, the trial court had some difficulty with the matter, and commented as follows:
This court does have some problem with this issue in that the indictment not only charged the offense of aggravated assault but it charged the particular method and factual situation behind such charge. The factual situation did not have any reference to reckless indifference and the indictment even spelled out the violation being charged as coming under the Section 97-3-7(2)(b) of the Mississippi Code. This Section does not cover reckless indifference which, in fact, is covered by a completely different subsection.
The jury instruction S-3 and D-1 instructed that recklessly under circumstances manifesting extreme indifference was an aggravated assault and it became an element of the crime charged even though it was not contained in the indictment. This court is aware that the defense was surprised and caught off guard with the reckless indifference issue. Additionally, during its deliberations, the jury did request further instructions on the reckless indifference issue and this court sent in an additional instruction on the issue. This issue was the apparent basis in the jury's mind for the conviction.
This court does have reservations about this particular issue.
It is true that the record contains no order indicating an approval of the amendment and actually ordering that the indictment be amended. The instructions as given, however, clearly reflect the new element which was not contained in the original indictment and, as noted above by the trial court, it was evidently this part of the instruction upon which the jury returned its verdict. Under these circumstances we have no alternative but to reverse and remand for further proceedings consistent with this opinion.
REVERSED AND REMANDED FOR FURTHER PROCEEDINGS CONSISTENT WITH THIS OPINION.
ROY NOBLE LEE, C.J., HAWKINS and DAN M. LEE, P.JJ., and PRATHER, ROBERTSON, SULLIVAN, ANDERSON and PITTMAN, JJ., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623079/ | 609 S.W.2d 782 (1980)
Donald Ray MORRIS, Appellant,
v.
The STATE of Texas, Appellee.
No. 62737.
Court of Criminal Appeals of Texas, Panel No. 1.
November 12, 1980.
Rehearing Denied January 14, 1981.
*783 Malcolm Dade, Dallas, Mack Barnhart, Gainesville, for appellant.
Jerry Spencer Davis, Dist. Atty., Greenville, Robert Huttash, State's Atty., Austin, for the State.
Before ONION, P. J., and DOUGLAS and TOM G. DAVIS, JJ.
OPINION
TOM G. DAVIS, Judge.
Appeal is taken from a conviction for aggravated robbery. After the jury found appellant guilty, the court assessed punishment at thirty-five years.
In his first ground of error, appellant maintains that the court's charge to the jury is fundamentally defective because it authorized a conviction on a theory not alleged in the indictment. Appellant filed a written objection to the court's charge which complained of "the use of the words `threaten or' ... for the reason that it permits [a] conviction on a theory not alleged in the indictment." The objection was overruled.
The indictment in this case alleges that on September 17, 1976, appellant:
"did then and there while in the course of committing theft and with intent to obtain property of Mary Lou Anderson, to-wit: lawful money of the United States, without the effective consent of the said Mary Lou Anderson and with intent to deprive the said Mary Lou Anderson of said property, did then and there by using and exhibiting a deadly weapon, to-wit: a gun, intentionally and knowingly place Mary Lou Anderson in fear of imminent bodily injury," (Emphasis added).
In applying the law to the facts of the case, the court charged the jury in the following manner:
"Now, if you find from the evidence, beyond a reasonable doubt, that the defendant, DONALD RAY MORRIS, acting either alone or with another person, or persons, on or about the 17th day of September, 1975, in Hunt County, Texas, did then and there while in the course of committing theft, as that term is defined to you in this charge, and with intent to obtain or maintain control of the property of Mary Lou Anderson to-wit: lawful money of the United States without the effective consent of the said Mary Lou Anderson, of said property, did then and there intentionally or knowingly threaten or place the said Mary Lou Anderson in fear of imminent bodily injury or death, and if you further find from the evidence beyond a reasonable doubt that in so doing the foregoing acts, if you do so find, the defendant, acting either alone or with another person or persons, used or exhibited a deadly weapon, namely a firearm, then, you will find the defendant, DONALD RAY MORRIS guilty of aggravated robbery, as charged in the indictment. If you do not so find and believe from the evidence, beyond a reasonable doubt, then, you will find the defendant not guilty of aggravated robbery." (Emphasis added).
When the court's charge authorizes a conviction on a theory not alleged in the indictment, the charge is fundamentally defective and reversal is mandated on direct appeal. Gonzales v. State, Tex.Cr.App., 578 S.W.2d 736; Gooden v. State, Tex.Cr.App., 576 S.W.2d 382; Robinson v. State, Tex.Cr. App., 553 S.W.2d 371. In Lee v. State, Tex.Cr.App., 577 S.W.2d 736, this Court found fundamental error in the court's charge to the jury and we stated as follows:
"The indictment alleged, inter alia, that appellant committed aggravated robbery by using and exhibiting a handgun and by placing the complaining witness in fear of imminent bodily injury and death. The jury charge, in contrast, authorized a conviction if appellant either threatened or placed the complaining witness in fear of imminent bodily injury or death. This constituted an enlargement upon the allegations in the indictment since it authorized the jury to convict appellant upon finding facts that had not been alleged. See, V.T.C.A., Penal Code Sec. 29.02(a)(2). It is now well established that such error is fundamental...."
*784 The State's reliance on Cumbie v. State, Tex.Cr.App., 578 S.W.2d 732, is misplaced. In that case, we found no fundamental error in the court's charge adding the words "or death" to the allegation of the indictment that the defendant threatened and placed the complainants in fear of imminent bodily injury. In Cumbie, Lee v. State, supra, was specifically noted as an example of the type of case in which the charge authorizes a conviction on a theory alleged in the indictment and on one or more other theories not alleged in the indictment. The defect of such a jury charge is that it permits a conviction on proof different from and sometimes less than that required to prove the allegations in the indictment. Cumbie v. State, supra at 734.
Appellant's indictment alleges that he placed the complainant in fear of imminent bodily injury, however the charge authorized a conviction if the jury found that he threatened or placed the complainant in fear of imminent bodily injury. The charge therefore permitted a conviction on proof different from that required to prove the allegations of the indictment. We find the court's charge to be fundamentally defective.
The judgment is reversed and the cause is remanded.
DOUGLAS, J., dissents.
ON DENIAL OF STATE'S MOTION FOR LEAVE TO FILE MOTION FOR REHEARING WITHOUT WRITTEN OPINION
McCORMICK, Judge, concurring.
The panel decision goes beyond the necessary steps for the disposition of appellant's ground of error. I concur in denial of the State's motion for rehearing to clarify what should be the correct resolution.
Reiterating the panel opinion, appellant did file a written objection to the court's charge. Appellant complained that "the use of the words `threaten or' ... permits [a] conviction on a theory not alleged in the indictment." The objection was overruled.
This Court has previously held that a charge authorizing a conviction upon a theory not alleged in the indictment is erroneous. Dowden v. State, 537 S.W.2d 5 (Tex. Cr.App.1976). When an objection to the charge is not made, the error should be waived. Williams v. State, 535 S.W.2d 352 (Tex.Cr.App.1976); see Gooden v. State, 576 S.W.2d 382 (Tex.Cr.App.1979) (Dally, J., concurring). However, failure of the trial court to sustain a proper objection that the charge includes an offense not alleged in the indictment is reversible error. Walton v. State, 575 S.W.2d 25 (Tex.Cr.App.1978); Dowden v. State, supra; see Dirck v. State, 579 S.W.2d 198 (Tex.Cr.App.1979) (opinion on appellant's motion for rehearing).
I would reverse the judgment, holding that the appellant properly objected to the erroneous charge. I cannot follow the panel's opinion that the charge was fundamentally defective. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623149/ | 569 So. 2d 203 (1990)
Rose Mary PINES[1] and Lisa Pines, in her individual capacity and as tutrix for Roshondra Pines
v.
DR. CARLOS D. MORENO, INC. (A Professional Medical Corporation), d/b/a Hammond Diagnostic Clinic, Carlos D. Moreno, M.D., Glenda Solomon, Owen D. Linder, M.D., Gibraltor Insurance Company and Louisiana Medical Malpractice Insurance Company.
No. 89 CA 1147.
Court of Appeal of Louisiana, First Circuit.
October 16, 1990.
*204 Trevor G. Bryan, New Orleans, for plaintiffs-appellants Rosemary Pines, et al.
Franklin D. Beahm, New Orleans, for defendant-appellee Dr. Carlos Moreno.
John Litchfield, New Orleans, for defendant-appellee Dr. Owen Linder.
Before EDWARDS, WATKINS and LeBLANC, JJ.
WATKINS, Judge.
Plaintiff, Lisa Pines, filed this medical malpractice suit individually and on behalf of her minor daughter, Roshondra[2] Pines, seeking damages against defendants Dr. Carlos D. Moreno, Inc., Dr. Carlos D. Moreno, Glenda Solomon, Dr. Owen Linder, Louisiana Medical Mutual Insurance Company (LAMMICO), and Prudential Property and Casualty Insurance Company, for failure to diagnose her pregnancy. Plaintiff alleges that this failure prevented her from considering the option of aborting the fetus, which was afflicted with Cornelia DeLange Syndrome. Plaintiff also alleges that defendants' failure to diagnose her pregnancy denied her the opportunity to provide proper prenatal care, leading to the aggravation of the child's Cornelia DeLange Syndrome, or alternatively causing independent mental and physical retardation.
FACTS
Plaintiff's petition alleges that on March 12, 1982, she was taken by her mother to the Hammond Diagnostic Clinic[3] for a suspected pregnancy. She alleges that during her visit to the clinic she was examined by staff nurses and by Dr. Owen Linder;[4] however, no pelvic examination was performed. Furthermore, she contends that during her clinic visit a urine pregnancy *205 test, which read negative, was negligently performed by Glenda Solomon, a laboratory technician employed by the clinic. Plaintiff was informed by Dr. Linder that she was not pregnant and was given a new prescription for birth control pills. Plaintiff's third amending petition alleges that at the time she visited the clinic she was in fact pregnant with a fetus that was not viable. On May 1, 1982, plaintiff gave premature birth to Roshondra Pines, at the Lallie Kemp Charity Hospital. Roshondra Pines was born with the congenital birth defect known as Cornelia DeLange Syndrome.
Plaintiff's third amending petition also contains the following pertinent allegations:
XXC.
Under the circumstances of the lack of pre-natal [sic] care, the use of birth control pills during early pregnancy and the defects that could be observed with an ultrasound, the standard of care would have been to advise plaintiff Lisa Pines of the risk of deformity presented to the fetus and plaintiff would have been granted the option to terminate the pregnancy, which she would have chosen to do had she been advised of her pregnancy and the risk of a defective offspring.
. . . . .
XXI.
In the alternative, should this court find that defendants were not liable to plaintiffs for their failure to advise plaintiff of her pregnancy and the options she faced considering the likelihood of a defective offspring or refer her to a specialist who would properly advise her, defendants are nonetheless liable to plaintiff for failing to diagnose the pregnancy and failing to advise plaintiff to obtain proper pre-natal [sic] care. Said failure to provide proper pre-natal [sic] care aggravated the mental and physical retardation of Rashondra Pines which is associated with the congenital abnormality of Cornelia DeLange Syndrome.
. . . . .
XXVII.
Defendants had a duty to properly diagnose the pregnancy and advise Lisa Pines of it and that duty was owed to both plaintiffs Lisa Pines and Roshondra Pines, the failure to perform which duty led to the foreseeable consequence of an unwanted pregnancy and the birth of a severely physically and mentally retarded child which foreseeably places a severe burden on the financial, physical and emotional wherewithal of both parties above and beyond that ordinarily encountered in the rearing of a normal child into adulthood and the passage of life from adulthood to death.
Lisa Pines seeks damages individually for expenses incurred during pregnancy and delivery, pain and suffering, emotional and mental distress associated with the birth of an unplanned and unwanted child, economic costs of rearing a handicapped child, loss of society and companionship and mental pain and suffering associated with the rearing of and caring for a severely deformed and retarded child. Lisa Pines seeks damages on behalf of Roshondra for medical expenses, vocational training expenses, loss of earning capacity, expenses for institutional care, physical pain and suffering, and mental pain and suffering associated with her handicap.
The defendants filed an exception of no cause of action which the trial court sustained in part. The court gave the following pertinent reasons for its decision:
A.
The petition does not state a cause of action, under the Pitre decision, [Pitre v. Opelousas General Hosp., 530 So. 2d 1151 (La.1988)] on behalf of Lisa Pines, for the loss of society and companionship with her daughter;
B.
The petition under Pitre, does not state a cause of action on behalf of Lisa Pines for any general medical expenses, or any general claims for mental anguish, based on the birth of a child with a *206 deformity, unless plaintiff can prove that the Cornelia de Lange [sic] Syndrome could have been properly diagnosed by defendants as of the time of Lisa Pines' consultation and could have been mitigated, or minimized through proper medical treatment if a correct diagnosis of the congenital defect could have been reasonably made at the time of such consultation;
C.
The petition does not state a cause of action, under Pitre, as to any claims of Roshondra Pines for loss of future earning capacity;
D.
The petition does not set forth a cause of action, under Pitre, on behalf of Rashondra Pines for any general claim for pain and suffering, permanent disability and disfigurement, or future medical expenses, unless it can be established that Cornelia de Lange Syndrome could be diagnosed and the effects eliminated, mitigated, or minimized, through reasonable medical treatment as of the date of consultation of Lisa Pines with defendants;
E.
The petition does not state a cause of action, under Pitre, and under the provisions of R.S. 40:1299.35.4(A) on behalf of Lisa Pines (if any is in fact claimed in the pleadings) for any consequential damages of any nature to which she may claim to be entitled on the basis of a decision to abort the fetus, had a proper diagnosis of pregnancy been made at the time of her consultation with defendant.
The plaintiff appealed, alleging the trial court erred in granting the defendants' exception of no cause of action with respect to certain portions of the damages or demand claimed by the plaintiff. We agree.
EXCEPTION OF NO CAUSE OF ACTION
The peremptory exception of no cause of action tests the legal sufficiency of the pleadings. "When a petition states a cause of action as to any ground or portion of the demand, the exception of no cause of action must be overruled." Rodriguez v. American Bankers Insurance Co. of Fla., 386 So. 2d 652 (La.1980), citing Hero Lands Co. v. Texaco, Inc., 310 So. 2d 93 (La.1975).
The Rodriguez court explained that:
The purpose of the rule is to prevent multiple appeals. The trial court's ruling in this case is a final judgment which creates the right of appeal as to only part of plaintiff's cause of action and forces the intermediate court to consider the merits of that cause of action in a piecemeal fashion. The preferable procedure is for the trial court to overrule the exception and at the trial on the merits to exclude evidence of damages ... it (sic) the court believes such damages are not recoverable. Relator can then include the evidence by means of a proffer, and in any subsequent appeal all issues can be presented at one time.
Rodriguez, 386 So.2d at 652-53.
The defendant contends that partial exceptions of no cause of action are permissible where the petition sets forth separate and distinct causes of action. Defendant cites Bordelon v. Cochrane, 533 So. 2d 82 (La.App.3d Cir.1988), writ denied, 536 So. 2d 1255 (La.1989), in support of his argument. See also Bellah v. State Farm Fire & Cas. Ins., 546 So. 2d 601 (La.App.3d Cir.1989), and City of Natchitoches v. State, 221 So. 2d 534 (La.App.3d Cir.), writs denied, 254 La. 463 and 464, 223 So. 2d 870 (1969). This court has declined to follow this jurisprudential rule. Miller v. McDonald's Corporation, 415 So. 2d 418 (La. App. 1st Cir.1982), appeal after remand, 439 So. 2d 561 (La.App. 1st Cir.1983), writ not considered, 442 So. 2d 462 (La.1983). Instead, we adhere to the rule that if one portion of a petition asserts a cause of action, none of the other causes of action may be dismissed on an exception of no *207 cause of action. E. Lionel Pavlo Engineering Co. v. State, 429 So. 2d 454 (La. App. 1st Cir.1983).[5]
In reviewing a judgment on an exception of no cause of action, an appellate court must accept as true all well pleaded allegations of the plaintiff. Every reasonable interpretation must be accorded its language in favor of maintaining the sufficiency of the petition and affording the litigant an opportunity to present his evidence. LSA-C.C.P. 931; Haskins v. Clary, 346 So. 2d 193 (La.1977).
We must, therefore, accept as true the plaintiff's allegations that defendants were guilty of negligence that in fact caused the damages. Thus, our inquiry is whether defendants owed a duty of reasonable care to the plaintiffs and whether their negligence was a legal cause of the damage done to each of the plaintiffs' interest that was injured. Pitre v. Opelousas General Hospital, 530 So. 2d 1151 (La.1988).
From the facts alleged, it appears that plaintiffs' petition sets forth four causes of action[6] involving the misdiagnosis of Lisa Pines' pregnancy. Additionally, the petition seeks numerous associated damages which plaintiff alleges are consequences of the negligent misdiagnosis of her pregnancy. The various causes of action can be described as follows: (1) a "wrongful birth" claim on behalf of Lisa Pines; (2) a "wrongful life" claim on behalf of Roshondra Pines; (3) an ordinary negligence (malpractice) claim on behalf of Lisa Pines for her own injuries and for the prenatal injuries caused to Roshondra by the direct negligence of defendants; (4) an ordinary negligence (malpractice) claim on behalf of Roshondra for the prenatal injuries caused to Roshondra by the direct negligence of defendants.
In the instant case the trial court apparently found that the plaintiff's petition, upon proper proof, did allege a cause of action with regard to the direct negligence claims of both Lisa Pines and Roshondra Pines as discussed in numbers three and four of the preceding paragraph. However, the court sustained defendants' exception of no cause of action as to Lisa Pines' "wrongful birth" claim and Roshondra Pines' "wrongful life" claim. The trial court cited the recent Supreme Court decision in Pitre in support of its ruling.
In Pitre the plaintiffs, Mr. and Mrs. Pitre, filed a wrongful birth claim on their own behalf and a wrongful life claim on behalf of their child who was conceived after a failed tubal ligation, a fact of which the physician allegedly was aware, and the child was thereafter born with albinism. The plaintiffs did not allege that the defendant-physician knew or should have known *208 of the risk that the child would be born with albinism.
The Pitre court concluded that the defendant-physician owed a duty to the Pitres to exercise the degree of care ordinarily exercised by surgeons performing such operations in that specialty. Moreover, if the physician was aware of the failure of the operation, he owed a duty to the Pitres to inform them that the object of sterilization had not been attained. The court went on to state in dicta that "[f]urthermore, there is now quite general agreement that a doctor who negligently fails directly to prevent the conception or birth of an unwanted child, as by negligently performing a sterilization or abortion procedure, or by failing to diagnose or inform the parents that the child might be born with a birth defectbecause of a disease or genetic conditionbreaches his duty of care owed to the parents." Pitre at 1157. (Emphasis added.)
Although the Pitre court concluded provisionally that the physician owed no duty to protect the child from the risk of albinism, the court refused to accept a categorical denial of any duty on the part of a physician to protect an unconceived child from being born with a birth defect. Instead, the court concluded that "[w]hen a physician knows or should know of the existence of an unreasonable risk that a child will be born with a birth defect, he owes a duty to the unconceived child as well as to its parents to exercise reasonable care in warning the potential parents and in assisting them to avoid the conception of the deformed child." Pitre, 530 So. 2d 1157.[7]
Once the court establishes that a duty is in fact owed by the defendant to the plaintiff, the court must then concern itself with whether the doctor's negligence was a legal cause of the damage to the parent or child and, if so, the kind and the extent of damage to be attributed to the physician. Pitre, 530 So. 2d 1151. After considering various rules and policy considerations the Pitre court concluded that:
[A]s a general principle, ... the same criterion of foreseeability and risk of harm which determined whether a physician in this kind of situation was negligent in the first instance should determine the extent of his liability for that negligence; and that the doctor should not be held liable for consequences which no reasonable practitioner would expect to follow from the conduct. In accordance with the almost universal rule, however, the physician shall be liable for all resulting harm to the person caused by a negligent physical impact upon the person of the plaintiff. Likewise, in accordance with the general rule, and by analogy to our civil code articles governing contractual damages, a physician who intentionally, recklessly or in bad faith violates his legal duty shall be liable for all damages, foreseeable or not, that are a direct consequence of his breach of obligation. (Emphasis added.)
Pitre, 530 So. 2d 1161.
Applying these rules to the alleged damages, the Pitre court found that the parents, upon proper proof, might recover for the expenses incurred during pregnancy and delivery, the mother's pain and suffering, the father's loss of consortium, service, and society, their emotional and mental distress associated with the birth of an unplanned and unwanted child, and the unexpected restriction on their freedom to plan their family. These damages were deemed to be foreseeable consequences of the physician's alleged negligent acts and omissions. On the other hand, the court concluded that the parents could not recover for the special expenses regarding the child's albinism or for their emotional and mental distress associated with the child's deformity because the damages were not consequences that a reasonable practioner would expect to follow from the alleged *209 conduct.[8] The court based this decision in part on its knowledge of the congenital disorder of albinism and its apparent undetectability, reasoning that it could not infer that the physician reasonably could have foreseen an unreasonable risk of that birth defect.[9] The court, however, granted the parents leave to amend their petition to remove this deficiency.
In the instant case we find no error in the trial court's ruling that the plaintiff's original and amending petitions state a cause of action for direct negligence on behalf of Lisa Pines and Roshondra Pines. Although Roshondra Pines was born with the apparently unpreventable congenital defect, Cornelia DeLange Syndrome, the plaintiff's petition alleges that the improper diagnosis by Dr. Linder and the prescription for birth control pills which she took during her pregnancy contributed to or aggravated Roshondra's existing deformities. Apparently, plaintiff Lisa Pines does not contend that the malpractice directly caused the Cornelia DeLange Syndrome, but caused only an aggravation of the disease. Under these circumstances, it is clear that the defendants owed both Lisa and Roshondra a duty to properly diagnose the pregnancy and to recommend proper prenatal treatment. The duty to correctly diagnose a pregnancy encompasses the foreseeable risk that the unborn child will be affected by improper prenatal care. The defendants are therefore responsible for any damages associated with the foreseeable consequences of misdiagnosing a pregnancy, which consequences include foreseeable injuries caused to the fetus because of lack of proper prenatal care from the point of misdiagnosis, and the foreseeable injuries sustained by the parent because of the injuries to the child, including damages for loss of consortium, and mental pain and suffering.[10]
Because each plaintiff has stated at least one cause of action, the trial court erred in sustaining defendant's exception of no cause of action. Accordingly, the judgment of the trial court is reversed and the matter is remanded for further proceedings. Costs will await final disposition of this matter.
REVERSED AND REMANDED.
NOTES
[1] Rose Mary Pines, the mother of Lisa Pines, originally filed suit individually and on behalf of Lisa Pines and her granddaughter, Roshondra Pines. However, Rose Mary Pines was dismissed from the suit pursuant to an exception of lack of procedural capacity and no right of action.
[2] The various pleadings reflect the name of the minor as being spelled Roshondra and Roshondria. We have elected to use Roshondra except in those instances where we are citing quoted material.
[3] Dr. Carlos D. Moreno, Inc., is a professional medical corporation doing business as Hammond Diagnostic Clinic.
[4] Dr. Linder was hired by Dr. Moreno as a substitute physician for two weeks while Dr. Moreno was absent.
[5] In McGowan v. Ramey, 484 So. 2d 785 (La. App. 1st Cir.1986), this court found that only one unfair trade practice cause of action had been alleged, and that the exception of no cause of action was directed at an accessory claim for one of the several elements of relief sought. We held that the said exception is not the proper procedural device to eliminate an isolated claim of relief from consideration by the court and/or jury.
[6] The various causes of action in this type of case have often been characterized by special legal nomenclature. The most commonly accepted terminology seems to be as follows.
A wrongful pregnancy or wrongful conception action involves a suit brought by the parents of a healthy, but unexpected, unplanned, or unwanted child for negligence leading to conception of pregnancy. (I.e. The parents allege that the negligent performance of a sterilization technique caused the conception of the unplanned child.) In a wrongful birth action, parents claim they would have avoided conception or terminated the pregnancy if they had been informed of the risk of birth defects to the child. In wrongful birth actions, the child's impairment is due to a genetic trait or to the mother's suffering from a disease such as rubella during pregnancy, in contrast to prenatal injury actions where harm to an embryo, fetus, or pregnant woman causes what otherwise would have been a healthy child to be born in an impaired state. A wrongful life action is brought by or on behalf of the child for negligence causing him to endure life in the afflicted condition. In such actions there is no allegation that the physician's negligence directly caused the defect. Rather, it is alleged that the physician's negligent practice or failure to properly advise the parents has led to the birth of the child in the afflicted condition. Pitre v. Opelousas General Hospital, 530 So. 2d 1151; Comment, Wrongful Life: Should the Action be Allowed? 1987, 47 L.L.R. 1319.
[7] The court noted that the plaintiff's petition did not contain any allegation that the defendant physician knew or should have known of the risk of albinism. However, the court dismissed the child's suit provisionally, with leave to amend the petition within thirty days to state a cause of action.
[8] In addition the court held that the parents could not recover for the economic costs of rearing an unplanned and unwanted child.
[9] The court's reasoning for refusing to permit the recovery of the special expenses, and emotional pain and suffering associated with the birth defect implies that these damages may be recoverable upon proper allegations of knowledge on the part of the physician and the requisite forseeability.
[10] See Lejeune v. Rayne Branch Hosp., 539 So. 2d 849 (La.App. 3d Cir.1989), affirmed, 556 So. 2d 559 (La.1990). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623160/ | 569 So. 2d 895 (1990)
GOOD SAMARITAN HOSPITAL, INC., for the Use and Benefit of the Florida Hospital Trust Fund and the Florida Hospital Excess Trust Fund B, Petitioners,
v.
AMERICAN HOME PRODUCTS CORPORATION, a Foreign Corporation, and Wyeth Laboratories, Inc., a Foreign Corporation, Respondents.
No. 90-2534.
District Court of Appeal of Florida, Fourth District.
November 14, 1990.
*896 G. Bruce Hill of Adams, Hill, Reis, Adams & Hall, Orlando, for petitioners.
Lamar D. Oxford of Dean, Ringers, Morgan & Lawton, Orlando, for respondents.
PER CURIAM.
We grant petitioners', third-party plaintiffs' petition for writ of certiorari and quash the trial court's order which denied its motion for protective order and compelled discovery of information claimed by petitioners to be protected by a statutory privilege.
In June of 1985, eighteen-month-old Jennifer Malandro underwent a routine operation at Good Samaritan Hospital to prevent recurring ear infections. Her physician ordered the administration of an intramuscular bicillin-LA injection to Jennifer while she was in the recovery room, as a customary measure to stop any ear infections that may have already been in progress. Jennifer experienced a complication from the injection, which was inadvertently injected intra-arterially instead of intramuscularly, and ultimately sustained serious and permanent injuries, including vascular damage necessitating amputation of the lower portion of her right leg. Jennifer's parents brought suit against the Hospital, and the claim was settled by the Hospital and its insurers prior to trial. Subsequently, the Hospital filed a third-party complaint against respondents (the manufacturers and distributors of the bicillin-LA), alleging inter alia that the product was defective and failed to contain sufficient instructions regarding proper administration. Respondents answered and set forth several affirmative defenses, including allegations that the product was misused and that any injury to the patient resulted from the negligence of Hospital employees.
Respondents served a request to produce upon petitioners, asking for "Minutes of the Executive Committee, Pharmacy Committee, and any other committees or organizations that met relative to the use or non-use or discussions about the use or non-use" of bicillin-LA. Petitioners objected to the production and respondents filed a motion to compel, which motion was granted by the trial court on September 26, 1989. Petitioners produced the requested committee meeting minutes. The documents produced included the names of persons who had attended meetings of the Hospital's Pharmacy & Therapeutics Committee and Quality Assurance Committee.
Respondents noticed the taking of depositions duces tecum of several individuals who were named in the committee minutes as having been present at the committee meetings. The deponents were asked to bring with them:
1. Any and all records, notes, memoranda, or other writings pertaining to your involvement with any investigation or inquiry held by Good Samaritan Hospital, Inc. regarding use of Bicillin CR 600,000 units or any other long acting penicillin product at Good Samaritan Hospital, Inc. including, but not limited to, any service or involvement with the Pharmacy & Therapeutics Committee, Quality Assurance Committee, Division of Pediatrics or any other committee associated with Good Samaritan Hospital, Inc.
2. Any reports, records, correspondence and/or writings issued or generated by the Pharmacy & Therapeutics Committee, Quality Assurance Committee, or Division of Pediatrics regarding use of Bicillin CR 600,000 units or any other long acting penicillin at Good Samaritan Hospital, Inc.
3. Committee Meeting Minutes of the Pharmacy & Therapeutics Committee, Quality Assurance Committee, Division of Pediatrics or any other committee or department which you served on at Good Samaritan Hospital, Inc., relating to the use of Bicillin or any other long acting penicillin product.
Petitioners filed a motion for protective order and supporting memorandum, contending that to permit the depositions and production of the requested documents was contrary to a statutory privilege as well as public policy. The trial court compelled *897 production, and the instant petition for writ of certiorari followed.
We conclude that public policy requires the relief sought by petitioners. See Segal v. Roberts, 380 So. 2d 1049 (Fla. 4th DCA 1979), cert. denied, 388 So. 2d 1117 (Fla. 1980). See also Dade County Medical Ass'n v. Hlis, 372 So. 2d 117 (Fla. 3d DCA 1979); HCA of Florida, Inc. v. Cooper, 475 So. 2d 719 (Fla. 1st DCA 1985). We further conclude there has been no waiver by petitioners.
GLICKSTEIN, WALDEN and STONE, JJ., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623173/ | 569 So. 2d 139 (1990)
DEPARTMENT OF PUBLIC SAFETY AND CORRECTIONS, OFFICE OF YOUTH SERVICES
v.
Joseph D. SAVOIE.
No. 89 CA 1690.
Court of Appeal of Louisiana, First Circuit.
October 16, 1990.
*140 Peter J. Giarrusso, Asst. Atty. Gen., Dept. of Justice, Baton Rouge, for appellant.
Daniel M. Landry, III, Lafayette, for appellee.
Robert R. Boland, Jr., Civ. Service Legal Counsel, Dept. of State Civ. Service, Baton Rouge, for Herbert L. Sumrall, Director of the Dept. of State Civ. Service.
Before LOTTINGER and CARTER, JJ., and DOHERTY, J. Pro Tem.
LEWIS S. DOHERTY, III, Judge Pro Tem.[*]
This appeal presents the issue of the correctness of a judgment of a referee, appointed by the Civil Service Commission of the State of Louisiana, which reinstated the plaintiff to his former position after finding that the plaintiff had been denied procedural due process.
FACTS
The Louisiana Department of Public Safety and Corrections, Office of Youth Services Department, employed Joseph D. Savoie as a Juvenile Services Officer II. On April 20, 1988, Kenneth Stewart, Savoie's immediate supervisor, discovered that Savoie was allegedly failing to comply with agency regulations in the performance of his duties as Juvenile Services Officer. That day Stewart met with Savoie to discuss the alleged violations. During this meeting (which was taped by Savoie), Stewart discussed each of the charges with him. After this initial meeting, Stewart returned to his office and typed up five separate Employee Rule Violation Reports (DR-1's). However, Stewart only incorporated on one DR-1 Savoie's responses to that one particular charge.
The following day Stewart brought the written DR-1's to Savoie's office and went over each DR-1 with him. Although Stewart gave Savoie an opportunity to respond, he failed to record any of Savoie's responses on the DR-1 form in the space provided under "Employee Comments." At this time, Stewart informed Savoie that he was recommending termination and that he should hire an attorney. Copies of the DR-1's were subsequently forwarded to the Regional Supervisor, James A. Doucet.
Soon after the second meeting with Stewart, Savoie hired an attorney, and together they drafted a three-page letter, dated April 29, 1988, and delivered it to Doucet. The letter requested a review of the matter, requested additional information regarding the charges, and contained a detailed response to the charges.
Doucet met with Savoie on May 9, 1988. After reviewing each DR-1 with Savoie, Doucet informed him that he concurred with Stewart's disciplinary recommendation. Doucet gave Savoie a chance to respond to the charges, but he also failed to record them. Doucet subsequently forwarded the DR-1's to the appointing authority for review and decision on the matter.[1]
Three days later, on May 12, 1988, Doucet informed Savoie that he was under orders to suspend him, pending additional investigation.
By letter dated May 20, 1988, over the signature of James E. Morris, for Bruce N. Lynn, Secretary of the Department, Savoie was advised that his verbal suspension effective May 13, 1988 was confirmed and that he was being terminated effective May 27, 1988. The letter terminated Savoie for the reasons set forth in the five DR-1's.
Savoie appealed his termination to the Civil Service Commission, and on April 6, 1989, a hearing was held before Bernice R. *141 Pellegrin, a referee appointed by the Civil Service Commission. The referee reinstated Savoie after finding that the Department failed to comply with its own Procedures for Employee Disciplinary Action, and that the Department failed to provide Savoie a "meaningful opportunity" to respond to the charges against him. The referee set forth the following written reasons:
Appellant herein challenges both the sufficiency of the notice provided to him prior to his termination and the adequacy of his opportunity to respond. The evidence establishes that appellant was questioned by Mr. Stewart on April 20, 1988 and that as a result of such questioning, Mr. Stewart wrote up five disciplinary reports (DR-1's). Although Mr. Stewart incorporated some of appellant's answers to the questions propounded on April 20, 1988, in the reports written on April 21, 1988, Mr. Stewart neither recorded appellant's responses to the written reports nor furnished appellant with copies of the written charges, as required by the appointing authority's procedures. Although Mr. Doucet reviewed the DR-1's with appellant and gave appellant an opportunity to respond to him, Mr. Doucet did not provide appellant with the information requested by appellant's attorney, nor did he make a record of appellant's responses. Ultimately, only the charges of misconduct, i.e. the DR-1's, were forwarded to Mr. Riley and to Secretary Lynn's office and a decision to terminate appellant was made without either Mr. Riley or Secretary Lynn being apprised of appellant's responses. Appellant was denied a "meaningful opportunity to invoke the discretion of the decisionmaker" in this case; therefore, appellant was denied due process of law and the termination is void.
The Department, after application for review of the referee's decision was denied by the State Civil Service Commission, perfected a timely appeal to this court.
DISCUSSION
The final decision of the Civil Service Commission is subject to review on any question of law or fact. LSA-Const. Art. 10, § 12. On appellate review, findings of fact of the Commission are not to be overturned in the absence of manifest error. Additionally, a reviewing court should not reverse a Commission's conclusion as to the existence or absence of cause for dismissal unless the decision is arbitrary, capricious or an abuse of the Commission's discretion. However, the judicial review function is not so limited with respect to the Commission's decisions as to jurisdiction, procedure, and interpretation of laws and regulations. Walters v. Dept. of Police of New Orleans, 454 So. 2d 106 (La.1984); LSA-R.S. 49:964(G).
Having set forth the appropriate standard of review, we turn to the issues presented by this appeal.
The due process clause provides that the right to life, liberty, and property cannot be deprived except pursuant to constitutionally adequate procedures. In a public employment context, a due process claim depends upon having a property right in continued comparable employment. Cleveland Board of Education v. Loudermill, 470 U.S. 532, 105 S. Ct. 1487, 84 L. Ed. 2d 494 (1985). From the record, the parties appear to concede that Savoie has attained classified civil service status with the Department; therefore, he possesses a property right of which he cannot be deprived without cause and procedural due process. LSA-Const. Art. 10, § 8(A); Murray v. Department of Revenue and Taxation, 504 So. 2d 561 (La.App. 1st Cir. 1986); writs denied, 504 So. 2d 880, 882, 883 (La.1987). Accordingly, we will only examine what kind of process was due to Savoie.
A.
As a tenured employee, Savoie was entitled to "some kind of hearing." However, the hearing "need not be elaborate." Prior to discharge a public employee is only entitled to oral or written notice of the charges against him, an explanation of the employer's evidence, and an opportunity to present reasons why the proposed action *142 should not be taken. Loudermill, 105 S.Ct. at 1495.
Where the state law provides for a full administrative post-termination hearing and judicial review, the pretermination hearing "need not definitely resolve the propriety of the discharge." Instead, "[i]t should be an initial check against mistaken decisionsessentially, a determination of whether there are reasonable grounds to believe that the charges against the employee are true and support the proposed action." Id. In determining whether a particular pretermination hearing satisfies Loudermill, we must balance the competing interest at stake; namely, "the private interest in retaining employment, the governmental interest in the expeditious removal of unsatisfactory employees and the avoidance of administrative burdens, and the risk of erroneous termination." Id. at 1494.
The referee found that the Department failed to give Savoie adequate notice of the charges against him for two reasons. First, the Department failed to comply with the discovery requested in the letter written by Savoie and his attorney, and second, that one of the DR-1's lacked sufficient detail concerning the charge.
However, as stated above, notice is sufficient if it apprises the employee of the nature of the charges and the general substance of the evidence against him. Loudermill, 105 S.Ct. at 1495; Brock v. Roadway Exp. Inc., 481 U.S. 252, 107 S. Ct. 1740, 1749, 95 L. Ed. 2d 239 (1987); and Gniotek v. City of Philadelphia, 808 F.2d 241 at 244 (3d Cir.1986), writ denied, 481 U.S. 1050, 107 S. Ct. 2183, 95 L. Ed. 2d 839 (1987). On three occasions prior to his discharge, Savoie's supervisors orally reviewed the charges with him. The record reflects that Savoie responded to the charges at all three meetings. Furthermore, the explanation of the charges and evidence made by Stewart at the first two meetings were sufficient to allow Savoie and his attorney to draft a detailed response prior to the third meeting with Doucet. We cannot agree that Savoie was not provided an opportunity to rebut whether there were reasonable grounds to believe that the charges were true and supported the proposed action. To require more would intrude on the substantial governmental interest in quickly removing an unsatisfactory employee and create an unwarranted administrative burden.
B.
The referee also found that Savoie's pretermination due process rights were violated, because he was denied a "meaningful opportunity to invoke the discretion of the decision maker."
In reaching this decision, the referee placed great emphasis on two factors: First, that both Stewart and Doucet had the power only to make disciplinary recommendations, not the power to terminate Savoie; and second, that she believed the failure of the supervisors, Stewart and Doucet, to convey Savoie's remarks to the terminating authority was a violation of Loudermill and the appointing authority's own procedures.
We disagree. When an elaborate post-termination procedure provided by the Louisiana Civil Service Rules is in place, only the barest of a pretermination procedure is required. Risk of an erroneous termination is minimized by the power of the Civil Service Commission to reinstate the employee with back pay. While we appreciate the impulse behind the referee's decision to expand the protections afforded by Loudermill, the language of the opinion itself and the cases interpreting it do not support such a conclusion. See Loudermill v. Cleveland Board of Education, 844 F.2d 304, 311 (6th Cir.1988); writ denied, 488 U.S. 941, 109 S. Ct. 363, 102 L. Ed. 2d 353 and 488 U.S. 946, 109 S. Ct. 377, 102 L. Ed. 2d 365 (rejecting the argument that the employee's remarks must be conveyed to the "ultimate decision-maker"). We find this to be especially true where, as in this case, the department's internal rules provide an opportunity to request a hearing with the terminating authority, and the employee fails to do so. The Department's internal Employee Rules and Disciplinary Procedures provide as follows:
*143 If the employee is still dissatisfied with the final recommendation at the agency level, he may request in writing, within seven (7) days of receipt of the notice from the Unit Head, that the Secretary or his designee conduct a hearing. The request must be accompanied by a copy of the DR-1, the date the employee received a completed copy of the DR-1 from the Unit Head, and the remedy the employee is seeking.
A state should not be held to have violated due process when it has made procedural protection available and the employee has simply refused to avail himself of them.
C.
Although the Department may not have followed its own internal disciplinary procedures, we find that the violations are not of a constitutional dimension. A breach of internal rules violate the constitution only when the procedures promised are denied in such a manner that the constitutional minimum is itself denied or an independent constitutional deprivation is effected. Levitt v. University of Texas, 759 F.2d 1224, 1230 (5th Cir.1985); Franceski v. Plaquemines Parish School Bd., 772 F.2d 197 at 200 (5th Cir.1985); and Brown v. Texas A & M University, 804 F.2d 327, 335 (5th Cir.1986). The facts disclose that Savoie received notice of the charges against him, an explanation of the evidence, and an opportunity to contest the charges. Even if the Department failed to follow its own rules, it nevertheless gave Savoie all he was entitled to under the Constitution.[2]
For the above and foregoing reasons, we conclude the referee reinstated Savoie based upon an erroneous interpretation of Loudermill and progeny. Therefore, the judgment of the referee is REVERSED and the case is REMANDED for a proceeding not inconsistent with this opinion.
REVERSED AND REMANDED.
NOTES
[*] Judge Lewis S. Doherty, III, retired, is serving as judge pro tem by special appointment of the Louisiana Supreme Court to fill the vacancy created by the temporary appointment of Judge Melvin A. Shortess to the Supreme Court.
[1] Even though Doucet testified at the hearing that he forwarded the letter submitted by Savoie and his attorney, the referee found that only the DR-1's were actually sent.
[2] However, this court is troubled over the failure of the Department to follow its own internal rules which affect the rights and liabilities of its employees. The Department's breach of its own internal rules might be a violation of state law. There is a strong public interest in requiring a government agency to follow its own rules and regulations. See Cent. La. Elec. Co. v. La. Pub. Serv. Comm., 377 So. 2d 1188 (La.1979); but cf. Lombas v. Department of Police, 467 So. 2d 1273 (La.App. 4th Cir.), writ denied, 470 So. 2d 120 (1985). Since the question was not properly briefed and argued before the referee, we refrain from deciding this issue. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623345/ | 126 S.W.3d 558 (2003)
TAC REALTY, INC., Appellant,
v.
The CITY OF BRYAN, Texas, and only in their Official Capacities, Jay Don Watson, Michael M. Beal, Paul Madison, Joe Marin, Mitchell P. Morehead, Boyd Sheffield, and Ernest A. Wentrcek, Appellees.
No. 14-02-01002-CV.
Court of Appeals of Texas, Houston (14th Dist.).
November 20, 2003.
Rehearing Overruled February 26, 2004.
*559 W. Jeff Paradowski, Bryan, Jonathan S. Day, Charles Hampton, Houston, for appellant.
Michael John Cosentino, Bryan, for appellees.
Panel consists of Justices YATES, HUDSON, and FROST.
Rehearing Overruled En Banc February 26, 2004.
OPINION
LESLIE BROCK YATES, Justice.
Appellant TAC Realty, Inc. ("TAC") complains of the trial court's dismissal of its case for lack of subject-matter jurisdiction. In response to TAC's lawsuit seeking temporary and permanent injunctive relief to prevent the City of Bryan ("the City")[1] from spending additional funds in furtherance of certain development agreements executed by the City, the City and the individual defendants filed a plea to the jurisdiction asserting TAC does not have standing to challenge the agreements. The trial court conducted a hearing and sustained the City's plea. In three issues, TAC asks this court to determine (1) whether the trial court committed reversible error by failing to find TAC made a prima facie showing that the development agreements violate article 11, section 5 of the Texas Constitution, the Bryan City Charter and Texas public policy; and *560 (2) whether the trial court abused its discretion by refusing to grant TAC's request for a temporary injunction to prevent the City from spending additional monies in furtherance of the development agreements. We reverse and remand.
Factual and Procedural Background
TAC is a Texas corporation located in Bryan, Texas. It owns real property in the City and pays property taxes to the City. On November 2, 1999, the Bryan City Council approved three agreements with third-party developers as part of a project to develop a country club, golf course, hotel, conference center, and high-end residential area in the City ("Traditions Project"). In this lawsuit, TAC alleges the three agreements entered into by the City in connection with the Traditions Project obligated the City (1) to pay for the acquisition of land, public infrastructure improvements, and major utilities; (2) to donate land for a golf course and millions of gallons of water for use by the golf course developer; and (3) to contribute land and cash, in addition to a non-interest-bearing loan, toward the construction of certain improvements. TAC further alleges that the funds identified by the Bryan City Council on the same day the City Council approved the agreements were insufficient to satisfy the City's obligations under the development agreements. The City does not refute TAC's allegation that of the five funds identified, only two in fact existed and contained a total of $3.2 million. The City instead contends the City Council was told, prior to voting on the agreements, that it would be necessary to issue certificates of obligation in order to perform under the agreements. On October 26, 2000, the City issued approximately $17 million in Series 2000A certificates of obligation, an authorized use of which is paying "contractual obligations to be incurred" by the City in connection with, inter alia, the acquisition of streets and construction of improvements to real property. The City pledged ad valorem tax revenues during each year the certificates are outstanding and unpaid in an amount sufficient to fund the repayment of the bonds (both principal and interest). The City also created an interest and sinking fund of no less than 2% per annum.
In response to TAC's filing of this lawsuit, alleging the agreements violate article 11, section 5 of the Texas Constitution and the Charter of the City of Bryan and are contrary to Texas public policy, the City filed a plea to the jurisdiction and statement in opposition to temporary injunction. The City argued TAC lacked taxpayer standing and that the City did not have a binding obligation under the agreements when the City Council approved them, and the agreements, which were amended, are not void under article 11, section 5 of the Texas Constitution. The trial court held an evidentiary hearing on the City's plea and issued an order to sustain the City's plea and dismissed the case for lack of subject-matter jurisdiction on the basis that TAC does not have taxpayer standing to challenge the agreements. The trial court found that TAC failed to make a prima facie showing that "the City of Bryan is currently using or will use or will have to use ad valorem tax dollars to fund performance of the amended agreements" or "that the amended agreements ... are not in compliance with Art. 11, Section 5 of the Texas Constitution."
Discussion
A. Standard of Review
"Standing is a prerequisite to subject-matter jurisdiction, and subject-matter jurisdiction is essential to a court's power to decide a case." Bland Indep. *561 Sch. Dist. v. Blue, 34 S.W.3d 547, 553-54 (Tex.2000). Because subject-matter jurisdiction presents a question of law, we review a trial court's order granting a plea to the jurisdiction de novo. See Metro. Transit Auth. v. Burks, 79 S.W.3d 254, 256 (Tex.App.-Houston [14th Dist.] 2002, no pet.).
A party may challenge the absence of subject-matter jurisdiction by a plea to the jurisdiction and by other procedural vehicles, such as a motion for summary judgment. Bland Indep. Sch. Dist., 34 S.W.3d at 554. "A plea to the jurisdiction is a dilatory plea, the purpose of which is to defeat a cause of action without regard to whether the claims asserted have merit." Id. The purpose of a dilatory plea is not to force a plaintiff to preview its case on the merits, but to establish a reason why the merits of its case should never be reached. Id.
In deciding a plea to the jurisdiction, a court may not weigh the claims' merits but must consider only the plaintiffs' pleadings and the evidence pertinent to the jurisdictional inquiry. When we consider a trial court's order on a plea to the jurisdiction, we construe the pleadings in the plaintiff's favor and look to the pleader's intent.
Id. at 554-55. A trial court accepts the factual allegations in the petition as true, unless the defendant pleads and proves the allegations were fraudulently made to confer jurisdiction. Id. at 554. When reviewing a trial court's order on a plea to the jurisdiction, an appellate court may look to evidence outside of the pleadings. Id.
[T]he issues raised by a dilatory plea are often such that they cannot be resolved without hearing evidence. And because a court must not act without determining that it has subject-matter jurisdiction to do so, it should hear evidence as necessary to determine the issue before proceeding with the case. But the proper function of a dilatory plea does not authorize an inquiry so far into the substance of the claims presented that plaintiffs are required to put on their case simply to establish jurisdiction.
...
The court should, of course, confine itself to the evidence relevant to the jurisdictional issue.
Id. at 554-55.
B. Taxpayer Standing
In its first issue, TAC asserts the trial court improperly ruled on the merits of TAC's claim when the trial court found TAC does not have standing to challenge the City's development agreements. The Texas Supreme Court recently addressed the issue of taxpayer standing in Williams v. Lara, 52 S.W.3d 171 (Tex.2001). In Williams, the court stated that "[t]axpayers in Texas have standing to enjoin the illegal expenditure of public funds, and need not demonstrate a particularized injury. Implicit in this rule are two requirements: (1) that the plaintiff is a taxpayer; and (2) that public funds are expended on the allegedly illegal activity." Williams, 52 S.W.3d at 179. The City does not dispute TAC's status as a taxpayer in Brazos County. The only issue is whether TAC satisfies the second requirement namely, can TAC show that "public funds are being expended on the allegedly illegal activity"? See id. at 179.[2]
*562 To determine whether the trial court erred in its conclusion, we focus our attention on the supreme court's discussion of taxpayer standing in Williams. In Williams, former inmates and a Tarrant County resident sued Tarrant County and its sheriff, alleging that a religious-education program (the Chaplain's Education Unit ("CEU")) in a county jail facility violated the Texas and United States Constitutions and the plaintiffs' civil rights under section 1983 of title 42 of the United States Code. Id. at 175. The court recognized that it had not determined what constitutes "expending public funds," and turned to federal court authority for guidance. See id. at 181. After concluding the federal court jurisprudence of municipal taxpayer standing is most analogous to the requirements necessary to establish taxpayer standing in Texas, the court stated that a litigant must prove that the "government is actually expending money on the activity that the taxpayer challenges; merely demonstrating that tax dollars are spent on something related to the allegedly illegal conduct is not enough." Id. As an example, the court cited a Ninth Circuit Court of Appeals decision in which the court concluded there was no taxpayer standing to challenge a graduation prayer because spending tax dollars on renting a hall, printing programs, buying decorations, and hiring a security guard was necessary even if the ceremony did not include a prayer. See id. at 181-82 n. 6 (citing Doe v. Madison Sch. Dist. No. 321, 177 F.3d 789, 793-96 (9th Cir.1999)).
In Williams, the court concluded that Tarrant County used public funds to manage the CEU: "Based on their own testimony, we conclude that Sheriff Williams and Chaplain Atwell spent a significant amount of the County's time operating the CEU, including shaping and promoting its religious curriculum, and therefore that county funds were expended in operating the CEU." 52 S.W.3d at 183. The court further concluded that because Flowers was a Tarrant County taxpayer, "and because public funds are expended in running the CEU," Flowers had standing as a taxpayer to seek injunctive relief. Although the supreme court referred both to "tax dollars," see id. at 182, and "county funds," see id. at 183, it seems clear from the totality of the court's opinion that a taxpayer challenging a municipal activity is not required to prove that ad valorem tax dollars are expended on the challenged activity, only that public funds are spent on the allegedly illegal activity.[3]See id. at 183 n. 7 (citing Harvey v. Cobb County, 811 F. Supp. 669, 675-76 (N.D.Ga.1993) (finding that because a county inmate crew moved a Ten Commandments panel to new location and cleaned it, county funds were expended, and thus plaintiff had taxpayer standing), aff'd without opinion, 15 F.3d 1097 (11th Cir.1994)). Additionally, it does not matter that the City issued certificates of obligation, even assuming the City did not directly use ad valorem tax dollars to fund its contractual obligations under the development agreements.
Even though the court in Williams also held that the CEU was an unconstitutional *563 establishment of religion, see id. at 176, its standing analysis was entirely separate and did not turn on the question of whether the plaintiffs proved the illegality of the challenged activity. See id. at 180-81. To the contrary, the court framed the dispositive issue pertinent to the standing inquiry as "whether Tarrant County is actually expending public funds in operating the CEU." Id. Moreover, no earlier case decided by the Texas Supreme Court supports a contrary holding. In both Calvert v. Hull, 475 S.W.2d 907 (Tex.1972), and Osborne v. Keith, 142 Tex. 262, 177 S.W.2d 198 (1944), cited in Williams, the court decided, without extensive discussion, that the plaintiffs had standing as taxpayers, although the contracts or governmental acts challenged were ultimately found not to be illegal. See Calvert, 475 S.W.2d at 908; Osborne, 142 Tex. at 264, 177 S.W.2d at 200. The court's language in Osborne to the effect that a taxpayer only has standing to "enjoin public officials from expending public funds under a contract that is void or illegal," does not mean that a plaintiff must prove that the contract is illegal in order to have standing to challenge the contract. 177 S.W.2d at 200. In making the quoted statement, the court was emphasizing that taxpayers should not succeed on their claims if they are merely challenging "unwise or indiscreet expenditures" or if the contract is "merely voidable." Id. In neither case did the court address the question of a plaintiff's standing as a threshold issue. Based on our review of the relevant case law, the same is true for all earlier Texas cases involving challenges to governmental acts under article 11, section 5 of the Texas Constitution. We have been able to find only a few that mention standing and those statements are contained in dicta. See Hoffman v. Davis, 128 Tex. 503, 508, 100 S.W.2d 94, 96 (1937) ("When a taxpayer brings an action to restrain the illegal expenditure by the commissioners' court of tax money he sues for himself, and it is held that his interest in the subject-matter is sufficient to support the action...."); City of Austin v. McCall, 95 Tex. 565, 577, 68 S.W. 791, 794 (1902) ("`Of the right of resident taxpayers to invoke the interposition of a court of equity to prevent an illegal disposition of the moneys of the county, or the illegal creation of a debt which they in common with other property holders of the county may otherwise be compelled to pay, there is at this day no serious question.'") (quoting Crampton v. Zabriskie, 101 U.S. 601, 609, 25 L. Ed. 1070 (1879)).
In conclusion, the court's clarification of taxpayer standing in Williams does not require that a plaintiff prove the challenged activity is illegal. But, more than an allegation of unlawful expenditure is required. Plaintiffs first must allege and prove they pay ad valorem taxes. Williams, 52 S.W.3d at 180 (holding payment of sales taxes is not sufficient to confer taxpayer standing). Second, plaintiffs must allege and prove public funds are being spent on the alleged illegal activity. Id. at 179. As we noted above, in deciding a plea to the jurisdiction, a reviewing court accepts the factual allegations in a plaintiff's petition as true, unless the defendant pleads and proves the allegations were fraudulently made to confer jurisdiction. See Bland, 34 S.W.3d at 554. The City has not pleaded or proved TAC fraudulently made allegations in its petition in an effort to confer standing. We are not fearful that our holding will open a floodgate of taxpayer lawsuits challenging municipal contracts because affording a plaintiff standing to challenge municipal expenditures does not necessarily mean that the resulting suit or claim will succeed on the merits. We are bound by the Texas Supreme Court's pronouncement in *564 Williams, and apply the rule for taxpayer standing announced in it.[4]
As Bland made clear, a hearing and evidence on the question of whether TAC is a property taxpayer is proper. See id. at 554 (stating that evidentiary inquiry into the nature and purpose of plaintiff organization to determine if it has standing to assert claims on behalf of its members "does not involve a significant inquiry into the substance of the claims"). However, a hearing on the merits of TAC's claim in response to the City's plea to the jurisdiction was not proper. See id. at 554-55 ("A plea to the jurisdiction cannot be used to require the plaintiff to prove the damages to which he is entitled in order to show that they exceed the court's jurisdictional limits."). Turning our attention to the trial court's disposition of the City's plea to the jurisdiction, the evidence considered by the trial court went to the merits of TAC's claimnamely, whether the development agreements at issue violate the Texas Constitution. Cf. id. at 555 (concluding evidence offered by school district did not go to the merits of the plaintiffs' claim that the Public Property Finance Act was violated but only to the question of whether the plaintiffs had standing). Although the court in Bland did note that the evidence properly considered by the trial court in that case related to the "basic nature of the finance arrangement" at issue, see id., that does not mean that a trial court should decide the merits of a taxpayer's claim in order to determine if a plaintiff has standing. The plaintiffs in Bland challenged a lease-purchase agreement between the school district and Citicorp, Inc. to allow for the construction of a new school, contending that it violated the Public Property Finance Act. Id. at 549. The court concluded that the plaintiffs lacked standing because all obligations under the contract had been completed except for the school district's obligation to repay the loan. Id. at 556. Construction of the school was complete and the building was occupied. Id. Citicorp had performed its obligations under the contract; only the school district had any remaining obligationto repay the loan. Id. The court's holding in Bland was narrow: "When all that remains is a school district's repayment of a loan for work completed, allowance of a taxpayer action to prohibit such repayment threatens a substantial interference with governmental actions." Id. at 558.
*565 The issues in this case are quite different than those presented in Bland. It is undisputed that the City has spent or is spending public funds on the agreements TAC challenges. Whether those dollars are from funds already segregated by the City for any particular purpose or are from ad valorem tax dollars earmarked for this purpose is not relevant to the question of whether TAC has standing. The City does not contend TAC fraudulently pleaded its allegations in an effort to devise standing. Yet, in reaching its conclusion that TAC did not have standing, the trial court inappropriately ruled on the merits of TAC's claims.
Conclusion
We hold that the trial court's finding that TAC lacked standing because it failed to make a prima facie showing that the Traditions Project development agreements violate article 11, section 5 of the Texas Constitution was an improper ruling on the merits of TAC's claim. Construing the allegations in the original petition in TAC's favor, we conclude the trial court erred in finding that TAC does not have taxpayer standing to challenge the agreements. Accordingly, we sustain TAC's first point of error.
Because of our disposition of TAC's first point of error, we do not decide whether TAC is entitled to injunctive relief. Although we recognize the trial court's findings in essence constitute a decision on the merits, the trial court did not rule on TAC's request for injunctive relief. In the absence of a ruling, we cannot decide whether TAC is entitled to injunctive relief. See Huston v. F.D.I.C., 663 S.W.2d 126, 129 (Tex.App.-Eastland 1983, writ ref'd n.r.e.) ("Only such matters which were presented before the trial court will be reviewed upon this appeal from the order sustaining the defendant's plea to the jurisdiction and dismissing the cause.") (quoting Paradissis v. Royal Indemn. Co., 496 S.W.2d 146, 148 (Tex.Civ.App.-Houston [14th Dist.] 1973), aff'd, 507 S.W.2d 526 (Tex.1974)); Watson v. Missouri-Kansas Texas R.R. Co. of Texas, 173 S.W.2d 357, 362 (Tex.Civ.App.-El Paso 1943, no writ) (stating that because trial court did not pass on the merits of the case, but sustained the intervenor's plea to the jurisdiction, dissolved the temporary injunction, and dismissed the case, there was nothing before the court of appeals to review except for the trial court's action in dismissing the cause).
We reverse the trial court's judgment and remand this case to the trial court for further proceedings consistent with this opinion.
NOTES
[1] The individual defendants were sued only in their official capacities in order to effectuate the injunctive relief sought by TAC.
[2] TAC argues the trial court committed reversible error by failing to find TAC made a prima facie showing that the agreements violate article 11, section 5 of the Texas Constitution. Although TAC cites the rule for taxpayer standing announced in Williams, and argues it need not prove the illegality of the challenged contracts for purposes of determining standing, TAC contends it nevertheless proved the agreements' illegality. Because a resolution of whether TAC proved the illegality of the challenged agreements necessitates this court making a merit-based determination, we decline to reach this issue. We only decide whether TAC established taxpayer standing.
[3] Obviously, citizens may not know how municipalities allocate their tax revenues, and it would be overly burdensome and impractical to require plaintiffs to trace particular tax revenues to the funds being spent on allegedly illegal activity. It is also conceivable that much of Texas case law presumes "public funds" equates to "tax dollars" because common sense dictates that municipal governments operate using property tax revenues.
[4] We are unable to find an opinion reflecting that any Texas court of appeals has applied the rule enunciated in Williams to decide whether a plaintiff has standing as a taxpayer to challenge municipal activity. We thus appear to be the first court of appeals to be faced with this issue since the Texas Supreme Court decided Williams. However, we note that federal courts of appeals' decisions discussing municipal taxpayer standing are in accord with our holding that a taxpayer need not prove the illegality of the challenged activity to establish standing. See generally, e.g., Doe v. Beaumont Indep. Sch. Dist., 173 F.3d 274, 282 (5th Cir.1999) ("[T]o establish ... municipal taxpayer standing ... a plaintiff must show only that (1) he pays taxes to the relevant entity, and (2) tax revenues are expended on the disputed practice.") (citations omitted) (emphasis added); Clay v. Fort Wayne Cmty. Sch., 76 F.3d 873, 879 (7th Cir.1996) ("[M]unicipal taxpayers have standing when they object to a disbursement of funds occasioned solely by the alleged unconstitutional conduct. Municipal taxpayer status does not confer standing absent some allegation by the plaintiffs of an illegal use of tax revenues.") (citations omitted) (emphasis added); United States v. New York, 972 F.2d 464, 470 (2d Cir.1992) (stating proposition "municipal taxpayers have standing to challenge allegedly unlawful municipal expenditures," and concluding plaintiff had standing to challenge city's expenditure of funds on contracts, but affirming district court's grant of summary judgment in favor of city on plaintiff's claims) (citations omitted). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623607/ | 303 F. Supp. 677 (1969)
STONERIDGE APTS., COMPANY, a Partnership, on behalf of itself and all other similarly situated owners of real property in the City of New York, Plaintiff,
v.
John V. LINDSAY, as Mayor of the City of New York; Jason D. Nathan, as Administrator of the Housing and Development Administration of the City of New York, and the City of New York, Defendants.
No. 69 Civ. 2405.
United States District Court S. D. New York.
August 4, 1969.
*678 Abraham Engelman, New York City, for plaintiff.
J. Lee Rankin, Corp. Counsel, James Nespole, Asst. Corp. Counsel, and Harry Michelson, Asst. Counsel, New York City, for defendants.
OPINION
LASKER, District Judge.
This is one of a number of cases brought by landlord-plaintiffs attacking the constitutionality of Local Law 16 of 1969 of The City of New York. The plaintiff asks judgment on behalf of itself and others similarly situated declaring the local law unconstitutional for reasons stated below and enjoining its enforcement.
The complaint alleges that plaintiff is the owner of a Class A multiple dwelling in the City of New York (containing six or more housing units occupied by tenants), which is subject to a mortgage insured under the provisions of the National Housing Act. 12 U.S.C. § 1702 et seq. Plaintiff, suing in behalf of itself and all other owners of real property in the City of New York similarly situated, contends that Local Law 16, if held to be applicable, is violative of the following clauses of the Constitution of the United States: Article I, Section 10, in that its provisions impair the obligations of contracts; Article VI, cl. 2, in that the ordinance conflicts with the National Housing Act, enacted under the authority of the United States, which is the supreme law of the land; and Amendments V and XIV in that its enforcement against plaintiff would constitute a deprivation of property without due process of law.
The local law by its terms, YY 51-3.0, applies to Class A multiple dwellings containing six or more units completed after February 1, 1947, with the exception of dwelling units "aided by government insurance under any provision of the National Housing Act, to the extent this local law or any regulation or order issued thereunder is inconsistent therewith, * * *." With respect to covered property, a rent guidelines board shall establish a level of fair rent increases over the rent charged on May 31, 1968, "but not in excess of ten per cent for a two year lease and fifteen per cent for a three year lease over the rental charged on May thirty-first, nineteen hundred sixty-eight * * *" YY 51-5.0. The law also provides for the formation of a real estate industry stabilization association "having as members the owners of no less than forty per cent of the dwelling units covered by this law * * *" YY 51-6.0. The association must adopt a code which "binds the members of the association not to exceed the level of fair rent increases under any lease renewal or new tenancy bearing an effective date on or after June first, nineteen hundred sixty-eight for dwelling units covered by this law * * *" YY 51-6.0 c. (2). As to dwelling units whose owners do not become members in good standing of an association pursuant to YY 51-6.0, the maximum rent is to be established by the city rent agency "on the basis of the rent charged on May thirty-first, nineteen hundred sixty-eight." YY 51-4.0 b.
As previously pointed out, the real property involved herein is subject to the lien of a mortgage aided by United States government insurance under provisions of the National Housing Act. The presence of federal government insurance carries with it rent schedules pursuant to 12 U.S.C. § 1747c, which states:
"The Secretary shall require that the rents for the dwellings in any project insured under this subchapter shall be established in accordance with a rent schedule approved by the Secretary, *679 and that the investor shall not charge or collect rents for any dwellings in the project in excess of the appropriate rents therefor as shown in the latest rent schedule approved pursuant to this section." (Emphasis added.)
Accordingly, in November of 1967, the Federal Housing Administration determined that the maximum annual rental which plaintiff could lawfully receive was not to exceed $344,900, and this figure remained applicable on May 6, 1969, the date Local Law 16 was approved by the Mayor.
Plaintiff contends that the local law, if held to be applicable, would impose on both plaintiff and the Federal Housing Administration a fixed annual rental for plaintiff's property in a different amount than that authorized by the contract between plaintiff and the Federal Housing Administration. Despite the local law's express exclusion of Class A multiple dwellings completed after February 1, 1947, "aided by government insurance under any provision of the National Housing Act, to the extent this local law or any regulation or order issued thereunder is inconsistent therewith," plaintiff claims that public officials of the City have openly declared that federally-insured dwelling units are subject to the local law and that the prospect of the local law applying to federally-insured property presents plaintiff with the dilemma of whether or not to join the association. Failing to join the association, plaintiff asserts, would deprive it of the limited benefits thereof, i. e., right to receive such rent fixed by "guidelines board" not to exceed a sum equal to 10% of the May 31, 1968 rent for a two year lease, and 15% for a three year lease. On the other hand, joining the association may, according to plaintiff, constitute a waiver of the right to challenge the validity of the local law.
For the reasons stated below, these contentions must be rejected.
The plaintiff misreads the effect of the impairment of contract clause of the Constitution (Article I, Section 10). The clause is clearly intended to protect benefits and rights of a party under a contract and not to interfere with legislation which merely relates to the subject matter of the contract. Local Law 16 does not interfere in any way with plaintiff's benefits and rights under its contract with the Federal Housing Administration. Plaintiff's benefit and right thereunder is the continuance of its federally-insured mortgage, and the legislation in no way affects that right. The argument that the plaintiff has a "right" to charge the maximum rent under its agreement with the FHA is not valid. The contract does not give plaintiff a right to charge such a maximum rent but, to the contrary, obligates it not to charge a rent in excess of the maximum.[1]
The argument that the ordinance violates the supremacy clause of the Constitution (Article VI, cl. 2) is without merit. There appear to be two strings to the plaintiff's bow on this issue. First, it contends that, although the ordinance on the face of it declares that it is not applicable to FHA-insured housing, nevertheless federal officials have made statements that the legislation is applicable to FHA-insured housing, and therefore the court should grant a judgment declaring such inapplicability. Plaintiff's arguments must be rejected because its factual allegations are not correct. The ordinance does not state that it does not apply to FHA housing, but excepts such property from its application only "to the extent this law or any regulation or order issued hereunder is inconsistent" with the National Housing Act. Furthermore, the record in this case does not establish that federal officials have contended that the ordinance applies generally to FHA housing. To the contrary, all that federal officials have *680 stated is that the ordinance applies, as it does, to the extent that it is not inconsistent with applicable federal legislation, and that conceivably the ordinance may diminish plaintiff's ability to fulfill its obligations to the Federal Housing Administration.[2] Should the ordinance operate at some future date to interfere with plaintiff's ability to perform its obligations to the FHA, it would, of course, have the right at that time to litigate the validity of the application of the ordinance to it. However, in this connection it is important to note that Local Law 16 establishes a procedure by which the plaintiff could apply to the Conciliation and Appeals Board "for increases in excess of the level of fair rent increase" and exhaustion of this remedy should precede resort to this court for relief on the ground of unconstitutionality.
The plaintiff's second argument is that the ordinance violates the supremacy clause because the ordinance, in spite of its proviso to the contrary, attempts to legislate in a field already occupied by federal legislation. The plaintiff's position is unsound. As brought out in the discussion above, no conflict exists between the subject matter of the ordinance and that of federal provisions which would invoke the supremacy clause. The ordinance deals with rent control pure and simple. It cannot conflict with federal legislation on this subject, since there is none. The only federal legislation relevant to the discussion is the National Housing Act, the subject matter of which, as indicated in Choy v. Farragut Gardens, 131 F. Supp. 609 (S.D.N.Y.1955), is unrelated to that of rent control. Surely nothing is here in the nature of the "irreconcilable conflict" between state and federal action which the Supreme Court has held is necessary to invalidate state legislation. Florida Lime & Avocado Growers v. Paul, 373 U.S. 132, 146, 83 S. Ct. 1210, 10 L. Ed. 2d 248. There the court stated (at 142, 83 S.Ct. at 1217):
"The test of whether both federal and state regulations may operate, or the state regulation must give way, is whether both regulations can be enforced without impairing the federal superintendence of the field, not whether they are aimed at similar or different objectives."
The plaintiff attacks the ordinance also as depriving it of property without due process of law. It has long been settled that state and municipal ordinances under the appropriate circumstances which exist here[3] do not constitute deprivation of property without due process. See, for example, Israel v. City Rent and Rehabilitation Admn. of the City of New York, 285 F. Supp. 908 (S.D.N.Y.1968), and cases cited; Stuyvesant Town, Inc. v. Ligham, 17 N.J. 473, 111 A.2d 744 (1955).
Finally, plaintiff is mistaken in its apprehension that should it exercise its option to join a real estate industry stabilization association, it will waive any rights to test the validity of the local law. While it is true that each *681 member of the association is required to agree in writing to comply with a code to be established by the association, nothing in the ordinance or otherwise prevents plaintiff from attacking the validity of the entire ordinance, the provisions relating to the association included. Indeed, that is precisely what plaintiff is doing at the moment. Should it hereafter determine to join an association, there appears no reason why it cannot do so, under protest, thereby saving its rights in accordance with normal procedure. Indeed, the affidavit of Walter J. Schneider, a partner in the plaintiff's partnership, submitted in support of the instant motion, emphasizes that the Real Estate Industry Stabilization Association of N.Y.C., Inc. has advised those interested in joining that:
"You do not waive any of your legal rights by joining the Association. You retain your right to challenge the City's guidelines in the courts, either individually or on an industry wide basis. These avenues are being explored at the present time."
According to the public press, other landlords do not consider compliance with the ordinance as constituting any waiver of rights.[4]
The cases of Fieger v. Glen Oaks Village, 309 N.Y. 527, 132 N.E.2d 492, and Fink v. Cole, 302 N.Y. 216, 97 N.E.2d 873, which plaintiff claims support its position, are inapposite. Fieger merely holds that tenants of an FHA housing project could not in a state court action against the landlord secure a revision or review of allegedly excessive rentals fixed by the Federal Housing Administrator or Commission. Fink deals only with the question of unconstitutional delegation of power to a private corporation. Here it is unnecessary to determine whether delegation of power to the associations established under Local Law 16 might be unconstitutional, since there is no requirement for the plaintiff to join such an association. Granted that there are benefits to be secured by joining the association, nevertheless if plaintiff chooses not to join, it will be subject to ordinary rent control provisions which, as stated above, have long been held constitutional.
It is clear that there is very little, if any, likelihood of the plaintiff's success at trial of this case on the merits. This being so, for the reasons stated above the motion is denied.
Pursuant to Rule 52(a), this opinion constitutes the court's findings of fact and conclusions of law.
It is so ordered.
NOTES
[1] 12 U.S.C. § 1747c, supra.
[2] Letter from William B. Ross, Acting Assistant Secretary-Commissioner of the Department of Housing and Urban Development, Federal Housing Administration, to Congressman Benjamin S. Rosenthal dated May 22, 1969 Exhibit A to affidavit of Jason R. Nathan sworn to June 23, 1969, and submitted in opposition to this motion.
[3] Local Law 16 finds "that a serious public emergency continues to exist in the housing of a considerable number of persons within the city of New York which emergency was created by war, the effects of war and the aftermath of hostilities; * * * that there continues to exist an acute shortage of dwellings; that unless residential rents and evictions continue to be regulated and controlled, disruptive practices and abnormal conditions will produce serious threats to the public health, safety and general welfare * * *" These findings were made on the basis of studies done by the Census Bureau of the United States Department of Commerce, investigations by the New York City Housing and Development Administration and the Department of Consumer Affairs, and Report to the Mayor by the Rent Guidelines Board.
[4] New York Times, July 31, 1969, p. 36: "Landlords have been attaching riders to new leases stating that if the law is stricken down, rents will be raised as much as 15% even during the remainder of the lease." | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623623/ | 360 S.W.2d 758 (1962)
Robert HARBOR, et al., Appellants,
v.
Thomas CAMPBELL, Appellee.
No. 5-2755.
Supreme Court of Arkansas.
October 8, 1962.
Terral & Rawlings and Gail O. Matthews, Little Rock, for appellant.
Denman & Denman, Prescott, for appellee.
McFADDIN, Justice.
This appeal stems from a traffic mishap which occurred when the appellee Campbell's car struck the rear of a car occupied by appellants and caused injuries and damages *759 for which appellants sought recovery. The jury verdict and judgment was for Campbell; and appellants seek a reversal because of matters which occurred in the course of the trial.
I. Conviction For Traffic Violation. Appellants sought to introduce in evidence a certified copy of the record of the Municipal Court in which appellee had paid a fine for "failure to yield the right-of-way," which charge arose because of the traffic mishap here involved. The Trial Court was correct in refusing to allow the Municipal Court record to be introduced in evidence. Section 75-1011 Ark.Stats. says: "No record of the conviction of any person for any violation of this act shall be admissible as evidence in any court in any civil action." Our recent cases of Garver v. Utyesonich, 235 Ark. 33, 356 S.W.2d 744; and Girard v. Kuklinski, 235 Ark. 337, 360 S.W.2d 115 (1962), are in point.
II. Plea Of Guilty For Traffic Violation. When Appellee Campbell was testifying, appellants sought to interrogate him to show that for this identical traffic mishap Campbell had entered a plea of guilty in Municipal Court to the charge of failure to yield the right-of-way. The Trial Court refused this evidence of a plea of guilty; and such ruling was error. A plea of guilty for traffic violation for the identical traffic mishap is certainly a declaration against interest; and such plea of guilty is as admissible as any other declaration against interest in any other case. In Covington v. Little Fay Oil Co., 178 Ark. 1046, 13 S.W.2d 306, we said: "It is well settled that any statements made by a party to a suit against his interest bearing on material facts are competent as original testimony." Appellants sued appellee for damages, alleging appellee had been guilty of six acts of negligence. One of these was "failing to have his car under proper control," and another was "failing to exercise ordinary care under the existing circumstances." Appellee's plea of guilty to "failure to yield the right-of-way," had clear evidentiary value on the alleged acts of negligence. In Miller v. Blanton, 213 Ark. 246, 210 S.W.2d 293, 3 A.L.R. 2d 203, we said: "Appellant Miller testified that a charge of `reckless driving' was filed against him as a result of this collision and that he pleaded guilty to this charge. * * This testimony as to appellant's plea of guilty was competent as showing a deliberate declaration against interest by said appellant. 20 Am.Jur. 545."[1]
III. Comments Of The Trial Judge. One of the grounds of negligence levelled against the appellee was the claim that he was driving while intoxicated. Robert Harbor testified that immediately after the traffic mishap he smelled alcohol on Campbell's breath. Other witnesses testified that immediately after the mishap they saw Campbell throw some beer cans out of his car into the bushes; and a State Trooper testified that he found four unopened cans of cold beer and one empty can in the bushes pointed out to him by some of the witnesses. When Campbell was on the witness stand, the following occurred on cross-examination:
"By Mr. Rawlings:
"Q. You don't know what time you left home?
"A. I don't remember exactly what time it was.
* * * * * *
"Q. You can't tell the jury what time you left home?
"A. I can not.
"Q. The truth of the matter, you were so drunk that you don't know?
"A. I don't think so, I (interrupted)
"Mr. Denman, Sr.: I object to that.
*760 "The Court: The objection is sustained.
* * * * * *
"Mr. Rawlings: Well, he testified he wasn't drunk, so don't I have a right to ask him if the truth of the matter is that, wasn't he so drunk that he don't know what time he left home.
* * * * * *
"The Court: Well, I don't think it is proper to come out and ask a man, that kind of a question, when there is no proof about his being drunk, so far.
"Mr. Rawlings: If the court please, I want to ask for a mistrial at this time, because there is evidence in this record that this man threw beer out of his car, that he had an odor of alcohol on his breath; and the statement of the court that (interrupted) * * *
"The Court: That's far different from being drunk; having the odor of alcohol on his breath is far different from a statement that he was drunk.
"Mr. Rawlings: We wish to object to the statement the court is making in the presence of the jury."
We have copied the pertinent cross-examination so there may be seen the full effect of the Court's remarks. At one place the Court said: "* * * when there is no proof about his being drunk, so far"; and at another place the Court said: "That's far different from being drunk; having the odor of alcohol on his breath is far different from a statement that he was drunk." The appellants claim that these remarks of the Trial Judge constituted comments on the weight of the evidence; and we agree with appellants. When the Court made these remarks, there was already in the record evidence that: (a) the appellee stated he could not remember what time he left home; (b) appellee had driven his car into the rear of a preceding car on the public highway; (c) the appellee had then thrown one empty and four unopened beer cans into the bushes; and (d) a witness had testified that he had smelled the odor of alcohol on the appellee's breath immediately after the collision.
We are of the opinion that said evidence already offered was sufficient to take the case to the jury on the issue of whether the defendant was guilty of negligence, in that he was driving his car while intoxicated. Such being true, the remark of the Trial Judge was a comment on the weight of the evidence as to intoxication.[2] In Fuller v. State, 217 Ark. 679, 232 S.W.2d 988, we quoted from our earlier cases, and summarized:
"The requirement of art. 7, § 23, of our Constitution, that `judges shall not charge juries with regard to matters of fact', applies as well to the credibility of witnesses and the weight to be given their testimony as to the outright truth or falsity of what they say. St. Louis Southwestern Ry. Co. v. Britton, 107 Ark. 158, 154 S.W. 215. And it applies not only to what judges tell juries in the course of formal instructions but also to what they say in colloquys with lawyers in the jury's hearing."
IV. Appellate Procedure. The appellee urges one point to overcome appellants' entire appeal; and it relates to a procedural matter which we have considered, and which we find does not possess merit. The appellants duly filed notice of appeal and duly obtained extensions for the filing of the record. But the appellants delayed *761 several months before formally filing with the Court the designation of the record and the points relied on for appeal. Appellee says that this delay in filing the designation of the record and the points on appeal is violative of Sections 8 and 11 of Act No. 555 of 1953, as now found in § 27-2127.2 and § 27-2127.5 Ark. Stats. We believe that this present contention by the appellee is an afterthought. The appellee apparently considered the time element immaterial, because, when the appellants filed their designation and points, the appellee designated additional matters for the record without making any claim that the original designation of the record and points had come too late. In short, appellee has failed to show any prejudice to him. Furthermore, the appellee filed no motion to dismiss the appeal because of such delay, but only urged it in the brief; so we cannot say that this case falls within our holding in Jones v. Adcock, Ark., 343 S.W.2d 779.
Because of the errors of the Trial Court, as heretofore discussed, the judgment is reversed and the cause is remanded.
NOTES
[1] In 18 A.L.R. 2d 1307, there are cases cited from many jurisdictions to sustain the rule that proof of a plea of guilty is admissible as a declaration against interest.
[2] There are a series of annotations on the subject, "Driving While Intoxicated," as contained in 42 A.L.R. 1498; 49 A.L.R. 1392; and 68 A.L.R. 1356. In these annotations there is discussed the sufficiency of the proof of the condition of intoxication in criminal cases, and the admissibility of various bits of evidence. The holdings cited in the annotations fully support the conclusion that we have here reached. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623639/ | 360 S.W.2d 534 (1962)
Jesse Maurice HUTCHINS, Jr., Appellant,
v.
The STATE of Texas, Appellee.
No. 34700.
Court of Criminal Appeals of Texas.
June 30, 1962.
Rehearing Denied October 17, 1962.
*535 James H. Martin, Dallas, for appellant.
Henry Wade, Criminal Dist. Atty., John Rogers, Frank Watts, Phil Burleson, Assts. Dist. Atty., Dallas, and Leon B. Douglas, State's Atty., Austin, for the State.
BELCHER, Commissioner.
The conviction is for robbery with firearms; the punishment, thirty-five years.
Johnny Jackson testified that he was the night manager of a service station on May 15, 1961, when the appellant, who was wearing a "Jelly-Bean" hat, and a companion entered about 1:20 A.M. and robbed him of $23.95. He further testified that during the transaction appellant's companion Mendenhall held a pistol on him, and that appellant exhibited a tire tool in a threatening manner; that such actions put him in fear of his life or serious bodily harm, and that the appellant and Mendenhall took the $23.95 without his consent and against his will.
On June 19, Dallas Police Officers arrested the appellant, who was found hiding in a clothes closet, Mendenhall, who had a loaded pistol in his belt, and two companions in Mendenhall's apartment. Appellant and Mendenhall were subsequently identified in a police line-up by Jackson as the two men who robbed him.
Appellant testified and denied any connection with the robbery. He further denied having ever worn a hat, particularly the "Jelly-Bean" type, and related that he had only gone to Mendenhall's apartment, where he was arrested, to pick up two suitcases which Mendenhall had borrowed from him.
Appellant's mother and grandmother both testified that they had never seen appellant wearing a hat, and that prior to June 19 Mendenhall had come to their house, where appellant lived, to borrow the suitcases.
Appellant urges that the trial court erred in admitting testimony given by one of the arresting officers that Jackson identified appellant at the line-up even before those participating in the line-up were in proper position.
The record shows that prior to this testimony concerning the line-up Jackson himself had related, without objection, that
"as soon as they started coming through the door I told the detective there, I says, `that is one of them right there' (referring to appellant)."
In this no error is shown.
Appellant next complains of the admission of testimony by Officer Blessing that during the time of the arrest he heard a noise which he found to have been caused by a screen from Mendenhall's apartment hitting the ground, because it implied that the appellant was attempting to escape to avoid arrest.
The record reflects that about the time two other officers knocked on the apartment door, Officer Blessing was standing outside and heard the screen fall to the ground, which he found to be from Mendenhall's apartment. He looked up and "saw this defendant (appellant) perched in the window sill of the window", and told him "to get back inside the apartment." There is no error in admitting such evidence because escape, flight and attempts to escape are always admissible as evidence of guilt. Cawley v. State, 166 Tex. Crim. 37, 310 S.W.2d 340.
Appellant strenuously objects to the admission of testimony given by Deputy Sheriff Kitching that appellant was in a Dallas jail from April 28 to May 4, 1961, on the ground that this testimony was improper impeachment of his witnesses on an *536 immaterial matter. It is also urged that the testimony given by his witnesses which was contradicted by Kitching was brought out by the state on cross-examination, and that the state cannot impeach what they developed themselves.
The record shows that appellant testified and denied any connection with the crime which was alleged to have occurred about 1:20 A.M., May 15, 1961, and the trial court in its charge to the jury submitted the defense of alibi. His witnesses testified, on cross-examination, that appellant lived with them continuously since March, 1961, and "spent every night there." It was further stated that appellant stayed at home every night in April and May, 1961, and that they never knew him to be out as late as 1 or 2 A.M. On re-direct examination of appellant's grandmother, she was asked: "He wasn't in prison or anything like that, was he?", and she answered, "No he sure wasn't." In view of these circumstances, no error is shown by the admission of Kitching's testimony.
Appellant challenges the sufficiency of the evidence to support the jury's verdict on the ground that the state's only evidence of guilt came from one uncorroborated witness, Jackson, whose testimony was contradicted by appellant, his mother, and his grandmother.
The jury are the exclusive judges of the facts proved and the credibility of the witnesses and the weight to be given to the testimony. Art. 706, C.C.P. Except where corroboration is required by law, the fact that a single witness for the state is contradicted by a greater number of witnesses for the appellant does not alter the above rule. 24 Tex.Jur.2d 378, Sec. 715, and cases there cited.
The other contentions presented have been considered and do not show error.
The evidence is sufficient to support the jury's verdict and no error appearing, the judgment is affirmed.
Opinion approved by the Court. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623061/ | 564 N.W.2d 177 (1997)
222 Mich. App. 637
MAYOR OF THE CITY OF LANSING and City of Lansing, Plaintiffs/Counterdefendants-Appellees,
v.
KNIGHTS OF THE KU KLUX KLAN and David A. Neumann, Defendants/Counterplaintiffs-Appellants.
Docket No. 187765.
Court of Appeals of Michigan.
Submitted February 4, 1997, at Lansing.
Decided April 4, 1997, at 9:45 a.m.
Released for Publication June 16, 1997.
*178 Brian W. Bevez, Assistant City Attorney, Lansing, for Plaintiffs and Counter defendants-Appellees.
Mark Granzotto and Paul J. Denenfeld, Detroit, for Defendants and Counter plaintiffs-Appellants.
Before O'CONNELL, P.J., and MARKMAN and M.J. TALBOT,[*] JJ.
AFTER REMAND
MARKMAN, Judge.
Defendants, the Knights of the Ku Klux Klan and David A. Neumann, appeal as of right from an order granting summary disposition for plaintiffs, the mayor of the City of Lansing and the City of Lansing with regard to defendants' countersuit, which sought damages pursuant to 42 USC § 1983 and for malicious prosecution. We affirm.
On July 8, 1994, following the issuance of a state permit for a Klan rally to be held on the grounds of the Capitol building on July 23, 1994, plaintiffs filed a complaint for injunctive relief, asking the circuit court to order that the rally be held at an alternate site in light of various public safety concerns. Defendants counterclaimed, alleging that plaintiffs' initiation of the suit constituted an unconstitutional prior restraint on defendants' First Amendment rights, in violation of 42 USC § 1983 and the Michigan Constitution, and that the suit constituted malicious prosecution.
Plaintiffs' suit was prompted by the events attending defendants' previous rally on the Capitol grounds on April 23, 1994. Despite the presence of approximately five hundred uniformed state and city police officers and total expenditures of $147,000 in public funds (including $47,000 by the City of Lansing), the April rally triggered occurrences of public disorder and violence. The mayor testified that "the crowd got out of control," "police security was breached," and that the police "lost control," and a police officer testified that "there came a point in time where basically we had no control of the crowd." On the basis of this history, the mayor asked defendants to change the location of the rally to a nearby city parka more defensible but also a more remote location in terms of the potential audience for defendants' message. Defendants rejected the offer. Plaintiffs then filed a complaint seeking injunctive relief, claiming that they would be unable to provide adequate police protection for the second rally as planned. The Ingham Circuit Court granted a preliminary injunction prohibiting the demonstration from being conducted on the Capitol grounds.
On appeal by defendants, a panel of this Court peremptorily reversed the circuit court's decision in an order that stated in relevant part:
Based upon the facts presented to this Court in the briefs of the parties and in the complaint and affidavits of plaintiff, the circuit court's July 21, 1994 preliminary injunction represents an abuse of discretion. The facts of this case do not justify enjoining defendant's exercise of its First Amendment rights in a quintessentially public forum, and we find that the preliminary injunction was not narrowly drawn to achieve a compelling state interest. Madsen v. Women's Health Center, Inc., [512 U.S. 753, 114 S. Ct. 2516, 129 L. Ed. 2d 593 (1994) ]; Forsyth County v. The Nationalist Movement, 505 U.S. [123, 112 S. Ct. 2395], 120 L. Ed. 2d 101 (1992); Frisby v. Schultz, 487 U.S. 474, 108 S. Ct. 2495, 101 L. Ed. 2d 420 (1988); Boos v. Barry, 485 U.S. 312, 108 S. Ct. 1157, 99 L. Ed. 2d 333 (1988); Perry Education Ass'n v. Perry Local Educat[ors'] Ass'n, 460 U.S. 37, 103 S. Ct. 948, 74 L. Ed. 2d 794 (1983); Christian Knights of the Ku Klux Klan [Invisible Empire, Inc.] v. District of Columbia, [297 U.S.App. DC 312] 972 F.2d 365 ([]1992). Insulting and even outrageous speech must be tolerated in order to protect First Amendment freedoms. Boos v. Barry, 485 U.S. at 322 [108 S.Ct. at 1164]. The grounds of the State Capitol are both symbolic and directly relevant to defendant's intended message. The threat of violence relied upon by plaintiff is insufficient to prohibit entirely defendant's *179 speech in the public forum chosen by defendant. [Mayor of the City of Lansing v Knights of the Ku Klux Klan, unpublished order of the Court of Appeals, entered August 2, 1994 (Docket No. 177118).]
Because of conflicting interpretations of the scope and effect of our interlocutory decision, the parties then brought cross motions for summary disposition in the trial court. Defendants claimed that this Court's decision overturning the preliminary injunction rendered plaintiffs' case moot and that defendants were entitled to partial summary disposition with respect to their § 1983 claim and to compensatory and punitive damages. Plaintiffs claimed that they were entitled to summary disposition with respect to the § 1983 claim because their request for injunctive relief had not been arbitrary or capricious and had sought only to impose a permissible restriction on the place the rally was to be held. Following oral argument, the trial court issued a written opinion and order granting plaintiffs' motion for summary disposition with regard to defendants' counterclaims, apparently pursuant to MCR 2.116(C)(10). The court concluded that plaintiffs could not be held liable under 42 USC 1983 for seeking an overly broad injunction and that defendants' malicious prosecution claim failed because they had not demonstrated that plaintiffs' suit lacked probable cause.
The only issue before us is the appropriateness of the trial court's grant of summary disposition in favor of plaintiffs with respect to the § 1983 counterclaim, because defendants do not challenge the dismissal of their malicious prosecution theory on appeal. This Court reviews decisions regarding motions for summary disposition de novo to determine if the moving party was entitled to judgment as a matter of law. Stehlik v. Johnson (On Rehearing), 206 Mich.App. 83, 85, 520 N.W.2d 633 (1994).
MCR 2.116(C)(10) permits summary disposition when, except for the amount of damages, there is no genuine issue concerning any material fact and the moving party is entitled to [judgment] as a matter of law. A court reviewing such a motion must consider the pleadings, affidavits, depositions, admissions, and any other evidence in favor of the opposing party and grant the benefit of any reasonable doubt to the opposing party. [Id.]
42 USC § 1983 provides that a person, including a public officer, acting under color of law who
subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law, suit in equity, or other proper proceeding for redress.
Proper analysis of a § 1983 claim against a municipality requires examination of two issues: "(1) whether plaintiff's harm was caused by a constitutional violation, and (2) if so, whether the city is responsible for that violation." Collins v. Harker Heights, 503 U.S. 115, 120, 112 S. Ct. 1061, 1066, 117 L. Ed. 2d 261 (1992). Here, we assume that the harm to defendantswhich consists of a time-shifting of the planned rally due to judicial adjudication of the First Amendment issueswas caused by a constitutional violation, because this Court reversed the preliminary injunction on First Amendment grounds.[1] The issue before us, therefore, *180 becomes whether plaintiffs' action of seeking an injunction to limit the location of the rally "caused" the constitutional violation.
Here, plaintiffs' actions consisted exclusively of availing themselves of the legal process to try to limit the location of defendants' rally. The United States Supreme Court has recognized the validity under the First Amendment of injunctions placing narrowly-tailored time, place, and manner restrictions on speech. See Madsen, supra.[2] Here, plaintiffs, having some reason to anticipate violence, attempted to strike at it preemptively by pursuing an injunction to limit the place of the planned rally to a more easily defended location. Plaintiffs presented a colorable claim that their proposed injunction constituted an appropriate time, place, or manner restriction on defendants' First Amendment rights and sought a court ruling with respect to the issue.[3]
The direct "cause" of the constitutional violation here was the court's issuance of the overbroad injunction, not plaintiffs' pursuit thereof. If the court had denied the injunction, there would have been no constitutional violation. However, defendants argue that plaintiffs "caused" the constitutional violation because the court would not have issued the overbroad injunction unless plaintiffs had requested it. In other words, "but for" plaintiffs' lawsuit, the court would not have been prompted into taking its action.
Under federal law, the general rule is that if an injunction issues erroneously, any resulting irreparable injury is not redressable because the error was an act of the court, not of the party who sought the injunction. Detroit Newspaper Publishers Ass'n v. Detroit Typographical Union No. 18, Int'l Typographical Union, 471 F.2d 872, 876 (C.A.6, 1972). Similarly, in Michigan, at common law the general rule is that there is no tort liability for wrongfully suing out an injunction. In re Prichard Estate, 169 Mich.App. 140, 149, 425 N.W.2d 744 (1988). Federal and state court rules provide exceptions to this general rule.[4] Nevertheless, under *181 the general rule, the act of filing a complaint seeking injunctive relief does not "cause" the erroneous issuance of the requested injunction for purposes of § 1983 because any erroneous issuance of an injunction is the act of the court.
More generally, the processes of the law can be said to have caused any constitutional violation resulting from an injunction. Here, the circuit court sought to interpret § 1983, the First Amendment, and the law concerning injunctions. The circuit court did nothing more than give voice to this law. That, in view of this Court, it ultimately erred in its interpretation does not alter the fact that it was the operation of the law itself that caused any resulting harm to defendants. Our legal system fully contemplates that courts will sometimes act in error and that such error will need to be corrected through an appellate process. Const 1963, art 6, §§ 1, 8, and 13. That such appellate process must be invoked before an error can be corrected does not mitigate the fact that it is the law itself that is working its effect upon the parties, not the will of the individual judge, much less that of the party initiating resort to the legal process. The law itself is responsible for the consequences of its operation, not the litigant who avails himself of that law.[5]
Moreover, a rule that transforms judicial error into a basis for tort liability by an adversely affected litigant would chill legitimate access to courts. The First Amendment right to petition the government has been construed to implicate the right of access to courts for redress of wrongs. Sure-Tan, Inc. v. NLRB, 467 U.S. 883, 896-897, 104 S. Ct. 2803, 2811-2812, 81 L. Ed. 2d 732 (1984); Moore v. Fragatos, 116 Mich.App. 179, 185, n. 3, 321 N.W.2d 781 (1982). Allowing a damages remedy here would elevate defendants' undeniable First Amendment rights over those of plaintiffs, when both sides here have called on the protections and guarantees of the United States Constitution. We believe that it would chill the right of access to the courts to make a litigant who invokes judicial remedies, in other than a frivolous proceeding, liable for damages for judicial error. No litigant, given a judiciary free of corruption and bias, has control over judicial actions.
Defendants rely on Malley v. Briggs, 475 U.S. 335, 344, n. 7, 106 S. Ct. 1092, 1098, n. 7, 89 L. Ed. 2d 271 (1986), in support of their contention that plaintiffs are responsible for the constitutional harm here. The Malley Court addressed the degree of immunity accorded a police officer whose submission of a criminal complaint that was facially inadequate to establish the requisite probable cause resulted in the issuance of an arrest warrant. It stated:
[Section] 1983 "should be read against the background of tort liability that makes a man responsible for the natural consequences of his actions." Since the common law recognized the causal link between the submission of a complaint and an ensuing arrest, we read § 1983 as recognizing the same causal link. [Id.]
It held that the magistrate's action in authorizing the arrest warrant did not insulate the police officer from personal liability for a failure to exercise reasonable professional judgment in making the threshold determination whether the facts alleged could possibly justify an arrest. Id. at 345-346, 106 S.Ct. at 1098-1099.
Defendants also cite a number of federal cases involving § 1983 causation issues.[6] All *182 involve police officers who either provided misleading information or failed to provide relevant exculpatory information in pursuing criminal charges and who argued that they were not responsible for any constitutional deprivations because other parties, e.g., prosecutors, intervened. In Jones v. Chicago, 856 F.2d 985, 993-994 (C.A.7, 1988), the court reiterated that "`a man [is] responsible for the natural consequences of his actions'" and that Malley held that the issuance of an arrest warrant will not shield a police officer from liability if a reasonably well-trained officer would have known that his affidavit failed to establish probable cause. It continued:
By parallel reasoning, a prosecutor's decision to charge, a grand jury's decision to indict, a prosecutor's decision not to drop charges but to proceed to trialnone of these decisions will shield a police officer who deliberately supplied misleading information that influenced the decision....
... If police officers have been instrumental in the plaintiff's continued confinement or prosecution, they cannot escape liability by pointing to the decisions of prosecutors or grand jurors or magistrates to confine or prosecute him. They cannot hide behind the officials whom they have defrauded. [Id. at 994.]
These cases involve factual misrepresentations by police officers to the parties responsible for deciding whether to proceed with criminal charges or whether there is sufficient evidence to issue arrest or search warrants. In this context, where a subsequent decision-maker makes a decision solely on the basis of information provided by a police officer, usually in an ex parte presentation, that decision cannot shield the officer who engaged in wrongdoing by supplying false or misleading information. The misleading information is so enmeshed in the decision of the subsequent decision-maker that the officer's misconduct merges with the action of the subsequent decision-maker. The essential point of these cases is that where the officer's misconduct taints the legal process, a decision bearing that taint cannot insulate the officer from liability.
Defendants cite Wyatt v. Cole, 504 U.S. 158, 164-165, 112 S. Ct. 1827, 1831-1832, 118 L. Ed. 2d 504 (1992), for the proposition that § 1983 liability extends to parties who "set the wheels of government in motion by instigating a legal action." Actually the portion of Wyatt cited by defendants states only that the absolute immunity accorded public prosecutors and judges at common law "did not extend to complaining witnesses who, like respondents, set the wheels of government in motion by a legal action." Id. Thus, the Wyatt Court did not address the issue of the plaintiff's affirmative liability under § 1983 for seeking relief under the statute but only addressed whether they were entitled to absolute immunity akin to that of selected public officials. Id. at 168-169, 112 S.Ct. at 1833-1834.
Further, Wyatt involved a statute allowing seizure of property on the basis of ex parte proceedings. See also Lugar v. Edmondson Oil Co., Inc., 457 U.S. 922, 102 S. Ct. 2744, 73 L. Ed. 2d 482 (1982). In these cases, the courts made decisions to seize or execute property on the basis of information provided solely by the party seeking such relief and subsequent hearings required by the statutes resulted in the dismissal of the complaints. That these courts changed their minds about the propriety of seizure or execution suggests that only upon the subsequent full hearings were the courts provided with a complete recitation of the facts necessary to resolve the controversies. Accordingly, we believe that these cases also involved situations where the actions of the parties seeking relief may be understood to have merged with the judicial actions.
The rationale of these cases carve out an exception to the general rule that the courtor more properly the law itselfrather than the party seeking an injunction, is responsible for a wrongly issued injunction. We note that the Malley Court itself expressly indicated that it was announcing an exception to the general rule that parties requesting relief are not responsible for errors by a court in issuing such relief:
[I]t goes without saying that where a magistrate acts mistakenly in issuing a warrant but within the range of professional competence of a magistrate, the officer who requested the warrant cannot be held *183 liable. But it is different if no officer of reasonable competence would have requested the warrant, i.e., his request is outside the range of the professional competence expected of an officer. [Malley, supra at 346, n. 9, 106 S.Ct. at 1098, n. 9.]
This exception applies when the party seeking an injunction engages in misconduct that taints the process such that the court's decision cannot be separated from the party's misconduct. For example, in Dennis v. Sparks, 449 U.S. 24, 25, 31-32, 101 S. Ct. 183, 185, 188, 66 L. Ed. 2d 185 (1980), the Court held that private parties who "participate in subverting the judicial process" by conspiring with a judge to "corruptly" issue an injunction were not immune from § 1983 damages liability. A merger of a party's actions with judicial action is also sometimes implicated when judicial decisions are made on the basis of ex parte proceedings. Ex parte proceedings allow a party to present a single version of the facts and applicable law without an opportunity for an opposing party to contest these representations. The possibility that concerned the Malley Court with regard to arrest warrants"it is possible that a magistrate, working under docket pressures, will fail to perform as a magistrate should," Malley, at 345-346, 106 S.Ct. at 1098-1099is largely vitiated in an adversarial proceeding. The actions of a party do not merge with the court's actions when the court is able to fulfill independently its adjudicative responsibilities and to exercise its discretion on the basis of information gleaned in an adversarial proceeding.
The proposition that a party is "responsible for the natural consequences of his actions" is limited where subsequent, independent factors are more proximately responsible for the consequences. In the cases cited by defendants, this proposition held because the officers' misconduct infected the subsequent decisions of prosecutors or judges and thereby remained the proximate causes of any constitutional violations. However, generally, in the absence of misconduct by a party that taints the process and the independence of subsequent decision-makers, what emerges from the legal process is more directly a consequence of the dictates of the law than the conduct of a litigant.
Here, plaintiffs' pursuit of the injunction, which was ultimately determined to be overbroad, did not taint the legal process. Plaintiffs did not engage in any wrongdoing. Plaintiffs did not make misrepresentations that would have undermined the trial court's ability to perform its adjudicative function or to exercise its discretion. Plaintiffs simply made the colorable argument that their proposed injunction was warranted under the undisputed facts relating to the previous Klan rally. Plaintiffs' attorney, exercising "reasonable professional judgment," Malley, at 346, 106 S.Ct. at 1098-1099, could have responsibly concluded that the request for preliminary injunctive relief was justified by the facts and the law. Further, the proceedings were not ex parte. They were conducted adversarially, as required by MCR 3.310(A)(1); both parties had a full opportunity to proffer evidence, to contest proofs advanced by the other and to argue their respective positions. The trial court was thus properly apprised of the facts and the arguments of both sides and was able to make an informed judgment concerning the merits of the proposed injunction. The exercise of this independent judgment by the court, untainted by any misconduct on plaintiffs' part, constitutes the "cause" of the constitutional violation at issue.
For these reasons, we conclude that defendants cannot raise a genuine factual issue indicating that plaintiffs were responsible for the constitutional violation at issue. Accordingly, the trial court properly granted plaintiffs' motion for summary disposition regarding the § 1983 claim, albeit on the basis of a different analysis than that articulated here. Therefore, we will not disturb the circuit court's holding on appeal. See In re Condemnation of Private Property to Acquire Land for the Detroit Metropolitan Wayne Co. Airport, 211 Mich.App. 688, 692, 536 N.W.2d 598 (1995).
Affirmed.
NOTES
[*] Circuit judge, sitting on the Court of Appeals by assignment.
[1] We note that consideration of a threshold issue might have obviated the necessity of reaching the constitutional questions. Defendants obtained their permit from the Michigan Capitol Park Commission, which has authority to promulgate rules pursuant to the Administrative Procedure Act of 1969, M.C.L. § 24.201 et seq.; M.S.A § 3.560(101) et seq., for the management and operation of the State Capitol and its grounds, M.C.L. § 18.1298c(b); M.S.A. § 3.516(298c)(b). The commission consists of seven members, one of whom is a nominee of the mayor of the City of Lansing, M.C.L. § 18.1298(2); M.S.A. § 3.516(298)(2). The commission conducts its business subject to the Open Meetings Act and must give public notice of the time, date, and place of its meetings. M.C.L. § 18.1298a(1); M.S.A. § 3.516(298a)(1). Hence, we assume plaintiffs had constructive, if not actual, notice that defendants' application for a rally permit would be up for consideration by the commission before the actual approval of the permit and, likewise, had notice of the issuance of the permit. Accordingly, plaintiffs had an opportunity to argue their justification and evidentiary support for time, place, and manner restrictions to the commission. In lieu of seeking injunctive relief, they could have pursued remedies pursuant to M.C.L. § 600.631; M.S.A. § 27A.631 (RJA § 631). Southeastern Oakland Co. Incinerator Authority v. Dep't of Natural Resources, 176 Mich.App. 434, 440 N.W.2d 649 (1989). The present suit for injunctive relief was vulnerable to a motion to dismiss for plaintiffs' failure to exhaust its remedies under RJA § 631. Blue Cross & Blue Shield of Michigan v. Comm'r of Ins., 155 Mich.App. 723, 729-734, 400 N.W.2d 638 (1986).
[2] The United States Supreme Court has recognized the power of the police to limit or curtail speech when there is a "`clear and present danger of riot, disorder, interference with traffic upon the public streets, or other immediate threat to public safety, peace, or order.'" Feiner v. New York, 340 U.S. 315, 320, 71 S. Ct. 303, 306, 95 L. Ed. 295 (1951), quoting Cantwell v. Connecticut, 310 U.S. 296, 308, 60 S. Ct. 900, 905, 84 L. Ed. 1213 (1940); see also Cohen v. California, 403 U.S. 15, 20, 91 S. Ct. 1780, 1785-1786, 29 L. Ed. 2d 284 (1971). Recognizing that "the ordinary murmurings and objections of a hostile audience cannot be allowed to silence a speaker" and "mindful of the possible danger of giving overzealous police officials complete discretion to break up otherwise lawful public meetings," the Feiner Court nevertheless held that when a situation threatens to turn into civil disorder, the authorities are not "powerless to prevent a breach of the peace." Feiner, supra at 320-321, 71 S.Ct. at 306-307. See also Schenck v. United States, 249 U.S. 47, 52, 39 S. Ct. 247, 249, 63 L. Ed. 470 (1919).
[3] Any error on plaintiffs' part was exclusively in their application of the law to the situation at issue. Such legal errors do not generally subject a party to tort liability. For example, we note that Michigan does not recognize a separate civil action for perjury, Meyer v. Hubbell, 117 Mich.App. 699, 704, 324 N.W.2d 139 (1982); a fortiori, a litigant would not be liable for damages for making a nonperjurious plausible legal argument. Further, in the absence of frivolousness, a losing party is not even liable for the other party's attorney fees, much less tort damages, for seeking recovery to which it is ultimately found unentitled. See MCR 2.625(A)(2); M.C.L. § 600.2591; M.S.A. § 27A.2591; State Farm Automobile Ins. Co. v. Allen, 50 Mich.App. 71, 74-80, 212 N.W.2d 821 (1973).
[4] For example, with respect to the issuance of a preliminary injunction or temporary restraining order, FR Civ P. 65(c) and MCR 3.310(D)(1) provide for security, in the amount the court deems proper, for the payment of damages that "may be incurred or suffered by any party who is found to have been wrongfully enjoined or restrained." MCR 3.310(D)(1) explicitly indicates the discretionary nature of this relief by stating that the court "may" require such security. Such express provisions of relief to a party injured by an injunction, if anything, underscore the continued viability of the general rule in Michigan and the federal system, to wit: that relief is not generally available to a party so injured apart from these rules. That the posting of security is not required of municipal corporations that seek injunctions, MCR 3.310(D)(2), does not, in our judgment, alter this inference.
[5] That there are additional transactional costs, in terms of delay, involved in an appeal does not shift responsibility for the consequences of an erroneously granted injunction. Defendants' injury resulted from the fact that appellate correction of the circuit court's error was not instantaneous. However, the system does not generally compensate for such unavoidable delays of process.
[6] Jones v. Chicago, 856 F.2d 985 (C.A.7, 1988); Robinson v. Maruffi, 895 F.2d 649 (C.A.10, 1990); Buenrostro v. Collazo, 973 F.2d 39 (C.A.1, 1992); DeLoach v. Bevers, 922 F.2d 618 (C.A.10, 1990); Goodwin v. Metts, 885 F.2d 157 (C.A.4, 1989); Wagenmann v. Adams, 829 F.2d 196 (C.A.1, 1987); Reich v. Minnicus, 886 F. Supp. 674 (S.D.Ind., 1993); Johnson v. Chicago, 711 F. Supp. 1465 (N.D.Ill., 1989); Mitchell v. City of Hartford, 674 F. Supp. 60 (D.Conn., 1986). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623125/ | 15 So. 3d 939 (2009)
KEYBANK NATIONAL ASSOCIATION, Appellant,
v.
KNUTH LTD.; Scott M. Sutter; The Scott Sutter Trust U/A 11/18/03; Accredited Surety and Casualty Co., Appellees.
No. 3D09-996.
District Court of Appeal of Florida, Third District.
August 12, 2009.
Arnstein & Lehr and Alan G. Kipnis and Joseph F. Poklemba, Fort Lauderdale, for appellant.
Samuel J. Kaufman, Key West and James W. McQuade, for appellees.
Before COPE, WELLS, and SUAREZ, JJ.
*940 COPE, J.
This is an appeal of a non-final order which denied a motion to appoint a receiver. We conclude that the motion should have been granted and remand for further proceedings.
KeyBank National Association ("the lender") made a mortgage loan on property in Key West, Florida, owned by Knuth, Ltd., Scott M. Sutter, and The Scott Sutter Trust U/A 11/18/03 ("the borrowers"). The borrowers have defaulted and the outstanding principal and interest is approximately $2 million.
The property consists of rental units. In January, 2009, the trial court entered an order enforcing the assignment of rents clause which is contained in the mortgage. The order was effective as of December 15, 2008. The court ordered that (a) the rents could only be used to maintain and operate the property; (b) any excess was to be deposited in the registry of the court; and (c) a complete and full accounting was to be provided monthly to the court and the lender.
In March, 2009, the lender filed a verified emergency motion for appointment of receiver. See Fla. R. Civ. P. 1.620. The trial court conducted a hearing and denied the motion. The lender has appealed. See Fla. R.App. P. 9.130(a)(3)(D).
At the hearing it was undisputed that the borrowers had not complied with the order enforcing assignment of rents. The borrowers had not deposited any of the rents into the registry of the court and had not provided an accounting. By the time of the hearing, over three months had passed since the December 15, 2008 effective date of the order enforcing the assignment of rents.
"A receiver will not be appointed unless certain requirements are met. First, the party seeking a receiver must show that there is a substantial likelihood that it will prevail on the merits at the conclusion of the case." Manuel Farach, Florida Real Estate § 28:9 (2008) (citing Colley v. First Fed. Sav. & Loan Ass'n, 516 So. 2d 344, 345 (Fla. 1st DCA 1987)). That requirement is met here, for it is undisputed that the mortgage is in default and the borrowers did not show any meritorious defense in the proceedings below.
"If the rents and profits are pledged as additional security, then not using the rents and profits to pay the mortgage is a basis for appointment of a receiver." Manuel Farach, Florida Real Estate § 28.9 (citing Carolina Portland Cement Co. v. Baumgartner, 99 Fla. 987, 128 So. 241, 248 (1930)); Colley, 516 So.2d at 345-46. In this case, the rents and profits are pledged as additional security. The borrowers have not obeyed the order enforcing the assignment of rents.
The Florida Supreme Court has said:
Where the rents and profits are expressly made a part of the security, and the mortgagor is receiving them but refusing to apply them to the mortgage debt, which he is allowing to go in default, thus dissipating a part of the security while allowing the debt to increase, a court of equity should appoint a receiver unless the mortgagor makes it clear that the real property covered by the mortgage will sell for enough to pay the debt and charges due the mortgagee and thus affords ample and entirely adequate security. Having voluntarily pledged the rents and profits as part of the security, a mortgagor in default who is misapplying them should not be heard to object to their being impounded by the court pending foreclosure proceedings, regardless of his solvency, unless he satisfies the court that the remaining real estate security is entirely adequate, and that there is no equitable need to disturb the possession *941 accorded him by the statute, or gives security to account for such rents and profits.
Carolina Portland Cement Co., 128 So. at 249-50 (emphasis added); Barnett Bank of Alachua County, N.A. v. Steinberg, 632 So. 2d 233, 234 (Fla. 1st DCA 1994); Florida Reinvestment Corp. v. Cypress Sav. Ass'n, 509 So. 2d 1352, 1354 (Fla. 4th DCA 1987) (en banc); Colley, 516 So.2d at 346.
The lender in this case carried its burden. The borrowers failed to show that the real property covered by the mortgage would sell for enough to pay the debt and charges. Alternatively, the borrowers did not provide "security approved by the court, to account for the rents and profits." Florida Reinvestment, 509 So.2d at 1354.
The trial court reasoned that the motion to appoint a receiver was premature, because earlier in the same hearing, the court had issued an order to the borrowers to show cause why they should not be held in contempt for failing to comply with the order enforcing the assignment of rents. The show cause order was to be returnable at a future date. While a show cause order was perfectly appropriate in light of the borrowers' noncompliance, the case law cited above explains that on the showing made here, a receiver should have been appointed.
The trial court also commented that "no admissible evidence was tendered to the Court demonstrating that the present value of the property is insufficient to meet Plaintiff's claims." The lender correctly points out that this places the burden on the wrong party. As stated in the cases cited above, the burden is on the borrowers to demonstrate that the value of the property is sufficient to pay the debt and charges due to the lender. The motion for a receiver should have been granted. In light of the foregoing, we need not address the lender's additional argument that the borrowers are committing waste by allowing city-imposed fines to accumulate on the property.
For the stated reasons, we reverse the order now before us and remand with directions to grant the motion to appoint a receiver. This ruling is effective immediately, and will not be delayed by the filing of a motion for rehearing or other postdecision motion. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623132/ | DEANO & DEANO, INC. AND ROBERT M. GREEN
v.
SUCCESSION OF NOEL RICKS AND ALETA RICKS.
No. 2008 CA 1782.
Court of Appeals of Louisiana, First Circuit.
July 31, 2009.
Not Designated for Publication
MALCOLM B. ROBINSON, Jr., Counsel for Plaintiffs/Appellees Deano & Deano, Inc. and Robert M. Green.
WILLIAM M. MAGEE, PATRICE W. OPPENHEIM, Counsel for Defendant/Appellant Succession of Noel Ricks.
Before: KUHN, GUIDRY, and GAIDRY, JJ.
GAIDRY, J.
In this suit on open account, the Succession of Noel Ricks appeals a judgment ordering it to pay for legal services purportedly provided to it by plaintiffs. We remand to have the trial court render a judgment which is precise, definite, and certain.
FACTS AND PROCEDURAL HISTORY
On February 4, 2003, the law firm of Deano & Deano and Robert M. Green (collectively "plaintiffs") filed a suit on open account against the Succession of Noel Ricks ("the Succession"), through its testamentary executrix, Aleta Ricks, and also against Aleta Ricks individually. The petition alleges that the Succession owes plaintiffs $32,761.94, plus interest and attorney's fees, for legal services rendered by plaintiffs for the benefit of the estate. The petition alternately states that should the court find that any portion of the debt is not a succession debt, then Aleta Ricks is personally indebted to plaintiffs for that amount.
Aleta Ricks filed a reconventional demand on September 25, 2003, in which she stated that as executrix of the Succession, she hired the plaintiffs to perform legal work for the Succession.
On March 2, 2005, the plaintiffs filed a Petition for Declaratory Judgment seeking to have the court declare which of the professional legal services rendered by the plaintiffs were rendered for the benefit of the Succession and the testamentary executrix and which services were rendered for the benefit of Aleta Ricks personally.
On December 21, 2006, plaintiffs filed a Motion to Determine Status of Succession Debt, seeking to have the court "determine what percentage of the services performed by [plaintiffs] are debts of the Succession of Noel Ricks incurred by Aleta Ricks in her capacity as Executrix." A hearing was held on this motion on November 12, 2007, after which the court rendered judgment on April 23, 2008 in favor of plaintiffs and against the Succession finding that the Succession is indebted to the plaintiffs for all of the professional legal services rendered by plaintiffs, with the exception of the charges associated with the filing of the motion to withdraw.
The Succession appealed, assigning the following trial court errors:
The Trial Court erred in failing to recognize that plaintiffs failed to prove a written contract existed with a duly authorized representative of the Succession.
The Trial Court erred in failing to recognize that plaintiffs failed to prove the existence of an oral contract in excess of $500.00 existed with a duly authorized representative of the Succession.
The Trial Court erred in holding that Aleta Ricks was authorized to incur debts on behalf of the Succession during the entirety of the time for which plaintiff sought recovery of fees and expenses.
The Trial Court erred in holding that the actions of the plaintiffs benefited the Succession without evidence of same.
DISCUSSION
Louisiana Civil Code article 1846 provides that if the price or value of a contract is in excess of five hundred dollars, an oral contract must be proved by at least one witness and other corroborating circumstances. To meet this burden of proof, a plaintiff may serve as his own witness, and the "other corroborating circumstances" may be general and need not prove every detail of the plaintiffs case. However, the corroborating circumstances that are required must come from a source other than the plaintiff. Pennington Construction, Inc. v. R A Eagle Corporation, 94-0575 (La. App. 1st Cir. 3/3/95), 652 So. 2d 637, 639.
The existence or non-existence of a contract is a question of fact, and the trial court's determination of this issue will not be disturbed unless it is manifestly erroneous or clearly wrong. Townsend v. Urie, XXXX-XXXX (La. App. 1st Cir.5/11/01), 800 So. 2d 11, 15, writ denied, XXXX-XXXX (La. 9/21/01), 797 So. 2d 674. Similarly, the issue of whether there were corroborating circumstances sufficient to establish an oral contract is a question of fact. Pennington Construction, Inc., 652 So.2d at 639. Moreover, when evaluating the evidence needed to establish the existence or non-existence of a contract, the trial court is allowed to make credibility determinations. See Imperial Chemicals Limited v. PKB Scania (USA), Inc., 2004-27'42 (La. App. 1st Cir. 2/22/06), 929 So. 2d 84, 93, writ denied, XXXX-XXXX (La. 5/26/06), 930 So. 2d 31.
In this case, the plaintiffs carried their burden of proving an oral contract in excess of five hundred dollars by the testimony of Robert Green and the statement in Aleta Rick's reconventional demand that she hired the plaintiffs to perform legal work for the benefit of the Succession.
Despite our conclusion that the plaintiffs carried their burden of proving an oral contract, we find that a defect in the trial court's judgment requires us to remand this matter so that a proper judgment may be rendered. The trial court's April 23, 2008 judgment ordered the Succession to pay plaintiffs "the sum of $32,761.94, together with legal interest thereon from the date of judicial demand until paid and all costs of these proceedings, less and except those sums in the statement of services rendered for the attorney time for the preparation and filing of the Motion to Withdraw and the court costs associated with the filing of the Motion to Withdraw." A judgment must be precise, definite, and certain. Vanderbrook v. Coachmen Industries, Inc., XXXX-XXXX (La. App. 1st Cir. 5/10/02), 818 So. 2d 533, 906, 913. Moreover, a judgment must not be based on any contingency. Drury v. Drury, XXXX-XXXX (La. App. 1st Cir. 8/21/02), 835 So.2d, 538-539. If a judgment based upon a demand for money purports to be final, the amount of the recovery must be stated in the judgment with certainty and precision, and the amount should be determinable from the judgment without reference to an extrinsic source such as pleadings or reasons for judgment. Vanderbrook, 818 So.2d at 913. If the amount remains to be determinable by a future contingency or is otherwise indefinite and uncertain, it is not a valid and proper judgment. Fontelieu v. Fontelieu, 116 La. 866, 881, 41 So. 120, 125 (1906); see also Russo v. Fidelity & Deposit Co., 129 La. 554, 561, 56 So. 506, 508 (1911), and Simon v. Hulse, 12 La. App. 450, 450-451, 124 So. 845, 846 (La. App. 1st Cir. 1929).
The amount ordered to be paid by the Succession in the judgment is not certain. The amount for "the attorney time for the preparation and filing of the Motion to Withdraw" can only be found by reference to an extrinsic source the statement of services filed along with the petition; and the amount of "the court costs associated with the filing of the Motion to Withdraw" is not contained in the record. Therefore, we remand to the trial court for the limited purpose of amending the judgment to state the amount of recovery with certainty and precision.
DECREE
This matter is remanded to the trial court for the sole purpose of amending the judgment to state the amount awarded to the plaintiffs with certainty and precision. The appeal record is to be supplemented with the reformed judgment, within thirty days of the date of this action, and all assignment of errors will be addressed after the record is supplemented. Costs of this appeal will be assessed after the final determination of the appeal.
REMANDED. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623141/ | 569 So. 2d 1120 (1990)
William MORLTE, Plaintiff-Appellee,
v.
CERTIFIED LLOYDS, et al., Defendant-Appellants.
No. 89-476.
Court of Appeal of Louisiana, Third Circuit.
November 7, 1990.
*1121 Downs & Downs, James C. Downs, Alexandria, plaintiff-appellee.
David E. Marquette, Baton Rouge, James N. Lee, Bunkie, for defendants-appellants.
Before DOMENGEAUX, C.J., and STOKER and YELVERTON, JJ.
STOKER, Judge.
Plaintiff, William Morlte, brought suit to recover for damages to his automobile under his Certified Lloyds automobile insurance policy. The damages were sustained on June 6, 1988. The issue in this case is whether plaintiff's financed automobile insurance policy was in effect on that date. The insurer relies on a cancellation notice issued on January 21, 1988 by the premium financing agency relative to an earlier issued insurance binder. The defendants in this suit are I & F Insurance Agency, Certified Lloyds, Live Oak Underwriters (Certified Lloyds' insurance underwriter) and Premium Finance Company, Inc. The trial court held in favor of Morlte, finding that Certified Lloyds was estopped from denying liability to plaintiff. The trial court held Premium Finance not liable under the facts of the case.
Certified Lloyds appeals this judgment contending it is not liable because the policy was effectively canceled at the time of the accident and, in the alternative, that Premium Finance is liable to Morlte for misleading Morlte as to the existence of insurance coverage on his automobile. Morlte answered the appeal, asking that Premium Finance be held liable for damages in the event we find Certified Lloyds *1122 not liable. We affirm and amend to grant additional attorney fees.
FACTS
The trial court ably set forth the facts established at trial in its reasons for judgment which we adopt as our own as follows:
"Plaintiff went to I & F Insurance Agency in Alexandria to purchase insurance on a 1983 Ford LTD automobile which he had recently bought. I & F gave to plaintiff an `insurance binder' showing coverage effective at 3:45 P.M. on November 30, 1987, through January 30, 1988. The binder was signed by Mr. Errol Janet, as authorized representative, on November 30, 1987, and listed the insurance company as `Live Oak/Certified Lloyds.' The binder was unnumbered. (See P-1.) At this same time plaintiff signed a premium financing agreementtruth-in-lending disclosure on a form provided by Premium Finance Company, Inc. to I & F. The agreement stated that the policy was to be issued by Live Oak as the general agent and was to be issued by Certified Lloyds as the insurance company with an effective date of November 30, 1987 for a policy term of twelve months. The premium finance agreement provided that Premium Finance Company, Inc. (hereinafter Premium) was granted a power of attorney to cancel the policy for non-payment of premium and to collect all return premiums on the policy and to execute all necessary written instruments, lost policy releases and notices in connection therewith and `to do whatever is necessary in the cancellation of such policies.' Plaintiff paid, not the down payment of $338.00 listed on the premium finance agreement, but $30.00 to I & F. The payment in the amount of $107.90 was due Christmas Day of 1987. Errol Janet signed the agreement as agent. Plaintiff thought, contrary to the written document which he had signed, that his first payment would be due January 25th. Accordingly, he failed to pay the December installment and, in accordance with its power of attorney, Premium issued to Certified Lloyds through its general agent, Live Oak, a request for cancellation after sending the appropriate notice to plaintiff. Upon receiving the notice of cancellation, plaintiff went to I & F and inquired about the matter. He paid the policy premium [for December and January] of $221.19 plus a late charge of $5.39 which was received by Premium on February 4, 1988. Thereafter, he made payments which were received by Premium as follows:
2/23/88 $107.90
3/22/88 $107.90
4/25/88 $107.90
5/24/88 $107.90
6/27/88 $107.90
(See P-7, P-8)
"When Premium received the December and January payments in the total amount of $226.58, it wrote plaintiff on February 4, 1988, advising that binder # 1130723B with Certified Lloyds had been cancelled for non-payment. The letter provided that `we are accepting this payment on the basis that your insurance is cancelled at this time; but we will write to the insurance company requesting reinstatement as your note is no longer in default.' The letter further provided in a post script. `By copy of this letter to the company we are requesting they reinstate the above mentioned policy.'
"Ostensibly, in reply to Premium's request to reinstate the policy, Certified sent I & F Agency a memo requesting a statement of No Loss signed by William Morlte, said memo being dated February 22, 1988.
"Thereafter, plaintiff received correspondence from I & F Insurance Agency dated March 17, 1988, informing him that `please find enclosed your automobile policy effective November 30, 1987 through November 30, 1988 along with your Louisiana identification cards.' Enclosed in the I & F letter was a Certified Lloyds policy insuring plaintiff's automobile for liability, property damage, comprehensive and collision losses. The policy (see P-11) had effective dates of November *1123 30, 1987, through November 30, 1988. It was countersigned as being issued on February 10, 1988, some six days after the Premium letter of February 4, 1988, advising plaintiff that reinstatement of his insurance had been requested of Certified Lloyds. As noted above, plaintiff continued to pay with utmost faithfulness the monthly installments through June 27, 1988. On June 6, 1988, plaintiff loaned his automobile to Melvin Jenkins who struck a parked car while operating it. The uncontradicted evidence shows that the cost to repair plaintiff's vehicle is $2,309.85. On June 13, 1988 plaintiff submitted a proof of loss on a form completed by Mr. David Bates of David Bates Insurance Agency and within two weeks [July 6, 1988] Certified Lloyds issued a premium refund to Premium Finance Co., Inc. who in turn refunded the excess to plaintiff [August 12, 1988], both refunds being premises [sic] on the contention that the Certified Lloyds was `cancelled.' Plaintiff, through undersigned counsel, on July 26, 1988, made demand on Certified Lloyds and Premium for adjustment of the loss. All defendants have denied liability."
OPINION
CERTIFIED LLOYDS' LIABILITY
Certified Lloyds contends on appeal that Morlte's automobile insurance policy was effectively canceled as of January 21, 1988, due to Morlte's failure to make timely payments and was not reinstated due to Morlte's failure to return a "No Loss Statement" for the period from January 21, 1988, through February 4, 1988. Morlte argues that the binder was canceled on January 21, 1988, but that the policy was not since it was not issued until February 10, 1988 (the date it was countersigned by Certified Lloyds) and therefore was in effect at the time of the accident.
We find that the binder was canceled by Premium Finance, rather than the insurance policy. The binder issued to Morlte was a temporary insurance contract which was to be effective from November 30, 1987 to January 30, 1988. A binder does not constitute part of an insurance policy. LSA-R.S. 22:628; LSA-R.S. 22:631; Liberty Mut. Ins. Co. v. Ads, Inc., 357 So. 2d 1360 (La.App. 4th Cir.1978). See also Ferrara v. Strain, 497 So. 2d 1077 (La.App. 5th Cir.1986), writ denied, 501 So. 2d 238 (La. 1987). At the time of the January 21, 1988 cancellation, the binder was the only contract in effect since the insurance policy was not issued until February 10, 1988. Therefore, the insurance policy was not canceled.
Certified Lloyds contends that "reinstatement" of Morlte's policy was conditioned upon his return of a signed "No Loss Statement" for the period from January 21, 1988 to February 4, 1988. Despite the fact that this statement was not returned to Certified Lloyds, Morlte's policy was issued on February 10, 1988, mailed to I & F and forwarded to Morlte on March 17, 1988. His premium was retained by Certified Lloyds until July 6, 1988.
LSA-R.S. 9:3550(H) requires the insurer to return the unearned premium on a canceled policy which has been financed no later than sixty days after the effective date of the cancellation. Certified Lloyds returned the unearned premium five and one-half months after cancellation. Subsection (G)(3) of that statute provides that the insurer is fully discharged from all liability under the insurance contract for any loss occurring subsequent to the effective date of the cancellation upon mailing of any unearned premium to the finance company. Since the accident occurred on June 6, 1988, and Certified Lloyds did not mail the unearned premium to Premium Finance until July 6, 1988, Certified Lloyds was not "fully discharged from all liability" at the time of the June 6 accident.[1]
*1124 Although the extent of Certified Lloyds' liability under LSA-R.S. 9:3550(G) is not clear from the statute and there is no jurisprudence construing the statute, we hold that Certified Lloyds is liable in these circumstances for Morlte's damages, as discussed below.
We hold that Certified Lloyds intentionally waived its right to avoid the contract since it issued Morlte's policy without having received the "No Loss Statement" and did not refund the unearned premium within sixty days. However, Certified Lloyds alleges that the policy was issued after cancellation and the premium refunded untimely because of an office move and holidays which caused disorganization and a backlog in work. Even so, Certified Lloyds is estopped from denying coverage since Morlte relied to his detriment upon the reasonable belief that he was insured by Certified Lloyds.
Morlte's detrimental reliance on the Certified Lloyds policy is clear. Morlte reasonably believed he was insured because his policy was issued, effective from November 30, 1987 to November 30, 1988, after his binder was canceled and after he had requested "reinstatement." Morlte relied to his detriment on this belief because criminal sanctions are imposed for failure to carry automobile liability insurance and because he would not have coverage for the damages incurred in the June 6 accident.
Certified Lloyds issued Morlte's policy with actual knowledge of its power of avoidance due to cancellation of the binder for nonpayment of premiums and nonreceipt of the "No Loss Statement." Therefore, it is estopped from avoiding liability for Morlte's claim on the June 6, 1988 accident. See Stovall v. Empire State Ins. Co., 215 La. 100, 39 So. 2d 837 (1949); Quinones v. Life & Cas. Ins. Co. of Tennessee, 209 La. 76, 24 So. 2d 270 (1945); Humphries v. Puritan Life Ins. Co., 311 So. 2d 534 (La.App. 3d Cir.1975); Comment, 22 La.L.Rev. 202 (1961).
PREMIUM FINANCE'S LIABILITY
Finally, Certified Lloyds contends the trial court erred in holding Certified Lloyds liable rather than Premium Finance, since Premium Finance misled Morlte by continuing to accept payment on the premium note without receiving notice of reinstatement. We disagree.
A premium financing agreement is an agreement by which an insured or prospective insured promises to pay an insurance premium finance company the amount advanced under the agreement to an insurer in payment of premiums on an insurance contract. LSA-R.S. 9:3550(B)(2). Payments made to the finance company by the insured are not premium payments, they are loan payments. Therefore, while Morlte might have taken the acceptance of the monthly loan payments by Premium as an indication that his insurance was in force, such an assumption was not warranted. As between Morlte and Premium the payments were loan payments. Consequently, we cannot say that Premium misled Morlte by accepting his loan payments.
Moreover, Certified Lloyds alone was responsible for the issuance of Morlte's insurance policy and for the failure to refund the unearned premiums. We affirm the trial court's finding of no liability on the part of Premium Finance.
ATTORNEY FEES
Morlte has answered the appeal, asking for an award of attorney fees for this appeal. We find that plaintiff is entitled to an award of $750 to cover the cost of attorney services on appeal. LSA-R.S. 22:658; Bernard v. Merit Drilling Co., 434 So. 2d 1282 (La.App. 3d Cir.1983).
*1125 CONCLUSION
Accordingly, for the reasons given, the judgment of the trial court is affirmed and amended to increase the award of attorney fees by $750, to a total of $3,250. Costs of this appeal are assessed to defendant-appellant, Certified Lloyds.
AFFIRMED AS AMENDED.
NOTES
[1] Certified Lloyds argues that failure by the insurer to timely refund the unearned premium does not extend the effective date of the policy; it merely creates a creditor-debtor relationship. Ardoin v. Audubon Ins. Co., 434 So. 2d 627 (La. App. 3d Cir.1983). This argument applies to LSA-R.S. 22:636(D), which mandates a refund of the unearned premium "as soon as practicable." However, LSA-R.S. 9:3550, which is the applicable statute in this case, requires the refund to be made "as soon as reasonably possible but in no event shall the period for payment exceed sixty days after the effective date of cancellation." (Emphasis added.) | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623129/ | 609 S.W.2d 423 (1980)
STATE of Missouri, Respondent,
v.
Eddie GREER, Appellant.
No. WD 31117.
Missouri Court of Appeals, Western District.
November 3, 1980.
Motion for Rehearing and/or Transfer Denied December 2, 1980.
Application to Transfer Denied January 13, 1981.
*425 Clifford A. Cohen, Public Defender, Gary L. Gardner, Asst. Public Defender, Kansas City, for appellant.
John Ashcroft, Atty. Gen., Jefferson City, Earl W. Brown, III, Philip M. Koppe, Asst. Attys., Gen., Kansas City, for respondent.
Before TURNAGE, P. J., and SHANGLER and MANFORD, JJ.
Motion for Rehearing and/or Transfer to Supreme Court Denied December 2, 1980.
MANFORD, Judge.
This is a direct appeal from convictions for two counts of kidnapping, two counts of rape, two counts of sodomy and two counts of armed criminal action. The jury assessed punishment of six hundred twenty years imprisonment. The judgment is reversed in part and affirmed in part.
Appellant presents three points of error, which in summary allege (1) the trial court erred in failing to dismiss the two counts of armed criminal action because said counts placed appellant in double jeopardy; (2) the trial court erred in compelling appellant to be fingerprinted because, although requested, appellant received no evidentiary hearing pursuant to Rule 25.35; and (3) the trial court erred in admitting both the out-of-court and in-court identification of appellant because the identification was the result of impermissible suggestion by hypnosis, and apart from any suggestiveness, identification premised upon hypnosis is inherently unreliable and violates appellant's rights to constitutional due process.
On November 1, 1977, at about 7:30 p. m., two teenage girls drove to a local record shop in Kansas City, Missouri. They were in the record shop for about 15 minutes and departed early because while inside, they noticed a black male staring at them. The girls rushed to their stationwagon, which was parked and locked on a side street. As the one girl (driver) was unlocking the stationwagon and opening the right front door for the other girl, a white automobile with four or five black males inside backed up alongside the stationwagon. A voice from inside the white automobile asked the girls, "How are you doing tonight?" The girls did not respond. As the girls got into the stationwagon, appellant, with a gun, forced his way into the stationwagon on the passenger side. Appellant pointed the gun at the girls and made them drive through an alley where another black male was located. This second man knocked on the window of the stationwagon and entered the stationwagon. At this point, the girls were forced *426 to move to the rear seat with appellant. Appellant ordered the girls at gunpoint to lay their heads on his lap. The other black male drove the stationwagon. While they were riding and in this position, appellant ordered one of the girls to unzip her pants and appellant placed his hand inside her pants.
After a ride lasting approximately 10-15 minutes, the girls were taken inside a house. Appellant and the other black male were joined in the house by three or four more black males. At gunpoint, the girls were ordered to disrobe. They were told if they did not disrobe, they would be shot or killed. After they removed their clothing, the girls were subjected to multiple and simultaneous acts of vaginal, oral and anal sexual assault by appellant and the other four or five black males in the house. The girls were then ordered to dress, and after doing so, were told to undress, and repeated sexual assaults again occurred. After the second assaults, the girls were taken back to their stationwagon by appellant and another black male. They were ordered to lay on the back seat and from that position, neither girl could observe their location. The time at this point was approximately 11:00 p. m. as the radio was on in the stationwagon and the hour was announced. After driving a short period of time, appellant and the other black male abandoned the girls in the stationwagon. The girls lay on the back seat for about 45 minutes, as appellant had told them to do, because he was going to talk to someone and would return in about 20 minutes. When the girls realized the two black males were gone, they jumped in the front seat and drove the stationwagon away. While driving away, the girls became involved in a collision with another vehicle. They asked the driver of the other vehicle to take them to the hospital. This other driver took the girls to Menorah Hospital. At the hospital, the girls met with a policeman, who transported them to St. Luke's Hospital. At approximately 1:00 a. m., a medical examination was performed on both girls. The medical examination revealed seminal fluid with live sperm in both of the girls and the fact that sexual intercourse had occurred.
While at St. Luke's Hospital, the girls described their abductor as a negro male about 30 years of age, five foot six, 150 pounds, of stocky build with a mustache and afro hairdo of medium length. They said he was wearing a black hat and white coat and was armed with a silver-colored handgun.
An investigation was launched, which resulted in an indictment charging appellant with kidnapping, rape, sodomy and armed criminal action. Numerous pretrial motions were filed and hearings held thereon. Appellant presented an alibi defense. The jury entered its verdict and following the overruling of appellant's motion for new trial, this appeal followed.
Turning to appellant's point one, this court is required to determine whether or not appellant was placed in double jeopardy by being charged with kidnapping (two counts because there were two victims) by and through the use, aid and assistance of a dangerous and deadly weapon; and by the use, aid and assistance thereof, he was charged with two counts of armed criminal action.
Appellant was charged with kidnapping in violation of § 559.240, RSMo 1969, the pertinent part of which reads:
"559.240. Kidnapping.-1. If any person shall, willfully and without lawful authority, forcibly seize, confine, inveigle, decoy or kidnap any person, with intent to cause such person to be sent or taken out of this state, or to be secretly confined within the same against his will, or shall forcibly carry or send such person out of this state against his will, he shall, upon conviction, be punished by imprisonment in the penitentiary not exceeding ten years."
Because appellant kidnapped the two girls at gunpoint, he was charged with two counts of armed criminal action in conjunction therewith. These two counts were premised upon violation of § 559.225 RSMo Supp. 1976, which reads:
*427 "559.225. Armed criminal action-penalty-exceptions.-1. Except as provided in subsection 4 of this section, any person who commits any felony under the laws of this state by, with, or through the use, assistance, or aid of a dangerous or deadly weapon is also guilty of the crime of armed criminal action and, upon conviction, shall be punished by imprisonment by the division of corrections for a term of not less than three years. The punishment imposed pursuant to this subsection shall be in addition to any punishment provided by law for the crime committed by, with, or through the use, assistance, or aid of a dangerous or deadly weapon. No person convicted under this subsection shall be eligible for parole, probation, conditional release or suspended imposition or execution of sentence for a period of three calendar years.
2. Any person convicted of a second offense of armed criminal action shall be punished by imprisonment by the division of corrections for a term of not less than five years. The punishment imposed pursuant to this subsection shall be in addition to any punishment provided by law for the crime committee [sic] by, with, or through the use, assistance, or aid of a dangerous or deadly weapon. No person convicted under this subsection shall be eligible for parole, probation, conditional release or suspended imposition or execution of sentence for a period of five calendar years.
3. Any person convicted of a third or subsequent offense of armed criminal action shall be punished by imprisonment by the division of corrections for a term of not less than ten years. The punishment imposed pursuant to this subsection shall be in addition to any punishment provided by law for the crime committed by, with, or through the use, assistance, or aid of a dangerous or deadly weapon. No person convicted under this subsection shall be eligible for parole, probation, conditional release or suspended imposition or execution of sentence for a period of ten calendar years.
4. The provisions of this section shall not apply to the felonies defined in sections 559.005, 564.590, 564.610, 564.620, 564.630, and 564.640, RSMo."
The issue of double jeopardy arises, of course, from and as a result of the decision by our State Supreme Court in Sours v. State, 593 S.W.2d 208 (Mo.banc 1980). It is not necessary to reiterate the details of Sours, but it suffices to state that the conviction of Sours for robbery, first degree and armed criminal action was held to have subjected Sours to conviction and punishment twice for the same offense, thereby placing Sours in double jeopardy and violating his constitutional rights.
Following the vacating of Sours by the United States Supreme Court in light of Whalen v. United States, 445 U.S. 684, 100 S. Ct. 1432, 63 L. Ed. 2d 715 (1980), and a remand to our State Supreme Court (see Missouri v. Sours, 593 S.W.2d 208 (1980), a second opinion was issued by our State Supreme Court which resulted in the reinstatement and supplement of its original opinion, see Sours v. State, 603 S.W.2d 592 (Mo.banc 1980).
Reduced to its simplest form, the entirety of this issue rests upon the answer to the following questions: Does Sours prohibit punishment for armed criminal action and an "underlying felony" when such felony is robbery in the first degree only? or Does Sours mandate a broader application which results in the prohibition of punishment for armed criminal action in conjunction with any "underlying felony" upon which the armed criminal action is based?
Our State Supreme Court, in the original Sours decision, concluded that robbery, first degree and armed criminal action are the same offense regarding double jeopardy and that punishment for both, whether occurring in a single proceeding or successive proceedings is prohibited. Our State Supreme Court took from and applied the "same offense test" expressed in Blockburger v. United States, 284 U.S. 299, 52 S. Ct. 180, 76 L. Ed. 306 (1932). The court, in Blockburger, declared at 304, 52 S.Ct. at 182:
*428 "The applicable rule is that where the same act or transaction constitutes a violation of two distinct statutory provisions, the test to be applied to determine whether there are two offenses or only one, is whether each provision requires proof of a fact which the other does not."
In Sours, our State Supreme Court concluded that § 559.225 does more than enhance the punishment for the underlying felony. Rather, the court concluded that the statute required two sentences for two crimes (i. e., robbery, first degree and armed criminal action). Our State Supreme Court concluded that armed criminal action and the underlying felony constituted only one offense and not two, and in applying the "same offense test" from Blockburger, further and finally concluded that "conviction for both robbery first degree and armed criminal action places a defendant twice in jeopardy by multiplying the punishment for one offense," Sours, 593 S.W.2d at 222.
The United States Supreme Court then handed down its decision in Whalen v. United States, supra. Whalen reversed a conviction for rape and felony murder (the murder having been committed in perpetration of the rape). The United States Supreme Court concluded the rape and the felony murder were the "same offense", applying Blockburger, and declaring, "proof of rape is a necessary element of proof of the felony murder". Whalen 100 S.Ct. at 1439. The United States Supreme Court then vacated Sours in light of the Whalen decision and Sours was remanded for reconsideration by our State Supreme Court.
Upon remand, our State Supreme Court interpreted Whalen in a very narrow context. In the second Sours decision, our State Supreme Court held that Whalen failed to answer the question of whether legislative intent regarding imposition of multiple punishments for the same offense violated the prohibition against double jeopardy. Our State Supreme Court construed Whalen as having only reached the question of whether or not, by statute, the legislature intended multiple punishment for the same offense. Our Supreme Court found that the United States Supreme Court concluded in Whalen that the legislature did not intend multiple punishments for the same offense, but that Whalen did not address or provide any direction relative to the constitutional question of double jeopardy. From this conclusion, our State Supreme Court felt obligated to again look at § 559.225 with regard to the legislative intent therein and without any direction or guidance from Whalen.
In its second consideration of Sours, our State Supreme Court applied the "same offense test" in Blockburger and concluded that the language of the armed criminal action statute, § 559.225, and the statute defining the underlying felony (robbery first degree) "plainly" do not "require proof of a fact which the other does not ..." Sours v. State, 603 S.W.2d 592, 598 (Mo. banc 1980).
Whalen declared that the court should presume that cumulative punishments were not intended by the legislature where the same offense is involved, unless a contrary intent exists. In Sours, our State Supreme Court found that the Missouri legislature did intend to authorize conviction and punishment for both armed criminal action and the underlying felony. Having reached that point, our State Supreme Court proceeded to decide the proposed constitutional issue of double jeopardy. This conclusion departs from Whalen, for in Whalen, the court had not found such legislative intent.
In its second Sours decision, our State Supreme Court adopted its analysis from its first Sours decision and held thusly, at p. 603 of its opinion:
"The double jeopardy clause of the fifth amendment to the United States Constitution prohibits the state from punishing a person twice for the same offense. . . (citations omitted) . . . Armed criminal action and the underlying felony used to prove armed criminal action-in this case, robbery first degree-are the same offense for double jeopardy purposes under the same evidence test, because it is not the case that proof of robbery requires proof of any fact not *429 also required to prove armed criminal action. . . (citations omitted) . . . Therefore, the double jeopardy clause prohibits separately punishing a person both for armed criminal action and for the underlying felony."
The result in the second Sours decision was the vacating of appellant's conviction for armed criminal action and the reinstatement of the original Sours decision as supplemented.
The instant proceedings require this court to interpret Sours and to determine the extent of its applicability regarding felonies other than the felony of robbery, first degree, hence the question above as to whether or not, for purposes of double jeopardy, punishment for armed criminal action is restricted to robbery, first degree. The instant proceedings also require this court to determine whether or not Sours mandates a broader application, resulting in the prohibition of punishment for armed criminal action in conjunction with any "underlying felony" upon which the armed criminal action is based.
This court is bound to follow the mandate of our State Supreme Court. This court concludes that the prohibition mandated in Sours applies to all underlying felonies and is not limited or restricted to the felony of robbery, first degree. This conclusion is reached for the following reasons and upon the following analyses.
In the first instance, our State Supreme Court, in both Sours' opinions, speaks in general terms about armed criminal action and the "underlying felony". Both opinions only occasionally specify the particular felony involved, to wit, robbery in the first degree. In substance, both opinions, in speaking of the "underlying felony" do not limit the effect of the opinions to robbery, first degree. For example, in the first Sours opinion, the court declared:
"We find that armed criminal action and the underlying felony, in this case robbery first degree are the `same offense' for double jeopardy purposes." Sours, 593 S.W.2d at 210
In its second decision, at pp. 597, 598, 599 and 604 of the opinion, the State Supreme Court stated:
"Applying Blockburger as a rule of statutory construction to the armed criminal action statute and the statute defining the underlying offense, in this case robbery first degree statute ... § 559.225... plainly authorizes punishment both for armed criminal action and for the underlying felony ... Therefore, the double jeopardy clause prohibits separately punishing a person both for armed criminal action and for the underlying felony." (emphasis added)
In addition, if the "same offense test" in Blockburger were applied as it was in Sours, the result reached would be the same, whether applied in those cases where the underlying felony is robbery, first degree, or as in the instant case, the underlying felony is kidnapping, or to any case involving any specific underlying felony and armed criminal action arising out of that felony. Further, Sours has held that the offense of armed criminal action, by definition, includes the underlying felony, in turn defining the underlying felony as a lesser and included offense. Still further, Sours mandates, for the purposes of double jeopardy, that a greater offense is the "same" offense. This was expressed in Sours as follows:
"The crime of armed criminal action consists of two features: (1) any felony, and (2) the use of a dangerous and deadly weapon in the commission of (1). The first feature may be any one of a class of offenses, each of which consists in turn of several elements. If (1) specified a single felony, it would be obvious that armed criminal action includes all of the elements of the felony specified ... the result is no different where the statute refers to `any felony'. Proof of armed criminal action still `cannot be had without' proof of the underlying offense. Harris stands for the proposition that when a statute defines a crime as `any felony' plus other elements, proof of the particular felony involved is required to prove that crime ... Thus ... armed *430 criminal action and the underlying felony constitutes only one offense and not two." Sours, 593 S.W.2d at 219-220
In its Sours decision, our State Supreme Court mandated that § 559.225 be construed as if the sentence, "The punishment imposed pursuant to this subsection shall be in addition to any punishment provided by law for the crime committed by, with or through the use, assistance or aid of a dangerous or deadly weapon," were in fact stricken from each subsection of § 559.225.
In applying the foregoing analysis of Sours, this court concludes that the prohibition premised upon double jeopardy is not limited or restricted to the felony of robbery, first degree, but applies to any underlying felony. For and upon the foregoing reasons, point one raised by appellant is sustained and the convictions are reversed. The sentences affixed pursuant thereto are held to be void.
In point two raised by appellant, the record reveals that during the pretrial hearings on appellant's motions to suppress, respondent filed a motion to compel the taking of appellant's finger and palm prints pursuant to Rule 25.35.[1] Prior to the filing of the written formal motion, respondent, in the presence of appellant's counsel, informed the court that the motion was being filed to avoid transporting a former police officer who, at the time of trial, was a resident of California. This police officer had previously taken appellant's fingerprints while an officer in the State of Illinois. At this juncture, appellant's counsel responded, "I will ... I would anticipate the hearing on that motion would be less than 10 minutes."
The written motion was filed when the court reconvened. Respondent explained to the court the great expense involved in bringing the former police officer from California. Respondent also explained that since appellant was fingerprinted in Illinois as a result of another criminal charge, the production of the prints obtained in Illinois might suggest to the jury appellant's involvement in other criminal activities.
Appellant opposed the motion, stating it was his understanding that Rule 25.35 required a hearing with production of evidence. Appellant further claimed the state was required to show why prints were necessary and what difficulties would be encountered by offering the prints, as they were possessed by respondent. Respondent had the master card of the prints taken in Illinois. Appellant further argued that prints need not be taken because respondent had the master card, that the situation should have been apparent to respondent prior to the day before trial and that the prints could be introduced by use of the master card in such manner as to devoid reference to appellant's involvement in other criminal activity.
After listening to counsel for respondent and appellant, the trial court entered the following order:
"Now on the 4th day of June, 1979, plaintiff presenting to this court good cause, the Court orders that the inked impressions requested in the State's Motion to Compel the Taking of Defendant's Fingerprints and Palmprints, be taken from Defendant Eddie L. Greer in a manner agreed on by the State and Defendant."
Appellant claims that Rule 25.35 (now 25.06), particularly subsections (C) and (D) were not complied with. The pertinent portions of this rule are:
"(B) Upon motion by the state, and subject to constitutional limitations and any other safeguards deemed appropriate by the court, and upon a showing of good cause, the court may order the defendant to: ... (3) Be fingerprinted ...
(C) If requested by any party, the court shall hear evidence on the necessity of discovery requested under Rule 25.06(B).
(D) In its order directing discovery under this Rule, the court shall make the grounds for its decision on a part of the record."
*431 Rule 25.35, predecessor to Rule 25.06, became effective on July 1, 1974 and since its inception, no case has construed the rule.
When appellant was advised the motion was going to be filed, appellant did not anticipate any lengthy consideration of the motion. The record, when viewed in total, reveals that appellant had no real objection to it and in fact argued the master card from Illinois could be introduced in such a manner as to avoid alerting the jury that he was involved in other criminal activity.
Respondent pointed out to the trial court that one of the main reasons for requesting appellant's fingerprints, and hence discarding the use of the Illinois master card, was to safeguard appellant. Appellant cannot be heard to complain upon alleged noncompliance of the rule on that basis because, as a result of the request and the subsequent order by the trial court, he was afforded greater protection of his rights to a fair trial. Further, if the state were to have offered evidence upon the reasons for the fingerprints, the motion would have been granted. Conversely, if the state were unable to produce evidence upon the motion, the prints via the Illinois master card would have been produced. The result of the trial court's action was to protect appellant from potential prejudice which might have arisen if the Illinois master card had been produced, indicating other criminal behavior. The bare assertion of no evidentiary hearing, contrasted with the facts and circumstances of the instant case, shows this argument to be without merit.
Appellant also argues that the court did not state grounds for its decision as required by the rule (see Rule 25.35[D] above). That portion of appellant's argument fails for two reasons. The order declares that respondent presented to the trial court "good cause" in support of the motion. It must be pointed out that the order followed argument by both parties wherein the reasons (i. e., transport of a former police officer and the possible prejudice to appellant by use of the Illinois master card) had been presented. These factors and review of the entire record upon this point do not lead to the conclusion that the trial court's failure to further specify the reasons for its order is tantamount to noncompliance with the rule. In addition, no objection to the trial court's order was raised at trial and such issue is first raised upon this appeal. No mention or challenge of the order as violative of Rule 25.35(D) was made in appellant's motion for new trial. Nothing on this point was preserved for review, see Rule 29.11(d) (formerly rule 27.20); State v. Martin, 451 S.W.2d 96 (Mo. 1970) and State v. Holmes, 439 S.W.2d 518 (Mo.1969).
For the foregoing reasons, point two is ruled against appellant.
Disposition of appellant's final alleged error necessitates interrelated consideration of appellant's pretrial motion to suppress evidence and the evidence developed upon trial. Appellant argues that identification of appellant was not admissible because such identification was the result of impermissibly suggestive hypnosis and, even if there were no impermissive suggestions, the process of identification resulting from hypnosis was inherently unreliable.
Our courts have spoken to the issue of impermissible suggestive identification. The latest authority presenting the analysis to be applied is State v. Higgins, 592 S.W.2d 151 (Mo.banc 1979). Higgins involved pretrial identification by use and the viewing of photographs. Our State Supreme Court held at 592 S.W.2d at 159 the danger to be guarded against is any procedure "so impermissibly suggestive as to give rise to a very substantial likelihood of irreparable misidentification". (emphasis added)
In determining whether such a danger exists, our courts must look to the totality of the surrounding circumstances, see Simmons v. United States, 390 U.S. 377, 88 S. Ct. 967, 19 L. Ed. 2d 1247 (1967) and Stovall v. Denno, 388 U.S. 293, 87 S. Ct. 1967, 18 L. Ed. 2d 1199 (1966). In weighing the matter, two questions arise and were present in the Higgins case. These are: Were the investigative procedures employed by the police impermissibly suggestive? If so, *432 were they so impermissibly suggestive as to create a very substantial likelihood of an irreparable misidentification at trial? See Higgins, supra, at 159.
It has been held that even if the procedures were impermissibly suggestive, identification testimony may nevertheless be admissible if it is reliable. The necessary reliability is to be determined from the "totality of the circumstances". Those factors to be considered in determining reliability are "the opportunity of the witness to view the criminal at the time of the crime, the witness' degree of attention, the accuracy of the witness' prior description of the criminal, the level of certainty demonstrated by the witness at the confrontation, and the length of time between the crime and the confrontation". Neil v. Biggers, 409 U.S. 188, 199, 93 S. Ct. 375, 382, 34 L. Ed. 2d 401 (1972). "Against these factors is to be weighed the corrupting effect of the suggestive identification itself," see Manson v. Brathwaite, 432 U.S. 98, 114, 97 S. Ct. 2243, 2253, 53 L. Ed. 2d 140 (1977).
The victims in the instant case were kidnapped, raped and sodomized the night of November 1, 1977. These events occurred between 7:00 p. m. and 11:00 p. m. While at the hospital, late the same evening and into the early morning hours of the next day, the victims provided a police detective with a description of the suspect who had kidnapped them at gun point and who had participated in the subsequent offenses. They described a "Negro male about 30 years old, five foot six, 150 pounds, stocky build, wearing a black hat, armed with an unknown type handgun, silver color, reported to have a mustache, medium length afro hairdo and wearing a white coat."
On November 4, 1977, in separate sessions, the victims were hypnotized by Dr. Marshall Saper, a local psychologist. Dr. Saper testified that he had training in the use of hypnosis and had used hypnosis periodically in his therapy work and in police cases (in his capacity as a reserve police officer). The hypnosis sessions were attended by two police officers, but neither participated in the sessions other than to observe. Dr. Saper testified the hypnosis was done to improve the victims' recollection, and stated that once a state of relaxation and concentration is achieved, the person is taken back in time to the incident in question and asked to describe what they see and hear. The person in such a state is fully awake and conscious of his or her surroundings.
Dr. Saper testified that the victims in the instant case achieved this conscious state of hypnosis. Dr. Saper admitted that once under hypnosis, a subject is open to suggestions. Dr. Saper then testified that "once the subjects were under hypnosis, no suggestion was given to them of any kind by me. The only suggestions given were to get them into hypnosis and that involved suggestions to relax, to imagine a feeling of warmth, to imagine a feeling of relaxation." Dr. Saper stated that prior to the hypnosis session, he did not know what the initial interrogation by police officers had revealed. He did testify, however, that following the session, a detective did tell him that the police had come up with more information than they had prior to the session.
One of the detectives attending the hypnosis session testified that both victims gave the description that their abductor was "... around 30, heavy build, but wasn't fat ... something very strange about his eyes, almost Oriental or Egyptian... he had very slight fingers and wore no jewelry ... he wore a black hat."
Subsequent to the hypnotic sessions, a police artist made a composite drawing from the description provided by one of the victims. This composite was made while the victim was not under hypnosis. This officer testified that the description given for the composite was the same given by this victim during the hypnosis session which he attended. He was the second officer during the hypnosis session.
On November 18 or 19, 1977, the victims were shown an array of photographs, appellant's photo was not among this array, and no identification was made. On November 22, 1977, another array of photographs (13 *433 altogether) was shown to the victims. The photographs were an admixture of color and black/white photographs. Of the 13, a total of four were of the appellant. The victims were separated, the photographs shuffled and handed to the victims. Independently, the victims identified appellant and two others. One victim's identification was positive. The trial revealed the other victim stated she would have to hear appellant's voice to be completely certain. The record shows this second victim did identify appellant's voice when appellant made a spontaneous outburst during trial.
On December 29, 1977, the victims, accompanied by a female police officer and a female assistant prosecutor, traveled to Murphysboro, Illinois, where appellant was in the custody of Illinois authorities. The victims observed appellant, separately, through the window in a courtroom door. Appellant was inside the courtroom with seven other black males. Each victim was asked to view the men inside and then independently mark on a piece of paper the person they could identify, if anyone. Independently, and without suggestion from authorities or as a result of any conference between them, the victims identified appellant. One victim made a positive identification and the other victim made a tentative identification. The tentative identification was made subject to the second victim hearing appellant's voice as referred to above.
The foregoing evidence was before the trial court on appellant's motion to suppress. The motion was overruled.
Trial commenced and both victims testified appellant did not attempt to conceal his face; that they saw his face as he forced his way into their stationwagon and at the house where the assaults were committed upon them. They were questioned about their being blindfolded and both testified they were not blindfolded until after they were ordered to disrobe. One victim testified to being able to see through the sweater which was used as the blindfold on her. Both victims made positive identification of appellant in the courtroom. The second victim became positive in her identification after hearing appellant's voice during an outburst by appellant during trial. Both victims testified to being able to identify appellant from the photographs and the lineup.
In resolving appellant's point three, this court must answer four questions which arise as a result of appellant's argument. First, was the hypnosis impermissibly suggestive and as an adjunct thereof, does hypnosis render identification inherently unreliable? Second, was the lineup impermissibly suggestive? Third, was the photographic display impermissibly suggestive? Fourth, disregarding suggestiveness, were the identifications reliable?
Regarding question (1) above, appellant argues that hypnosis is "inherently susceptible to the process of suggestion and to the misperception of reality". He further argues that in the instant case, the hypnosis was "impermissibly suggestive because the girls' prehypnosis description was not lacking in detail." In his argument, appellant states "the hypnotic sessions ... did not reveal any description significantly different or more detailed" than what was given prior to the hypnosis.
The precise question of hypnosis is unique in our state, so this court must look to other jurisdictions for consideration of the question. The majority view holds that pretrial hypnosis does not, as a matter of law, render resulting identification and testimony related thereto inadmissible. The line of authority admitting such evidence reasons that hypnosis aids recall, and later identifications are made from refreshed recollections. Such recollections have been likened to much the same as memories refreshed by diaries, memos and the like. This line of authority also concludes that the effect of the hypnosis is a matter to be weighed by the trier of fact.
A case which takes up the issue of pretrial identification procedure in particular is People v. Hughes, 99 Misc. 2d 863, 417 N.Y. S.2d 643 (1979). The case involved a rape victim unable to recall anything about a rape and an assault. The victim was hypnotized and thereafter, able to recall details *434 of the attack and the name of her assailant. The opinion provides a detailed explanation of hypnosis, its history and describes the growing use of hypnosis in criminal investigation. The New York Court stated that in civil cases, hypnosis has been held only to affect the weight of the evidence and that criminal cases dealing with the admissibility of a witness in a criminal case subsequent to hypnosis seem to follow the civil approach. In Hughes, 417 N.Y.S.2d at 648, the court concluded, "... that testimony, which is hypnotically induced recollection, is not inadmissible as a matter of law. Given a proper foundation of general acceptance in the scientific community and adequate procedural safeguards to insure reliability, this court believes that evidence elicited through hypnosis can be valuable to the determination of the guilt or innocence of those who have been accused of crimes."
For other authority supporting the acceptance of testimony following hypnosis, see State v. Jorgensen, 8 Or.App. 1, 492 P.2d 312 (1971), which held that hypnosis goes to the weight of the testimony; People v. Smrekar, 68 Ill.App.3d 379, 24 Ill. Dec. 707, 385 N.E.2d 848 (1979), which held that hypnosis goes to the weight of evidence where (1) the hypnotist was shown to be competent; (2) the evidence reveals no suggestion employed during hypnosis session; (3) other substantial evidence corroborated identification and (4) witness had ample opportunity to view assailant at the time of the occurrence; Clark v. State, 379 So. 2d 372 (Fla.App.1979) which held that testimony goes to the weight thereof since it is made upon "present recollection refreshed"; Harding v. State, 5 Md.App. 230, 246 A.2d 302 (1968), cert. denied, 395 U.S. 949, 89 S. Ct. 2030, 23 L. Ed. 2d 468 (1969), which held it is a matter of weight of testimony; United States v. Adams, 581 F.2d 193 (9th Cir. 1978), cert. denied, 439 U.S. 1006, 99 S. Ct. 621, 58 L. Ed. 2d 683 (1978), which held that failure to disclose hypnosis is a basis for reversal; United States v. Awkard, 597 F.2d 667 (9th Cir. 1979), cert. denied, 444 U.S. 885, 969, 100 S. Ct. 179, 460, 62 L. Ed. 2d 116, 383 (1979), which held that it goes to weight, if disclosed to the jury; State v. Hurd, 173 N.J.Super. 333, 414 A.2d 291 (1980), which held that such evidence is admissible if procedural safeguards are followed so that no impermissible suggestion is allowed; State v. McQueen, 295 N.C. 96, 244 S.E.2d 414 (1978) which held that the credibility of such evidence is for the jury to determine; and United States v. Narciso, 446 F. Supp. 252 (E.D.Mich.1977), which held that the possibility of misidentification is not sufficient grounds for exclusion of such evidence where defendant failed to prove "very substantial likelihood of irreparable misidentification".
As contrasted with the above line of authority during oral argument of the instant case, appellant brought to this court's attention the case of State v. Mack, 292 N.W.2d 764 (Minn.1980). The court in Mack applied the rule in Frye v. United States, 293 F. 1013 (D.C. Cir. 1923), with the result being that Minnesota holds that testimony of a previously hypnotized witness is inadmissible as a matter of law. The Minnesota court in Mack refers to the entry of the victim into a "deep hypnotic state" and expresses concern over the possibilities of prehypnotic and posthypnotic status. In Mack, the court simply refuses, under Frye, to accept the value of hypnosis as a matter of law.
With the foregoing authority as a background on this issue, pertinent facts in the instant case must again be referred to as they relate to the disposition of this issue. The record shows that both victims had separately and independently given a description of their abductor prior to any hypnotic session. There was no suggestion of any detail, event, persons or any other specific or general reference to the matter and the information given by the victims was their own statement. The most significant factors which distinguish the prehypnotic session related to the identification of appellant, and those details given during the hypnotic session were the added features of "Oriental or Egyptian eyes, broad flat nose, heavy lips, very slight fingers and no jewelry". Appellant admits that the hypnotic session did not produce a description "significantly *435 different or more detailed" than that previously given.
There is nothing in the instant case which supports appellant's contention than any impermissible suggestion occurred which would result in a "very substantial likelihood of irreparable misidentification". Further, the record of this case supports the in-court identification of appellant by both victims upon present recollection. Appellant made no attempt to conceal his identity at the time of abduction, during the entry into the place where the sexual acts occurred, or during departure from said location. The only questionable period of time regarding the continued possible observation of appellant by the victims is during the time they were blindfolded and assaulted. Even in the latter instance, one victim was able to see through her blindfold during the actual sexual assaults.
Appellant pursues his argument further and attacks the photographic array wherefrom appellant's photograph was selected separately and independently by both victims. The victims were shown an array of photographs on two separate occasions. In the first instance, no selection was made by either victim, but appellant's photo was not among the array. On the second occasion, the victims separately viewed 13 photos. Of this group, appellant appeared in four photos. The victims, without conference with each other, independently identified appellant from the photographic array. While no case involving the precise factual situation has been found, it has been held that the showing of only one picture of an accused to a witness was not improper, see State v. Parker, 458 S.W.2d 241 (Mo.1970) and State v. Greenlaw, 593 S.W.2d 641 (Mo. App.1980). There is nothing upon the record of the instant case which shows anything other than the fact that a multiple number of photographs were shown to the victims who in turn independently identified appellant from the photographs. There is nothing of record in the instant case to support appellant's contention that such photographic array was in any manner impermissibly suggestive and such argument is found to be without merit.
Appellant argues still further that the lineup from which both victims separately and independently identified him was impermissibly suggestive. Appellant had been arrested and was in custody in Murphysboro, Illinois. The victims traveled to the courthouse in Murphysboro. The victims observed appellant, along with seven other black men, through a window in a courtroom door. The victims were separated to prevent discussion or comparison between them for purposes of identification. Each victim was given a piece of paper and asked to place a number on the paper if they identified any of the persons inside the courtroom. As the persons were so aligned inside the courtroom, appellant was number four from the left and each victim separately and independently marked that number on their respective pieces of paper.
Appellant argues that he was the shortest of the eight men in the courtroom and the manner in which the eight were located formed a "V" shape with the base of the "V" pointing to appellant, directly implicating him. The facts on the record dispel appellant's contention. In the first instance, three of the other seven men were nearly the same height as appellant. In addition, the record reveals that while from left to right the heights of the individuals descended down to appellant, the persons on appellant's far right did not ascend in any order of height toward the location of appellant. It has been held that dissimilarity in height does not provide sufficient basis to hold that a lineup was permissibly suggestive, see State v. Gant, 586 S.W.2d 755 (Mo.App.1979); State v. Bivens, 558 S.W.2d 296 (Mo.App.1977) and Gaitan v. State, 464 S.W.2d 33 (Mo.1971). There is no merit to appellant's argument that the identification of appellant was unreliable because the lineup was impermissibly suggestive.
There is nothing upon the record of this case to support appellant's contention that the identification of appellant was unreliable upon the premise of impermissible suggestiveness. Appellant's argument that employment of hypnosis rendered all identification *436 unreliable is by this court rejected. It is the opinion of this court that absent the showing that use of hypnosis was impermissibly suggestive so that "a very substantial likelihood of irreparable misidentification" occurred, the evidence based thereon was not inadmissible as a matter of law, but rather such hypnotic process goes to the weight of the testimony of the evidence and is a matter for determination by the trier of fact.
Even in the absence of impermissible suggestion, were the identifications of appellant herein still reliable? State v. Higgins and Manson v. Braithwaite, supra, mandate that the key to admissible identification is the reliability of that identification.
As discussed above, the record herein reflects no impermissible suggestiveness in the identification of appellant. The task of this court under existing authority is to review the reliability of identification from the "totality of the circumstances", see Neil v. Biggers, supra. The factors to be considered in the "totality of the circumstances" include the "opportunity of the witness to view the criminal at the time of the crime, the witness' degree of attention, the accuracy of the witness' prior description of the criminal, the level of certainty demonstrated by the witness at the confrontation, and the length of time between the crime and the confrontations", Neil v. Biggers, supra, 409 U.S. at 199, 93 S.Ct. at 382. See also State v. Higgins, supra, at 160 and State v. Kent, 602 S.W.2d 799 (Mo.App. 1980).
In the instant case, the evidence was uncontroverted that appellant forced his way into the victim's stationwagon. Appellant made no attempt to conceal his face. Appellant walked to the location of the sexual assaults with both victims, again making no effort to conceal his face. Prior to the actual sexual assaults, both victims, while inside the house, observed appellant's face and the rest of his appearance. Even during the actual assaults, one victim could see through her blindfold. Hence, there was more than ample opportunity to view the appellant "at the time of the crime". Both victims were attentive to what was going on. Both victims provided police officers a description within a short time following the assault upon them. That description varied little and without marked difference from subsequent identification by both victims. The consistency of the victims' identification tends to establish the degree of attention and accuracy of the victims' prior descriptions. As to the level of certainty, one victim continuously and without reservation identified appellant by verbal description, the photographic array, the lineup and a positive in-court identification. The other victim expressed only one reservation as to complete and total positive identification, and that was the hearing of appellant's voice. The identity of the voice which led to an unequivocal positive identification by the second victim occurred when appellant made repeated outbursts during the course of trial in the courtroom. Regarding the final element, time, the record shows a general description of the night of the assault. This was followed by the observance of a photographic array three weeks later. That procedure was followed by the lineup observation some thirty-seven days later. It cannot be said that an unwarranted amount of time lapsed between the time of the crime and the time of confrontation for purposes of competent identification.
Considering the totality of the circumstances, the standard set forth has been met, thereby rendering the identification of appellant reliable for purposes of its admissibility.
As set forth above, the court, at the outset, posed four questions which the court felt necessitated an answer in disposition of appellant's final point. Question one, based upon the foregoing, is answered in the negative as this court finds the use of hypnosis under the particular facts and circumstances of this case was not inherently unreliable and such matter does not go to its inadmissibility as a matter of law, rather, it is a matter to be weighed by the trier of fact. The evidence upon this record does not support appellant's contention that the hypnosis *437 session revealed any impermissible suggestion. Regarding questions two and three, they are answered in the negative as the record fails to support the contention that the photographic array and the police lineup contained any element of impermissible suggestion. Question four is also answered in the negative because when the "totality of the circumstances" is considered from this record, the identification of appellant upon the reasons set forth above renders such identification reliable for purposes of its admission in evidence.
Point three is ruled against appellant.
For the foregoing reasons, that portion of the judgment relating to the convictions for armed criminal action is reversed. For the foregoing reasons, that portion of the judgment relating to the convictions for kidnapping, rape and sodomy is in all respects affirmed.
All concur.
NOTES
[1] Now Rule 25.06(C). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1920537/ | 107 B.R. 60 (1989)
In re CROWN-GLOBE, INC., Debtor.
MEDALLION KNITWEAR, INC., Plaintiff,
v.
PARKDALE MILLS, INC., Defendant.
No. 86-04189T.
United States Bankruptcy Court, E.D. Pennsylvania.
October 31, 1989.
*61 Anthony R. Distasio, Roland & Schlegel, Reading, Pa., for plaintiff.
J. Bradford McIlvain, Reed, Smith, Shaw & McClay, Philadelphia, Pa., for defendant.
OPINION
THOMAS M. TWARDOWSKI, Chief Judge.
Parkdale Mills, Inc. ("defendant") has filed a motion to dismiss the complaint filed against it by Medallion Knitwear, Inc. ("plaintiff"). Before addressing the merits of this motion, it is necessary to first provide some general background information on this bankruptcy case.
Crown Globe, Inc. ("debtor") filed a chapter 11 petition with this court in 1986. Both plaintiff and defendant are creditors of debtor. Plaintiff's claim is unsecured, while defendant's claim is secured. During the course of this bankruptcy proceeding debtor filed a motion to use cash collateral, to which defendant objected, and defendant filed a motion seeking relief from the automatic stay. To resolve these matters, a stipulation was approved by our colleague Judge Scholl under which defendant was authorized to liquidate certain of debtor's assets. The stipulation also required, among other things, that defendant and certain other secured creditors release all claims against debtor's other assets and release all claims against the parties who guaranteed debtor's indebtedness to them. Plaintiff was not a party to the stipulation.
Plaintiff maintains that defendant did not properly liquidate debtor's assets and that, as a result, the value of debtor's estate has been diminished by at least $450,000.00. To redress this wrongdoing, plaintiff filed this nine count complaint, on behalf of itself and all other unsecured creditors of debtor, against defendant and various other parties with the District Court.[1] Defendant and the other parties then filed this motion to dismiss. At plaintiff's request, the District Court dismissed all of the claims against the parties other than defendant, dismissed all RICO claims against defendant and transferred the remaining claims against defendant to us. As a result, we must now decide defendant's motion to dismiss the remaining counts of the complaint. These counts can be categorized as follows: count V which alleges conversion, count VI which alleges breach of a third party beneficiary contract, count VII which requests equitable subordination under 11 U.S.C. § 510(c), count VIII which alleges intentional misrepresentation and count IX which alleges negligent misrepresentation. For the following reasons, we deny defendant's motion to dismiss counts V, VI, VIII and IX of the complaint and we grant defendant's motion to dismiss count VII of the complaint.
Defendant maintains that the causes of action outlined in counts V, VI, VIII and IX of the complaint belong to debtor and that, therefore, plaintiff lacks standing to raise them. Although we agree that these causes of action are part of debtor's bankruptcy estate since they involve the liquidation of debtor's assets, and that the more appropriate way for plaintiff to raise them would have been by way of a motion to compel debtor to act or a petition requesting leave to bring suit in debtor's name, see, Committee of Unsecured *62 Creditors v. Monsour Medical Center (Matter of Monsour Medical Center), 5 B.R. 715 (Bankr.W.D.Pa.1980), we do not believe that these counts of the complaint must be dismissed. Rather, it is well established that if a creditor asserts a colorable claim and the debtor or trustee fails to act, the court may authorize the creditor to institute the action on behalf of the debtor or trustee. Equitable Gas Co. v. Equibank, N.A. (In re McKeesport Steel Castings Company), 799 F.2d 91 (3rd Cir.1986); In re Philadelphia Light Supply Co., 39 B.R. 51 (Bankr.E.D.Pa.1984); Matter of Monsour Medical Center, supra. Instantly, there is no trustee and debtor has not taken any action to redress the wrongdoing alleged by plaintiff. In fact, as plaintiff notes, it is not likely that debtor will take steps to correct the alleged misconduct, given defendant's release of debtor's shareholders on the guarantees. Furthermore, the facts alleged in counts V, VI, VIII and IX of the complaint state a colorable claim. Accordingly, we deny defendant's motion to dismiss these counts of the complaint. However, we will direct plaintiff to amend its complaint to join debtor as a party pursuant to B.R. 7017. Matter of Monsour Medical Center, supra.
Defendant next maintains that count VII of the complaint, which requests that defendant's interest in debtor's assets be subordinated to plaintiff's interest under 11 U.S.C. § 510(c), should be dismissed as an untimely attempt to revoke confirmation of debtor's chapter 11 plan. As this count seeks to shift the priority of claims as they are to be paid under debtor's confirmed plan, we agree.
11 U.S.C. § 1144 governs revocation of a confirmation order and provides:
On request of a party in interest at any time before 180 days after the date of the entry of the order of confirmation, and after notice and a hearing, the court may revoke such order if and only if such order was procured by fraud. An order under this section revoking an order of confirmation shall
(1) contain such provisions as are necessary to protect any entity acquiring rights in good faith reliance on the order of confirmation; and
(2) revoke the discharge of the debtor.
(emphasis supplied). Courts strictly construe this 180 day time limitation and, as our colleague Judge Fox has indicated, this 180 day time limitation must be applied even though the fraud was discovered beyond the 180 day time period. In re Cinderella Clothing Industries, Inc., 93 B.R. 373 (Bankr.E.D.Pa.1988). See also, In re Chipwich, Inc., 64 B.R. 670 (Bankr.S.D.N. Y.1986). Hence, we must reject plaintiff's defense that it discovered the fraud after debtor's plan was confirmed and after the 180 day time limitation expired.
Instantly, debtor's chapter 11 plan was confirmed on May 28, 1987. Since plaintiff's complaint was filed more than 180 days after the confirmation date, plaintiff's request for equitable subordination is time barred and count VII must be dismissed.
NOTES
[1] Since this complaint was originally filed with the District Court and then transferred to us, it has never been placed on our adversary docket and it has not been assigned an adversary number. We will direct the clerk's office to place this case, and all pleadings filed to date, on our adversary docket and assign it an adversary number. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1920561/ | 107 B.R. 328 (1989)
In re Aaron D. SILVER and Jerilyn H. Silver, Debtors.
WESTERN BANK, SANTA FE, Plaintiffs,
v.
Aaron D. SILVER, et al., Defendants.
Bankruptcy No. 11-87-01194 R S, Adv. No. 88-0180 R.
United States Bankruptcy Court, D. New Mexico.
November 6, 1989.
James Jacobsen, Albuquerque, N.M., for debtor/defendants.
*329 Jack Hardwick, Santa Fe, N.M., for Western Bank.
MEMORANDUM OPINION
STEWART ROSE, Chief Judge.
THIS MATTER comes before the Court upon the debtor/defendant's Motion to Dismiss the Complaint Seeking Exception to Discharge filed by Western Bank, Santa Fe (Western). For the reasons set forth in this opinion the Court will grant the Debtor's motion and dismiss plaintiff's complaint.
FACTS
Aaron and Jerilyn Silver filed their voluntary chapter 11 petition on June 5, 1987. Western Bank was not listed on the debtors' schedules and consequently did not receive notice of the § 341 meeting of creditors. On June 19, 1987, even though not scheduled, Western Bank's attorney entered his appearance and request for notice on behalf of Western Bank, a creditor of the debtor. The § 341 meeting of creditors was held in Santa Fe on July 7, 1987. On September 4, 1987 debtors sent a notice of a hearing on their Disclosure Statement to all creditors, including the attorney for the plaintiff, Western Bank. On September 18, 1987 debtors' Plan of Reorganization was sent to Western Bank's attorney. On September 23, 1987, debtors' schedules were amended to include Western Bank, with Western Bank's claim listed as disputed/contingent. On October 26, 1987, Western Bank filed an objection to the debtor's Disclosure Statement. A hearing was held on October 30, 1987 with regard to the debtors' Disclosure Statement. Western Bank's attorney attended via telephone. On May 11, 1988, approximately one year later, the clerk's office sent a special notice to Western. Notice was triggered by debtor's amendment to his schedules on September 23, 1987. The notice provided a 30 day time period to file a complaint. On June 10, 1988, one year and 5 days after debtors filed their petition Western Bank filed its § 523 complaint.
DISCUSSION
The debtor argues that because Western Bank's attorney and therefore Western Bank, had actual knowledge of the bankruptcy petition in time to file a complaint, the plaintiff's complaint was untimely and therefore, should be dismissed. The plaintiff argues that the debtor had not listed it as a creditor in his schedules. However, when Western received the special notice from the Clerk on May 11, 1988, it filed its § 523 complaint within the 30 days allowed by that special notice.
Unscheduled creditors are dealt with in § 523 of the Bankruptcy Code. Section 523(a)(3)(B) excepts from discharge any debt not listed or scheduled....
(B) if such debt is of a kind specified in paragraph (2), (4), or (6) of this subsection, timely filing of a proof of claim and timely request for a determination of dischargeability of such debt under one of such paragraph, unless such creditor has notice or actual knowledge of the case in time for such filing and request. (emphasis added).
Notice to a creditor's attorney of a bankruptcy filing is usually sufficient if the attorney received knowledge of it while representing his client in enforcing a claim against the bankrupt. 3 Collier on Bankruptcy, 15th Ed., § 523.15(5)(C) (1983); See In re Saltzmann, 8 C.B.C.2d 9, 25 B.R. 125 (Bankr.E.D.Wis.1982). Notice or actual knowledge will be imputed to a creditor or claimant when it comes to someone who has clear authority to act for the creditor and which provides ample opportunity (for the creditor) to participate in the bankruptcy proceeding. Matter of Robertson, 13 B.R. 726, 733 (Bankr.E.D.Va.1981).
In this case, Mr. Hardwick, attorney for Western Bank, entered his appearance on behalf of his client on June 19, 1987, fourteen (14) days after the debtor filed his chapter 11 petition. Mr. Hardwick represented the plaintiff in these bankruptcy proceedings and does not dispute his authority to receive notice on behalf of the plaintiff. Based on these facts, notice to the plaintiff's attorney of the bankruptcy *330 proceeding was sufficient for purposes of § 523(a)(3)(B).
The precise question in this case is whether a debtor's failure to schedule a creditor with actual knowledge of the bankruptcy proceeding allows the unscheduled creditor to file a nondischargeability complaint under § 523(c) after the sixty-day time limitation pursuant to Bankruptcy Rule 4007(c) has passed. The relevant portion of § 523 states:
(c) Except as provided in subsection (a)(3)(B) of this section, the debtor shall be discharged from a debt of a kind specified in paragraph (2), (4), or (6) of subsection (a) of this section, unless on request of the creditor to whom such debt is owed, and after notice and a hearing, the Court determines such debt to be excepted from discharge under paragraph (2), (4) or (6), as the case may be, of subsection (a) of this section.
Rule 4007(c) of the Bankruptcy Rules provides in pertinent part:
A complaint to determine the dischargeability of any debt pursuant to § 523(c) of the Code shall be filed not later than 60 days following the first day set for the meeting of creditors held pursuant to § 341(a). The Court shall give all creditors not less than 30 days notice of the time so fixed in the manner provided in Rule 2002.
The plaintiff argued that Rule 4007(c) requires the Court to send notice of the bar date to all creditors. This Court sent notice on May 11, 1988 and plaintiff filed his complaint within the allotted time. The plaintiff cites Reliable Electric Co., Inc. v. Olson Construction Company, 726 F.2d 620 (10th Cir.1984) as requiring actual notice under Rules 4007 and 2002 before its claim would be barred. The plaintiff also cites In re Schwartz & Meyers, 64 B.R. 948 (Bkrtcy.S.D.N.Y.1986) in which the Court held that the mailing of notice in accordance with Rule 2002 is the "necessary predicate and trigger to the running of the 60 day period [set forth in Rule 4007]." Id. at 953. The Schwartz Court, citing Reliable, states "... the right of creditors to notice of the deadline cannot be denied because creditors have a right to assume they will receive all statutory notices." Id. at 953. Accord South Dakota Cement Plant v. Jimco Ready Mix Company, 57 B.R. 396 (D.S.D.1986).
Reliable can be distinguished from the present case. In Reliable the Court dealt with a creditor who was listed as an account receivable and not a creditor so he therefore did not receive any notices. The debtor was able to confirm a Chapter 11 plan, after which the creditor was awarded a money judgment against the debtor. The debtor then filed a claim on behalf of the creditor in his Chapter 11 bankruptcy. The debtor then attempted to have the creditor's claim determined to be a prepetition debt subject to compromise and payment as a general unsecured claim under the Confirmed Plan and therefore subject to discharge. 726 F.2d 620 (10th Cir.1984). Reliable dealt with a debtors attempt to impose a confirmed plan on a creditor who had no notice; this case deals with a creditor who has knowledge of the bankruptcy proceeding, but not of the 60 day bar date.
Schwartz is also distinguishable from this case. In Schwartz the first notice sent by the bankruptcy clerk's office failed to list the last day to file a § 523 complaint. Once this date had passed the Clerk's office amended the notice and gave the creditors 60 more days in which to file a § 523 complaint. 64 B.R. 948 (Bankr.S.D.N.Y. 1986). In Schwartz the Court held that Bankruptcy Rules 4007(c) and 2002(f) require that the court shall give not less than 30 days notice of the time fixed for filing a § 523 complaint. The court determined that when notice of the deadline is lacking, the 60 day time period is not triggered. Id. at 955. Here there was no error on the part of the Clerk; instead Western Bank received no notice because the debtor did not include it on his schedules.[1] In so far *331 as the rationale in Reliable, Schwartz, and Jimco Ready Mix, is cited by the plaintiff the court is not persuaded and therefore rejects it and instead adopts the reasoning of In re Alton, 64 B.R. 221 (Bankr.M.D. Fla.1986).
In Alton the creditor was not listed by the debtor on its schedules and consequently never received notice of the § 341 meeting or of the bar dates. The creditor, however, had actual knowledge of the debtor's bankruptcy proceedings. The Alton Court cites in the Matter of Gregory, 705 F.2d 1118 (9th Cir.1983) to support its holding, that an unscheduled creditor with actual notice of the bankruptcy must inquire as to the bar dates for filing a nondischargeability complaint.[2] In Gregory the Court points out that had the creditor's attorney inquired into the bankruptcy proceedings, he would have easily discovered that he was not scheduled and could have taken action to have the creditor's name placed on the clerk's mailing list, thereby insuring notice under Rule 4007. The same is true in this case. Mr. Hardwick knew enough of the bankruptcy proceedings to enter his appearance on behalf of Western Bank, a creditor of the debtor, some 14 days after the debtor filed its chapter 11 petition. By inquiring further Mr. Hardwick would have realized that his client was not scheduled and then could have taken action to remedy this problem, thereby insuring himself of notice of important dates and deadlines.
The Alton decision has been followed by the 9th Circuit in In re Price, 17 C.B.C.2d 999, 79 B.R. 888 (9th Cir. B.A.P.1987). In Price the Court held that since the creditor had actual notice of the debtor's bankruptcy filing, he was responsible for protecting his claim and could have done so by inquiring into the status of the bankruptcy proceedings. In Price the creditor was not listed on the debtor's chapter 7 petition, however, the creditor's attorney did receive notice of the debtor's bankruptcy filing. Since the creditor was not listed he never received notice of the § 341 meeting or notice of deadlines to file Rule 4007(c) complaints.
The 10th Circuit in In re Rider, 89 B.R. 137 (Bankr.D.Colo.1988) followed Alton. In Rider the Court held that an unlisted creditor of the debtor who had "no formal knowledge" of the debtor's bankruptcy and "no actual knowledge" of the bar date for filing objections to discharge had sufficient notice and knowledge of the case to timely file proof of claim and request determination of dischargeability, thus, the creditor was barred from filing a complaint for determination of dischargeability. Id. at 137. In Rider the debtor employed a commercial auctioneer to sell farm machinery which unbeknownst to the auctioneer was pledged as security by the debtor. The debtor failed to use any of the proceeds from the sale to retire the debt. The debtor later filed for Chapter 11 (later converted to Chapter 7) and failed to list the auctioneer as a creditor, therefore the auctioneer never received any notices. The auctioneer filed a § 523 complaint over two years after the expiration of the bar date and the Court dismissed the complaint as untimely, stating that this creditor had sufficient knowledge as well as notice of the debtor's bankruptcy proceeding sufficient to afford him ample time to file his proof of claim and to timely request a determination of dischargeability. Id. at 141.
More recently the 10th Circuit in In re Green, 876 F.2d 854 (CA 10 Okla 1989) again followed the reasoning of Alton and Rider. In Green the Court held that a creditor who does not receive formal notice of the debtor's Chapter 7 petition, but who has actual knowledge shortly after the filing, is bound by the bar dates for filing complaints to determine dischargeability. In Green the creditor was pursuing a claim against the debtor in state court. The debtor then filed a Chapter 7 petition and the state court action was stayed. The debtor failed to list the creditor (Yukon) on his schedule. Yukon never received notice of the § 341 meeting and of the bar date *332 contained in that notice. Prior to the bar date running, Yukon learned of the bankruptcy petition of the debtor. The Court found Yukon had timely notice of the debtor's filing and the bar date and dismissed Yukon's complaint.
A quote from Alton will best state the Court's position:
Section 523(a)(3)(B) specifically provides that when a debtor fails to list those debts incurred fraudulently or incurred because of malicious injury to another or lists them too late to allow a creditor to file a proof of claim and dischargeability complaint in a timely manner, then those debts will be undischarged "unless such creditor had notice or actual knowledge of the case in time for such timely filing and request" (emphasis added). The statutory language clearly contemplates the mere knowledge of a pending bankruptcy proceeding is sufficient to bar the claim of a creditor who took no action, whether or not that creditor received official notice from the Court of various pertinent dates. This furthers the bankruptcy policy of affording a "fresh start" to the debtor by preventing a creditor, who knew of a proceeding but who did not receive formal notification, from standing back, allowing the bankruptcy action to proceed without adjudication of his claim and then asserting that the debt owed them is undischargeable. In re Alton, 837 F.2d 457, 460 (11th Cir. 1988).
Another Court, faced with a similar situation and the same argument that the plaintiff advances, summed up the relevance of the language in § 523 to the problem of notice under Rule 4007(c):
... [S]ection 523 of the Code, which Rule 4007 is designed to implement, places a heavy burden on the creditor to protect his rights: a debt of the type presented here is automatically discharged unless the creditor requests a determination of dischargeability. The one narrow exception to this rule incorporates a duty-to-inquire approach to notice issue. Under § 523(a)(3)(B), a debt is not automatically discharged if the debtor fails to schedule the creditor and the creditor has no notice or actual knowledge of the case in time to file a claim and a request for determination of dischargeability. Thus, in cases such as this one, it would be inconsistent with the scheme of § 523 to require technical compliance with the notice provision of Rule 4007: this would place the creditor who has written notice of the bankruptcy (albeit deficient notice under the Rule) in a better position than the unlisted creditor whose debt is dischargeable under § 523(c) if he merely learns of the bankruptcy proceeding in time to protect his rights. Neeley v. Murchison, 815 F.2d 345, 347 (5th Cir. 1987)
This Court believes the law to be correctly stated as follows: If a creditor is not listed by the debtor as contemplated by Bankruptcy Code § 521, thus causing the creditor not to receive official notice of the § 341 meeting of creditors, and consequently no notice of the bar date for the filing of a § 523 complaint; and if the creditor has actual knowledge of the bankruptcy proceeding in sufficient time to inquire and file a complaint prior to expiration of the bar date; then a complaint filed thereafter is untimely under Rule 4007(c).
The complaint is untimely and should be dismissed with prejudice. Counsel for the defendant is directed to submit an appropriate form of order within ten days.
NOTES
[1] In Neeley v. Murchison, 815 F.2d 345 (5th Cir.1987) the 5th Circuit has rejected arguments similar to the plaintiff's. Failure by the Clerk's office to give the 30 day notice under Rule 4007(c) does not suspend the running of the 60 day limitation period.
[2] The 9th Circuit has held that when a creditor has actual knowledge of the debtor's bankruptcy proceeding he is placed on inquiry notice, and the burden is on him to ascertain any bar dates or occurrences that affect him. In re Rhodes, 61 B.R. 626 (9th Cir. B.A.P.1986) and reaffirmed in In re Ricketts, 80 B.R. 495 (9th Cir. B.A.P.1987). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1920623/ | 107 B.R. 663 (1989)
In the Matter of John Joseph RUDLOFF, Edith Josephine Rudloff, Denis William Rudloff, Debtors.
Bankruptcy Nos. BK88-124, BK88-123.
United States Bankruptcy Court, D. Nebraska.
May 11, 1989.
*664 David Copple of Domina, Gerrard, Copple & Stratton, P.C., Norfolk, Neb., for Farm Credit System-Omaha.
John Joseph Rudloff, Edith Josephine Rudloff and Denis William Rudloff, Verdigre, Neb., pro se.
MEMORANDUM
TIMOTHY J. MAHONEY, Chief Judge.
Hearing was held on April 10, 1989, on motion for relief from stay filed by the Farm Credit System Omaha, debtors' objection to the motion and debtors' motion for sanctions. David Copple of Domina, Gerrard, Copple & Stratton, P.C., Norfolk, Nebraska, appeared for Farm Credit System Omaha; John J. Rudloff, Edith J. Rudloff and Denis William Rudloff, Verdigre, Nebraska, appeared pro se.
Facts
Farm Credit System Omaha (FCS-O) filed a motion for relief from the automatic stay pursuant to Section 362(d)(1), (2)(A) and (2)(B) to permit the scheduling and conducting of a sheriff's sale of debtors' real property. That property is the subject of a decree of foreclosure entered in state court in March, 1987.
In a letter dated September 16, 1988, FCS-O informed debtors that their Federal Land Bank of Omaha (now Farm Credit System of Omaha) loans "may be" distressed loans. The letter stated that debtors' loans "may be suitable for restructuring." A copy of the Eighth Farm Credit District Distressed Loan Policy was enclosed along with the materials needed to enable the debtor/borrower to submit an application for loan restructuring. Debtors, in a letter dated October 20, 1988, to FCS-O, acknowledged receipt of the September 16 letter, but pointed out the language which said the loans "may be" distressed. Debtors said, in their letter, that FCS-O was required by the Agricultural Act of 1987 to make a determination that their loan "is" distressed or "has become" distressed. Debtors then asked: is the Federal Land Bank making the determination that the loan "is" distressed? and requested proper forms. A reply letter from FCS-O, dated October 24, 1988, stated that proper procedures and policies were followed, and reminded debtors that their 48-day period to submit a restructuring application expired November 3, 1988. Debtors submitted a restructuring application on November 2, 1988.
FCS-O wrote to debtors on November 10, 1988, listing items deemed necessary to a complete restructuring application which were requested of debtors, but not submitted by them. Deadline for their submission was November 17, 1988. Debtors replied in a short letter, dated November 16, 1988, giving their explanation of why certain information was not submitted. On December 28, 1988, an "Adverse Credit Action Notice" was sent to debtors denying their restructuring application. The reasons given on the notice for the adverse *665 credit action were (1) production records not provided; (2) balance sheets were incomplete; (3) unrealistic value placed on land; and (4) inaccurate and incomplete financial information.
In its motion for relief FCS-O alleges that debtors have made no payments for principal or interest since the decrees of foreclosure were entered, that debtors have no equity in the property encumbered by FCS-O mortgages, that the property is not necessary to effect reorganization nor is there a likelihood that reorganization may be confirmed, that the property has been allowed to deteriorate, and that debtors have failed to provide FCS-O with adequate protection of its interest in the property.
Debtors have objected to the motion for relief and have filed a motion for sanctions. Debtors say that FCS-O filed a motion for relief previously and was granted limited relief by this Court so that they might comply with the Agricultural Credit Act of 1987, but that they have not so complied.
Debtors argue that the letter they received from FCS-O did not indicate that FCS-O had made a determination that the loan was distressed or had become distressed. Debtors point to this Court's order of January 13, 1989, In re Wagner, 107 B.R. 662 (Bankr.D.Neb.1989), in which this Court held that such a determination was statutorily required before restructuring eligibility is considered. Debtors also maintain that the property is necessary to an effective reorganization. Lastly, debtors request sanctions against FCS-O, alleging the motion for relief is frivolous.
Discussion
On a determination by FCS-O that a loan is or has become a distressed loan, as defined in 12 U.S.C. § 2202a(a)(3), FCS-O must provide written notice that the loan may be suitable for restructuring. 12 U.S.C. § 2202a(b)(1). This notice must be sent not later than 45 days before the lender begins foreclosure proceedings. 12 U.S.C. § 2202a(b)(2). The lender may not foreclose or continue any foreclosure proceeding with respect to a distressed loan before the lender has completed consideration of the loan for restructuring. 12 U.S.C. § 2202a(b)(3). Restructuring is required if it will produce equal or more return to the lender than foreclosure. 12 U.S.C. § 2202a(e)(1); See also H.Rep. No. 295(I), 100th Cong. 1st Sess. 52 reprinted in 1987 U.S.Code Cong. & Admin.News 2723.
It is this Court's reading of Section 2202a that the statute requires initially that a determination must be made that a loan is or has become distressed before the restructuring notice is sent. The legislative history is consistent with this reading of Section 2202a(b)(1).
Subsection (b) will require a qualified lender, once it has determined that a loan is or has become a distressed loan, to provide written notice to the borrower that the loan may be suitable for restructuring. . . . "
H.Rep. No. 295(I), 100th Cong. 1st Sess. 76 reprinted in 1987 U.S.Code Cong. & Admin.News 2723, 2747. (emphasis added).
Relief from the stay is the beginning, or in this case the continuation, of a foreclosure action. Because the Court concludes that FCS-O has not made the initial, requisite determination, the motion for relief is hereby denied. Any obligations of debtors in regard to the restructuring application are not triggered without this initial determination. FCS-O must specifically comply with the statute.
Debtors' motion for sanctions against FCS-O for noncompliance with the Court's order of September 12, 1988, is also denied.
Separate journal entry to be filed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1920665/ | 107 B.R. 759 (1989)
In re Michael Marne ROSS and Karen Kelly Ross, Debtors.
Bankruptcy No. 89-03217-LN.
United States Bankruptcy Court, W.D. Oklahoma.
November 22, 1989.
*760 Kenneth C. McCoy, Oklahoma City, Okl., for debtors.
Joe M. Anthis, Oklahoma City, Okl., for creditor.
ORDER ON RENEWED OBJECTION TO CONFIRMATION OF CHAPTER 13 PLAN
PAUL B. LINDSEY, Bankruptcy Judge.
On June 23, 1984, debtors executed a promissory note for "improvements and business" in favor of Local Federal Savings and Loan Association ("Local") and gave a second mortgage on debtors' home as security. On or about January 30, 1989, Local tendered the sum of $61,640.30 to American Mortgage and Investment Company, the first mortgage holder, thereby acquiring the first mortgage loan on debtors' home. Local asserts that it took this action in order to protect its second mortgage position, as the first mortgage note was then in default. On February 21, 1989, Local filed an action to foreclose the second mortgage. On May 12, 1989, a Journal Entry of Judgment of $22,544.69 was entered in favor of Local in the second mortgage foreclosure action. The balance of the first mortgage at that time was $64,562.05.
On May 22, 1989, debtors filed for relief under Chapter 13 of the Bankruptcy Code.
Debtors' amended petition divides Local's secured claims into two components. The first component describes Local's first mortgage as being in the amount of $61,700, with arrearages of $6,221.88. The proposed plan provides for regular monthly payments of $691.32 and, in addition, forty-eight monthly installments of $129.63 to cure the arrearage. The second component describes Local's claim under the second mortgage of $22,544.69. Debtors contend that the fair market value of the property is $65,000, subject to the first mortgage, leaving a secured value of $437.95 attributable to the second mortgage. Under debtors' plan, Local would be paid this latter amount, plus interest, in forty-eight monthly installments. The balance of Local's second mortgage, $22,106.74, would be treated as unsecured and would receive through the plan, as would all other unsecured creditors, approximately four percent of its value.
Local's objection to debtors' amended plan is that it contemplates the bifurcation of the second mortgage into secured and unsecured portions, under 11 U.S.C. § 506(a) and modifies Local's rights. Local argues that 11 U.S.C. § 1322(b)(2) prohibits modification because the note is secured only by a security interest in real property that is debtors' principal residence. Local relies, at least in part, on this court's ruling in In re Tinsley, Case No. BK-88-5022-LN (June 27, 1989). Local also argues that it is preposterous to believe that it would have paid $61,640.30 in order to protect a second mortgage position amounting to only $437.95.
Debtors, after reviewing the authorities discussing the relationship between 11 U.S.C. § 506 and § 1322(b)(2), request this court to reconsider at least one element of the position taken by it in Tinsley, in light of recent decisions from other jurisdictions.
CAN SECTIONS 506 AND 1322(b)(2) COEXIST?
In providing for the determination of secured status of claims, 11 U.S.C. § 506(a) states:
(a) An allowed claim of a creditor secured by a lien on property in which the estate has an interest, or that is subject to setoff under section 553 of this title, is a secured claim to the extent of the value of such creditor's interest in the estate's interest in such property, or to the extent of the amount subject to setoff, as the case may be, and is an unsecured claim to the extent that the value of such creditor's interest or the amount so subject to *761 setoff is less than the amount of such allowed claim.
Insofar as it is applicable here, the provisions of § 506(d) are as follows:
(d) To the extent that a lien secures a claim against the debtor that is not an allowed secured claim, such lien is void. . . .
A chapter 13 plan may "modify the rights of holders of secured claims, other than a claim secured only by a security interest in real property that is the debtor's principal residence. . . ." 11 U.S.C. § 1322(b)(2).
There appear to be at least three ways in which to analyze the interplay between §§ 506(a) and 1322(b)(2). Under the first, it is noted that § 506 applies in cases under chapters 7, 11, 12 and 13, [11 U.S.C. § 103(a)], and that, as a provision of general applicability, it may be limited by more specific provisions, such as § 1322(b)(2), which applies only in chapter 13 cases. In re Hynson, 66 B.R. 246, 250 (Bankr.D.N.J. 1986). The Hynson court held that the unsecured portion of a junior lienholder's claim may not be avoided by operation of section 506(d), as such would violate section 1322(b)(2). Id. at 253. See also In re Russell, 93 B.R. 703 (D.N.D.1988); In re Brown, 91 B.R. 19 (Bankr.E.D.Va.1988); In re Catlin, 81 B.R. 522 (Bankr.D.Minn. 1987); and In re Hemsing, 75 B.R. 689 (Bankr.D.Mont.1987). The Hynson reasoning was subsequently rejected in In re Harris, 94 B.R. 832, 836 (D.N.J.1989). The Harris court held that the protection of § 1322(b)(2) applies only to claims that are "secured claims" as defined by and determined under § 506(a). Id. at 836. See also In re Frost, 96 B.R. 804 (Bankr.S.D.Ohio 1989); In re Kehm, 90 B.R. 117 (Bankr.E. D.Pa.1988); and In re Caster, 77 B.R. 8 (Bankr.E.D.Pa.1987).
The second analysis presupposes that the purpose of § 1322(b)(2) is to protect long-term purchase money mortgage lenders, and not short-term finance company lenders, and holds that claims of undersecured second mortgage holders may be modified. In re Bruce, 40 B.R. 884, 886 (Bankr.W.D. Va.1984); accord In re Simmons, 78 B.R. 300 (Bankr.D.Kan.1987). The Simmons court held that § 1322(b)(2) does not protect undersecured junior mortgage holders and § 506(d) may be applied to void the unsecured portion of such claims. Id. at 304.
The third analysis holds that basic rules of statutory construction require § 1322(b)(2) to be read as consistently as possible with § 506, and that § 1322(b)(2) protects security interests which really exist rather than those which appear to be fully secured, but which in reality are undersecured. In re Caster, 77 B.R. 8, 13 (Bankr.E.D.Pa.1987). The Caster court found that § 1322(b)(2) prevents debtors from changing the payment terms of claims based on mortgages which are fully secured. Id. at 13. The Caster court held that a first mortgage, if less than fully secured, may be bifurcated under § 506 into a secured portion and an unsecured portion under § 1322(b)(2). Id. at 15.
In a very recent case, it was determined that the "truly secured portion of the residential real estate lender's claim does have special protection. Only the unsecured portion does not." Hougland v. Lomas & Nettleton Co. (In re Hougland), 886 F.2d 1182, (9th Cir.1989). The Hougland court held that a claim of a lender on residential real estate could be bifurcated under § 506(a) into secured and unsecured components, and that the lender's rights under the unsecured portion could be modified without violating the prohibition of § 1322(b)(2). Id. It noted that several of the courts which had dealt with the matter had determined that § 1322(b)(2) was ambiguous. After referring to the legislative history of the provision to resolve the ambiguity, it is noted that these courts often came to diametrically opposed results.
In Hougland, the court finds not only that the two provisions are not in conflict, as some courts have held, but that they "are in harmony when read in the context of the whole statute." Id. It finds that the limiting, "other than" clause of § 1322(b)(2), following as it does the term "secured claim" and preceding references to the term "unsecured claim," must refer *762 to the former rather than the latter and that there is no reason to give those terms any different meaning than that given to them by § 506(a).
It is true that Congress could have made this meaning more clear, for instance by inserting the qualifying word "claim" before the word "secured" in the "other than" clause, or by specifically making § 506(a) applicable in the context of § 1322(b)(2). Unfortunately, however, it did not do so. The Hougland court, however, found that the meaning was implicit from the language employed, and that its conclusion as to the meaning was supported by the leading treatise on bankruptcy law. See 5 Collier on Bankruptcy, ¶ 1322.06(1)(a) (15th Ed.1979).
In Tinsley, supra, this court rejected the contention that § 1322(b)(2) was intended to be applied to "traditional, longterm mortgages," and that it should not be employed to protect the holders of short-term second or subsequent liens. This court also ruled in Tinsley that the common, "boiler plate" language in mortgage instruments, referring to insurance, rents and profits, buildings, improvements, machinery, equipment and the like, did not constitute additional security for the debt which would preclude the application of § 1322(b)(2). Nothing has been presented here which suggests that the court should change its views on either of those issues, and its holdings on them are thus reaffirmed.
In addition to these two holdings in Tinsley, however, this court, in a single brief paragraph, held, citing Hynson, supra, that bifurcation of a secured claim would itself constitute a modification of the rights of the holder of the secured claim. As has been noted above, the Hynson reasoning was subsequently rejected in its jurisdiction. Harris, supra. Such reasoning has similarly been rejected by other recent decisions, including Hougland, supra. Although this court's extremely brief holding on this point in Tinsley is unequivocal, it is clear that the court did not consider the possibility that § 1322(b)(2) should be limited in its applicability to claims determined to be "secured" through § 506(a). Instead, this court held, without discussion or apparent consideration and assuming that the claim was a secured claim, that the application of § 506(a) would itself constitute a modification of the rights of the holder of the claim. It appears, in reviewing Harris and Hougland, and the other more recent decisions cited above, that such assumption was unwarranted and incorrect, particularly since the term "secured claim" has meaning only as defined in § 506(a).
Thus, although adhering to its other holdings in Tinsley, described above, this court is now convinced that it erred in holding that § 1322(b)(2) prohibited a determination under § 506(a) as to the extent to which a claim is secured and unsecured. In fact, a determination of the extent of the secured claim, available only under § 506(a), is necessary in order to determine the extent to which § 1322(b)(2) is applicable.
It should be noted here that, although Local relies in part on this court's holding in Tinsley which the court has now held to have been in error, Local can not claim prejudice by reason of such reliance. The Tinsley decision was issued June 27, 1989, more than five months after Local had purchased the first mortgage position of American Mortgage and Investment Company.
DECISION
Based upon the foregoing, it is this court's view that the renewed objection by Local to debtors' amended chapter 13 plan should be overruled. To the extent Local's claim is a secured claim, debtors' plan may not modify the rights of the creditor. Thus, the amount of the payments required to be made under the governing documents may not be changed, although the result may be that the obligation secured by the mortgage may be paid in full much more rapidly. Neither, of course, may the interest rate or other provisions of the documents be altered. Such prohibition, however, relates only to the extent that the claim is determined to be a secured claim. Debtors are not prohibited, by § 1322(b)(2) *763 or otherwise, from proposing a plan which would modify Local's rights as to the unsecured portion of its claim.
Since the parties have not agreed upon the value of the property, proceedings pursuant to § 506(a) must be held to determine that value. After this has been done, debtors may amend their plan further to give effect to the valuation and to the court's determinations herein, and a further, hopefully final, confirmation hearing may be held. Should the parties agree upon the value of the property before the valuation hearing is held, a stipulation to that effect may be filed and the hearing will be unnecessary.
IT IS SO ORDERED. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623155/ | 569 So. 2d 1001 (1990)
Theresa WHITE, Glenda White Leonard and Athena White
v.
STATE of Louisiana, DEPARTMENT OF PUBLIC SAFETY AND CORRECTIONS OFFICE OF MOTOR VEHICLES and Andrew Jackson Casualty Insurance Company.
No. CA 89 1457.
Court of Appeal of Louisiana, First Circuit.
September 27, 1990.
*1002 Harold J. Lamy, New Orleans, for plaintiffs-appellants, Theresa White, et al.
Henry G. Terhoeve, Baton Rouge, for defendant-appellee Andrew Jackson Cas. Ins. Co.
Before COVINGTON, C.J., and LANIER and ALFORD, JJ.
PER CURIAM.
The issue raised on appeal is whether or not the trial court erred by granting an exception of no cause of action brought by defendant, Andrew Jackson Casualty Insurance Company (Andrew Jackson), and dismissing it from the lawsuit.
This lawsuit arises out of an automobile accident in which Theresa White was injured while riding as a guest passenger in a vehicle driven by Edward T. O'Connor. Plaintiffs sued the State of Louisiana for alleged negligence in issuing a driver's license to Mr. O'Connor. Plaintiffs sued Andrew Jackson in two capacities, as the automobile insurer of Mr. O'Connor and for alleged negligence in issuing an automobile insurance policy to Mr. O'Connor. Andrew Jackson filed a peremptory exception arguing that, as to the negligent issuing of an insurance policy, plaintiffs had no cause of action. The trial court granted the exception.[1] Plaintiffs appeal that judgment.
The peremptory exception of no cause of action questions whether or not the law affords any remedy to the plaintiff under the allegations of the petition. If a remedy is provided, the exception must be overruled. The exception is triable solely on the face of the petition and any attached documents. No evidence may be introduced in support of the exception. La.C. C.P. art. 931. All well-pleaded facts are accepted as true, and any doubts are resolved in favor of the sufficiency of the petition. Bamber Contractors, Inc. v. Henderson Brothers, Inc., 345 So. 2d 1212 (La.App. 1st Cir.1977).
*1003 The petition makes the following allegations with respect to Andrew Jackson:
11.
Edward T. O'Connor applied to Sunshine Insurance Agency, 991 Mahlon E. Village, DeRidder, Louisiana 70634 for an automobile insurance policy. On information and belief it is averred that Sunshine Insurance Agency and Imperial Lloyds Insurnace (sic) Company refused to issue a motor vehicle liability insurance policy to Edward T. O'Connor because he was an uninsurable risk due to his disability. Thereafter, Edward T. O'Connor applied to Andrew Jackson Casualty Insurance Company through its duly authorized agent, Beauregard Insurance Agency, a Division of Mid South Insurance (sic) Agency, Inc. Despite receiving a report from Dr. Russell W. Robert, Krooss Family Medical Clinic, 901 S. Pine Street, DeRidder, Louisiana certifying that Edward T. O'Connor suffered from a stroke which has left him with a right hemiplegia with weakness in the rightleg (sic) and minimal usuage (sic) of the right arm, Andrew Jackson Casualty Insurance Company issued an insurance policy to Edward T. O'Connor, policy number AJP0000505 effective for policy period 1/11/88 to 7/11/88, providing for limits of $10,000/$20,000 BI, and $10,000 PD.
. . . . .
14.
It is averred that the above and foregoing accident was caused or contributed to by the negligence of the defendant, Andrew Jackson Casaualty (sic) Insurance Company jointly and in solido including the following:
1. By issuing a motor vehicle automobile liability policy to Edward T. O'Connor while knowing that he suffered from a paralysis on the right side described as right hemiplegia which rendered the use of his right arm and right leg almost totally useless. This disability which defendant, Andrew Jackson Casualty Insurance Company knew or should have known, rendered Edward T. O'Connor a noninsurable risk. By issuing an insurance policy to Edward T. O'Connor he was able to obtain an automobile license title and plates to operate a motor vehicle in the State of Louisiana.
La. Civil Code art. 2315 provides in relevant part:
Every act whatever of man that causes damage to another obliges him by whose fault it happened to repair it.
Within the contemplation of article 2315, fault is the breach of a duty owed by one party to another. United States Fidelity and Guaranty Company v. State, Department of Highways, 339 So. 2d 780 (La. 1976). Whether or not a legal duty is owed by one party to another depends on the facts and circumstances of the case and the relationship of the parties. Straley v. Calongne Drayage & Storage, Inc., 346 So. 2d 171 (La.1977).
Therefore, the issue presented in the instant case is whether or not there is a duty owed to the public by an insurance company to insure only persons who are physically capable of driving safely. Appellant argues that the insurance industry, as a specially regulated industry and a "quasi public institution", has a duty to the public not to insure an incapable driver. We find no merit to this argument.
It has long been the recognized public policy of this state that a policy of liability insurance is issued for the protection of the general public as well as for the security of the insured. Hughes v. Southeastern Fidelity Ins. Co., 340 So. 2d 293 (La.1976); West v. Monroe Bakery, 217 La. 189, 46 So. 2d 122 (1950). The Louisiana Civil Code provides in articles 1978 and 1980 that a person may, in his own name, make some advantage for a third person the condition or consideration of a contract, and the contract cannot be revoked if the third person consents to avail himself of the advantage stipulated in his favor. A liability insurance contract is recognized as a stipulation by the insured in favor of a party injured due to the fault of the insured. Dixon v. Shockley, 356 So. 2d 96 (La.App. 1st Cir.), writ denied, 358 So. 2d 642 (La.1978).
*1004 We, however, decline to extend this policy to say that an insurance agency owes a duty to the public to insure only persons who are physically able to drive safely. Cf. Bustamante v. State Farm Mutual Automobile Ins. Co., 517 So. 2d 232 (La.App. 1st Cir.1987), writ denied, 518 So. 2d 510 (La.1988); LeBouef v. Colony Ins. Co., 486 So. 2d 760 (La.App. 1st Cir. 1986); Campbell v. Continental-Emsco Co., 445 So. 2d 70 (La.App. 2d Cir.), writ denied, 446 So. 2d 1223 (La.1984). We conclude that plaintiffs cannot recover against Andrew Jackson pursuant to a tort theory in the manner alleged in their petition. We further conclude that the petition cannot be amended to state a cause of action. Pursuant to Louisiana Code of Civil Procedure article 934, if the grounds of the objection cannot be removed by amendment, the action shall be dismissed. See Johnfroe v. Children's Hosp., 537 So. 2d 383 (La.App. 4th Cir.1988). Therefore, the trial court properly sustained the objection of no cause of action and dismissed plaintiffs' tort action against Andrew Jackson.
For the foregoing reasons, the judgment of the trial court is affirmed. Costs of this appeal are assessed against appellants.
AFFIRMED.
LANIER, J., concurs in the result.
NOTES
[1] When a petition states two causes of action, an objection of no cause of action may be sustained as to one cause of action and overruled as to the other. McGowan v. Ramey, 484 So. 2d 785 (La.App. 1st Cir.1986). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623178/ | 15 So. 3d 614 (2009)
Javis REDDIX, Appellant,
v.
The STATE of Florida, Appellee.
No. 3D09-49.
District Court of Appeal of Florida, Third District.
June 3, 2009.
Javis Reddix, in proper person.
Bill McCollum, Attorney General, and Richard L. Polin, Chief Assistant Attorney General, for appellee.
Before COPE, SHEPHERD, and SUAREZ, JJ.
SHEPHERD, J.
Defendant, Javis Reddix, appeals a trial court order denying his motion to correct illegal sentence pursuant to Florida Rule of Criminal Procedure 3.800(a), arguing the trial court failed to secure from him a waiver of credit for time served on the incarcerative portion of his original split sentence after he violated the probationary portion of that sentence and was sent back to prison. Because there does not appear of record a clear showing of express waiver, as permitted by our case law, or other record evidence sufficient for us to conclude that Reddix accepted an offer he was aware would include such a waiver, we reverse the order on appeal and remand the case for further proceedings.
FACTS
On February 26, 2007, Reddix was adjudicated guilty in two cases and sentenced to two years in state prison followed by one year of probation. He served the incarcerative portion of his sentence and was released. Thereafter, an affidavit of violation of probation was filed against him for, inter alia, leaving Miami-Dade County without first seeking the permission of *615 his probation officer.[1] In discussions preceding Reddix's plea, the State noted that its offer was "five (5) years state prison with credit time served since the last time he was booked[,]" but that there was a "different court offer." After more discussion, Reddix ultimately chose to accept "the Court's offer[,]" which, to that point, had not been described on the record in any detail. Thereafter, the following exchange took place:
THE COURT: You can lower your hand. Tell me [your] full name, please, sir?
THE DEFENDANT: Javis Deon Reddix.
THE COURT: How old are you, sir?
THE DEFENDANT: Twenty-eight.
THE COURT: How far did you go in school?
THE DEFENDANT: Eleventh grade.
THE COURT: Tell me what you do for a living or what your last job was?
THE DEFENDANT: Construction labor pool.
THE COURT: Have you ever been treated for a mental illness?
THE DEFENDANT: No, sir.
THE COURT: Today, are you under the influence of any drugs, alcohol, or prescription medicine that might impair your ability to understand?
THE DEFENDANT: No, sir.
THE COURT: Has anyone made you any promises to get you to accept the plea offer other than the terms that have been announced on the record?
THE DEFENDANT: No, sir.
THE COURT: Has anyone threatened or forced you to accept these terms?
THE DEFENDANT: No, sir.
THE COURT: Have you had enough time to discuss [the terms] with your attorney?
THE DEFENDANT: Yes, sir.
THE COURT: Are you satisfied with your lawyer's assistance as counsel?
THE DEFENDANT: Yes, sir.
THE COURT: Do you understand if you prefer to have a right to have a probation violation hearing before this court on both cases? At the hearing it would be the State's obligation to prove to me, not to a jury, by a preponderance of the evidence the violation of probation[?]
THE DEFENDANT: Yes, sir.
THE COURT: You would have the right to bring in witnesses to testify, the right to confront or cross-examine the State's witnesses, the right to testify yourself or not testify, which would be your decision alone to make, and finally, the right to take an appeal to a higher court should I find you to be in violation of your probation in any regard. Do you understand that if I go ahead and accept your plea here today, then there will be no probation violation hearing, and you would give up the rights that I have just described?
THE DEFENDANT: Yes, sir.
THE COURT: Do you understand the maximum penalties that could have been imposed here if I found you to be in violation wereCan you tell me, Mr. Aroca, what he faced here?
*616 MR. AROCA [Assistant State Attorney]: Forty-one (41).
THE COURT: Forty-one (41) years in state prison all together. Do you understand, sir?
THE DEFENDANT: Yes, sir.
THE COURT: Are you admitting that you are the same Javis Reddix who was on probation in both of these cases and that you violated your probation by leaving Miami[-]Dade County without first getting the permission of your probation officer back on January 14th of 2008 by going to Broward County?
THE DEFENDANT: Yes, sir.
THE COURT: Do you understand that by entering into the plea if you are not a U.S. Citizen, it is possible you could get deported?
THE DEFENDANT: Yes, sir.
THE COURT: Do you understand that by entering into a plea you give up your right to have your lawyer investigate or continue to investigate any physical evidence from these cases that might, through DNA testing demonstrate that you didn't commit the violation.
THE DEFENDANT: Yes, sir.
THE COURT: Do you understand if you have any prior convictions for crimes that involve sexual violence or crimes that were sexually motivated, then it's possible that a plea on these cases could result in your indefinite involuntary civil commitment under the Jimmy Ryce Act?
THE DEFENDANT: Yes, sir.
THE COURT: Very well. The Court does find the defendant is alert and intelligent. He's made a knowing and voluntary plea, he has been assisted by competent counsel in whom he expressed his satisfaction, and he understands the nature and consequences of his plea.
Accordingly, I accept his admission of one of the violations alleged in each of these cases, that being leaving the county without getting permission. I'm going to revoke his probation in both cases. Sentence will be four (4) years state prison with all credit time served to which he is entitled since his booking date on these affidavits. That's the time he gets credit for.
MR. AROCA: Your honor, that's for the record verification, but taking the plea here means credit for time served only since the date he was booked on the violation of probation.
THE COURT: That is what I just said.
MR. AROCA: I'm getting motions from defendants.
THE COURT: So am I. They come in every day. My inbox has a stack of Rule 3 motions, and a lot of them are on this issue but I usually do explain to people and tell them the specific date from which they get CTS and that is the situation here as well.
CORRECTION OFFICER: You said four (4) years, right, judge?
THE COURT: Correct. With all CTS from 2/14/08 ... forward.
(emphasis added).
ANALYSIS
Absent: (1) clear record evidence of an express waiver of entitlement to credit time served by a defendant in his plea colloquy, see, e.g., Troutman v. State, 985 So. 2d 1167 (Fla. 3d DCA 2008); Hines v. State, 906 So. 2d 1137 (Fla. 3d DCA 2005); (2) clear record evidence revealing a defendant understood he was waiving the credit time served in question as part of his new sentence, see, e.g., Joyner v. State, *617 988 So. 2d 670 (Fla. 3d DCA 2008); or (3) clear record evidence revealing that applying the credits to which a defendant now claims entitlement would lead to an absurd result clearly not within the contemplation of the parties at the time of sentencing, see, e.g., Rivera v. State, 954 So. 2d 1216 (Fla. 3d DCA 2007);[2]Fulcher v. State, 875 So. 2d 647 (Fla. 3d DCA 2004) (Cope, J., concurring), a defendant is entitled to credit for the time he served on the original split sentence. See Isaac v. State, 992 So. 2d 304 (Fla. 3d DCA 2008); Brownlee v. State, 899 So. 2d 341 (Fla. 3d DCA 2005); Cozza v. State, 756 So. 2d 272 (Fla. 3d DCA 2000).
The record in this case clearly shows Reddix was never asked during his plea colloquy whether he consented to waive his credit for the two years he served on the incarcerative portion of his split sentence. The court only announced Reddix's waiver after it accepted his plea to the violation. In this respect, this case is factually analogous to Ryan v. State, 837 So. 2d 1075, 1076 (Fla. 3d DCA 2003), where the court explained it was offering the defendant "two years [of youthful offender incarceration] followed by two years community control[]" but did not engage in any discussion of what credit the defendant was entitled to until after it pronounced sentence.
The only material difference between this case and Ryan is a statement by the State in this case that its offer was "five (5) years state prison with credit time served since the last time he was booked[,]" and that there was a "different court offer," which Reddix ultimately accepted. This Court has explained that "[a] plea agreement is a contract and the rules of contract law are applicable to plea agreements." Garcia v. State, 722 So. 2d 905, 907 (Fla. 3d DCA 1998). A contract-based analysis of this case reveals two separate offers of record, one by the State of five years in prison with credit for time served since "the last time he was booked," and a second offer by the court of four years in prison that was silent as to what credit Reddix was required to waive until after Reddix accepted it. In order for us to affirm on consideration of this additional evidence, we would have to first infer that the proposed waiver in the State offer was imported into the court offer, and then infer that Reddix understood that to be the case. Such an analysis does not meet the requirement that a "waiver [of credit for time served] must be clearly shown on the record." Ryan, 837 So.2d at 1076.[3],[4]
*618 On remand, the trial court should further examine the record to determine whether some other document or evidence of record exists which clearly demonstrates Reddix was aware he would be waiving two years of credit for time served when he accepted the trial court's offer. See, e.g., Joyner, 988 So.2d at 671-72 (affirming where plea agreement signed by the defendant clearly indicated he was aware he would only be entitled to credit from a specific date); Rivera v. State, 954 So.2d at 1218 (affirming where "[granting] the requested additional credit here would reach an absurd result by undoing the amounts of time the defendant specifically agreed to serve"). If no such waiver can be shown or otherwise deduced, the court should enter an order crediting Reddix with the time served on the incarcerative portion of his original split sentence.[5]See Isaac, 992 So.2d at 304; Cozza, 756 So.2d at 272.
Reversed and remanded for further proceedings.
SUAREZ, J., concurs.
COPE, J. (dissenting).
Respectfully, I believe the transcript sufficiently supports the waiver of credit for time served prior to the last booking date.
This case came before the court for a probation violation hearing. The court inquired what plea offer had been made by the State. After a delay in the proceedings, the State said:
[ASSISTANT STATE ATTORNEY]: Yes, we were ready this morning. The State's offer is five (5) years state prison with credit time served since last time he was booked. I know there's a different court offer.
Over the next several pages it became clear that part of the negotiation involved the length of the sentence, and part of it involved which probation condition the defendant would admit that he violated. The defendant wished to agree to a ground which would not adversely affect him in a pending case against him in Broward County. None of the discussion between the parties and the court involved credit for time served.
At the end of the negotiation, it was agreed that the defendant would admit to committing a technical violation of probation and would receive a four-year sentence (instead of the five years the State had offered).
The judge stated:
Sentence will be four (4) years state prison with all credit for time served to which he is entitled since his booking date on these affidavits. That's the time that he gets credit for.
[ASSISTANT STATE ATTORNEY]: Your Honor, that's for the record verification, but taking the plea here means credit for time served only since the date he was booked on the violation of the probation.
THE COURT: That is what I just said.
(Emphasis added). There was no objection by the defendant or his counsel.
This colloquy is clear enough to document a waiver of credit for time served prior to the last booking date. Our court has said that "a provision in a plea agreement *619 that the defendant is to be awarded credit for time served from a specific date effectively waives any claim to credit for time served before that date." Johnson v. State, 974 So. 2d 1152, 1152 (Fla. 3d DCA 2008), review stayed, No. SC08-418 (Fla. March 18, 2008); Joyner v. State, 988 So. 2d 670, 672 (Fla. 3d DCA 2008). The transcript sufficiently reflects such a waiver. We should affirm.
NOTES
[1] Defendant's plea colloquy reveals the affidavit of probation violation also listed as a ground that Defendant was arrested on new charges in Broward County. As a result of negotiations between the trial court and counsel for both parties, however, Defendant was not required to plead to this arrest as a factual ground supporting his violation. Thus, we do not consider it here.
[2] In Rivera, this Court noted that:
The defendant's claim for an additional 732 days of credit for time served would mean that the defendant's incarceration would be limited to eleven monthswhich is totally inconsistent with the time frames to which the defendant previously agreed. An eleven-month term of incarceration would be less than the eighteen months required for the Modality Programwhich was the purpose of the downward departureand is less than the two and a half year estimated incarceration to which the defendant agreed.
Rivera, 954 So.2d at 1218.
[3] The cases cited by the dissent, Johnson v. State, 974 So. 2d 1152 (Fla. 3d DCA 2008), and Joyner, 988 So.2d at 670, are inapposite. Both included written waivers of credit for time served.
[4] Our case is similarly distinguishable from our recent release, Holmes v. State, 11 So. 3d 444 (Fla. 3d DCA 2009) (stating that defendant's express assent to proceed with plea colloquy after his counsel stated, "he [the defendant] just wants to be clear what he is getting credit for,") id. at 445 n. 1, "conclusively demonstrates that Holmes waived ... credit for any additional time served." Id. at 446.
[5] If it is not already included, it may be prudent for the criminal division of the circuit court to consider including an insert in any model colloquy form that may exist in that court a prompt or question to assure that a defendant who is accepting a plea offer expressly acknowledges of record that the offer excludes some or all credit for time served before he or she accepts the offer of a plea. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623190/ | 15 So. 3d 1241 (2009)
COMMERCIAL UNION ASSURANCE PLC, Royal and Sun Alliance P.C., Axa Global Risks UK, Ltd., Independent Insurance Company, Ltd., Terra Nova Insurance Company, Ltd., and A.N. underwriter for himself and on behalf of all other Lloyd's underwriters subscribing to Policy Nos. MM96M0199 and LE9605111
v.
TIDEWATER MARINE SERVICE, INC. and Zapata Gulf Marine International Ltd.
Commercial Union Assurance PLC, et al.
v.
Tidewater Marine Service, Inc., et al.
Nos. 2008-CA-1114, 2008-CA-1131.
Court of Appeal of Louisiana, Fourth Circuit.
June 24, 2009.
*1242 H. Alston Johnson III, Phelps Dunbar LLP, Baton Rouge, LA, and Edward F. Lebreton III, Fowler Rodriguez Valdes-Fauli, New Orleans, LA, for Navigators Insurance Company.
C. Henry Kollenberg, Melinda M. Riseden, Crain Caton & James P.C., Houston, TX, and James A. Babst, Hamilton Brown & Babst, LLC, New Orleans, LA, for Marsh Inc., Marsh USA, Inc.
Cliffe E. Laborde III, Robert E. Torian, Laborde & Neuner, Lafayette, LA, for Tidewater Marine Service, Inc., Tidewater Inc., Zapata Gulf Marine International Limited, TT Boat Corporation, Pental Insurance Co., Ltd., Tidewater Crewing Ltd., Tidewater Marine, L.L.C. and Tidewater Marine West Indies Limited.
(Court composed of Judge JAMES F. McKAY III, Judge ROLAND L. BELSOME, Judge PAUL A. BONIN).
JAMES F. McKAY III, Judge.
In this marine insurance case, the defendant, Navigators Insurance Company, appeals the trial court judgment holding it liable for damages based upon an excess insurance policy it issued. The defendant also appeals the trial court's denial of its claim for indemnification. We affirm.
FACTS AND PROCEDURAL HISTORY
On or about December 15, 1996, the port stern anchor of the M/V Oceanic Seahorse hooked a subsea electric cable owned by the Trinidad and Tobago Electric Commission (T-TEC). This caused significant damage to a major electrical conduit running between Trinidad and Tobago. At the time of the accident, the M/V Oceanic Seahorse, which was owned by Tidewater Marine Services, Inc. (Tidewater), had been chartered by Amoco and then sub-chartered by Tucker Energy Services, Inc. (Tucker) to perform subsea cable repairs off the coast of Trinidad. In the contract, Tidewater required that Tucker indemnify Tidewater up to five million dollars for any damage that might occur during the work.
*1243 Commercial Union Assurance, PLC (Commercial Union) issued a property insurance policy to T-TEC and paid T-TEC for the damage to the cable. Thereafter, Commercial Union brought suit against Tidewater in Orleans Parish. Thereupon, Tidewater brought a third party action against Tucker for contractual indemnity under the sub-charter contract. Tucker had specifically added the M/V Oceanic Seahorse to the schedule of covered vessels in its primary P & I policy.[1] This policy provided $1.5 million of liability coverage. Tucker also had an existing excess P & I policy underwritten by Navigators Insurance Company (Navigators).
Tidewater and Commercial Union reached a settlement, and Tucker's primary P & I underwriter honored Tucker's obligation to indemnify Tidewater and paid its policy limits of $1.5 million. Navigators, however, denied coverage and Tidewater contributed $500,000.00 toward the settlement. Tidewater reserved its rights against Navigators as an additional assured/third party beneficiary under the excess policy. For added measure, Tucker assigned any rights it had against Navigators for this loss over to Tidewater. Shortly thereafter, Tidewater brought suit against Navigators to recover its settlement contribution as well as defense costs (items that were covered under Tucker's primary and excess P & I policies). Navigators denied liability and third-partied Marsh Inc. and Marsh USA, Inc. (collectively Marsh); Marsh was an insurance broker who procured Tucker's insurance policies.
Trial in this matter was bifurcated into liability and damages phases. The liability phase of the case was tried to the court, without a jury on four days, December 11 and 12, 2007 and April 8 and 9, 2008. On April 29, 2008, the trial court found coverage for the M/V Oceanic Seahorse under the excess policy issued by Navigators to Tucker. The trial court also dismissed Navigators' third-party demand against Marsh. After the entry of that judgment, Tidewater filed motions to tax its trial expert's fees as costs, to admit certain exhibits into evidence that would support its claims against Navigators for indemnity and defense, and for a monetary judgment for the amount of its claim for indemnity and defense. On July 14, 2008, the trial court awarded Tidewater $1,535,519.00, together with judicial interest from the date of judicial demand until paid. The trial court also awarded Tidewater $24,300.00 in expert fees. Navigators now appeals the trial court's judgment.
DISCUSSION
On appeal, Navigators raises the following assignments of error: 1) the trial judge erred in concluding that excess coverage which Navigators Insurance Company had provided to its insured with respect to one vessel had been expanded by Navigators to include a different vessel; 2) even if excess coverage is held to have been expanded to include a different vessel, the coverage was "following form"[2] coverage and the underlying primary policy did not have coverage for any contractual indemnity obligation owed by the insured, nor could any of the policy's coverages be assigned by the insured to anyone else; 3) even if there were excess coverage which included contractual indemnity and as to which assignment by the insured was permitted, the insured actually had no reimbursable claim under the policy and thus nothing to assign; 4) the trial judge erred in dismissing Navigators *1244 third-party claim against Marsh, whose sub-standard conduct either wholly or partially caused Navigators to be cast in judgment to Tidewater; and 5) the trial judge erred in including certain items in the damage award.
Assignment of Error No. 1
In its first assignment of error, Navigators contends that the trial court erred in concluding that the excess policy it issued to Tucker provided coverage for the M/V Oceanic Seahorse. Navigators contends that its excess policy was limited to a single vessel, a liftboat known as the Gene Buras Elevator. Navigators' position is largely based on two documents, a binder[3] and a blank form of the American Institute Hull Clauses. At trial, Navigators' insurance broker opined on how he believed the American Institute Hull Clauses form would have read in this case, but that was really nothing more than conjecture on his part because no actual form was filled out in this case. As to the binder, Louisiana law holds that the binder is of no effect or import once the policy is issued. La. R.S. 22:870. See also Liberty Mut. Ins. Co. v. Ads, Inc., 357 So. 2d 1360, 1362-1363 (La.App. 4 Cir.1978); Commercial Credit Equip. Corp. v. Evans, 302 So. 2d 727, 728 (La.App. 3 Cir. 1974). Navigators' position is largely based on the opinion testimony of its experts and not the actual facts and documents pertinent to this case.
On the other hand, the trial court specifically found that trial exhibit 14 introduced by Tidewater was a policy as it was properly counter-signed by Navigators' duly authorized representative, called itself a policy no fewer than thirteen times, and contained the essential terms required for it to qualify as a policy. Navigators failed to issue any policy documents necessary to restrict or limit the coverage under its policy to a single vessel. The trial court also found that this excess policy was by its terms a "following form" P & I policy that provided coverage for any vessel covered by the primary policy. The M/V Oceanic Seahorse was covered by the primary policy. Because this was a following form policy and Navigators failed to limit or restrict its coverage, the law provides that the excess policy adopts the terms and conditions of the primary P & I policy. Accordingly, based on the record before this Court, we find no error regarding Navigators' first assignment of error.
Assignment of Error No. 2
In its second assignment of error, Navigators contends that the underlying policy did not cover contractual indemnity and could not be assigned. However, Navigators never raised these defenses in its answer or at the liability phase of the trial. Navigators first attempted to raise these defenses after the liability phase of the trial. The trial court found that any and all defenses or claims regarding liability should have been argued at trial and any defenses asserted after the trial were waived and abandoned. Because Navigators failed to assign the trial court's ruling on Navigators' waiver and abandonment as error, it is precluded from raising these defenses on appeal. Outdoor Systems, Inc. v. Entergy Corp., XXXX-XXXX (La.App. 4 Cir. 12/19/01), 804 So. 2d 848, 852; Box v. French Market Corp., XXXX-XXXX (La.App. 4 Cir. 9/5/01), 798 So. 2d 184, 190. Accordingly, Navigators is precluded from asserting defenses on liability that it failed to raise at trial. See McDaniel v. Charity Hospital, XXXX-XXXX (La.App. 4 Cir. 8/13/08), 991 So. 2d 1138, 1140.
Even if Navigators were not precluded from raising its second assignment *1245 of error, the assignment of error has no merit. The trial court held that Navigators' excess policy follows the coverage of the primary P&I policy. The primary policy lists the following as assureds: "Tucker Energy Services, Inc. and/or affiliated and/or associated companies and/or as expiring." Tucker was hired by T-TEC to perform repair work on a cable resting on the seabed. Tucker needed a vessel from which to perform the work, and sub-charted the M/V Oceanic Seahorse from Tidewater for that purpose. Tidewater provided the vessel along with her captain and crew, and Tucker furnished its own crew to perform the repair work on the cable. As a company engaged by Tucker to perform an integral part of Tucker's work for T-TEC, Tidewater would qualify as an "associated company" of Tucker for purposes of assured status.
Assignment of Error No. 3
In its third assignment of error, Navigators contends that Tidewater has no reimbursable claim under the policy. However, Navigators did not raise this defense at trial and is precluded from doing so now on appeal for the same reasons discussed in assignment of error number two.
Even if Navigators' third assignment or error was not waived, its contention that Tidewater has no reimbursable claim under the policy is wrong. The purpose of protection and indemnity (P & I) insurance is to provide protection to a shipowner for damages caused by the operation of its vessel. Because maritime law provides that a vessel may be seized to satisfy liability claims against it, the typical hull policy includes P&I coverage up to the value of the vessel. In the instant case, Tucker was contractually obligated to obtain insurance coverage to indemnify Tidewater from any damages arising out of its operation of the M/V Oceanic Seahorse. One of the primary reasons for Tucker's procuring these insurance policies was to indemnify Tidewater. The insurer should have been aware of this situation. See generally Gulfwide Boat Rentals, Inc. v. Security Ins. Co., 292 So. 2d 796 (La.App. 1 Cir.1974). It is clear from the circumstances that Tidewater has a reimbursable claim under the policy.
Assignment of Error No. 4
In its fourth assignment of error, Navigators argues that Marsh should bear the entire loss, or alternatively, half of it.
The trial court found no liability on the part of Marsh, for the simple reason that Navigators' liability was based on a policy document created by Somerset Insurance Services, Inc. (Somerset) and signed by Somerset on behalf of Navigators with Marsh playing no part in the creation of the document. In any event, Marsh was the agent of Tucker, not Navigators. There is no cause of action for negligently causing another party to enter into a contract. Neither Tucker nor Tidewater sued Marsh. Navigators sued Marsh only for indemnity.
However, in this Court, Navigators raises a new set of arguments against Marsh, based principally on a misrepresentation theory. As stated above, Navigators is not permitted to raise arguments in this Court that were not urged in the court below. See Graubarth v. French Market Corp., XXXX-XXXX (La.App. 4 Cir. 10/24/07), 970 So. 2d 660, 664; Boudreaux v. State, DOTD, XXXX-XXXX (La.2/26/02), 815 So. 2d 7, 9.
Texas law governs Navigators' claims against Marsh. Navigators never disputed the applicability of Texas law in the trial court. Under Texas law, common law indemnity has been essentially abolished. Common law indemnity survives only in two limited circumstances: (1) in *1246 products liability actions and (2) in negligence actions when a defendant's liability is purely vicarious. Aviation Office of America, Inc. v. Alexander & Alexander of Texas, Inc., 751 S.W.2d 179, 180 (Tex. 1988); Cypress Creek Util. Serv. Co. v. Muller, 640 S.W.2d 860, 864 (Tex.1982). Neither of those limited circumstances is involved in the instant case. Furthermore, there is no contract of any kind between Navigators and Marsh, and thus there can be no contractual indemnity. There is really no way under the facts and pertinent law that Marsh can be liable in this case. Accordingly, Navigators' fourth assignment of error has no merit.
Assignment of Error No. 5
In its fifth assignment of error, Navigators contends that the trial court erroneously included several items in its damage award totaling $304,348.80. This assignment of error is without merit. As the excess P & I insurer of the M/V Oceanic Seahorse, Navigators was responsible for all defense costs once the primary policy limits were exhausted. Tidewater presented its billing entries to the trial court and the trial court saw how the bills were apportioned and was aware why certain experts were retained. Based on our review of the record, the trial court's award of damages for these items was not clearly wrong or manifestly erroneous.
CONCLUSION
Based on the record before this Court, we find nothing clearly wrong or manifestly erroneous with the trial court's judgment. Accordingly, for the foregoing reasons, the judgment of the trial court is affirmed.
AFFIRMED.
NOTES
[1] P & I insurance provides protection to a shipowner for damages caused by the operation of its vessel.
[2] A following form policy is an insurance policy that adopts the terms and conditions of another insurance policy.
[3] A preliminary document used in the insurance industry to temporarily bind coverage pending issuance of a policy. See La. R.S. 22:870. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623202/ | 569 So. 2d 1349 (1990)
Dorothy PATERNO, Appellant,
v.
Rose FERNANDEZ and Stephen Fernandez, Appellees.
No. 89-2874.
District Court of Appeal of Florida, Third District.
November 13, 1990.
James K. Pedley, Fort Lauderdale, for appellant.
George dePozsgay, Miami, for appellees.
Before JORGENSON, COPE and GODERICH, JJ.
PER CURIAM.
The defendant, Dorothy Paterno, appeals the trial court's non-final order granting the plaintiffs' motion for partial summary judgment as to the issue of liability. We affirm.
The State brought criminal charges against the defendant for criminal acts allegedly committed against the plaintiffs, Rose Fernandez and Stephen Fernandez. On September 8, 1987, the defendant plead guilty to an information charging her with grand theft in the first degree.[1] The trial *1350 court ordered the defendant to pay $50,000.00 as investigative costs and/or restitution.
The plaintiffs filed a second amended complaint [complaint] alleging several causes of action against the defendant and others. Specifically, Count IV of the complaint states a cause of action for civil theft against Joseph Paterno and Dorothy Paterno [collectively referred to as Paternos] alleging that the plaintiffs delivered $850,000.00 to the Paternos and others, that the Paternos took the funds with the intent of stealing the funds, and that they actually did steal the funds. Count IV demands judgment against the defendant and the Estate of Joseph Paterno, jointly and severally.
The plaintiffs filed a motion for partial summary judgment as to Count IV. In support of the motion, the plaintiffs argued that the defendant is estopped from denying the allegation that she stole money from the plaintiffs where she had already admitted that she had done so by her guilty plea in the underlying criminal charges. See §§ 775.089(8) and 772.14, Fla.Stats. (1985). In opposition to the motion, the defendant filed an affidavit stating that she plead guilty to grand theft charges to avoid the risk of trial and to close the criminal case.[2] She also stated that she did not steal any money from the plaintiffs. The trial court granted the motion. The defendant appeals.
The defendant contends that the trial court erred in granting the motion for partial summary judgment as to liability where her affidavit in opposition of summary judgment raises a question of material fact. We disagree.
The defendant now wishes to deny, through her affidavit, the very fact which she plead guilty, that she stole $20,000 or more from the plaintiffs. Section 775.089(8), Florida Statute (1985) reads in pertinent part as follows: "The conviction of a defendant for an offense involving the act giving rise to restitution under this section shall estop the defendant from denying the essential allegations of that offense in any subsequent civil proceeding." § 775.089(8), Fla. Stat. (1985).
Section 775.089(8) requires that the defendant be convicted of "an offense involving the act giving rise to restitution under this section... ." First, there is no doubt that the defendant was convicted since a guilty plea was entered. See Long v. State, 529 So. 2d 286 (Fla. 1988) (guilty plea is an agreement for the entry of a conviction); Lee v. State, 204 So. 2d 245 (Fla. 4th DCA 1967), cert. denied, 210 So. 2d 868 (Fla. 1968) (guilty plea is a conviction). Secondly, there is no dispute that the defendant was convicted of an offense for which restitution was ordered. As a result, section 775.089(8) mandates that the defendant is estopped "from denying the essential allegations of that offense in any subsequent civil proceeding." In the instant case, the "essential allegations," inter alia, are that the defendant committed the crime of grand theft in the first degree when she took $20,000.00 or more from the plaintiffs with the intent to deprive them of the right to their property and appropriated the property for her use or for the use of others. Thus, the defendant's affidavit in opposition to the plaintiffs' motion for partial summary judgment does not, by law, raise a genuine issue as to any material fact.
The defendant also contends that the trial court erred in finding that Section 775.089(8) is constitutional as applied to her case. We disagree.
*1351 Florida courts have not dealt with the constitutionality of section 775.089(8), and thus the federal court's treatment of its similar section is applicable. Section 775.089(8) is almost identical to 18 U.S.C. § 3580(e) (1982)[3] which is part of the Federal Victims Witness Protection Act of 1982.[4]
Federal courts have upheld the constitutionality of the collateral estoppel provision. See United States v. Palma, 760 F.2d 475 (3d Cir.1985); United States v. Satterfield, 743 F.2d 827 (11th Cir.1984), cert. denied, 471 U.S. 1117, 105 S. Ct. 2362, 86 L. Ed. 2d 262 (1985); United States v. Brown, 744 F.2d 905 (2d Cir.), cert. denied, 469 U.S. 1089, 105 S. Ct. 599, 83 L. Ed. 2d 708 (1984). In Satterfield, the court stated that "[t]he facts underlying a criminal offense that gives rise to a restitution order will be given collateral estoppel effect only if they were fully and fairly litigated at the criminal trial, or stipulated through a guilty plea." Satterfield, 743 F.2d at 838. The defendant argues that the facts underlying the criminal offense were not fully and fairly litigated at a criminal trial or stipulated through a guilty plea, and therefore, collateral estoppel effects may not be applied. We disagree with this argument.
In pleading guilty to an information charging her with the crime of grand theft in the first degree, the defendant admitted all facts contained in the information, that she committed the crime of grand theft in the first degree when she took $20,000.00 or more from the plaintiffs with the intent to deprive them of the right to their property and appropriated the property for her use or for the use of others. Thus, we find that the facts underlying the criminal offense were stipulated through a guilty plea.[5]
Since we find that Section 775.089(8), Florida Statutes (1985), is constitutional and that the trial court did not err in granting the partial summary judgment as to the issue of liability, we find no need in addressing the plaintiffs' contention that Section 772.14, Florida Statutes (1985) also estops the defendant from denying the theft of $20,000.00 or more.
AFFIRMED.
NOTES
[1] The information stated in pertinent part:
"Dorothy Paterno, beginning on or about the 1st day of September, 1982, and continuing through the 20th day of June, 1985, ... did knowingly, unlawfully and feloniously obtain or use, or did endeavor to obtain or use MONEY, good and lawful currency of the United States of America, the property of ROSE FERNANDEZ and/or STEPHEN FERNANDEZ, value of TWENTY THOUSAND DOLLARS ($20,000.00) or more, with the intent to deprive said ROSE FERNANDEZ and/or STEPHEN FERNANDEZ of the right to the property or of a benefit therefrom or to appropriate the property to her own use or to the use of any person not entitled thereto... ."
[2] Although the defendant now alleges in her affidavit that she plead guilty as a matter of convenience, neither the plea agreement nor the plea colloquy reflects that convenience was the reason for the plea.
[3] 18 U.S.C. § 3580(e) provides as follows:
A conviction of a defendant for an offense involving the act giving rise to restitution under this section shall estop the defendant from denying the essential allegations of that offense in any subsequent Federal civil proceeding or State civil proceeding, to the extent consistent with State law, brought by the victim.
[4] 18 U.S.C. § 3580(e) has since been renumbered as 18 U.S.C. § 3664 (e).
[5] The partial summary judgment establishes only that Paterno is liable for theft of an uncertain sum ($20,000 or more), the exact amount of which remains to be established in further proceedings below. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623210/ | 569 So. 2d 50 (1990)
STATE of Louisiana
v.
Gary PRESTON.
No. 89-KA-0503.
Court of Appeal of Louisiana, Fourth Circuit.
October 11, 1990.
*51 Harry F. Connick, Dist. Atty., Richard Olsen, Asst. Dist. Atty., New Orleans, for appellee.
M. Craig Colwart, Orleans Indigent Defender Program, New Orleans, for appellant.
Before SCHOTT, C.J., and LOBRANO and PLOTKIN, JJ.
LOBRANO, Judge.
Defendant Gary Preston (Preston) and Richard Stutson (Stutson) were charged by bill of information with possession of cocaine. Originally, both Preston and Stutson pleaded not guilty, but Stutson later changed his plea to guilty. Preston was tried by a six person jury on November 14, 1988, and was found guilty as charged. Following the denial of his motion for a new trial, on December 2, 1988, Preston was sentenced to five years at hard labor. The state filed a multiple bill, and Preston admitted the prior offense. The original sentence was rescinded, and Preston was resentenced to five years at hard labor.
FACTS:
On June 3, 1988, at approximately 5:45 p.m., Officers Donald Polk and Stephen Imbraguglio of the New Orleans Police Department were on routine patrol in the St. Thomas Housing Project. The officers were in plain clothes and in an unmarked vehicle driven by Imbraguglio.
As they were driving down Adele Street, they saw Preston come out of the entrance of the building at 501 Adele. Preston walked up to Stutson. Polk and Imbraguglio saw Preston hand Stutson a small object. At that time, Preston and Stutson *52 glanced over at the officers' car and appeared startled.
Believing they had seen a drug transaction, Polk and Imbraguglio exited their car and announced they were police officers. Stutson made a yawning motion, stretching out his arms, at which time he dropped a white object to the ground. Preston and Stutson were placed under arrest, and Polk retrieved the white object, which was a small plastic bag containing cocaine. Imbraguglio entered 501 Adele, and in the second floor hallway, he found a gray bag underneath a footstool. Inside the bag were twenty-two large plastic bags and sixty-three small plastic bags of cocaine which were similarly packaged as the package dropped by Stutson. Preston was searched, and was found to be carrying $160.00.
ASSIGNMENT OF ERROR NO. 1:
In his first assignment of error, Preston contends that the trial court erred in denying his motion to suppress the evidence because Officers Polk and Imbraguglio did not have reasonable cause to make an investigatory stop. He argues that there was no evidence that he had been engaged in, was at the time engaged in, or was about to be engaged in criminal activity.
The Louisiana Code of Criminal Procedure Art. 215.1, provides that a law enforcement officer has the right to stop a person whom he reasonably suspects is committing, has committed or is about to commit a offense. Reasonable cause to make an investigatory stop is something less than probable cause, and it must be determined under each case by whether the officer had sufficient knowledge of the facts and circumstances to justify an infringement upon the person's right to be free from governmental interference. State v. Smith, 489 So. 2d 966 (La.App. 4th Cir.1986). Reasonable cause must be based upon the officer's belief that the individual has been, is, or is about to be engaged in criminal conduct, and the totality of the circumstances must be considered in determining whether such reasonable cause exists. State v. Belton, 441 So. 2d 1195 (La.1983), cert. den. sub nom. Belton v. Louisiana, 466 U.S. 953, 104 S. Ct. 2158, 80 L. Ed. 2d 543 (1984).
In Belton, the Louisiana Supreme Court stated:
"The totality of the circumstances, `the whole picture,' must be considered in determining whether reasonable cause exists. (citations omitted) Although flight, nervousness, or a startled look at the sight of a police officer is, by itself, insufficient to justify an investigatory stop, ... this type of conduct may be highly suspicious and, therefore, may be one of the factors leading to a finding of reasonable cause." Id. at 1198. (Citations omitted)
In Belton the defendant was standing in front of a bar. When the police appeared they told him to halt and he ran inside the bar. The police entered, and the barmaid told them she saw the defendant drop a bag on the ground. The police seized the bag, and found drugs inside. The seizure of the bag was upheld. There was a finding of reasonable cause to stop the defendant because in an earlier encounter with the police, defendant was found in possession of drugs, but not arrested. When defendant was later observed at the bar, he was standing as though he was holding drugs, and the area was notorious for drug trafficking. These facts, along with the defendant's flight into the bar, were sufficiently suspicious to justify an investigatory stop.
Considering the totality of the circumstances in the instant case, namely the observation of Preston handing the small white object to Stutson, Preston's and Stutson's startled looks, and the fact that the area is known for narcotics trafficking, reasonable cause existed to stop Preston. The trial court did not err in denying the motion to suppress.
ASSIGNMENT OF ERROR NO. 2:
In his second assignment of error, Preston argues that absent the evidence which should have been suppressed, namely the packet of cocaine dropped by Stutson, there is insufficient evidence to prove constructive possession of the drugs found in the hallway at 501 Adele. He asserts that *53 without the first packet of cocaine, which was packaged similarly to the packets found in the gray bag, there is no evidence to link Preston to the cocaine found in the gray bag.
When determining the sufficiency of evidence, the standard of review is whether any rational trier of fact, viewing the evidence in the light most favorable to the prosecution, could have found the defendant guilty beyond a reasonable doubt and, where the evidence is circumstantial, to the exclusion of every reasonable hypothesis of innocence. Jackson v. Virginia, 443 U.S. 307, 99 S. Ct. 2781, 61 L. Ed. 2d 560 (1979); State v. Maresco, 495 So. 2d 311 (La.App. 4th Cir.1986), writ denied, 500 So. 2d 419 (La.1987).
The principle of constructive possession was explained by this court in State v. Walker, 514 So. 2d 602, 604 (La.App. 4th Cir.1987). This court stated:
"To support a conviction for possession of a controlled dangerous substance in violation of La.R.S. 40:967, the state must prove that the defendant was (1) in possession of the illegal drug and (2) that he knowingly possessed the drug. The state need not prove that a defendant was in actual physical possession of the drugs found; constructive possession is sufficient to support a conviction. (citation omitted)
The mere presence of the defendant in the area where the drugs are found, or the mere fact that the defendant knows the person in actual possession is insufficient to prove constructive possession. (citation omitted) However, a person found in the area of the contraband may be considered in constructive possession if the illegal substance is subject to his dominion and control. (citations omitted) Or if the person is in joint possession of a drug which is in the physical possession of a companion, if he willfully and knowingly shares with the other the right to control of the drug. Guilty knowledge is the essential element. (citation omitted) The determination of whether there is possession sufficient to convict depends on the facts peculiar to each case."
Since we have determined that the packet of cocaine dropped by Preston was properly seized there is sufficient evidence to sustain a finding of actual and/or constructive possession of this cocaine by defendant.
With respect to the cocaine seized in the Hallway at 501 Adele Street, we further discuss its admissibility, infra at pro se assignment No. 2.
PRO SE ASSIGNMENT OF ERROR NO. 1:
In his first pro se assignment of error, defendant argues that the trial court erred in failing to admonish the jury to disregard the prejudicial and unqualified expert testimony of Officer Polk. He further argues that the trial court erred in giving the impression that the witness was qualified to testify as an expert.
During cross-examination by defense counsel, Officer Polk testified that he knows from his experience as a police officer in narcotics that a dealer would not hold the bulk of his "stash" on him. Defense counsel interrupted and objected on the basis that Polk was not qualified as an expert. The trial judge instructed Officer Polk not to give his opinion unless the prosecutor qualified him as an expert. The trial judge further stated that this did not mean that he was not an expert. No request for admonishment was made by defense counsel. Because no admonishment was requested, the trial judge's failure to admonish the jury cannot be raised on appeal. C.Cr.P. Art. 841.
PRO SE ASSIGNMENT OF ERROR NO. 2:
In his second assignment of error, Preston complains that the court erred in allowing the state to introduce into evidence the large quantity of cocaine found in the gray bag. He argues that it was irrelevant to his prosecution for possession of the one package he handed to Stutson, and thus prejudiced the jury. He also argues that he was not given notice by the State of its intent to introduce evidence of "other crimes," i.e., distribution of cocaine citing, State v. Prieur, 277 So. 2d 126 (La.1973).
*54 We first note that there was no objection to the introduction of the cocaine in the gray bag, and thus C.Cr.Pro. Art. 841 prevents the error from being raised on appeal. Nonetheless, because of Preston's complaint of ineffective assistance of counsel, we shall address his arguments.
The bill of information charges defendant with possession of cocaine, but does not specify which cocaine. Immediately after seeing defendant exit 501 Adele, the police officers observed him handing a package to Stutson. They saw him in actual possession of that cocaine, and, as discussed supra, it was properly admitted into evidence. The officers also immediately seized the large quantity of cocaine in the hallway at 501 Adele. The evidence shows that that cocaine was packaged in the same fashion as the cocaine in Preston's possession.
After reviewing this evidence, we conclude that Preston could have been charged and tried for the actual and constructive possession of both quantities. Thus, introduction of the large quantity was relevant to proof of constructive possession.
However, assuming arguendo that defendant was charged only with possessing the one package he gave to Stutson, introduction of the larger quantity would still be permissible under the res gestae exception to other crimes evidence. La. R.S. 15:447[1] provides:
"Res gestae are events speaking for themselves under the immediate pressure of the occurrence, through the instructive, impulsive and spontaneous words and acts of the participants, and not the words of the participants when narrating the events. What forms any part of the res gestae is always admissible in evidence."
In State v. Reaux, 539 So. 2d 105 (La. App. 4th Cir.1989), cocaine was seized from the car of an individual who was not the defendant. However, the police officers had observed that individual purchasing the cocaine from an unidentified subject who was in close proximity to the defendant. Later that same day, defendant was arrested for the distribution of narcotics to another individual. This Court upheld the admissibility of the cocaine seized from the vehicle holding that it formed part of the res gestae. We noted that there was sufficient connexity in time and place to substantiate a common scheme, citing State v. Craddock, 435 So. 2d 1110 (La.App. 1st Cir. 1983).
Here, there was a close connexity in time and place between Preston and the drugs in question. Immediately prior to the transaction, Preston was seen emerging from 501 Adele, where the cocaine in the gray bag was found. In addition, the cocaine dropped by Stutson and the cocaine in the gray bag were similarly packaged. These facts, when considered as a whole, satisfy the res gestae requirements. Therefore, under either scenario, the evidence was properly admitted.
PRO SE ASSIGNMENT OF ERROR NO. 3:
Defendant argues that his counsel was ineffective because he failed to object to introduction of the cocaine in the gray bag, and that he failed to object to comments made by the prosecutor during closing argument about distribution of cocaine.
Normally, a claim of ineffective assistance of counsel is more properly raised in an application for post conviction relief. However where the record is complete and contains sufficient evidence to make a determination of counsel's effectiveness, a decision may be made on appeal in the interest of judicial economy. State v. Seiss, 428 So. 2d 444 (La.1983).
We have already discussed the admissibility of the large quantity of cocaine. It was properly admitted and any objection by counsel would have been fruitless. Furthermore, the comments made by the prosecutor during closing argument were made in rebuttal to defense counsel's closing remarks *55 wherein he mentioned distribution of cocaine. We find no merit in this assignment.
PRO SE ASSIGNMENT OF ERROR NO. 4:
In his final pro se assignment of error, Preston claims there was insufficient evidence to support his adjudication as a multiple offender. A review of the multiple offender hearing transcript shows that defendant admitted his identity at the hearing. Hence, there is no basis for his claim of insufficient evidence for his being found a multiple offender. This assignment of error is without merit.
For the foregoing reasons, defendant's conviction and sentence are affirmed.
AFFIRMED.
NOTES
[1] La.R.S. 15:447, 448 were repealed and replaced by Acts 1988, Sec. 8 Louisiana Code of Evidence effective January 1, 1989. However, because this case was tried on November 14, 1988, the new act does not apply. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623240/ | 609 S.W.2d 874 (1980)
The WESTERN CASUALTY AND SURETY COMPANY, Appellant,
v.
James Rhabb DICKIE, Appellee.
No. 6226.
Court of Civil Appeals of Texas, Waco.
December 12, 1980.
Rehearing Denied January 15, 1981.
Dan E. Mayfield, Sheehy, Lovelace & Mayfield, Waco, for appellant.
*875 Mack Kidd, Kidd, Whitehurst & Harkness, Austin, Jerry B. Donaldson, Donaldson & McClellan, Gatesville, for appellee.
OPINION
JAMES, Justice.
This is a worker's compensation case involving a claim for disability resulting from a heart attack.
Appellee James Rhabb Dickie suffered a heart attack on his employer's premises shortly before or during a lunch break. Dickie brought this suit seeking to recover benefits for total and permanent disability on the theory that the heart attack was precipitated or caused by the work activities performed by him. After trial to a jury and on the jury's verdict, the trial court rendered judgment that Dickie recover $37,550.00 as compensation benefits for total and permanent disability and $5,773.00 for medical expenses incurred as a result of the heart attack. We affirm this judgment.
Appellant Western Casualty and Surety Co. appeals on fourteen points of error, all of which are variations of one central contention, and all of which were discussed by Appellant jointly. Appellant contends that in order to recover worker's compensation benefits for a heart attack, there must be a showing that the heart attack was produced by "strain, overexertion, or shock" which occurred in the course of one's employment; that no legally or factually sufficient evidence of such strain or overexertion is present in this record and that the court erred in failing to require a specific jury finding that strain or overexertion produced this particular heart attack.
Appellee, who was 45 years old at the time of the heart attack in question, had worked in various phases of the construction trade for about thirty years. On the date in question he was employed as a carpenter for a construction company engaged in building a single-firm office building. He reported for work as usual at 7:30 or 8:00 in the morning. It was a cold morning, temperature in the 20's, with a slight misting rain. Appellee's job that particular day was "saw man," and all his work was done outside. The crew was finishing out the "overhang" of the building and that involved the use of four different raw materials, to wit: 4' × 8' sheets of masonite (3/8"-7/16" thick), 1" × 12" masonite strips in lengths of 16', 1" × 12" cedar, also in 16' lengths, and 4' × 8' sheets of plywood (¾" thick). Appellee and his helper transported the materials from a stack about 40 yards away and did the sawing. Most of the sawing was done with a Skil power saw but some more precise detail work had to be done with a hand saw. Sometimes, according to Appellee, it would also be necessary for him to climb up the scaffold or ladder to take measurements so that holes could be cut to fit around columns or vents.
Appellee testified that on three different occasions that morning he had experienced chest pain. The first incident occurred while he was doing some hand sawing. Appellee had suffered from gastrointestinal problems for some years, and he attributed this first pain to gas or indigestion. He rested a minute and resumed work. The next incident also occurred that same morning while he was doing some hand sawing. The pain was more serious and he lost his breath momentarily and got dizzy. He again stopped working, but a few minutes later the incident passed and he went back to work.
Shortly before lunch, Appellee was sawing some masonite sheets and he had another chest pain which was so severe that he was very nauseated and felt like vomiting. Since it was close to lunchtime, he quit work, went into the job office where there was a fire and poured himself a cup of coffee. Shortly thereafter he went outside and vomited. He went to his truck and got some Rolaids and returned to the job office. At that time he had his most severe attack and was taken to the hospital and diagnosed as having suffered an acute myocardial infarction or heart attack.
As hereinabove noted, Appellant contends that there must be a showing that Appellee's heart attack was produced by "strain, *876 overexertion or shock," citing Bean v. Hardware Mutual Casualty Co. (Beaumont CA 1961) 349 S.W.2d 284, n. r. e. Appellant further asserts that the instant case is very similar to the Bean case in that there was no showing of strain or overexertion which caused the heart attack in question. We disagree with Appellant's interpretation of the law and the facts in the Bean case, and fail to see its similarity to the case at bar.
It is true that our Supreme Court has consistently held that the mere fact that a heart attack occurs on an employer's premises is not sufficient to establish a right to recovery under the worker's compensation law. Furthermore, the worker's compensation system is designed to compensate an employee for accidental personal injuries sustained in the course of employment. Olson v. Hartford Accident and Indemnity Company, 477 S.W.2d 859 (Tex. 1972). Nonetheless the Supreme Court has liberally construed "accident" and "injury" to include heart attacks which occur in the course of employment. Olson v. Hartford Accident and Indemnity Company, cited supra. Although the Supreme Court generally requires a showing of "strain or overexertion" in heart attack cases, it does not appear necessary to show unusual strain or exertion. It seems that the normal strain or exertion involved in one's work is sufficient if the work is generally physically taxing. Henderson v. Travelers Insurance Co., 544 S.W.2d 649 (Tex.1976). Moreover, the "strain" required may be less for one suffering from pre-existing circulatory dysfunction, and the existence of this predisposing bodily infirmity will not preclude recovery so long as the work itself is also a cause of the injury. Baird v. Texas Employers' Insurance Association, 495 S.W.2d 207 (Tex.1973). In all worker's compensation cases a compensable injury must be causally traced to a definite time, place or cause. Olson v. Hartford Accident and Indemnity Company, cited supra. The Supreme Court seems to have adopted the "strain and exertion" requirement primarily to insure that the injury of a heart attack is indeed causally related to the work activity of an employee.
In the instant case there is ample evidence that the Appellee's work was physically taxing and that the Appellee had actually performed his work activities throughout the morning. Although Appellee admitted that his work was "light work in comparison to a lot of other things," he and other witnesses testified that it "took strength and exercise" and was "physically exertive."
Furthermore, there was legally and factually sufficient evidence of a causal relationship between Appellee's work and his heart attack. First of all, he testified that each of the three experiences of chest pain occurred while he was sawing, either by hand or with an electric saw; each time he rested briefly and the pain subsided, except of course the last time when he was finally taken to the hospital. The Appellee's treating physician also testified in this case. He explained in detail the relationship of Appellee's work activities and the work environment to the injury which Appellee sustained and concluded that these work activities, the cold temperature, and the pre-existing coronary disease suffered by Appellee combined to cause the heart attack in question. In light of this testimony and the entire record we overrule Appellant's contentions that the evidence was legally or factually insufficient to support the verdict in this case. In re King's Estate, 150 Tex. 662, 244 S.W.2d 660 (1952).
Appellant also complains that the trial court erroneously submitted this case to the jury because the court did not require the jury to make a specific finding that Appellee's heart attack resulted from strain or overexertion. Appellant does not challenge any findings in regard to the amount or extent of the damage sustained.
The court's charge in this case contained only one issue relating to the liability of the insurer, to wit:
"Do you find from a preponderance of the evidence that on or about February 9, 1979, the work activity performed by Rhabb Dickey in the course of his employment *877 for Kenneth Brown Construction Company resulted in `INJURY' to him?"
In connection with this issue, the jury was charged with a standard definition of "injury":
"`INJURY' means damage or harm to the physical structure of the body and such diseases or infection as naturally result therefrom, or the incitement, acceleration, or aggravation of any disease, infirmity, or condition, previously or subsequently existing, by reason of such damage or harm."
Appellant contends that this issue is defective because it does not require the jury to find that Appellee's heart attack resulted from "strain or overexertion" and further because the phrasing of the issue implied causation or causal connection without requiring the jury to make a specific finding as to causation.
We think the ultimate and controlling issue in this case is whether or not the heart attack in question was caused by the work activities of the injured party. An issue inquiring about "strain or overexertion" would have merely been evidentiary. In our opinion the issue submitted by the trial court fairly submitted this ultimate question and did not imply or assume a causal connection, but rather directly inquired about the same. Appellant's points relating to the court's charge are therefore also overruled.
We have carefully considered all of Appellant's points, and have overruled them as being without merit. We therefore affirm the judgment of the trial court.
AFFIRMED. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623241/ | 15 So. 3d 532 (2009)
Ex parte Lori Jane Ethridge MCCORMICK.
(In re Lori Jane Ethridge McCormick v. William Curtis Ethridge).
1080149.
Supreme Court of Alabama.
February 27, 2009.
Jerry M. Blevins, Montgomery, for petitioner.
Submitted on petitioner's brief only.
Prior report: Ala.Civ.App., 15 So. 3d 524.
BOLIN, Justice.
WRIT DENIED.
*533 COBB, C.J., and LYONS, WOODALL, STUART, SMITH, PARKER, and SHAW, JJ., concur.
MURDOCK, J., dissents.
MURDOCK, Justice (dissenting).
As indicated in the Court of Civil Appeals' opinion, to justify a change of custody in a child-custody-modification case, not only must the noncustodial parent seeking the change demonstrate that he or she is a fit custodian, (1) there must have been a material change of circumstances since the previous custodial award and (2) the positive good to be brought about by the proposed change of custody must more than offset whatever disruption will be caused by the change. McCormick v. Ethridge, [Ms. 2070405, Oct. 17, 2008] 15 So. 3d 524 (Ala.Civ.App.2008). The reason for the first requirement that there has been a material change of circumstances is to overcome the res judicata effect of the prior custodial judgment. See Self v. Fugard, 518 So. 2d 727, 730 (Ala.Civ.App. 1987); Spears v. Wheeler, 877 So. 2d 607, 609 n. 1 (Ala.Civ.App.2003). See generally Ex parte J.P., 641 So. 2d 276, 278 (Ala. 1994). The latter requirement, often referred to as the "material promotion" test of Ex parte McLendon, 455 So. 2d 863 (Ala. 1984), is a separate requirement. I would grant certiorari review in this case to examine the record and, in the context of that record, to review the holdings of the trial court and the Court of Civil Appeals to determine whether there has been some confusion of these two requirements. It is hard for me to conceive that where, in the words of the Court of Civil Appeals, at the time of the divorce "the mother was mired in a substance-abuse problem and agreed to give custody of the child to the father because of that problem," but undisputedly "has since overcome that problem, remarried, obtained steady employment, given birth to another child whom she is raising with her current husband, and established a suitable home for her children," 15 So.3d at 527, there has not been a material change of circumstance since the divorce. (Whether a change of custody to the mother would satisfy the "material promotion" requirement would then be a separate question.) Even aside from this change of circumstance, which the petition appears not to treat as the basis for concluding that there has been a material change of circumstances, I would like to consider further the arguments made by the mother in her petition as to a change of circumstances, namely that, since the parties' divorce, the father has developed an alcohol problem, has cohabited with a series of women, and has committed acts of domestic violence against some of the women, or their children, all of which the mother argues have adversely affected the child.
Based on the foregoing, I conclude the petition should be granted; therefore, I respectfully dissent. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623208/ | 15 So. 3d 122 (2009)
Cathy REINHARDT, individually and on behalf of her minor son, Joseph Untz, II
v.
Terry L. BARGER and Barbara Barger, individually and on behalf of the Minors, Brandon Barger, Brent Barger and Jacob Barger and ABC Insurance Company.
No. 2007 CA 2363.
Court of Appeal of Louisiana, First Circuit.
April 29, 2009.
Rehearing Denied June 30, 2009.[*]
John W. Redman, Margaret E. Madere, New Orleans, LA, for Plaintiffs-Appellants, Cathy Reinhardt, et al.
Peter L. Donovan, Metairie, LA, for Defendants-Appellees, Terry L. Barger, et al.
Jude H. Trahant, Jr., Madisonville, LA, for Defendant-Appellee, Allstate Insurance Company.
Before CARTER, C.J., WHIPPLE, PARRO, KUHN, GUIDRY, PETTIGREW, DOWNING, GAIDRY, McDONALD, McCLENDON, HUGHES, and WELCH, JJ.
PER CURIAM.
In the courts of appeal of the State of Louisiana, "[a] majority of the judges sitting in a case must concur to render judgment." La. Const. Art. V, § 8(B). Because the en banc panel of this court is evenly split, no majority has concurred to reverse or modify the trial court's judgment; thus, the judgment of the trial court must stand, and the effect of the court of appeal's vote is to affirm the trial court's judgment as rendered. Parfait v. Transocean Offshore, Inc., XXXX-XXXX (La.3/14/08), 980 So. 2d 634, 638-639.
TRIAL COURT JUDGMENT STANDS.
KUHN, GUIDRY, GAIDRY and HUGHES, JJ., concur and assign reasons.
PARRO, J., concurs and assigns reasons, joined by McCLENDON, J.
PETTIGREW, J., concurs and assigns reasons, joined by DOWNING and WHIPPLE, JJ.
*123 WELCH, J., concurs with the reasons assigned by PETTIGREW and HUGHES, JJ.
McDONALD, J., concurs for reasons assigned by KUHN, GAIDRY, and PARRO, JJ.
PETTIGREW, J., concurring.
Although I am compelled to concur with the per curiam because this court's en banc panel is evenly split, I take this opportunity to express why I am of the opinion the trial court should be reversed.
This is an action for personal injuries sustained by a minor child, who was allegedly attacked and beaten by several of the defendants. The mother of the injured minor instituted the present lawsuit, both individually and on behalf of her child, seeking recovery for the negligent and intentional acts of the defendant parents, their grown children, and their minor child for whom the parents are vicariously liable. The trial court granted summary judgment in favor of the defendants' homeowner's insurer based upon an intentional act exclusion contained in the policy. For the reasons that follow, I am of the opinion the trial court should be reversed and this matter should be remanded for further proceedings.
FACTS
Cathy Reinhardt, plaintiff herein, filed the instant suit on July 7, 2005, seeking to recover damages for personal injuries allegedly sustained by her minor son, Joseph Untz, II ("Joey"), when he was involved in a fight with one or more members of the Barger family in front of the Barger residence. Named as defendants in this matter are Terry L. Barger ("Mr. Barger"), his wife, Barbara Barger ("Mrs. Barger"), their sons, Brandon Barger, Brent Barger, and Jacob B. Barger, together with Allstate Insurance Company ("Allstate"), in its capacity as the homeowner's insurer of Mr. and Mrs. Barger.
Ms. Reinhardt has alleged in her petition that on or about January 2, 2005, Joey was brutally attacked and beaten without provocation[1] by Mr. Barger and his sons, Brandon, Brent, and Jacob, while on the Barger property situated at 304 Cumberland Street in Slidell, Louisiana.[2] The record also reflects that Mr. Barger and two of his sons, Brent and Jacob, later pled guilty to simple battery on Joey in connection with this incident. The parties do not dispute that Mr. Barger and Mrs. Barger are the natural parents of Brandon, a minor at the time of the alleged beating, who resided with his parents at the Cumberland Street address.
Mr. and Mrs. Barger purchased a homeowner's policy through Allstate that provides coverage for personal injuries sustained on the premises. Ms. Reinhardt has also alleged that Mr. and Mrs. Barger are vicariously liable for any tortious acts committed by their minor son, Brandon, pursuant to La. Civ.Code art. 2318. Additionally, the parties do not dispute that Mrs. Barger took no part in the alleged beating.
ACTION OF THE TRIAL COURT
In response to the petition for damages filed by Ms. Reinhardt, Allstate filed a motion for summary judgment seeking dismissal of Ms. Reinhardt's claims against the insurer on the ground that the homeowner's *124 policy issued to the Bargers excludes from coverage any liability arising from intentional acts on the part of an insured (the "intentional acts exclusion").
In a judgment rendered in open court on March 6, 2007, and signed on March 19, 2007, the trial court granted Allstate's motion for summary judgment and dismissed all claims against the homeowner's insurer with prejudice. Ms. Reinhardt thereafter filed an application for a supervisory writ and reversal of the summary judgment in favor of Allstate. This court later denied Ms. Reinhardt's writ application and ordered that the case be remanded to the trial court with instructions to grant Ms. Reinhardt an appeal. Ms. Reinhardt was directed to submit an order for appeal to the trial court within thirty days.
Due to Ms. Reinhardt's failure to file her motion for appeal until thirty-one days after entry of this court's order, Allstate filed a motion seeking to dismiss the appeal. On March 5, 2008, a panel of this court denied Allstate's motion and maintained Ms. Reinhardt's appeal.[3]
ISSUE PRESENTED FOR REVIEW
The sole issue presented by this appeal is whether an intentional act exclusion contained within the provisions of a homeowner's policy that purports to exclude coverage for damages resulting from a parent's vicarious liability for the intentional acts of their minor child, contravenes the public policy of the State of Louisiana.
SUMMARY JUDGMENT
A motion for summary judgment is a procedural device used to avoid a full scale trial when there is no genuine issue of material fact. Johnson v. Evan Hall Sugar Coop., Inc., 2001-2956, p. 3 (La.App. 1 Cir. 12/30/02), 836 So. 2d 484, 486. Summary judgment is properly granted if the pleadings, depositions, answers to interrogatories, and admissions on file, together with affidavits, if any, show that there is no genuine issue of material fact and that mover is entitled to judgment as a matter of law. La.Code Civ. P. art. 966(B). Summary judgment is favored and is designed to secure the just, speedy, and inexpensive determination of every action. La.Code Civ. P. art. 966(A)(2); Thomas v. Fina Oil and Chemical Co., XXXX-XXXX, pp. 4-5 (La. App. 1 Cir. 2/14/03), 845 So. 2d 498, 501-502.
On a motion for summary judgment, the burden of proof is on the mover. If, however, the mover will not bear the burden of proof at trial on the matter that is before the court on the motion for summary judgment, the mover's burden on the motion does not require that all essential elements of the adverse party's claim, action, or defense be negated. Instead, the mover must point out to the court that there is an absence of factual support for one or more elements essential to the adverse party's claim, action, or defense. Thereafter, the adverse party must produce factual evidence sufficient to establish that he will be able to satisfy his evidentiary burden of proof at trial. If the adverse party fails to meet this burden, there is no genuine issue of material fact, and the mover is entitled to summary judgment. La.Code Civ. P. art. 966(C)(2); Robles v. ExxonMobile, *125 XXXX-XXXX, p. 4 (La.App. 1 Cir. 3/28/03), 844 So. 2d 339, 341.
In determining whether summary judgment is appropriate, appellate courts review evidence de novo under the same criteria that govern the trial court's determination of whether summary judgment is appropriate. Allen v. State ex rel. Ernest N. Morial-New Orleans Exhibition Hall Authority, XXXX-XXXX, p. 5 (La.4/9/03), 842 So. 2d 373, 377. Because it is the applicable substantive law that determines materiality, whether a particular fact in dispute is material can be seen only in light of the substantive law applicable to the case. Foreman v. Danos and Curole Marine Contractors, Inc., 97-2038, p. 7 (La.App. 1 Cir. 9/25/98), 722 So. 2d 1, 4, writ denied, 98-2703 (La.12/18/98), 734 So. 2d 637.
DISCUSSION
This case presents no genuine dispute as to the material facts alleged in the petition with respect to how the injury occurred. The critical issue therefore is whether, in light of the undisputed facts, Allstate is entitled to judgment as a matter of law based upon the exclusion contained within its policy. In her brief to this court, Ms. Reinhardt asserts that the legal question posed by the instant appeal is whether it is against the public policy of this state to allow a homeowner's insurer, i.e., Allstate, to exclude coverage for damages resulting from a parent's vicarious liability for the intentional acts of his or her minor child. For purposes of the instant appeal, Ms. Reinhardt has conceded that any intentional torts allegedly committed by the adult defendants, i.e., Mr. Barger, Brent, and Jacob, are excluded from coverage under the intentional acts exclusion set forth in the Allstate policy. Ms. Reinhardt further urges that the trial court's rendition of summary judgment should be reversed because the exclusion of coverage for a parent's vicarious liability resulting from an intentional act committed by a minor child is against the public policy of this state as well as a specific directive of the Louisiana Commissioner of Insurance ("Commissioner").
The interpretation of an insurance contract is nothing more than a determination of the common intent of the parties. Doerr v. Mobil Oil Corporation, 00-0947, p. 4 (La.12/19/00), 774 So. 2d 119, 124; see also La. Civ.Code art.2045. The initial determination of the parties' intent is found in the insurance policy itself. Doerr, 00-0947 at 5, 774 So.2d at 124. In analyzing a policy provision, the words, often being terms of art, must be given their technical meaning. Id.; see also La. Civ. Code art.2047. When these technical words are unambiguous and the parties' intent is clear, the insurance contract will be enforced as written. Doerr, 00-0947 at 5, 774 So.2d at 124; see also La. Civ.Code art.2046. Courts lack the authority to change or alter the terms of an insurance policy under the guise of interpretation. Louisiana Insurance Guaranty Association v. Interstate Fire & Casualty Company, 93-0911 (La.1/14/94), 630 So. 2d 759, 764. If on the other hand, the contract cannot be construed simply, based on its language, because of an ambiguity, the court may look to extrinsic evidence to determine the parties' intent. Doerr, 00-0947 at 5, 774 So.2d at 124.
When determining whether or not a policy affords coverage for an incident, it is the burden of the insured to prove the incident falls within the policy's terms. On the other hand, the insurer bears the burden of proving the applicability of an exclusionary clause within a policy. When making this determination, any ambiguities within the policy must be construed in favor of the insured to effect, not deny, coverage. Id.
*126 The purpose of liability insurance is to afford the insured protection from damage claims. Reynolds v. Select Properties, Ltd., 93-1480 (La.4/11/94), 634 So. 2d 1180, 1183. Ambiguous policy provisions generally are to be construed against the insurer who issued the policy and in favor of coverage to the insured. Under this rule of strict construction, equivocal provisions seeking to narrow an insurer's obligation are strictly construed against the insurer, since these are prepared by the insurer and the insured had no voice in the preparation. Louisiana Insurance Guaranty Association, 630 So.2d at 764. The determination of whether a contract is clear or unambiguous is a question of law. Watts v. Aetna Casualty and Surety Co., 574 So. 2d 364, 369 (La.App. 1 Cir.), writ denied, 568 So. 2d 1089 (La.1990). Subject to the above rules of interpretation, insurance companies have the right to limit coverage in any manner they desire, so long as the limitations do not conflict with statutory provisions or public policy. See Reynolds, 634 So.2d at 1183.
The exclusionary clause contained in the Allstate policy that formed the basis of the trial court's grant of summary judgment provides as follows:
SECTION II Family Liability and Guest Medical Protection
Coverage X
Family Liability Protection
Losses We Cover Under Coverage X:
Subject to the terms, conditions and limitations of this policy, Allstate will pay damages which an insured person becomes legally obligated to pay because of bodily injury or property damage arising from an occurrence to which this policy applies, and is covered by this part of the policy.
* * * *
Losses We Do Not Cover Under Coverage X:
1. We do not cover any bodily injury or property damage intended by, or which may reasonably be expected to result from the intentional or criminal acts or omissions of any insured person. This exclusion applies even if:
a) such insured person lacks the mental capacity to govern his or her conduct;
b) such bodily injury or property damage is of a different kind or degree than intended or reasonably expected; or
c) such bodily injury or property damage is sustained by a different person than intended or reasonably expected.
This exclusion applies regardless of whether or not such insured person is actually charged with, or convicted of a crime. [Bold emphasis supplied]
In connection with the trial court's grant of Allstate's motion for summary judgment, the following colloquy took place:
THE COURT:
I grant the Motion for Summary Judgment. I think it's well established that insurance companies are only responsible for the negligent acts of their [sic] minor children. The only thing you could possibly argue is that they didn't mean to beat him up so badly, or they didn't understand their own strength. Also, your client had a little bit to do with this. He went over their [sic] with a bat after an argument ensued, alleged, about him calling too late at night and he went over to settle the score. I guess he was friends with one of the Bargers, and I guess he didn't expect to get beaten up.
I note your objection for the record.
[Counsel for defendant ALLSTATE]:
*127 I'll prepare a judgment, Your Honor.
THE COURT:
The Court finds, as a matter of fact, there's no genuine issue of material fact as to the exclusion in the policy. It's quite clear from all the pleadings that Allstate has no liability in this matter, at least no obligation to pay for any damages, I should say. I do note, even procedurally today, I think it's alleged that [Joey] is now a major, but the record doesn't reflect that he's been substituted. And since there was no objection raised, I will not address that.
[Counsel for plaintiff]:
Your Honor, just so I'm clear, the Court is making a finding that, as a matter of law, Directive 152 does not apply to intentional acts of minors.
THE COURT:
Yes.
[Counsel for plaintiff]:
Thank you, Your Honor.
In granting Allstate's motion for summary judgment, the trial court explicitly ruled that Directive Number 152 issued by the Commissioner did not apply to the intentional acts of minors. On appeal Ms. Reinhardt relies upon this directive and argues that the trial court's grant of summary judgment should be reversed because the exclusion of coverage for a parent's vicarious liability resulting from an intentional act committed by his or her minor child is against the public policy of this state.
The Commissioner of Insurance is a constitutionally-created office, and the elected official holding that office is statutorily charged with the administration of the Louisiana Insurance Code and the protection of the public interest relative to insurance matters. See La. Const, art. IV, § 11; La. R.S. 22:2. In accordance with these statutory mandates, the Commissioner is authorized to promulgate rules and regulations which the Commissioner deems necessary. La. R.S. 22:3. Thus, any rules and regulations issued by the Commissioner are done so with the public's interest foremost in mind.
On June 9, 2000, the Commissioner issued Directive Number 152, a copy of which is contained within the record of this matter, in response to this court's decision in Baugh v. Ray, 97-2625 (La.App. 1 Cir. 5/5/99), 751 So. 2d 888 (on rehearing). The question presented to the court in Baugh was whether it was against public policy for a homeowner's insurer to limit coverage due to statutorily-imposed vicarious parental liability without specifically advising the insured of the reduction in coverage. In its per curiam opinion in Baugh, a panel of this court held that our "law does not mandate insurance coverage for vicarious liability arising from the acts of one's children, and there is no state law or public policy prohibiting a lower limit for parental vicarious liability." Baugh, 97-2625 at 1, 751 So.2d at 888-89.[4]
In issuing Directive Number 152, the Commissioner reasoned:
*128 When consumers purchase homeowner's insurance, their intent is to purchase a broad package policy to protect themselves from a broad range of risks that may arise out of homeownership and personal liability. A limitation for liability coverage related to children is not a reasonable expectation of the policyholder. No homeowner would knowingly purchase a homeowner's policy limiting coverage for their liability with respect to their children.
As part of this same directive, the Commissioner further declared:
Because the Department of Insurance is charged with the duty of regulating the business of insurance in the public interest, the Department of Insurance views the use of any type of limitation clause in a homeowner's policy which results in limiting the liability coverage of an insurer for parents' vicarious liability for acts of their children is against the public interest. [Bold emphasis supplied]
In response to the arguments put forth by Ms. Reinhardt, Allstate contends on appeal that the Allstate policy at issue does not contain any provision addressed in Directive 152.
Additionally, Allstate contends that on its face, Directive 152 does not pertain to the intentional acts exclusion. Allstate argues that Directive 152 does not state that an insurer's coverage of the parents' vicarious liability for the tort of a child is broader than the parent's liability for their own torts, or broader than the explicit language of the insuring agreements of the policy. Liability arising from intentional acts is excluded from coverage, whether the parents' liability is vicarious, for their child's intentional tort, or direct, for their own intentional tort.
Recently this court handed down the case of P.D. v. S.W.L., 07-2534 (La.App. 1 Cir. 7/21/08), 993 So. 2d 240, writ denied, 08-2770 (La.2/13/09), 999 So. 2d 1146. In P.D., this court found that the homeowner's policy issued to the defendants contained an exclusion providing for no personal liability or medical payments coverage for "bodily injury ... [a]rising out of sexual molestation" and precluded coverage under the policy for alleged acts of non-consensual sexual intercourse and non-consensual sexual conduct by defendants' minor child. See P.D., 07-2534 at 14, 993 So.2d at 248. Although this court was not persuaded by the plaintiff's argument that pursuant to Directive 152, any exclusion that limited coverage for the parent's vicarious liability for the alleged acts of sexual molestation by their son violated public policy, this court specifically found that the issue of whether Directive 152 precluded application of the sexual molestation exclusion with respect to parental vicarious liability was not an issue before this court. See P.D., 07-2534 at 13, 993 So.2d at 248. Furthermore the court in P.D. specifically pretermitted consideration of the issue of whether it is against the public policy of this State to allow a homeowner's insurer to exclude coverage for damages resulting from a parent's vicarious liability for intentional acts of his or her minor child. Id.
In Perkins v. Shaheen, 03-1254 (La. App. 3 Cir. 3/3/04), 867 So. 2d 135, the Third Circuit interpreted language from a Farm Bureau policy similar to the Allstate provision at issue in this case, and in effect concluded that Directive 152 issued by the Commissioner only prohibits exclusions resulting from a child's negligent acts, but does not prohibit an exclusion for a minor's intentional acts. Perkins, 03-1254 at 5, 867 So.2d at 139.
Ms. Reinhardt asserts that the court's holding in Perkins is not binding on this court. Ms. Reinhardt further points to the *129 fact that Directive 152, pursuant to its terms, is not restricted in its application to parental liability stemming only from a child's negligent acts. Directive 152 clearly states that "the Department of Insurance views the use of any type of limitation clause in a homeowner's policy which results in limiting the liability coverage of an insurer for parents' vicarious liability for acts of their children is against the public interest." [Emphasis supplied]. It is the position of Ms. Reinhardt that if, in drafting Directive 152, the Commissioner had intended to restrict his comments on parental vicarious liability only to negligent acts, he could have easily done so.
It is the job of the courts to resolve disputes over insurance coverage. Doerr, 00-0947 at 24, 774 So.2d at 134; see La. Const, art. V, § 1. Because of the Commissioner's role in the regulation of Louisiana insurance law, his opinion regarding matters within his province, such as protection of the public interest in the realm of insurance, is persuasive. Doerr, 00-0947 at 23-24, 774 So.2d at 134. Directive 152 was issued by the Commissioner in direct response to this court's ruling in Baugh, wherein this court held that an insurance clause limiting parental vicarious liability for the acts of one's minor children was not contrary to public policy. The Baugh case dealt with an intentional act (i.e., sexual assault) by a minor on another individual. Directive 152 established a public policy prohibiting an insurer from limiting the liability coverage available to parents due to their statutorily-imposed vicarious liability for both the negligent and intentional acts of their minor children.
Directive 152 further declares that "[a] limitation for liability coverage related to children is not a reasonable expectation of the policyholder. No homeowner would knowingly purchase a homeowner's policy limiting coverage for their liability with respect to their children."
Considering the foregoing, it is my opinion that any exclusion in the Allstate policy that purports to limit coverage to Mr. and Mrs. Barger for their vicarious liability stemming from the acts of their minor child must be considered null and against the public policy of this state.
CONCLUSION
For the reasons set forth above, I would reverse the summary judgment in favor of Allstate, and remand this case to the trial court for further proceedings. I would further hold to the extent this concurring opinion is inconsistent with this court's previous opinions in Baugh and P.D., these previous opinions would be expressly overruled.
HUGHES, J., concurring with the PER CURIAM action of the court.
I respectfully disagree with this court's action. The Commissioner's Directive 152 is not binding. But Louisiana law forces parents to be responsible for their minor children. They cannot contract away this responsibility. It should be against public policy for an insurer to exclude this risk. It is not a fair bargain for the parents.
The intentional acts exclusion is to prevent adults from acting poorly because they will be covered by the insurance company, not to hang parents out for every shoving match or rock thrown. If parents are required to be responsible for these acts they should have the opportunity to purchase insurance for them.
GAIDRY, J., concurring.
I concur in the per curiam opinion, but believe that the trial court's judgment should be affirmed on the merits. The policy language is unambiguous in excluding coverage for the intentional or criminal *130 acts or omissions of any "insured person." Brandon Barger was the minor dependent son of the named insureds and resided with them. He was thus an "insured person" as defined in the policy.
The public policy of this state has long been that an intentional tortfeasor should not be allowed to insure his intentional wrongful acts and thereby elude ultimate personal responsibility for them. The mere fact that the liability of the parents of a minor tortfeasor is vicarious does not in any way negate the rationale for that public policy. This conclusion is self-evident from the parallel policy underlying the strict liability of parents for the torts of their minor children. See La. C.C. art. 2318. The basis for imposition of such liability on parents is their right and duty to control the behavior of their minor children. If parents could be said to "reasonably expect" that their liability insurer would assume financial responsibility for their child's intentional delictual acts, or even crimes, then the parents would have even less incentive to regulate their child's behavior. (Irresponsible parents might even encourage such behavior on the part of their child, or use their child to commit intentional acts on their behalf, secure in the belief that their insurer would "pick up the tab.") Directive No. 152 does not explicitly address the issue of vicarious liability for intentional acts, as opposed to negligence, and cannot logically be read as establishing or recognizing a new public policy contrary to the longstanding public policy supporting an "intentional acts" exclusion in a liability policy.
KUHN, J., concurring.
While this court cannot reach an executable majority addressing the merits of this case, I write separately to address why the trial court's judgment should be affirmed on the merits.
Plaintiff, Cathy Reinhardt, does not challenge that the acts of defendant, Mr. Barger, and his sons were intentional and that the language of Allstate's homeowners' policy excludes liability arising from intentional acts, unless the policy language is deemed against public policy. Plaintiffs sole argument advanced on appeal is that the "intentional act" exclusion contravenes Louisiana public policy, because it applies to a parent's vicarious liability for the acts of a minor under La. C.C. art. 2318. Plaintiff relies on Louisiana Insurance Commissioner's Directive 152 to support her argument. That directive states, in pertinent part:
When consumers purchase homeowner's insurance, their intent is to purchase a broad package policy to protect themselves from a broad range of risks that may arise out of homeownership and personal liability. A limitation for liability coverage related to children is not a reasonable expectation of the policyholder. No homeowner would knowingly purchase a homeowner's policy limiting coverage for their liability with respect to their children.
Because the Department of Insurance is charged with the duty of regulating the business of insurance in the public interest, the Department of Insurance views the use of any type of limitation clause in a homeowner's policy which results in limiting the liability coverage of an insurer for parents' vicarious liability for acts of their children is against the public interest.
This language does not specifically address intentional acts of a minor, so it is unclear whether the Commissioner contemplated the factual situation at hand or was attempting to solely address blanket reductions in coverage when the liability is based on the vicarious liability of the parents' minor children, which would also limit *131 liability for negligent acts. But even if the Commissioner contemplated exclusions for liability based on intentional acts of minors, the Commissioner's directive is not controlling in this case.
The Office of the Commissioner of Insurance is a constitutionally-created office, and the elected official holding that office is charged with the administration of the Insurance Code and the protection of the public interest in the realm of insurance. See La. Const. Art. IV § 11; La. R.S. 22:2; Doerr v. Mobil Oil Corp., 00-0947, pp. 23-24 (La.12/19/00), 774 So. 2d 119, 134. Due to the Commissioner's role in the regulation of Louisiana insurance law, his opinion regarding matters within this province is persuasive. However, it is the job of the courts to resolve disputes over insurance coverage. See La. Const. Art. V, § 1; Doerr, 00-0947 at p. 24, 774 So.2d at 134. Thus, we cannot allow the commissioner to usurp either the legislative or judicial role.
As a strict constructionist, I believe the role of the judiciary is to apply the laws as written by the legislature. Pursuant to La. C.C. art.2047, "[t]he words of a contract must be given their generally prevailing meaning." Because there is no ambiguity in the policy in question, its words should be given effect. In the absence of a conflict with a statute or public policy, insurers have the same rights as individuals to limit their liability and impose whatever conditions they desire upon their obligations. Sims v. Mulhearn Funeral Home, Inc., 07-0054 (La.5/22/07), 956 So. 2d 583, 595. The insurance policy establishes the limits of liability, and that policy is the law between the parties. Id. at pp. 18-19, 956 So.2d at 595. When the provisions of the policy are clear and unambiguous, we must enforce the policy as written. La. C.C. art.2046.
The apparent public policy consideration underlying the exclusion of insurance coverage for intentional torts is that a person should not have advance protection against the consequences of his intentional wrongdoing. I see no compelling public policy argument that would contradict the extension of this principle to minors who engage in intentional wrongdoing. Why should the insurer bear the costs that arise from this intentional activity rather than the parents who should be supervising their minor children? Thus, I conclude that Allstate's policy language should be given effect, and this court should affirm the trial court's judgment, which granted Allstate's motion for summary judgment and dismissed plaintiffs claims against Allstate.
GUIDRY, J., concurring.
I concur in the per curiam opinion. The language of the policy at issue unambiguously excludes coverage for the intentional or criminal acts or omissions of any "insured person." Brandon Barger was an insured person as defined by the policy. Therefore, I would affirm the decision of the trial court.
PARRO, J., concurring.
I concur in the per curiam opinion essentially for the reasons set forth by Judge Kuhn. I write separately to emphasize the significance that the division of powers between the legislative, executive, and judicial branches of government has on the merits of this case. See LSA-Const. art. II, § 1.
The sources of law are legislation and custom. LSA-C.C. art. 1. Legislation is the superior source of law in Louisiana. LSA-C.C. art. 1, Revision Comments 1987, comments (a) and (c). Legislation is a solemn expression of legislative will. LSA-C.C. art. 2. The Louisiana Insurance Code (Code) was enacted by the legislature to regulate the insurance industry, an *132 industry affected with the public interest, in all of its phases. See LSA-R.S. 22:2(A)(1). Pursuant to the authority contained in the Constitution of Louisiana,[1] the office of the commissioner of insurance (commissioner) was created. The duty of the commissioner is to administer the provisions of the Code. LSA-R.S. 22:2(A)(1). Louisiana Revised Statute 22:11 gives the commissioner authority to promulgate rules and regulations necessary for the "implementation" of the Code. Due to the commissioner's role in the regulation of Louisiana insurance law, his opinion regarding matters within this province is persuasive. Doerr v. Mobil Oil Corp., 00-0947 (La.12/19/00), 774 So. 2d 119. However, the commissioner is not the final, definitive arbiter for the interpretation and reconciliation of the Code and insurance policy language. That role is, of course, constitutionally assigned to the judiciary. ANR Pipeline Company v. Louisiana Tax Commission, 01-2594 (La.App. 1st Cir.3/20/02), 815 So. 2d 178, 183-84, affirmed and remanded, 02-1479 (La.7/2/03), 851 So. 2d 1145. Thus, it is the job of the courts to resolve disputes over insurance coverage. See LSA-Const. art. V, § 1;[2]Doerr, 774 So.2d at 134. By giving the commissioner the authority to administer the Code, the legislature certainly did not intend to empower the commissioner to promulgate rules and regulations that would supersede legislation.
The role of the judiciary is to apply the laws as written by the legislature. See LSA-C.C. art. 9. When a law is clear and unambiguous and its application does not lead to absurd consequences, courts are bound to apply the law as written without resort to determining the legislative intent. See LSA-C.C. art. 9. The words of a law must be given their generally prevailing meaning. LSA-C.C. art. 11.
A contract is an agreement by two or more parties whereby obligations are created, modified, or extinguished. LSA-C.C. art.1906. Parties are free to contract for any object that is lawful, possible, and determined or determinable.[3] LSA-C.C. art.1971. Contracts have the effect of law for the parties and may be dissolved only through the consent of the parties or on grounds provided by law. LSA-C.C. art. 1983. The words of a contract must be given their generally prevailing meaning. LSA-C.C. art.2047. An insurance policy is a contract between the parties and should be construed using the general rules of interpretation of contracts set forth in the Civil Code. LeBlanc v. Aysenne, 05-0297 (La.1/19/06), 921 So. 2d 85, 89. Because there is no ambiguity in the policy in question, its words should be given effect. In the absence of a conflict with a statute or *133 public policy, insurers have the same rights as individuals to limit their liability and impose whatever conditions they desire upon their obligations. Sims v. Mulhearn Funeral Home, Inc., 07-0054 (La.5/22/07), 956 So. 2d 583, 595.
This court has previously considered whether an endorsement to an insurance policy, limiting the insurer's liability coverage if liability was due to a statutorily-imposed parental vicarious liability, was against public policy. See Baugh v. Ray, 97-2625 (La.App. 1st Cir.5/5/99), 751 So. 2d 888, 888-89. In Baugh, this court found that the law does not mandate insurance coverage for vicarious liability arising from the acts of one's children and that there is no state law or public policy prohibiting a lower limit for parental vicarious liability. Id. I believe, under the facts of this case, that any attempt by the commissioner in issuing Directive Number 152 to establish a contrary public policy constituted an unauthorized exercise of legislative and/or judicial power.
Accordingly, I would affirm the judgment of the trial court granting Allstate's motion for summary judgment and dismissing all claims against the homeowner's insurer, with prejudice.
NOTES
[*] Pettigrew and Hughes, JJ., dissent and would grant a rehearing.
[1] It was later revealed that Joey had a baseball bat concealed in his pants leg for "insurance."
[2] It should be noted that the depositions of the parties in this matter reveal some discrepancy as to who was present and their roles in the battery.
[3] In maintaining Ms. Reinhardt's appeal, this court ruled that although she failed to file an order for appeal within the delay, Ms. Reinhardt nevertheless filed a notice of her intention to seek writs together with a request for a return date order that was signed by the trial court within the delay. In its denial of Allstate's motion, this court cited In Re Howard, 541 So. 2d 195, 197 (La. 1989), and ruled that said pleading could be treated as a timely motion for a devolutive appeal.
[4] It should be noted that five months after the issuance of Directive 152, this court issued its opinion in Neuman v. Mauffray, 99-2297 (La. App. 1 Cir. 11/8/00), 771 So. 2d 283. In Neuman, 99-2297 at 3-4, 771 So.2d at 285, this court held that an intentional act exclusion in an Allstate homeowner's policy excluded coverage for intentional acts committed by an insured minor in addition to a claim of negligent supervision directed against the parents of said minor. A similar ruling was made in the case of Leslie v. Andrews, 04-2053 (La. App. 4 Cir. 5/25/05), 905 So. 2d 368, 372-373, writ denied, 05-1161 (La.5/5/05), 901 So. 2d 1077. In both Neuman and Leslie, no issue of Directive 152 was raised by the parties or addressed by the courts; therefore, we find those cases are distinguishable from the case at hand and we decline to follow same.
[1] LSA-Const. art. IV, § 11.
[2] It has long been the law of this land that it is emphatically the province and duty of the judicial branch to say what the law is. The judicial power is vested in Louisiana courts by Article V, Section 1 of the Louisiana Constitution. The separation of powers doctrine is set forth in LSA-Const. art. II, § 2: "Except as otherwise provided by this constitution, no one of these branches, nor any person holding office in one of them, shall exercise power belonging to either of the others." Thus, unless authorized by the Constitution, the executive branch cannot exercise judicial power. ANR Pipeline Company, 815 So.2d at 183-84. The Department of Insurance is included as part of the executive branch of state government; the commissioner serves as the executive head and chief administrative officer of the Department and is also referred to as the "secretary." See LSA-R.S. 36:4(A)(16), 682, and 685.
[3] Persons may not by their juridical acts derogate from laws enacted for the protection of the public interest. Any act in derogation of such laws is an absolute nullity. LSA-C.C. art. 7. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623222/ | 126 S.W.3d 466 (2004)
Matt A. LUDWIG, Respondent,
v.
Kathleen J. LUDWIG, Appellant.
No. WD 62555.
Missouri Court of Appeals, Western District.
February 17, 2004.
*469 John Allinder, Independence, for Appellant.
John W. Dennis, Jr., Independence, for Respondent.
RONALD R. HOLLIGER, Judge.
Kathleen Ludwig appeals a judgment of dissolution, asserting three claims of error relating to the custody determination and two points relating to the division of marital property and allocation of debts. She first contends that the Guardian ad Litem failed to conduct an adequate investigation. In her second and third points, she argues that the trial court erred in failing to find a pattern of domestic violence and in failing to make specific findings under Section 452.375.13, RSMo 2000,[1] that the custody arrangement best protected the parties and the children from domestic violence or abuse. Wife's remaining two points claim that the trial court erred by dividing the marital property and debts in an unfair and inappropriate manner.
We conclude that the trial court committed reversible error in failing to make the findings required by Section 452.375.13, RSMo. We also hold that the trial court abused its discretion in its division of marital property and debts. The judgment below is, therefore, reversed, and the matter remanded for further proceedings.
FACTUAL AND PROCEDURAL BACKGROUND
Matt Ludwig ("Husband") and Kathleen Ludwig ("Wife") were married on April 28, 1990, and two sons were born during the marriage. Both parties admitted at trial that the marriage was stormy and that they often engaged in heated arguments. Several of those altercations resulted in intervention by the police. In 1992, before the birth of their first child, Husband was arrested following one of those incidents. While no charges were filed against Husband, he underwent anger management counseling. Husband also indicated that Wife hit him on a number of occasions, and Wife conceded that those altercations had *470 been physical at times. There was also evidence that both parties had argued with others on a few instances.
Husband was continuously employed throughout the marriage. Wife's last employer prior to the separation was Blue Cross / Blue Shield. She voluntarily left that employment in March 2000, though did not reveal to Husband that she had quit that position until two or three weeks later. Following the separation, Wife moved through a number of jobs. She also claimed to have been working for the U.S. Post Office, a claim that the trial court found to be not credible, based on her testimony.
The parties separated on July 14, 2000. Wife moved to California, taking the children with her. She did not advise Husband of her intended out-of-state relocation with the children until the day she moved. Husband filed the petition for dissolution of marriage a few weeks later.
Upon reaching California, Wife initially moved in with her mother and stepfather. Wife's grandmother, together with Wife's half-sister and her three children, were also living at that residence. At some point late 2000 or early 2001, Wife was involved in an altercation with her mother in which Wife struck her mother. Following this incident, Wife was thrown out of her mother's house. Wife then moved in with James and Martha Tijerina, two of Wife's friends.
Following Wife's move to California, she refused to tell Husband where she was living or to provide contact information. Husband was able to determine where Wife was living, at one point, through use of "Caller ID" services. Nevertheless, Wife refused to provide Husband with her address in California for over two years after she moved with the children. Wife also failed to provide that information in response to interrogatories propounded to her.
Perhaps in an attempt to ensure that Husband would not find out where she and the children were living, Wife apparently also withheld address or phone information from the children, as well. This endangered the welfare of the children. During one incident, the children wandered away from the residence and became lost. Police picked up the children, but the children were unable to relate where they lived or to provide a phone number at which their mother could be contacted. They only knew the phone number for their Missouri residence. The police contacted Husband, who was also unable to provide the police any assistance in locating Wife or the children's residence. While that situation was later successfully resolved, the children were very frightened by that incident.[2]
Based, in part, on those events, Husband sought the appointment of a Guardian ad Litem for the children. The allegations in his motion also included physical, mental, and emotional abuse of the children by Wife and her violent conduct with others. It also alleged that Wife was preventing him from having contact with the children. Wife opposed the appointment of a GAL, claiming that no issues of abuse had been raised. Despite Wife's opposition, the trial court granted Husband's motion and appointed a Guardian ad Litem *471 for the children. Eventually, through the involvement of the children's Guardian ad Litem, an arrangement was reached whereby Husband was to have phone contact on Wednesdays and Sundays, but, even then, Husband's opportunities for contact remained sporadic.
Due to Wife's changes of residence, the children changed schools a number of times. This affected the academic performance of the eldest child, who had been performing at an average to above-average level before leaving Missouri. At the time of trial, the elder son was earning below average to failing grades. While Wife testified that she was taking steps to help improve the children's academic performance, she had failed to have the children's records from their prior schools transferred to their school in California.
Husband underwent a clinical assessment for anger control issues and alcohol dependencies, at the request of the Guardian ad Litem. The evaluation report that followed indicated that Husband did not exhibit "an emotional or behavioral problem requiring treatment." In addition, his alcohol use did not rise to a level where it would meet criteria for admission to a treatment program.
An attorney originally represented wife but was granted leave to withdraw before trial. Wife did not secure replacement counsel and proceeded to trial pro se.
In the dissolution judgment, the trial court awarded Husband sole legal[3] and physical custody of the children. Wife was granted visitation with the children and was ordered to pay child support in the amount of $400 per month (a departure from the presumed child support amount of $557 per month). The trial court awarded Husband approximately sixtyseven percent of the marital property, while awarding Wife the remaining thirtythree percent. Husband was allocated twenty-nine percent of the marital debt, and the bulk of the marital debt (seventyone percent) was allocated to Wife.
Wife, now represented by new counsel, appeals.
DISCUSSION
Preliminary Issues:
Husband has filed a motion asking us to dismiss Wife's appeal for a variety of alleged violations of Rule 84.04. Specifically, he raises four grounds for dismissal. First, he contends that Wife's statement of facts violates Rule 84.04(c), as it does not present a "fair and concise" presentation of the material facts. Second, he contends that the argument for a number of her points on appeal violates Rule 84.04(i) due to failure to include citations to the record. Third, he claims that three of Wife's points on appeal fail to comply with Rule 84.04(d). Fourth, he contends that Wife's brief should be struck and her appeal dismissed because it contains a number of factual claims that are completely outside the record.
We are generally reluctant to dismiss an appeal solely due to violations of Rule 84.04. See Kidd v. Wilson, 50 S.W.3d 858, 860 (Mo.App.2001). Where matters of child custody are at issue, we are even more cautious. See, e.g., R.W.D. v. L.J.D., 567 S.W.2d 376, 376 (Mo.App. 1978); Harbaugh v. Harbaugh, 472 S.W.2d 449, 451 (Mo.App.1971). Ultimately, our determination hinges on whether the violations *472 of Rule 84.04 impedes disposition of the merits by failing to make the issues on appeal clear to the parties and the appellate court. See Wilkerson v. Prelutsky, 943 S.W.2d 643, 647 (Mo. banc 1997).
While Wife's brief is no model of draftsmanship or compliance with Rule 84.04, we conclude that the deficiencies did not result in confusion of the issues on appeal. We therefore decline to exercise our discretion to dismiss Wife's appeal for the violations of Rule 84.04 identified by Husband. Husband's motion to dismiss Wife's appeal is denied.
Wife has also filed a cross-motion, asking us to strike Husband's brief for violations of "Rules 84.06(6) and 84.06(7)[sic]." The rules cited by Wife do not exist. However, it would appear that Wife intended to cite Rules 84.06(a)(6) and (a)(7), which concern the font and double-spacing requirement of briefs, respectively. Given our intent to address the merits of Wife's appeal despite the deficiencies of her brief, we refuse to strike Husband's brief, as well. Wife's cross-motion to strike Husband's brief is denied.
I. Adequacy of the Guardian ad Litem's Investigation
In her first point on appeal, Wife contends that the trial court erred in granting Husband sole legal and physical custody of the children for the reason that the Guardian ad Litem failed to adequately perform her obligations to represent the children's best interests. Specifically, Wife claims that the Guardian ad Litem failed to conduct an adequate investigation (including interviews) and failed to participate meaningfully at trial. Wife claims that, had the Guardian done so, the evidence would have shown that Wife was equally involved with the children, that Husband was abusive to Wife in front of the children, and that Husband abuses alcohol.
The adequacy of the Guardian ad Litem's investigation was not challenged in the proceedings below, and Wife raises the issue for the first time on appeal. Wife concedes that we may only review this point for plain error pursuant to Rule 84.13(c). In re S.M., 938 S.W.2d 910, 923 (Mo.App.1997). Plain error review is discretionary. Young v. Young, 59 S.W.3d 23, 27 (Mo.App.2001). We will generally grant relief upon plain error review only upon a showing that a manifest injustice or a miscarriage of justice has occurred. See In re S.M., 938 S.W.2d at 923.
While the matter was pending, the Guardian ad Litem did undertake an investigation. The Guardian ad Litem participated in a number of in-person and telephone conferences with the parties, Husband's parents, and at least one other individual. The Guardian also arranged a home visit with the children while they were in Husband's care in Missouri. As discussed above, Husband also underwent a clinical assessment at the Guardian's request.
The record is unclear as to what investigation the Guardian ad Litem conducted with regard to Wife's fitness with regard to custody of the children. We recognize that the Guardian was faced with the task of conducting an investigation that spanned half the continent. Compounding that difficulty are suggestions in the record that Wife was not cooperative in providing information to the Guardian ad Litem. For example, Wife did not provide the Guardian with the children's school records, forcing the Guardian to obtain them independently. Wife also either misled the Guardian as to the Tijerina's *473 name[4] or knowingly permitted a mistaken understanding regarding their name to continue.
In the proceedings below, the Guardian ad Litem extensively cross-examined both parties and made a number of evidentiary objections during trial. While Wife is correct that the Guardian did not call any witnesses of her own or cross-examine any other witnesses, we disagree with her implication that the Guardian was merely a passive observer. Wife contends that the Guardian should have interviewed one of the children's teachers, detailing a number of allegations that lie completely outside the record on appeal. Aside from that witness, Wife does not suggest any additional witnesses or that the Guardian Ad Litem was (or should have been) aware of any such witnesses or what testimony they might have offered. The Guardian ad Litem also presented her recommendations to the trial court at the conclusion of the case and offered her own proposed parenting plan.
Wife principally relies upon two cases. In the first, Baumgart v. Baumgart, 944 S.W.2d 572 (Mo.App.1997), the guardian's performance was minimal at best. The guardian's only involvement during trial was asking a few questions of a psychologist. Id. at 579. The guardian did not cross-examine any other witness (not even the mother, who testified) or call witnesses to present testimony. Nor did the guardian in Baumgart offer a recommendation to the trial court. There was also some question as to whether the guardian had even informed himself of the children's status or current custody arrangements. The guardian had done essentially nothing substantial toward discharging his responsibilities as the advocate for the children's best interests. While the judgment in Baumgart was reversed on other grounds, the trial court was ordered, on remand, to appoint a different guardian to represent the children. Id. at 580.
Wife also relies on McCreary v. McCreary, 954 S.W.2d 433 (Mo.App.1997), which concerned a modification judgment in which physical custody was changed to the father. Shortly after the entry of judgment, the mother filed a motion to amend the judgment and to reopen the evidence, in order to address allegations that the father had abused the children. The trial court appointed a guardian ad litem at that juncture but ultimately declined to reopen the case. Id. at 438. While this court suggested that the guardian's performance appeared to be potentially deficient, it was not a basis for the resulting reversal of the judgment. Indeed, this court also opined that the guardian might not have been able to do more under the circumstances. Id. at 449.
Unlike Baumgart, the Guardian ad Litem, here, was involved in the case and made an effort to investigate the issues relevant to the children's best interests. While some might argue that the Guardian could have been more thorough in her investigation, we cannot say, based upon the record before us, that the Guardian would have been able to do more in carrying out her duty to represent the children's best interests.
Certainly, based on the record before the court,[5] we cannot reach a conclusion *474 that the Guardian ad Litem's actions (or inaction) resulted in a manifest injustice or a miscarriage of justice. We therefore decline to exercise our discretion to engage in plain error review. Point denied.
II. Failure to Find a Pattern of Domestic Violence Under Section 452.375.2(6)
With regard to Wife's remaining points on appeal, our review is guided by the standard of Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976). King v. King, 66 S.W.3d 28, 32 (Mo.App.2001). We will reverse the trial court only if we conclude that the judgment was against the weight of the evidence, was not supported by substantial evidence, or misstated or misapplied the law. Id. We will reverse a judgment as against the weight of the evidence "only with caution and a firm belief that the judgment is wrong." Id. We view the evidence in the light most favorable to the judgment and give substantial deference to the trial court's judgment, even if the evidence could support a different conclusion. Taylor v. Taylor, 25 S.W.3d 634, 638 (Mo.App.2000).
In her second point on appeal, Wife argues that the trial court erred in failing to find that a pattern of domestic abuse existed between the parties. She takes the position that such a finding was required here, based upon the parties' history of altercations, including one incident that resulted in Husband's arrest. Husband, while conceding that there was a history of verbal arguments between the parties, the few instances in which those arguments turned into physical confrontations did not constitute a pattern of domestic violence or abuse.
In determining the best interests of the children for the purposes of allocating child custody, the trial court is required to consider all relevant factors. Among the factors articulated in Section 452.375.2(6), RSMo 2000, is the "mental and physical health of all individuals involved, including any history of abuse of any individuals involved." Should the court conclude that "a pattern of domestic violence has occurred," then the statute requires the trial court to make written findings of fact and conclusions of law. § 452.375.2(6), RSMo. The statute further provides that "[c]ustody and visitation rights shall be ordered in a manner that best protects the child and the parent or other family or household member who is the victim of domestic violence from any further harm[.]" Id.
A trial court need not conclude that a pattern of domestic violence exists when the evidence reveals only a few incidents of such violence. In Loumiet v. Loumiet, 103 S.W.3d 332, 341 (Mo.App. 2003), the trial court found that the husband had committed three acts of domestic violence against his wife, but found that there was no pattern of domestic violence. While the propriety of the trial court's finding was disputed on appeal, this court declined to disturb the trial court's ruling on that issue. See id.
Wife relies on Williams v. Williams, 55 S.W.3d 405 (Mo.App.2001), as providing an example of a finding of a pattern of domestic violence under similar conduct. Review of Williams, however, shows that the instances of physical violence were far more numerous, in which the husband was regularly injured by the wife's abusive conduct. See id. at 413. Police intervened in those incidents at least four times during the parties' marriage. See id. The trial court found that a pattern of domestic violence was present during the marriage. No issue was raised in regard to whether the *475 evidence was sufficient to support that finding. Indeed, the issue on appeal in Williams was not whether the evidence supported a finding of a pattern of domestic violence under Section 452.375.2(6), RSMo. Instead, the issue on appeal was the trial court's failure to make other required findings pursuant Section 452.375.13, RSMo, that the custody and visitation arrangement best protected the children and the husband from future domestic violence or abuse. Id.
The other case Wife relies upon, Belcher v. Belcher, 106 S.W.3d 601 (Mo.App.2003), does not expressly take up the issue of whether the incidents of domestic violence described in the evidence were sufficient to constitute "a pattern of domestic violence." [6] Instead, the opinion seems to merely presume that the statute was triggered and reverses for the failure to make the required statutory findings under both subsections of Section 452.375, RSMo.
Viewing the evidence in the light most favorable to the judgment, the case at bar seems closest to the situation faced by the court in Loumiet. While we have a history of heated arguments regularly occurring between the parties, the evidence indicated that physically violent confrontations between the parties were a comparatively rare event, occurring primarily prior to the birth of the children. This is in contrast to Belcher, where such events were frequent occurrences. Under the facts presented, the trial court could reasonably conclude, as it found, that the evidence did not support a finding that there had been a pattern of domestic violence. The court's finding that there was no pattern of domestic violence was supported by the evidence and was not against the weight of the evidence. Wife's second point on appeal is, therefore, denied.
III. Failure to Make Findings Under Section 452.375.13
Wife's third point claims that the trial court erred by failing to make specific findings pursuant to Section 452.375.13, RSMo. When that statute is applicable, it requires findings that the custody arrangement ordered by the court best protects the children and the parent who was the victim of abuse from further harm due to domestic violence or abuse.
This statutory requirement is triggered when there has been domestic violence or abuse during the marriage. Unlike Section 452.375.2(6), RSMo, it is irrelevant whether the domestic violence or abuse was an isolated incident or part of a pattern of domestic violence or abuse. Cooley v. Cooley, 99 S.W.3d 518, 520 (Mo. App.2003). It is also irrelevant which parent is awarded custody. Mund v. Mund, 7 S.W.3d 401, 404 (Mo. banc 1999). Once the trial court determines that domestic violence or abuse has occurred, the court is required to make the additional findings outlined in Section 452.375.13, RSMo. A trial court commits reversible error by failing to make those mandatory findings.[7]*476 See Dickerson v. Dickerson, 55 S.W.3d 867, 874 (Mo.App.2001).
Even though there was no pattern of domestic violence between the parties, both parties admit that there were incidents between them in which domestic violence occurred. The trial court made express findings regarding those incidents. While Husband concedes that the trial court failed to make findings under Section 452.375.13, RSMo, he nevertheless contends that we need not reverse the judgment below, raising three arguments in support of his position.
Husband first contends that Wife has not properly preserved this issue through her point on appeal. While we agree that the point on appeal is not the most artfully drafted, we disagree with his contention that it does not pass muster under Rule 84.04. In our view, Wife's stated point on appeal clearly raises the issue of whether the trial court failed to make the findings mandated by Section 452.375.13, RSMo.
Husband's second argument is that, despite the lack of express findings, we should imply those findings based upon the presumption that the trial court's judgment was made in view of the children's best interests. It is clear that the trial court was concerned about the isolated incidents of domestic violence and gave them consideration, although failing to make any findings about whether or how the custody or visitation order should address the issue. Accepting Husband's argument, however, would render Section 452.375.13, RSMo, essentially meaningless.
Husband's third argument is that, even if the failure to make findings was error, we should not reverse the judgment below because Wife has failed to show how either she or the children were prejudiced by the failure to make those findings. Precedent does not support husband's argument. In Williams v. Williams, 55 S.W.3d 405 (Mo. App.2001), there was no indication that the appellant was prejudiced by the lack of findings under Section 452.375.13, RSMo. Nevertheless, the failure to make those findings was held to constitute reversible error. Id. at 414.
The trial court's obligation under Section 452.375.13, RSMo, is analogous to its obligation to make findings in response to a timely request for findings under Rule 73.01(c). In that context, the failure to make the findings requested generally constitutes reversible error, provided the failure affects the merits of the action or interferes with appellate review. See Lattier v. Lattier, 857 S.W.2d 548, 549 (Mo. App.1993). If the record is sufficient to support the judgment, however, the judgment may be upheld on appeal, despite the failure to make the requested findings. See Clark v. Clark, 20 S.W.3d 562, 566 (Mo. App.2000).
Here, the lack of findings runs directly to the merits of the action. By creating the statutory requirement, the legislature's manifest intent was to ensure that, in cases where there was a history of domestic violence or abuse, the trial court carefully considered those circumstances in awarding child custody and providing for visitation. Requiring such findings also provides a means for more careful and thorough appellate review. Although we, frankly, perceive no obvious modifications of the parenting plan needed to accommodate domestic violence concerns, the statutory mandate for findings does not permit *477 such an exception. Thus, we grant Wife's third point on appeal, remanding to the trial court for the entry of appropriate findings pursuant to Section 452.375.13, RSMo.
IV. Division of Marital Property and Debts
Wife's fourth point on appeal contends that the trial court erred in its division of marital property, while her fifth point raises a parallel claim of error with regard to the division of marital debts. Wife argues that the trial court's property and debt division was so substantially in favor of Husband that it constituted an abuse of discretion.
When reviewing a trial court's division of marital property and debts, we will reverse the judgment "only if the division is so unduly weighted in favor of one party as to constitute an abuse of discretion." King v. King, 66 S.W.3d 28, 33 (Mo.App.2001). To find an abuse of discretion, we must conclude that the arbitrary and unreasonable nature of the award suggests indifference and a lack of appropriate judicial consideration. See id. Here, the trial court awarded Husband marital property in the amount of $21,245.10, while awarding Wife property amounting to $10,367.92. Husband was, therefore, awarded sixty-seven percent of the marital property. With regard to the division of marital debt, $4,412.44 was allocated to Husband and $17,491.76 was allocated to Wife.
Pursuant to 452.330, RSMo, a court must consider "all relevant factors" in dividing marital property and debts in a dissolution proceeding. Among the factors to be considered by the court are:
(1) The economic circumstances of each spouse at the time the division of property is to become effective, including the desirability of awarding the family home or the right to live therein for reasonable periods to the spouse having custody of any children;
(2) The contribution of each spouse to the acquisition of the marital property, including the contribution of a spouse as homemaker;
(3) The value of the nonmarital property set apart to each spouse;
(4) The conduct of the parties during the marriage; and
(5) Custodial arrangements for minor children.
§ 452.330.1, RSMo. The court is not limited to those factors, however, and may also consider any other relevant criteria. See Rawlings v. Rawlings, 36 S.W.3d 795, 798 (Mo.App.2001). No formula is given for how those factors are to be weighed, nor must the resulting division of property and debts be equal. See id. Ultimately, however, the division must be fair and equitable to the parties. See id.
A number of those statutory factors weigh in Husband's favor. For example, the fifth factor falls in favor of Husband, given that he was awarded custody of the children. The third factor also tends to favor him, as Husband received $2,500 less than wife in nonmarital property.
Husband claims that the fourth factor (misconduct) also comes into play here and favors him in the property division. Generally, a party's misconduct during the marriage may be considered within the context of the property division when it has placed additional burdens on the other party. See McNair v. McNair, 987 S.W.2d 4, 6-7 (Mo.App.1998). Those burdens need not necessarily be financial. Ballard v. Ballard, 77 S.W.3d 112, 117 (Mo.App.2002). Nevertheless, the court cannot use the property division solely to punish the spouse who has committed misconduct. *478 See Nelson v. Nelson, 25 S.W.3d 511, 519 (Mo.App.2000). Misconduct that may be considered in the division of property is misconduct that places an additional and unreasonable burden on the marital relationship. See id.; McNair, 987 S.W.2d at 6-7. Here both parties were guilty of misconduct toward the other.
Husband argues, however, that the Wife clearly committed misconduct by attempting to restrict Husband's access to and contact with the children following her move to California. Those actions also placed additional burdens on Husband. For example, Husband paid for at least two round trip tickets for the children so that they could spend time with him while the case was pending. He also purchased prepaid phone cards in an attempt to facilitate phone contact with the children. We disagree that this is the type of misconduct envisaged in Section 452.330. Although not appropriate, her actions were not shown to place any burden on the marital unit itself, whether economic or emotional. The trial court, therefore, erred to the extent it relied upon such misconduct to justify a highly disproportionate division of property.
Removing the element of misconduct from the analysis, none of the statutory or non-statutory factors justify the extent of the court's unequal division. With regard to the marital debts, it appears that the court essentially allocated to each party the credit cards held in that party's name.[8] The evidence established that each party held their own separate credit cards and bank accounts for at least ten years prior to trial. The parties also divided the marital expenses. Husband paid rent, utilities, insurance, taxes, and the children's daycare expenses. Wife paid for groceries and daycare. The parties divided other miscellaneous expenses, such as purchasing clothing for the children. Even in those circumstances, however, a written agreement between the parties to treat each other's credit card debt as separate, nonmarital debt is required to defeat the presumption that the debts are marital property. See Rawlings, 36 S.W.3d at 798 (Mo.App.2001).
Husband argues that he should not be saddled with Wife's credit card debt because he was financially responsible and kept his debt levels paid down. He points us to no evidence in the record, however, in support of that claim. Nor is there any other substantial evidence in the record with regard to how those debts were incurred that would enable Husband to overcome the presumption that they are marital debts or that Wife improperly incurred those debts. We, therefore, presume the debts to be marital and subject to division pursuant to Section 452.330.1, RSMo. See Bond v. Bond, 77 S.W.3d 7, 12 (Mo.App. 2002).
There are no non-statutory factors here that bear upon the division of marital property and debts. While a number of the statutory factors favor Husband, in our view, the trial court's allocation to Wife of seventy-one percent of the marital debts while awarding her only thirty-three percent of the marital property overwhelmingly favored Husband. The division of marital property and debt was so arbitrary *479 and unreasonable to suggest a lack of proper judicial consideration. We conclude that it was an abuse of discretion requiring reversal.
Wife's fourth and fifth points on appeal are sustained, and we reverse the judgment below with regard to the division of marital property and debt.
CONCLUSION
Having concluded that the trial court erred in failing to make the findings required by Section 452.375.13, RSMo, and that the division of marital property and debts constituted an abuse of discretion, the judgment below is hereby reversed and remanded for further proceedings consistent with this opinion.
EDWIN H. SMITH, Presiding Judge, and LISA WHITE HARDWICK, Judge, concur.
NOTES
[1] All further statutory references are to RSMo 2000, unless otherwise indicated.
[2] This was not the only circumstance in which Wife showed a lack of concern for the children. Due to Wife's decision to relocate with the children on July 14, 2000, the elder son was unable to personally receive a sports award at a gathering held the following day. On another occasion, Wife failed to meet the children at the airport when they were returning from spending time with Husband and had to be summoned to the airport by airline personnel.
[3] Both Husband and the Guardian ad Litem recommended awarding joint legal custody to both parents. The trial court, however, apparently determined that joint custody was inappropriate, given the parties' history of conflict and poor communication with regard to the children's welfare.
[4] During much of the proceedings, both the Guardian and Husband believed that Wife was living with "John and Martha Handyman," apparently based upon the household answering machine message.
[5] Wife includes in her argument claims regarding "evidence" that could have been obtained from one of the children's teachers. Those matters fall completely outside the record on appeal, however, and cannot be considered by this court. See 8182 Maryland Assocs., Ltd. P'ship v. Sheehan, 14 S.W.3d 576, 587 (Mo. banc 2000).
[6] The Belcher opinion glosses over the distinctions between Sections 452.375.2(6) and 452.375.13, RSMo. See 106 S.W.3d at 603. The first statute is triggered upon the existence of a pattern of domestic violence and requires findings if custody is awarded to the abusive parent. See Dickerson v. Dickerson, 55 S.W.3d 867, 872 (Mo.App.2001). The latter statute is triggered if any domestic violence has occurred and does not depend on which party is granted custody. See id. A close reading of Belcher suggests that the issue that led to reversal was the failure to make findings pursuant to the latter statute, not the lack of findings under Section 452.375.2(6), RSMo.
[7] Error has been found due to the failure to make findings under Section 452.375.13, RSMo, even when there had been no express finding of domestic violence or abuse in the trial court's judgment, when the weight of the evidence clearly supported an implicit finding that domestic violence or abuse had occurred. See, e.g., Cooley v. Cooley, 99 S.W.3d at 519-20.
[8] We note, in passing, that Gerald Ludwig, Husband's father, testified that he had loaned Wife $10,000 at one point and that $9,000 of that loan remained unpaid. There was no document or exhibit admitted into evidence reflecting that alleged loan. It is not clear from the record whether the trial court found Gerald Ludwig's testimony to be not credible. Nor does the record reveal whether the trial court considered that debt to be marital or nonmarital. We trust that the trial court, on remand, will address this alleged debt in its judgment. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623249/ | 609 S.W.2d 590 (1980)
OTTO, INC.
v.
COTTON SALVAGE & SALES, INC. et al.
No. 1756.
Court of Civil Appeals of Texas, Corpus Christi.
November 13, 1980.
Rehearing Denied December 11, 1980.
*591 W. S. Fly and Frank S. Buhler, III, Fly & Moeller, Victoria, for appellant.
Myrtle McDonald and J. R. Blumrosen, Blumrosen & McDonald, Lubbock, for appellees.
*592 OPINION
BISSETT, Justice.
This is a venue case. Otto, Inc., plaintiff in the trial court, has duly and timely appealed from an order of the District Court of Lavaca County, Texas, which sustained the pleas of privilege filed by Cotton Salvage and Sales, Inc., and W. G. Ripley, defendants in the court below, to be sued in Lubbock County, Texas, where they were domiciled. Plaintiff controverted the pleas of privilege and asserted that venue was properly maintainable in Lavaca County, Texas, under the provisions of Tex.Bus. & Comm.Code Ann., § 17.41 et seq. (Supp. 1980), the "Deceptive Trade Practices-Consumer Protection Act," hereinafter referred to as the "DTPA," and under Tex.Rev.Civ. Stat.Ann. Art. 1995, Subdivisions 7, 23, and 29a (1964).
Plaintiff sued to recover damages for fraud under the common law rules of equitable jurisprudence; or, in the alternative, to recover damages for false and deceptive acts within the meaning of the DTPA. In summary, concerning the acts committed by the defendants upon which suit is based, plaintiffs alleged: 1) it had seven (7) contracts with a third party in Taiwan to furnish the latter with certain grades of raw cotton; 2) it entered into a contract with defendants, whereby defendants agreed to furnish the cotton to fulfill plaintiff's contracts with the third party; 3) defendants represented to plaintiffs that they did furnish cotton to the third party of the specified grade; 4) plaintiff, following such representations, paid defendants for the cotton; and 5) the representations, some of which were made in Lavaca County, where "portions" of the negotiations leading up to the making of the contract between plaintiff and defendants were conducted, were false and misleading. Relating to plaintiff's contention that defendant, by virtue of making false representations, committed a deceptive trade practice, it was specifically alleged:
VI.
"In the alternative, and without waiving the foregoing, Plaintiff would show that Cotton Salvage and Ripley have violated the provisions of Sections 14.41, et seq., of the Business & Commerce Code of the State of Texas known as the Deceptive Trade Practices-Consumer Protection Act. Plaintiff alleges that these Defendants, and each of them, have committed deceptive trade practices described in Section 17.46, and specifically, but without limitation, Section 5 and 7 of such Act.
VII.
In the alternative, and without waiving the foregoing, this Plaintiff is entitled to recover against Defendants, and each of them, under the provisions of Section 17.50 of such Deceptive Trade Practices Act."
Plaintiff further alleged that it had been damaged by having "to make settlements for the poor quality of cotton furnished and which was different from the cotton that was agreed to be delivered," and that the defendants "have done business in Lavaca County." It sought a recovery of $171,498.40 as damages and asked that such damages be trebled because of defendants' deceptive trade practices.
We first consider plaintiff's third and sixth points of error, wherein it complains that the trial court erred in not sustaining venue in Lavaca County under the provisions of Section 17.56 of the DTPA.
Plaintiff's original petition was filed on August 15, 1979. Therefore, the 1977 amendments of the DTPA control this case. Section 17.56 of the 1977 amendments of the DTPA provided:
"An action brought which alleges a claim to relief under Section 17.50 of this subchapter may be commenced in the county in which the person against whom the suit is brought resides, has his principal place of business, or has done business."
Other applicable provisions of the 1977 amendments of the DTPA read:
"Section 17.45 Definitions as used in this subchapter:
*593 (1) `Goods' means tangible chattels or real property purchased or leased for use.
(2) `Services' means work, labor, or service purchased or leased for use, including services furnished in connection with the sale or repair of goods.
* * * * * *
(4) `Consumer' means an individual, partnership, corporation, or governmental entity who seeks or acquires by purchase or lease, any goods or services."
* * * * * *
"Section 17.50 Relief for consumers
(a) A consumer may maintain an action if he has been adversely affected by any of the following:
(1) The use or employment by any person of an act or practice declared to be unlawful by Section 17.46 of this subchapter;
(2) breach of an express or implied warranty;
(3) any unconscionable action or course of action by any person."
* * * * * *
To establish venue in Lavaca County under Section 17.56 of the DTPA as the same existed under the 1977 amendments, plaintiff had to initially allege facts sufficient to show that it was a "consumer" of "goods" or "services" within the definitions set out in Section 17.45, and that it had a claim to relief under the Act. United Plastics Co. v. Dyes, 588 S.W.2d 857 (Tex.Civ.App.-Tyler 1979, no writ); Compu-Center, Inc. v. Compubill, Inc., 580 S.W.2d 88 (Tex.Civ.App.-Houston [1st Dist.] 1979, no writ). See also, Delaney Realty, Inc. v. Ozuna, 593 S.W.2d 797 (Tex.Civ.App.-El Paso 1980, writ ref'd n. r. e.). Plaintiff's allegations show that it was either a purchaser of cotton, as "goods," from defendants "for use" by it; a purchaser of the "services" of the defendants in supplying the cotton required in plaintiff's contracts with the third party in Taiwan; or a purchaser of both "goods" and "services" from defendants.
Our first determination will be whether plaintiff purchased the cotton as goods "for use" within the meaning of Section 17.45(1) of the DTPA. In doing so, we are guided by several rules of statutory construction. First, since the Legislature did not specifically define "use," the ordinary meaning of the word will apply. Satterfield v. Satterfield, 448 S.W.2d 456, 459 (Tex.1969); Code of Construction Act, Tex. Rev.Civ.Stat.Ann. Art. 5429b-2, § 2.01 (Supp.1980). Second, we must consider the principles applicable in construing the DTPA. As set out in Pennington v. Singleton, 606 S.W.2d 682 (Tex.1980), those principles are:
"... The primary emphasis is on the intention of the legislature, keeping in view `the old law, the evil and the remedy.' Legislative intent should be determined from the language of the entire Act and not isolated portions. The court is not necessarily confined to the literal meaning of the words used, and the legislative intent rather than the strict letter of the Act will control. The Act itself provides in § 17.44 that it `shall be liberally construed and applied to promote its underlying purposes, which are to protect consumers against false, misleading, and deceptive business practices, unconscionable actions, and breaches of warranty and to provide efficient and economical procedures to secure such protection.'"
The words "for use" were defined in Beggs v. Texas Dep't. of Mental Health & Mental Ret., 496 S.W.2d 252, 254 (Tex.Civ. App.-San Antonio 1973, writ ref'd) as follows: "to put or bring into action or service; to employ for or apply to a given purpose." In James Stewart & Co. v. Mobley, 282 S.W.2d 290, 294 (Tex.Civ.App.-Dallas 1955, writ ref'd), the court said: "Use" is to employ for accomplishment of a purpose; to apply to one's service; to avail oneself of." Webster's Seventh New Collegiate Dictionary (1963) says that "use" of a thing is "a method or manner of employing or applying something; the legal enjoyment of property that consists in its employment, occupation, exercise, or practice."
*594 None of the above definitions would exclude from "use" one who purchases goods for resale. The purchaser merely converts the goods to his own purpose and enjoys a benefit, primarily financial, from their purchase. The goods, when they are bought for resale, are employed for a definite purpose, that is a resale for profit. We find no clear distinction among these definitions that would prevent plaintiff from qualifying as one who purchases cotton "for use."
Since its enactment in 1973, the DTPA has been amended in every subsequent legislative session. Many of these amendments have been enacted to broaden the scope of the DTPA, and to make its remedies available to consumers who were not able to sue under the original statute. This broadening of the scope of the DTPA is particularly apparent in the definition provision, Section 17.45. Partnerships, corporations and governmental entities have been added to the initial definition of "consumer" in subsection (4). In contrast, the original version of the DTPA only allowed "individuals" to sue under the statute. The definition of "merchant" as a "party to a consumer transaction other than a consumer" was deleted by the 1977 amendments. Also, real property and lease transactions were included in the "goods" definition by the 1975 amendments. And, in 1977, the definition of "services" was changed by deleting "for other than commercial or business use" to bring it in harmony with the "goods" definition of subsection (1).
After considering Section 17.45 as a whole, the amendments that the Legislature has enacted and the legislative history of the DTPA,[1] we feel that the clear intention of the legislature has been to expand the DTPA into a commercial setting. Some of our fellow courts, however, have been understandably reluctant to extend the scope of the DTPA to retailers or to persons who purchase the goods for the sole purpose of resale.
In Person v. Latham, 582 S.W.2d 246 (Tex.Civ.App.-Beaumont 1979, writ ref'd n. r. e.), a case which was filed prior to the effective date of the 1977 amendments to the DTPA, a purchaser of real estate who intended a resale to a "Mrs. Gigglia," was held not to be a "consumer" under the DTPA when he sued the real estate seller to recover damages for misrepresentations. The seller had evidently represented to the purchaser that "Mrs. Gigglia" would pay a large amount of money for a piece of lakefront property which the buyer could purchase at a lesser amount. Hoping to turn a quick profit, Person, the plaintiff, bought the lakefront property only to find out there was no such person as "Mrs. Gigglia." When plaintiff attempted to recover treble damages against the seller of the land involved, the Court stated that it was unwilling to liberally construe the DTPA to allow one who bought land for the sole purpose of defrauding a third party to recover as a "consumer." The Court said that the purchaser (Person) "did not purchase such lots for use, but to become a link in a chain designed to fleece the mythical Mrs. Gigglia of her funds," and that it "declined to permit one conspirator to recover treble damages against his coconspirator in a scheme to defraud a third person." For those reasons, the purchaser was denied a recovery of treble damages under the DTPA. There is no suggestion of any conspiracy to defraud a third party in the case at bar.
In Ratcliff v. Trenholm, 596 S.W.2d 645 (Tex.Civ.App.-Tyler 1980, writ ref'd n. r. e.) and Trial v. McCoy, 553 S.W.2d 199 (Tex. Civ.App.-El Paso 1977, no writ), the Courts *595 specifically held that one who purchased for resale was not a "consumer" within the DTPA. Both cases, however, were decided under the 1975 amendments, when the DTPA still defined a "merchant" as "a party to a consumer transaction other than a consumer." The deletion of this definition in the 1977 amendments, showing a legislative intent to include merchants as consumers under the DTPA, would distinguish these two cases from the one at bar.
Neither Person v. Latham, Ratcliff v. Trenholm, nor Trial v. McCoy, supra, involved venue. None of these cases are in point.
Two recent cases have drawn a distinction between use of "goods" and use of "services." In Baldwin v. Calcasieu Lumber Co., 588 S.W.2d 659 (Tex.Civ.App.-Austin 1979, no writ), a builder purchased certain fabricated trusses from a lumber company for use in homes which he intended to resell. The truss system was found by the trial court to be both a "good" and a "service", which was purchased by the builder. The Court of Civil Appeals, in the Baldwin case, found this distinction important, since the builder qualified as a consumer of the "goods" but not as a consumer of the "services." This odd result noted by the Court, was the result of the qualification in the "services" definition that they must be for "other than commercial or business use." Since no such qualification was made in the "goods" definition, a very real but illogical difference existed. The Court then held that since the builder had failed to distinguish between "goods" and "services," he had failed in his burden of proof, and could not be allowed to recover under the DTPA. This reasoning was followed under substantially the same facts in Greene v. Bearden Enterprises, Inc., 598 S.W.2d 649 (Tex.Civ. App.-Fort Worth 1980, no writ). Both the Baldwin and the Greene cases were decided under the 1975 amendments of the DTPA.
Since the 1977 amendments of the DTPA deleted the phrase "for other than commercial or business use," there is no longer an "illogical difference" between "goods" and "services," as was the case in Baldwin, where the 1975 amendments applied.
In Woods v. Littleton, 554 S.W.2d 662 (Tex.1977), the issue addressed was whether plaintiffs were "consumers" of "services" within the meaning proscribed by the DTPA. Plaintiffs had purchased a home by a contract which included a promise to repair any defects that arose within the first year. The Court held that plaintiffs had not only purchased the home "but also, and in addition, the services of the builders as that term `services' is used in the statute." The Court therein wrote:
"Webster's Third New International Dictionary gives a general definition of `service' as `action or use that furthers some end or purpose; conduct or performance that assists or benefits someone or something; deeds useful or instrumental toward some object.'" (Quoting Van Zandt v. Fort Worth Press, 359 S.W.2d 893, 895 (Tex.1962)."
Id. at 667.
We see nothing in the above definition that would prohibit plaintiff in the case at bar from being a "consumer" of "services." Plaintiff requested that Cotton Salvage & Sales go out and procure enough cotton to fulfill pre-existing contracts with a third person in Taiwan. This use was to further the end of complying with the contracts already entered into by plaintiff.
A broad and liberal construction of plaintiff's petition will justify a holding that the allegations contained therein are sufficient to allege that plaintiff is a "consumer" within the definition of Section 17.45. The pleadings allege that plaintiff either purchased the cotton from defendants "for use," within the meaning of subsection (1) of Section 17.45, or plaintiff purchased the "services" of defendant in fulfilling its contract with the third party in Taiwan, within the meaning of subsection (2) thereof.
We now determine whether plaintiff has alleged a "claim for relief" under Section 17.50 of the DTPA. It was alleged that Ripley and Cotton Salvage & Sales represented to plaintiff that the cotton *596 shipped to plaintiff's customer in Taiwan was a good grade of certain specified cotton types. It was further alleged that these statements were false and that plaintiff was adversely affected thereby. Violations of the DTPA were specifically pleaded and damages were sought for such violations. We hold that plaintiff did allege a claim for relief under Section 17.50 of the DTPA. Dairyland County Mut. Ins. Co. of Texas v. Harrison, 578 S.W.2d 186 (Tex.Civ.App.-Houston [14th Dist.] 1979, no writ); Compu-Center, Inc. v. Compubill, Inc., supra.
Section 17.56 of the DTPA also requires plaintiff to prove that defendants had done business in Lavaca County to sustain venue. Frost v. Molina, 595 S.W.2d 184 (Tex.Civ.App.-Corpus Christi 1980, writ ref'd w. o. j.); Compu-Center, Inc. v. Compubill, Inc., supra. To have done business, the contact need only be the one transaction that is the basis of the lawsuit. Legal Security Life Ins. Co. v. Trevino, 23 Tx.Sup. Ct.J. 577 (Per Curiam, June 30, 1980).
In the venue hearing, testimony was introduced, without objection, that Ripley went to Hallettsville, Lavaca County, Texas, as a representative for Cotton Salvage & Sales, and met with Otto Goedecke, a representative for plaintiff, concerning the cotton shipments; certain terms of the contract were discussed at that meeting. Also, two invoices made by Cotton Salvage & Sales to plaintiff, which showed that some of the cotton in question was sold to plaintiff and that the destination of the cotton was to plaintiff in Lavaca County, were introduced into evidence. There is ample evidence which establishes the fact that defendants have done business in Lavaca County.
Since we find that plaintiff has alleged a claim for relief under Section 17.56 of the DTPA and has proved that defendants have done business in Lavaca County, we find venue is properly sustainable in Lavaca County. Plaintiff's third and sixth points of error are sustained.
In view of our disposition of plaintiff's third and sixth points of error, it becomes unnecessary for us to consider its remaining points.
The judgment of the trial court is REVERSED, and judgment is here RENDERED that defendants' pleas of privilege be and the same are overruled.
REVERSED AND RENDERED.
NOTES
[1] "In 1975, a proposed amendment to Section 17.45(1) of the DTPA was submitted to the Human Resources Committee in the following form: `Goods' means tangible chattels and real property purchased or leased for final use." (emphasis supplied). The word `final' was deleted from the definition following testimony by a representative of the Texas Automobile Dealers Association. The representative testified that the inclusion of the word `final' would prevent automobile dealers from suing companies or individuals who sell products to dealers which products are, in turn, intended to be sold to dealers' customers. After this testimony, the word `final' was deleted, and the bill was reported favorably to the Senate where it was enacted as the 1975 amendment to Section 17.45(1) of the DTPA. Discussion on S.B. 48, Before Human Resources Comm., 64th Leg., 19-20 (Feb. 3, 1975). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623203/ | 564 N.W.2d 532 (1997)
222 Mich. App. 513
Carolyn PHINNEY, Plaintiff/Appellee/Cross-Appellant,
v.
Lois Verbrugge and Richard Adelman, Defendants/Cross-Appellees, and
Marion PERLMUTTER, Defendant/Appellant/Cross-Appellee.
Carolyn PHINNEY, Plaintiff/Appellee/Cross-Appellant,
v.
Richard ADELMAN, Defendant/Appellant/Cross-Appellee, and
Lois Verbrugge and Marion Perlmutter, Defendants.
Carolyn PHINNEY, Plaintiff/Appellant/Cross-Appellee,
v.
UNIVERSITY OF MICHIGAN BOARD OF REGENTS, Defendant/Appellee/Cross-Appellant.
Docket Nos. 175485, 175857 and 176940.
Court of Appeals of Michigan.
Submitted June 18, 1996, at Detroit.
Decided April 4, 1997, at 9:00 a.m.
Released for Publication June 16, 1997.
*540 Green & Green by Philip Green (Sommers, Schwartz, Silver & Schwartz, P.C. by Patrick Burkett, Southfield, of counsel), Ann Arbor, for Carolyn Phinney.
Bodman, Longley & Dahling, L.L.P. by Jerold Lax, Ann Arbor, for Marion Perlmutter.
Butzel Long by Diane M. Soubly and James S. Rosenfeld, Birmingham, for Lois Verbrugge, Richard Adelman, and University of Michigan Board of Regents.
Before WAHLS, P.J., and MURPHY and C.D. CORWIN[*], JJ.
*539 WAHLS, Presiding Judge.
Defendant Marion Perlmutter hired plaintiff, Carolyn Phinney, as a senior research associate at the Institute of Gerontology (IOG) at the University of Michigan. At the time, Perlmutter was a research scientist at *541 the IOG, and defendant Richard Adelman was the Director of the Institute. Plaintiff accused Perlmutter of stealing her research. Adelman appointed defendant Lois Verbrugge to conduct an investigation. The investigators found that Perlmutter was not guilty of scientific misconduct. Perlmutter was also found not guilty in two other investigations concerning allegations that she committed plagiarism. In the meantime, plaintiff lost her job at the IOG.
Plaintiff sued, alleging that Perlmutter had defrauded her of her research, and that Adelman and defendant University of Michigan Board of Regents retaliated against her for reporting Perlmutter's misconduct. The jury agreed with plaintiff and awarded her $133,000 in damages against Perlmutter for fraud and $989,200 against Adelman for retaliatory discrimination. The trial court, sitting as the Court of Claims, found no cause of action against the board of regents with regard to plaintiff's claim under the Whistleblowers' Protection Act (WPA), M.C.L. § 15.361 et seq.; M.S.A. § 17.428(1) et seq.
In Docket No. 175485, which involved the fraud claim, Perlmutter appeals and plaintiff cross appeals the judgment against Perlmutter. We affirm in part and remand for a recalculation of the amount of prejudgment interest to which plaintiff is entitled.
In Docket No. 175857, the retaliation claim against Adelman, Adelman appeals and plaintiff cross appeals the judgment against Adelman. We affirm in part and remand for a recalculation of the amount of prejudgment interest to which plaintiff is entitled.
In Docket No. 176940, the claim against the board of regents, plaintiff appeals and the board of regents cross appeals the trial court's order finding no cause of action against the board of regents. We affirm.
Docket No. 175485
I
Perlmutter argues that the trial court lacked subject-matter jurisdiction because plaintiff's claim involves rights arising under federal copyright law. We disagree.
Whether a court has subject-matter jurisdiction is a question of law. Universal Am-Can Ltd. v. Attorney General, 197 Mich.App. 34, 37, 494 N.W.2d 787 (1992). The burden is on the plaintiff to establish jurisdiction. Id. Although the jurisdictional issue here was never resolved by the trial court, a challenge to subject-matter jurisdiction may be raised at any time, even for the first time on appeal. Lehman v. Lehman, 312 Mich. 102, 105, 19 N.W.2d 502 (1945); Ass'n of Businesses Advocating Tariff Equity v. Public Service Comm., 192 Mich.App. 19, 24, 480 N.W.2d 585 (1991).
In general, a federal court does not have original jurisdiction over a case in which the complaint presents a state-law cause of action. Franchise Tax Bd. v. Construction Laborers Vacation Trust, 463 U.S. 1, 10, 103 S. Ct. 2841, 2846-47, 77 L. Ed. 2d 420 (1983). Here, plaintiff's complaint alleges a state-law claim of fraud. See Hi-Way Motor Co. v. Int'l Harvester Co., 398 Mich. 330, 336, 247 N.W.2d 813 (1976); Baker v. Arbor Drugs, Inc., 215 Mich.App. 198, 208, 544 N.W.2d 727 (1996). Accordingly, a federal court does not have subject-matter jurisdiction over this claim. Franchise Tax Bd, supra.
In addition, plaintiff's claim was not preempted by the Copyright Act. Before an action for infringement may be made under the federal Copyright Act, a publication must be registered. 17 USC 411(a); Marshall & Swift v. BS & A Software, 871 F. Supp. 952, 957 (W.D.Mich., 1994). This is a jurisdictional requirement. Id, at p. 958; Carter v. Helmsley-Spear, Inc., 861 F. Supp. 303, 331 (S.D.N.Y., 1994), modified on other grounds 71 F.3d 77 (C.A.2, 1995). Here, plaintiff never claimed that any of the works written by her, whether alone or as a joint author, were duly registered with the Register of Copyrights. In addition, defendants have provided no evidence of such registration. Thus, assuming arguendo that plaintiff's complaint can be construed to allege a violation under the Copyright Act, a federal court would not have had jurisdiction to hear such a claim. Marshall & Swift, supra, at p. 958; Carter, supra, at p. 331. Accordingly, the trial court had jurisdiction to hear plaintiff's claim.
*542 II
Perlmutter argues that the trial court abused its discretion by permitting plaintiff to file a fourth amended complaint. We disagree. Amendment is generally a matter of right rather than grace. Patillo v. Equitable Life Assurance Society of the United States, 199 Mich.App. 450, 456, 502 N.W.2d 696 (1992). A trial court should freely grant leave to amend if justice so requires. MCR 2.118(A)(2). Leave to amend should be denied only for particularized reasons, such as undue delay, bad faith, or dilatory motive on the movant's part, repeated failure to cure deficiencies by amendments previously allowed, undue prejudice to the opposing party, or where amendment would be futile. Horn v. Dep't of Corrections, 216 Mich.App. 58, 65, 548 N.W.2d 660 (1996). This Court reviews a grant or denial of a motion for leave to amend pleadings for abuse of discretion. Id. Here, Perlmutter has identified no prejudice that occurred because of the trial court's decision other than the generalized assertion that justice was not done. The trial court did not abuse its discretion in granting plaintiff leave to amend her complaint. Patillo, supra, at p. 456, 502 N.W.2d 696.
III
Perlmutter argues that plaintiff's claim was barred by the statute of frauds. We disagree. Assuming arguendo that plaintiff's claim is inextricably bound to her contract claim, an agreement for an indefinite term of employment is generally regarded as not being within the proscription of the statute of frauds. Toussaint v. Blue Cross & Blue Shield of Michigan, 408 Mich. 579, 612, n. 24, 292 N.W.2d 880 (1980). Employers are not protected against jury resolution of a claim of an oral agreement for an indefinite term. Id. Because plaintiff testified that Perlmutter offered her a position that could turn into a "long term research career" if they were successful in bringing in grant money, the trial court did not err in denying defendant's motion for summary disposition. Id.
IV
Perlmutter argues that the trial court erred in denying her motion for a directed verdict based on governmental immunity. We disagree. Viewing the evidence in the light most favorable to plaintiff, Hatfield v. St. Mary's Medical Center, 211 Mich.App. 321, 325, 535 N.W.2d 272 (1995), Perlmutter made job promises to plaintiff with knowledge of their falsity and with the intent that plaintiff would act on those promises. Because a question of fact existed regarding whether Perlmutter's actions were so reckless as to demonstrate a substantial lack of concern for whether an injury resulted, the trial court did not err in denying Perlmutter's motion for a directed verdict based on governmental immunity. M.C.L. § 691.1407(2); M.S.A. § 3.996(107)(2); Johnson v. Wayne Co., 213 Mich.App. 143, 159, 540 N.W.2d 66 (1995).
V
Perlmutter argues that the verdict against her was against the great weight of the evidence. We disagree. Perlmutter preserved this issue by moving for a directed verdict, a judgment notwithstanding the verdict (JNOV), and a new trial on this basis.
The standard of review for JNOV requires review of the evidence and all legitimate inferences in the light most favorable to the nonmoving party. Orzel v. Scott Drug Co., 449 Mich. 550, 557, 537 N.W.2d 208 (1995); Severn v. Sperry Corp., 212 Mich.App. 406, 412, 538 N.W.2d 50 (1995). Only if the evidence, so viewed, fails to establish a claim as a matter of law, should a motion for JNOV be granted. Orzel, supra, at p. 558, 537 N.W.2d 208. Similarly, in deciding a motion for a directed verdict, the trial court must consider the evidence in the light most favorable to the nonmoving party, making all reasonable inferences in favor of the nonmoving party. Mahrle v. Danke, 216 Mich.App. 343, 350, 549 N.W.2d 56 (1996). This Court reviews all the evidence presented up to the time of the motion to determine whether a question of fact existed. Hatfield, supra, at p. 325, 535 N.W.2d 272. This Court will not disturb the trial court's decision absent a clear abuse of discretion. Id. Finally, with *543 respect to a motion for a new trial, the trial court's function is to determine whether the overwhelming weight of the evidence favors the losing party. Severn, supra, at p. 412, 538 N.W.2d 50. This Court's function is to determine whether the trial court abused its discretion in making such a finding. Id. This Court gives substantial deference to the trial court's conclusion that a verdict was not against the great weight of the evidence. Id.
In order to prove fraud or misrepresentation, plaintiff had to show: (1) that Perlmutter made a material misrepresentation, (2) that it was false, (3) that Perlmutter knew it was false or made the promise recklessly without knowledge of its truth or falsity, (4) that Perlmutter made the promise with the intent that plaintiff would act on it, (5) that plaintiff acted in reliance, and (6) that plaintiff suffered damage. Arim v. General Motors Corp., 206 Mich.App. 178, 195, 520 N.W.2d 695 (1994). A fraudulent misrepresentation may be based on a promise made in bad faith without intention of performance. Hi-Way Motor Co., supra, at pp. 337-338, 247 N.W.2d 813.
Plaintiff testified that her initial work for Perlmutter focused on preparing a grant application with the Spencer Foundation. Perlmutter repeatedly told plaintiff that plaintiff would have a full-time position if the Spencer Foundation application was granted and that Perlmutter believed that the grant would be funded. Marion Faldet, the vice president and corporate secretary of the Spencer Foundation, testified that the foundation declined the application on July 20, 1988. Plaintiff and her assistant, Lisa Chiodo, testified that Perlmutter continued to promise employment through August and September, even though she must have known that the grant was rejected. During this time, plaintiff wrote out all the research she had done on the topic of "wisdom," including the theoretical rationale and methodology for all the instruments she developed to test subjects on the topic. It was not until November 1988 that Perlmutter told plaintiff that the Spencer Foundation grant application had been rejected. According to Chiodo, in addition to the promise that plaintiff would be employed, Perlmutter promised that plaintiff would have first authorship on any scientific paper if Perlmutter used her research in grant writing.
In addition, testimony at trial showed that plaintiff and Chiodo believed that a grant of $150,000 to $200,000 would be requested for a three-year period. In reality, the application requested more than $2 million over a six-year period. Although Perlmutter argues that it would have been "incredible" for her to deliberately sabotage the grant process by requesting an unfundable amount, the relevant issue at trial was not the reasonableness of the grant proposal, but whether Perlmutter informed plaintiff that she had substantially increased the amount of the grant request.
Regarding damages,[1] in Clemens v. Lesnek, 200 Mich.App. 456, 463-464, 505 N.W.2d 283 (1993), the Court held that there was insufficient evidence of mental anguish damages to put the issue before the jury. Id. In that case, one of the plaintiffs testified that "it[']s been pretty humiliating knowing that there's a stench coming out of the back yard and it's yours." Id., at p. 463, 505 N.W.2d 283. The plaintiffs in that case argued that their demeanor on the witness stand was sufficient to put the issue of mental anguish before the jury. Id. In contrast to Clemens, plaintiff here provided abundant direct evidence of her mental injuries. Dr. Kenneth Silk, plaintiff's treating psychiatrist, linked plaintiff's emotional distress to the events underlying the fraud. Other testimony showed that plaintiff's career would be damaged. Accordingly, Clemens is distinguishable.
Viewing the evidence in plaintiff's favor, reasonable jurors could find that Perlmutter knowingly made several false representations. Similarly, reasonable jurors could find that Perlmutter made these representations with the intent that plaintiff would rely on them and continue to give Perlmutter access *544 to her research, and that plaintiff did indeed rely on the representations in that manner. Reasonable jurors could find that such ongoing access to plaintiff's research, regardless of whether identical grant applications had been sent simultaneously, made the representations material. Finally, reasonable jurors could find that plaintiff suffered damages as a result of relying on Perlmutter's misrepresentations. Accordingly, the trial court did not abuse its discretion in denying Perlmutter's motions for a directed verdict and JNOV. Similarly, the trial court did not abuse its discretion in determining that the jury's verdict was not against the great weight of the evidence.
VI
Perlmutter argues that the trial court abused its discretion by admitting inflammatory and misleading evidence. We disagree. The decision whether to admit evidence is within the sound discretion of the trial court and will not be disturbed on appeal absent an abuse of discretion. Price v. Long Realty, Inc., 199 Mich.App. 461, 466, 502 N.W.2d 337 (1993).
First, Perlmutter argues that the trial court should not have admitted plaintiff's testimony that Dr. W. Andrew Achenbaum told her that plaintiff was the fourth person to complain to him about Perlmutter. To the extent that Perlmutter is arguing that the trial court should have instructed the jury to consider the evidence against the university only, and not against Perlmutter, she waived that argument by failing to request such an instruction. In re Forfeiture of $19,250, 209 Mich.App. 20, 32, 530 N.W.2d 759 (1995). This evidence was relevant and admissible against the university because it tended to show pretext.
We do not believe that the trial court abused its discretion in admitting plaintiff's Exhibits 9, 10, and 11 as complete documents. Because plaintiff's Exhibits 119, 120, 121, and 122 tended to show that Perlmutter was not as heavily recruited as her testimony made it appear, the trial court did not abuse its discretion in determining that they were relevant to Perlmutter's credibility. MRE 401; People v. Bahoda, 448 Mich. 261, 289, 531 N.W.2d 659 (1995). In addition, the trial court did not abuse its discretion in determining that the probative value of this evidence was not substantially outweighed by the danger of unfair prejudice, confusion of the issues, or misleading the jury, or by considerations of undue delay, waste of time, or needless presentation of cumulative evidence. MRE 403; Bahoda, supra, at p. 289, 531 N.W.2d 659.
Regarding Perlmutter's proposed Exhibit 10, she failed to make an offer of proof to provide this Court with the information it needs to evaluate the claim of error. MRE 103(a)(2); People v. Stacy, 193 Mich.App. 19, 31, 484 N.W.2d 675 (1992). Because the jury found no cause of action with regard to Perlmutter's cross-claim, the issue whether the trial court improperly excluded the questioning of her with respect to her legal expenses is moot. People v. Rutherford, 208 Mich.App. 198, 204, 526 N.W.2d 620 (1994); Crawford Co. v. Secretary of State, 160 Mich.App. 88, 93, 408 N.W.2d 112 (1987). Finally, the trial court did not abuse its discretion when it stopped questioning of Chiodo by plaintiff's counsel and indicated that the questioning went beyond the scope of rebuttal. MRE 611(b); Wischmeyer v. Schanz, 449 Mich. 469, 474-475, 536 N.W.2d 760 (1995).
The trial court did not abuse its discretion with respect to any of the evidentiary issues raised by Perlmutter.
VII
Perlmutter argues that the trial court made several errors in instructing the jury. We agree in part.
A
First, Perlmutter argues that the trial court erred in refusing to give an instruction that damages for emotional distress are not recoverable in a fraud action. We disagree. Perlmutter requested an instruction that "[d]amages for emotional distress, humiliation, injury to reputation or exemplary damages are not available in a fraud claim." In refusing to give the jury this instruction, the trial court noted the general rule that absent tortious conduct independent of a breach, *545 damages for mental distress are not available in a claim for breach of contract. However, the court also noted that when the contract has elements of personality, and when the damage suffered is not compensable by reference to the contract, damages for mental distress may be appropriate. Finally, the court stated that because the promises in this case involved matters of personality, damages for mental distress were awardable.
When a party requests an instruction that is not covered by the standard jury instructions, the trial court may, in its discretion, give additional, concise, understandable, conversational, and nonargumentative instructions, provided they are applicable and accurately state the law. Chmielewski v. Xermac, Inc., 216 Mich.App. 707, 713-714, 550 N.W.2d 797 (1996). If the requested instruction does not accurately state the law, it is properly refused. Id., at p. 714, 550 N.W.2d 797.
In Michigan, mental distress damages are not recoverable for the breach of a commercial contract unless it can reasonably be said that such damages were contemplated by the parties at the time that the contract was made. Kewin v. Massachusetts Mutual Life Ins. Co., 409 Mich. 401, 419, 295 N.W.2d 50 (1980). However, damages for mental and emotional distress may be awarded where there is allegation and proof of tortious conduct independent of the breach of contract. Phillips v. Butterball Farms Co., Inc. (After Second Remand), 448 Mich. 239, 251, 531 N.W.2d 144 (1995); Kewin, supra, at pp. 420-421, 295 N.W.2d 50.
We are not bound in this case by contractual principles only. First, plaintiff alleged tortious conduct. In Kewin, supra, at p. 423, 295 N.W.2d 50, the plaintiff "alleged and proved no more than the failure of the defendant to discharge its obligations under the disability insurance contract." Similarly, in Valentine v. General American Credit, Inc., 420 Mich. 256, 263, 362 N.W.2d 628 (1984), the plaintiff "failed to plead the requisite purposeful tortious conduct." Here, in contrast, plaintiff alleged fraud as a distinct cause of action.
Second, Kewin requires not only allegation but also proof of tortious conduct. Phillips, supra, at p. 251, 531 N.W.2d 144; Valentine, supra, at p. 263, 362 N.W.2d 628; Kewin, supra, at pp. 420-421, 295 N.W.2d 50. Thus, in Roberts v. Auto-Owners Ins. Co., 422 Mich. 594, 611, 374 N.W.2d 905 (1985), the Court held that the plaintiff was not entitled to mental distress damages where she failed to establish a prima facie claim for intentional infliction of emotional distress. Similarly, in Clemens, supra, at pp. 463-464, 505 N.W.2d 283, this Court held that there was insufficient evidence of mental anguish damages to put the issue before the jury. Id. Here, in contrast to Roberts and Clemens, plaintiff presented sufficient evidence from which a reasonable jury could find the elements of fraud. See issue V.
Finally, the tortious conduct must be independent of the contractual breach. Phillips, supra, at p. 251, 531 N.W.2d 144; Kewin, supra, at pp. 420-421, 295 N.W.2d 50. Here, plaintiff alleged that her authorship and coauthorship of scientific papers, grant applications, and studies were not within the scope of her employment. At trial, plaintiff testified that, in reliance on Perlmutter's misrepresentations, she worked without pay and shared the resulting creative work and research with Perlmutter.
Because plaintiff alleged and proved tortious conduct independent of any contractual claim, the trial court erred in limiting the available damages to those based on contract principles. Phillips, supra, at pp. 251-252, 531 N.W.2d 144. Despite the trial court's error, reversal is not required. This Court will not reverse where the right result is reached for the wrong reason. Welch v. District Court, 215 Mich.App. 253, 256, 545 N.W.2d 15 (1996).
Generally in tort cases actual damages include compensation for mental distress and anguish. Phillips, supra, at p. 251, n. 32, 531 N.W.2d 144; Veselenak v. Smith, 414 Mich. 567, 574, 327 N.W.2d 261 (1982). In addition, exemplary damages are available to the extent that a remedy for mental injury is not otherwise recognized. Id, at pp. 573-574, 327 N.W.2d 261. In a fraud and misrepresentation action, the tortfeasor *546 is liable for injuries resulting from his wrongful act, whether foreseeable or not, provided that the damages are the legal and natural consequences of the wrongful act and might reasonably have been anticipated. Price, supra, at p. 472, 502 N.W.2d 337; Fagerberg v. LeBlanc, 164 Mich.App. 349, 356-357, 416 N.W.2d 438 (1987).
In determining whether mental distress damages were awardable, the trial court stated:
The relationship between Phinney and Perlmutter was not strictly one of business. At the heart of this action was the use of mental impressions, creative works and academic research.
We agree with this assessment and hold that in the context of such a relationship,[2] emotional distress reasonably might have been anticipated as a legal and natural consequence of Perlmutter's actions.
Perlmutter relies on Pantelas v. Montgomery Ward & Co., Inc., 169 Mich.App. 273, 276, 425 N.W.2d 782 (1988), where this Court held that the plaintiff's frustration in not being able to purchase an advertised product was not a cognizable form of loss. However, that case involved a claim under the Michigan pricing and advertising act (PAA), M.C.L. § 445.351 et seq.; M.S.A. § 19.853(11) et seq., and not an allegation of common-law fraud. 169 Mich.App at 274, 425 N.W.2d 782. Accordingly, any statement in Pantelas concerning common-law fraud was dicta and did not constitute binding precedent. Roberts, supra, at pp. 597-598, 374 N.W.2d 905; People v. Green, 205 Mich.App. 342, 346, 517 N.W.2d 782 (1994). In addition, although the action in Pantelas implicated principles of fraud, the intent required to prove a violation of the PAA is less demanding than the intent required for common-law fraud. The PAA forbids an advertiser from advertising a sale unless certain requirements are met. M.C.L. § 445.355; M.S.A. § 19.853(15). The intent involved is only the "knowing" placement of an advertisement. Id. In comparison, this case required plaintiff to show that Perlmutter made a material promise to her in bad faith with no intention of performing and with an intent that plaintiff would rely on the promise. Hi-Way Motor Co., supra, at pp. 337-338, 247 N.W.2d 813; Arim, supra, at p. 195, 520 N.W.2d 695. This difference in intent distinguishes this case from Pantelas and supports an award of consequential damages, including emotional distress damages, in a case of common-law fraud. See Shaw v. Cassar, 558 F. Supp. 303, 311 (E.D.Mich., 1983) ("Actual damages in Michigan, particularly when an intentional wrong is involved,... include damages for emotional stress, embarrassment and humiliation"). Finally, to the extent that Pantelas holds that mental damages are never awardable in a fraud case, it conflicts with Clemens, supra, at pp. 463-464, 505 N.W.2d 283. Under Administrative Order No. 1996-4, this panel must follow Clemens.
The trial court erred in limiting damages to those based on contractual principles. Phillips, supra, at pp. 251-252, 531 N.W.2d 144; Kewin, supra, at pp. 420-421, 295 N.W.2d 50. However, because damages for mental distress were awardable in this case under tort principles, the trial court correctly refused the give the instruction requested by Perlmutter. Clemens, supra, at pp. 463-464, 505 N.W.2d 283; Price, supra, at p. 472, 502 N.W.2d 337; Shaw, supra, at p. 311.
B
Perlmutter argues that the trial court abused its discretion by refusing to instruct the jury that plaintiff reasonably must have relied on any representation made by Perlmutter. We disagree. Michigan courts have repeatedly cited the elements for a claim of fraud and misrepresentation as requiring that the "plaintiff acted in reliance upon [a material misrepresentation]." Kassab v. Michigan Basic Property Ins. Assn., 441 Mich. 433, 442, 491 N.W.2d 545 (1992); Hi-Way Motor, Co., supra, at p. 336, 247 *547 N.W.2d 813; Christensen v. Michigan State Youth Soccer Assn., Inc., 218 Mich.App. 37, 44, 553 N.W.2d 638 (1996); Baker, supra, at p. 208, 544 N.W.2d 727; Arim, supra, at p. 195, 520 N.W.2d 695.
Perlmutter relies on Montgomery Ward & Co. v. Williams, 330 Mich. 275, 284, 47 N.W.2d 607 (1951), where the Court stated that "fraud is not perpetrated upon one who has full knowledge to the contrary of a representation." This rule of law was explained in Sautter v. Ney, 365 Mich. 360, 363, 112 N.W.2d 509 (1961), where the Court stated:
To defeat an otherwise righteous cause for fraud, by means of the allegation that the plaintiff had timely knowledge of the fact he says was falsely represented, proof of negligence on his part will not suffice. The representation and its materiality proven, it must be shown that the plaintiff's knowledge was so informatively complete as to render the allegation of reliance quite as false as the representation itself.
In other words, someone who knows that a representation is false cannot rely on that representation. Such knowledge prevents not only reasonable reliance, it prevents any reliance at all. Accordingly, Montgomery Ward and Sautter are consistent with a requirement of actual, and not reasonable, reliance.
Our decision is complicated by the opinion in Nieves v. Bell Industries, Inc., 204 Mich.App. 459, 464, 517 N.W.2d 235 (1994), where a panel of this Court wrote:
Defendant also contends that the trial court erred in refusing to dismiss plaintiff's misrepresentation claim. We agree. A misrepresentation claim requires reasonable reliance on a false representation. See State-William Partnership v. Gale, 169 Mich.App. 170, 425 N.W.2d 756 (1988). There can be no fraud where a person has the means to determine that a representation is not true. Montgomery Ward & Co. v. Williams, 330 Mich. 275, 47 N.W.2d 607 (1951); Webb v. First of Michigan Corp., 195 Mich.App. 470, 474, 491 N.W.2d 851 (1992). Here, plaintiff acknowledged that he read the at-will employment language in the various documents presented to him and that Lerner could not alter the terms of the employment agreement. He chose to believe Lerner rather than the signed contract. However, a plaintiff cannot claim to have been defrauded where he had information available to him that he chose to ignore. Webb, supra, at p. 475, 491 N.W.2d 851.
Numerous cases both before and after Nieves have required only actual, and not reasonable, reliance. See, e.g., James v. City of Burton, 221 Mich.App. 130, 560 N.W.2d 668 (1997); Kassab, supra, at pp. 442-443, 491 N.W.2d 545; Baker, supra, at p. 210, 544 N.W.2d 727; Clement-Rowe v. Michigan Health Care Corp., 212 Mich.App. 503, 507-508, 538 N.W.2d 20 (1995); Brownell v. Garber, 199 Mich.App. 519, 534, 503 N.W.2d 81 (1993); Temborius v. Slatkin, 157 Mich.App. 587, 597, 403 N.W.2d 821 (1986). Accordingly, we need not follow Nieves under Administrative Order No. 1996-4. People v. Young, 212 Mich.App. 630, 639, 538 N.W.2d 456 (1995), remanded on other grounds 453 Mich. 973, 557 N.W.2d 315 (1996).
In any case, as its support for the proposition that a misrepresentation claim requires reasonable reliance, Nieves cites State-William, supra, at p. 179, 425 N.W.2d 756, which stated:
Defendants' fraud claim also fails because Gale could not reasonably rely on the alleged statements that the Bagel Place would rent the premises when the land contract expressly required plaintiff to deliver that space vacant Gale expressly reserved to himself that space, and cannot later claim that he relied on plaintiff to lease it when making his decision to purchase the building. [Emphasis added.]
A close reading of this language in State-William shows that the Court actually made an estoppel-type argument that prevented the counterclaim defendant from being able to show actual reliance. In addition, earlier in State-William, the Court had cited the elements of fraudulent misrepresentation as only requiring reliance. Id, at p. 178, 425 N.W.2d 756. The Court never cited any authority requiring reasonable, as opposed to actual, reliance. We believe that the misstatement in Nieves derives from this misreading of State-William.
*548 The trial court did not err in refusing to give the instruction requested by Perlmutter.
C
Because Perlmutter never objected on the record to the instruction regarding the burden of proof before the jury retired to deliberate, appellate review of this issue is precluded absent manifest injustice. MCR 2.516(C); Phillips v. Deihm, 213 Mich.App. 389, 403, 541 N.W.2d 566 (1995). This Court has held that manifest injustice does not occur where the trial court instructs the jury that fraud must be proved by a preponderance of the evidence. Mina v. General Star Indemnity Co., 218 Mich.App. 678, 685, 555 N.W.2d 1 (1996).
VIII
Perlmutter argues that the judgment erroneously failed to distinguish between past and future damages. However, she stipulated the use of a general verdict form. Error requiring reversal cannot be error to which the aggrieved party contributed by plan or negligence. Harville v. State Plumbing & Heating, Inc., 218 Mich.App. 302, 323-324, 553 N.W.2d 377 (1996); Byrne v. Schneider's Iron & Metal, Inc., 190 Mich.App. 176, 184, 475 N.W.2d 854 (1991). Accordingly, Perlmutter has waived this issue.
IX
Perlmutter argues that the damages awarded by the jury were excessive. We disagree. There was evidence from plaintiff's treating physician about her emotional distress and prognosis. In addition, other testimony showed that plaintiff's career would be damaged. The amount awarded was not greater than the highest amount the evidence can support. MCR 2.611(E)(1); Palenkas v. Beaumont Hosp., 432 Mich. 527, 531-532, 443 N.W.2d 354 (1989).
Although the trial court may consider whether a verdict was induced by bias or prejudice, its inquiry must be limited to objective considerations relating to the actual conduct of the trial or to the evidence adduced. Palenkas, supra, at p. 532, 443 N.W.2d 354; Howard v. Canteen Corp., 192 Mich.App. 427, 436, 481 N.W.2d 718 (1991). Here, Perlmutter's argument concerning the behavior of the jury after the trial does not concern the conduct of the trial or the evidence adduced. Id, at p. 436, 481 N.W.2d 718. Regarding the closing argument by plaintiff's counsel, it is the trial judge who has experienced the drama of the trial and is in the best position to determine whether the jury's verdict was motivated by such impermissible considerations as passion, bias, or anger. Palenkas, supra, at p. 534, 443 N.W.2d 354. After reviewing the record, we do not believe that the trial court abused its discretion in denying defendant's motion for a new trial. Palenkas, supra, at p. 532, 443 N.W.2d 354; Howard, supra, at p. 436, 481 N.W.2d 718.
X
Perlmutter argues that a new trial should have been granted on the basis of newly discovered evidence. We disagree. The excerpt of plaintiff's interview that Perlmutter provided in her appeal is ambiguous. In any case, the fact that plaintiff was able upon discovery of Perlmutter's scheme to prevent further injury did not undo the damage that had already been inflicted. After reviewing the record, we do not believe that the trial court abused its discretion in denying Perlmutter's motion for a new trial. People v. Miller (After Remand), 211 Mich.App. 30, 46-47, 535 N.W.2d 518 (1995); see 3 Martin, Dean & Webster, Michigan Court Rules Practice (3d ed.), p. 472.
XI
Perlmutter argues that the trial court erred in failing to determine whether jury misconduct required a new trial. We disagree. Perlmutter did not make an affirmative showing of prejudice. Nor do the facts that Perlmutter presented clearly establish an inference that juror prejudice occurred. The trial court did not abuse its discretion in denying Perlmutter's motion for a new trial. People v. Strand, 213 Mich.App. 100, 103-104, 539 N.W.2d 739 (1995); Tomei v. Bloom Associates, Inc., 75 Mich.App. 661, 668, 255 N.W.2d 727 (1977).
*549 XII
On cross appeal, plaintiff argues that the trial court should have granted interest from the date of the filing of plaintiff's original complaint. We agree.
Plaintiff first filed a complaint against Perlmutter on October 1, 1990. However, that complaint did not allege fraud and misrepresentation, the theory upon which plaintiff ultimately recovered. Plaintiff did not allege fraud and misrepresentation against Perlmutter until her fourth amended complaint, which was filed on March 11, 1992. The trial court ruled that judgment interest on the amount recovered from Perlmutter should run from the date of the filing of the fourth amended complaint.
This Court reviews de novo the award of prejudgment interest pursuant to M.C.L. § 600.6013(1); M.S.A. § 27A.6013(1). Beach v. State Farm Mutual Automobile Ins. Co., 216 Mich.App. 612, 623-624, 550 N.W.2d 580 (1996). M.C.L. § 600.6013(1); M.S.A. § 27A.6013(1), states, in part:
Interest shall be allowed on a money judgment recovered in a civil action, as provided in this section, except that for complaints filed on or after October 1, 1986, interest shall not be allowed on future damages from the date of filing of the complaint to the entry of judgment. As used in this subsection, "future damages" means that term as defined in [M.C.L. § 600.6301; M.S.A. § 27A.6301].
Imposition of statutory interest under this statute is mandatory. Hadfield v. Oakland Co. Drain Comm'r, 218 Mich.App. 351, 357, 554 N.W.2d 43 (1996); Dep't of Treasury v. Central Wayne Co. Sanitation Authority, 186 Mich.App. 58, 61, 463 N.W.2d 120 (1990). Prejudgment interest must be paid from the date the complaint is filed. M.C.L. § 600.6013(6); M.S.A. § 27A.6013(6); Hadfield, supra, at p. 357, 554 N.W.2d 43.
When courts construe statutes, their primary goal is to ascertain and give effect to legislative intent. Institute in Basic Life Principles, Inc. v. Watersmeet Twp. (After Remand), 217 Mich.App. 7, 12, 551 N.W.2d 199 (1996). Here, the purpose of prejudgment interest is to compensate the prevailing party for expenses incurred in bringing actions for money damages and for any delay in receiving such damages. Hadfield, supra, at p. 356, 554 N.W.2d 43; Paulitch v. Detroit Edison Co., 208 Mich.App. 656, 663, n. 2, 528 N.W.2d 200 (1995). A majority of the Michigan Supreme Court concurred with Justice Riley's opinion that this statutory purpose is not furthered by allowing interest for periods during which no claim existed against the defendant. Rittenhouse v. Erhart, 424 Mich. 166, 218, 380 N.W.2d 440 (1985) (Riley, J.). Similarly, a defendant must pay prejudgment interest only from the "date of delay." Beach, supra, at pp 624-625, 550 N.W.2d 580. A court may disallow prejudgment interest for periods of delay where the delay was not the fault of, or caused by, the debtor. Eley v. Turner, 193 Mich.App. 244, 247, 483 N.W.2d 421 (1992).
Here, the question posed by plaintiff has not been squarely addressed. Neither Rittenhouse, supra, nor Beach, supra, involved a plaintiff who filed an amended complaint that changed the theory of liability under which the plaintiff eventually recovered from the defendant. It would not seem to further the purpose of prejudgment interest to award it in a situation where the plaintiff's amendment changed the theory of liability. However, the prejudgment interest statute is remedial in nature and is to be construed liberally in favor of the plaintiff. Hadfield, supra, at p. 357, 554 N.W.2d 43. The Supreme Court has held that the relation back of amendments for other purposes is not analogous to the purposes of prejudgment interest. Rittenhouse, supra, at p. 218, 380 N.W.2d 440 (Riley, J.). Rather, "the complaint" for purposes of this statute is the "formal complaint filed against the defendant upon whom the prejudgment interest is being taxed." Id, at p. 217, 380 N.W.2d 440 (Riley, J.). Accordingly, prejudgment interest was awardable from the date that a complaint was filed against Perlmutter. Id. Contrary to Perlmutter's argument, plaintiff is entitled to prejudgment interest for future damages when the action does not result from personal bodily injury. Paulitch, supra, at pp. 662-663, 528 N.W.2d 200. We remand and instruct the trial court to recalculate *550 prejudgment interest from the date that plaintiff filed her original complaint.
Docket No. 175857
XIII
Defendant Adelman argues that the Court of Claims had exclusive jurisdiction over the claim against him because he is a state official. We disagree. Ordinarily, state actors may be sued only in the Court of Claims. Anzaldua v. Band, 216 Mich.App. 561, 584, 550 N.W.2d 544 (1996). However, the WPA defines "employer" to include state entities and specifies that the actions thereunder may be filed in the circuit court. Id. Accordingly, by enacting the WPA, the Legislature waived the right of state entities to be sued only in the Court of Claims. Id.; see Driver v. Hanley, 207 Mich.App. 13, 17-18, 523 N.W.2d 815 (1994).
XIV
Defendant Adelman argues that he is entitled to a new trial because plaintiff was not entitled to a jury trial under the WPA. We disagree. After an extensive discussion, this Court held recently that the WPA subjects state entities to jury trials. Anzaldua, supra, at p. 589, 550 N.W.2d 544. In any case, Adelman waived this challenge by consenting to the jury trial.
XV
Defendant Adelman argues that the trial court abused its discretion by permitting plaintiff's fourth amended complaint. We disagree. In granting plaintiff's motion for leave to amend her complaint, the trial court imposed $10,000 in costs upon plaintiff. Defendant Adelman has not shown bad faith on plaintiff's part or that the amendment caused him prejudice. The argument that the amendment was futile because of a ninety-day statute of limitations is treated in issue XVI. The trial court did not abuse its discretion in granting plaintiff's motion for leave to amend her complaint. Patillo, supra, at p. 456, 502 N.W.2d 696.
XVI
Defendant Adelman argues that plaintiff's claim against him was barred by the statute of limitations. We disagree. In reviewing a motion for summary disposition pursuant to MCR 2.116(C)(7), this Court accepts the plaintiff's well-pleaded allegations as true and considers all the documentary evidence that the parties disputed. Bowers v. Bowers, 216 Mich.App. 491, 495-496, 549 N.W.2d 592 (1996).
Plaintiff's original complaint of October 1, 1990, did not name Adelman as a defendant. Plaintiff first named Adelman as a defendant in her first amended complaint on April 1, 1991. On appeal, Adelman asserts for the first time that, for purposes of the statute of limitations, the filing date of plaintiff's claim against him should be April 1, 1991. When Adelman's counsel raised a statute of limitations argument before the trial court, he argued that "[t]he suit involving Dr. Adelman was, likewise, not started until October 1 of 1990." In renewing Adelman's motion, counsel again referred to that date. As a general rule, issues not raised before the trial court are not properly preserved for appellate review. People v. Connor, 209 Mich.App. 419, 422, 531 N.W.2d 734 (1995). In addition, a party may not take a position in the trial court and subsequently seek redress in an appellate court on the basis of a position contrary to that taken in the trial court. Living Alternatives for the Developmentally Disabled, Inc. v. Dep't of Mental Health, 207 Mich.App. 482, 484, 525 N.W.2d 466 (1994). Finally, a statute of limitations defense must be raised in a party's first responsive pleading or by motion filed not later than his responsive pleading. Butler v. DAIIE, 121 Mich.App. 727, 741, 329 N.W.2d 781 (1982). Consideration of this issue at this late stage would place a substantial burden on the parties and the court. Accordingly, Adelman has waived this portion of his statute of limitations argument. For purposes of this issue, we will treat plaintiff's filing date against Adelman as October 1, 1990.
Adelman argues in the alternative that if October 1, 1990, is the appropriate date, then the allegations against Adelman were present effects of earlier decisions that do not extend the WPA limitation period. A civil *551 action under the WPA must be brought within ninety days after the "occurrence of the alleged violation of this act." M.C.L. § 15.363(1); M.S.A. § 17.428(3)(1); Covell v. Spengler, 141 Mich.App. 76, 81, 366 N.W.2d 76 (1985).
It is not disputed that plaintiff was denied housing at the Institute for Gerontology within ninety days of October 1, 1990. Similarly, it is not disputed that plaintiff was denied a position in September 1990. However, other acts alleged by plaintiff clearly predated the filing of plaintiff's complaint by more than ninety days. For example, plaintiff alleges that Adelman suspended her for insubordination from October 13, 1989, to October 17, 1989, and that Adelman repeatedly attempted to coerce plaintiff into relinquishing her first authorship rights in November 1989. Accordingly, we must determine whether the continuing violations doctrine applies to claims under the WPA, an issue that is one of first impression.
In Sumner v. Goodyear Tire & Rubber Co., 427 Mich. 505, 510, 398 N.W.2d 368 (1986), the Court adopted the continuing violations doctrine for claims under the Michigan State Fair Employment Practices Act (FEPA), M.C.L. § 423.301 et seq.; M.S.A. § 17.458(1) et seq., repealed by 1976 PA 453, the Civil Rights Act, M.C.L. § 37.2101 et seq.; M.S.A. § 3.548(101) et seq., and the Handicappers' Civil Rights Act (HCRA), M.C.L. § 37.1101 et seq.; M.S.A. § 3.550(101) et seq. The continuing violations doctrine evolved as federal courts sought ways in appropriate cases to avoid the strict application of the ninety-day limit of title VII of the 1964 Civil Rights Act. 427 Mich. at 525, 398 N.W.2d 368. Federal courts refused to automatically dismiss untimely cases for three reasons: first, title VII was a remedial statute "whose purpose [was] to root out discrimination and make injured parties whole"; second, the injured party was often a lay person who was unaware of the need to act quickly, or was an employee who feared reprisal or awaited union action; and third and most importantly, discriminatory acts occurred in manners that made it difficult to say precisely when they occurred. Id., at pp. 525-526, 398 N.W.2d 368.
The rationale that necessitated development of the doctrine in the federal courts and that led the Michigan Supreme Court to adopt the doctrine to claims under the FEPA, the Civil Rights Act, and the HCRA supports the application of the doctrine to claims under the WPA. First, like title VII of the 1964 Civil Rights Act, the WPA is a remedial statute that is to be liberally construed in favor of the persons intended to be benefited. Dudewicz v. Norris-Schmid, Inc., 443 Mich. 68, 77, 503 N.W.2d 645 (1993); Terzano v. Wayne Co., 216 Mich.App. 522, 530, 549 N.W.2d 606 (1996). Second, the injured party in a WPA case is often an employee who fears reprisal. Finally, like acts of discrimination based on race, gender, or handicap, acts of discrimination based on retaliatory animus may occur in a manner that makes it difficult to state the precise date of their occurrence. Accordingly, we hold that the continuing violations doctrine applies to claims under the WPA. Sumner, supra, at pp. 525-526, 398 N.W.2d 368.
Having determined that the continuing violations doctrine is applicable to claims under the WPA, we must determine whether the doctrine is relevant to this case. In Sumner, the Court noted that there were three distinct subtheories under the continuing violations doctrine. Sumner, supra, at p. 528, 398 N.W.2d 368. The "policy of discrimination" subtheory involves "allegations that an employer has engaged in a continuous policy of discrimination." The "continuing course of conduct" subtheory involves a situation "where an employee challenges a series of allegedly discriminatory acts which are sufficiently related so as to constitute a pattern, only one of which occurred within the limitation period." Id. Finally, the "present effects of past discrimination" subtheory involved the situation where "a party suffered timely effects or injury from a past untimely act of discrimination." Id. This subtheory ceased to be actionable following the United States Supreme Court's decision in United Air Lines, Inc. v. Evans, 431 U.S. 553, 97 S. Ct. 1885, 52 L. Ed. 2d 571 (1977). Sumner, supra, at p. 528, 398 N.W.2d 368.
*552 Here, there was not sufficient evidence to support a claim under a theory of a "policy of discrimination." For example, in Evans, supra, a stewardess had been forced to resign under then-existing company rules that required stewardesses, but not male employees, to resign when they got married. Similarly, in Robson v. General Motors Corp., a companion case to Sumner, supra, the issue involved whether General Motors guidelines violated the plaintiff's rights under the HCRA. There was no comparable university policy at issue here. Rather, this case is comparable to Sumner, supra, where the plaintiff was allegedly subject to a continuing course of racial harassment that culminated in his dismissal. Thus, the question here is whether there was a genuine issue of material fact concerning whether there was a "continuing course of conduct" that satisfied the requirements of the continuing violations doctrine.
In applying the "continuing course of conduct" subtheory, the Sumner Court considered the following factors:
The first is subject matter. Do the alleged acts involve the same type of discrimination, tending to connect them in a continuing violation? The second is frequency. Are the alleged acts recurring (e.g. a biweekly paycheck) or more in the nature of an isolated work assignment or employment decision? The third factor, perhaps of most importance, is degree of permanence. Does the act have the degree of permanence which should trigger an employee's awareness of and duty to assert his or her rights, or which should indicate to the employee that the continued existence of the adverse consequences of the act is to be expected without being dependent on a continuing intent to discriminate? [Sumner, supra, at p. 538, 398 N.W.2d 368, quoting Berry v. LSU Bd. of Supervisors, 715 F.2d 971, 981 (C.A.5, 1983).]
As in Sumner, the facts here fit within this analysis. The alleged acts involved the same subject matter, i.e., retaliation, and occurred with fairly high frequency. Sumner, supra, at pp. 538-539, 398 N.W.2d 368. As with harassment, the nature of a retaliatory act is that it ceases once the intent to retaliate ends. It does not provide notice of subsequent neutrally initiated injuries. Id., at p. 539, 398 N.W.2d 368. Accordingly, we believe that there was a genuine issue of material fact regarding whether there was a continuing course of conduct that violated the plaintiff's rights under the WPA.
Of course, the mere existence of a continuing violation is insufficient if none of the relevant conduct occurred within the limitation period. Id., at pp. 539, 543, 398 N.W.2d 368. Indeed, Adelman's central argument is that the acts that occurred within the ninety-day statute of limitations were not independent acts of discrimination, but rather present effects of past discrimination. However, unlike in Knight v. Blue Cross-Blue Shield of Michigan, a companion case to Sumner, supra, at p. 544, 398 N.W.2d 368, here there was evidence of retaliatory acts within the limitation period. We believe that there was a genuine issue of material fact that the denial of housing at the Institute for Gerontology and the denial of a position in September 1990 were independent acts of discrimination sufficiently connected with the prior acts to constitute a continuing violation. Accordingly, the trial court did not err in denying Adelman's motion for summary disposition.
XVII
Adelman argues that the trial court erred in denying his motions for summary disposition, a directed verdict, and JNOV where plaintiff's claim was barred by the doctrine of governmental immunity. We disagree.
In determining whether a plaintiff's claim is barred by immunity granted by law, MCR 2.116(C)(7), a court must consider all documentary evidence filed or submitted by the parties. Tryc v. Michigan Veterans' Facility, 451 Mich. 129, 134, 545 N.W.2d 642 (1996). The court accepts well-pleaded allegations as true and construes them in a light most favorable to the nonmoving party. Id. The standards of review for the denial of a motion for a directed verdict and for the denial of a motion for JNOV were set forth in issue V. See Hatfield, supra, at p. 325, 535 N.W.2d 272; Severn, supra, at p. 412, 538 *553 N.W.2d 50. Under the governmental immunity act, M.C.L. § 691.1401 et seq.; M.S.A. § 3.996(101) et seq., governmental agencies are immune from tort liability when engaged in the exercise or discharge of a governmental function. Tryc, supra, at p. 134, 545 N.W.2d 642. This statute provides for broad immunity. Id.
Here, it is not disputed that Adelman was engaged in the exercise of a governmental function. Accordingly, were plaintiff an ordinary citizen, the governmental immunity act would generally bar her from suing Adelman for tort liability. However, the WPA explicitly includes the state in its definition of "employer," M.C.L. § 15.361(b); M.S.A. § 17.428(1)(b). Similarly, the statute includes an agent of an employer within its definition of an "employer." Id. Accordingly, we must determine whether the WPA operates as an exception to the governmental immunity act.
In an analogous case, Madison v. Detroit, 208 Mich.App. 356, 527 N.W.2d 71 (1995), rev'd on other grounds 450 Mich. 976, 547 N.W.2d 653 (1996), this Court held that the Worker's Disability Compensation Act (WDCA), M.C.L. § 418.101 et seq.; M.S.A. § 17.237(101) et seq., applies to governmental agencies despite the broad provisions of the governmental immunity statute.[3] The Madison Court relied on three factors in reaching that conclusion. First, the Court stated that, when the government is the plaintiff's employer, the governmental immunity statute must be read in pari materia with the WDCA. Id., at p. 360, 527 N.W.2d 71. Second, the Court stated that the extension of remedies to governmental employees under the WDCA is consistent with the protection afforded to governmental employees against third parties provided by the governmental immunity act. Id., at pp. 360-361, 527 N.W.2d 71. Finally, the Court stated that the WDCA "contains no language freeing the government from its requirements, regulations and restraints in other areas, but generally treats it as any other employer." Id., at p. 361, 527 N.W.2d 71.
All of those factors apply here. First, like Madison, this case concerns the duties of a governmental agency as an employer. Accordingly, the governmental immunity statute must be read in pari materia with the WPA. Second, the extension of remedies under the WPA is consistent with the protections that the governmental immunity act offers to governmental employees against third parties. Third, the WPA not only "contains no language freeing the government from its requirements, regulations and restraints in other areas," id., but it explicitly includes the state in its definition of "employer." M.C.L. § 15.361(b); M.S.A. § 17.428(1)(b). Accordingly, the WPA treats the state like any other employer.
In addition, where there are two acts or provisions, one of which is special and particular and certainly includes the matter in question and the other general, which, if standing alone, would include the same matter and thus conflict with the special act or provision, the special act must be taken as intended to constitute an exception to the general act, because the Legislature is not to be presumed to have intended a conflict. Driver, supra, at p. 17, 523 N.W.2d 815. We hold that the specific duties that the WPA requires of state entities and their agents constitute an exception to the general rule established by § 7 of the governmental immunity act. Madison, supra, at pp. 360-361, 527 N.W.2d 71; Driver, supra, at p. 17, 523 N.W.2d 815. Accordingly, Adelman's claim must fail.
XVIII
Adelman argues that insofar as the WPA abrogates governmental immunity, it violates the "Title-Object Clause" of the Michigan Constitution. We disagree. Const. 1963, art. 4, § 24 provides:
No law shall embrace more than one object, which shall be expressed in its title. No bill shall be altered or amended on its passage through either house so as to *554 change its original purpose as determined by its total content and not alone by its title.
When assessing a title-object challenge to the constitutionality of a statute, all possible presumptions should be afforded to find constitutionality. Lawnichak v. Dep't of Treasury, 214 Mich.App. 618, 620, 543 N.W.2d 359 (1995). The clause is violated only where the subjects are so diverse in nature that they have no necessary connection. Id. The purpose of the clause is to prevent the Legislature from passing laws not fully understood, to ensure that both the legislators and the public have proper notice of legislative content, and to prevent deceit and subterfuge. Id., at p. 621, 543 N.W.2d 359. If the act centers on one main general object or purpose that the title comprehensively declares, though in general terms, and if provisions in the body of the act not directly mentioned in the title are germane, auxiliary, or incidental to that general purpose, the constitutional requirement is met. Ace Tex Corp. v. Detroit, 185 Mich.App. 609, 615, 463 N.W.2d 166 (1990). A determination whether a statute violates the Title-Object Clause is subject to review de novo on appeal. Mooahesh v. Dep't of Treasury, 195 Mich.App. 551, 562, 492 N.W.2d 246 (1992).
Here, the purpose of the WPA is to protect employees who suffer retaliation for reporting violations of law. Dudewicz, supra, at p. 77, 503 N.W.2d 645. The inclusion of the state within the definition of employer is merely incidental to this purpose. Accordingly, the WPA does not violate the Title-Object Clause of the constitution. Lawnichak, supra, at pp. 620-621, 543 N.W.2d 359; Ace Tex, supra, at p. 615, 463 N.W.2d 166.
XIX
Adelman argues that the trial court abused its discretion by denying his motions for summary disposition, a directed verdict, and JNOV where plaintiff failed to prove that she engaged in protected activity or made any report to higher authority, to establish any nexus between her alleged protected activity and the nonrenewal of her appointment, or to demonstrate pretext. We disagree.
Adelman's argument focuses entirely on the evidence that plaintiff presented at trial. Accordingly, the portion of this issue dealing with Adelman's motion for summary disposition has been abandoned on appeal as being insufficiently briefed. Dresden v. Detroit Macomb Hosp. Corp., 218 Mich.App. 292, 300, 553 N.W.2d 387 (1996). The standards of review for the denial of a motion for a directed verdict and for the denial of a motion for JNOV were set forth in issue V. See Hatfield supra, at p. 325, 535 N.W.2d 272; Severn, supra, at p. 412, 538 N.W.2d 50.
In order to establish a prima facie case under the WPA, the plaintiff must establish: (1) that plaintiff was engaged in protected activities as defined by the act; (2) that plaintiff was subsequently discharged, threatened, or otherwise discriminated against; and (3) that a causal connection existed between the protected activity and the discharge, threat, or discrimination. M.C.L. § 15.362; M.S.A. § 17.428(2); Terzano, supra, at p. 526, 549 N.W.2d 606; Hopkins v. Midland, 158 Mich.App. 361, 378, 404 N.W.2d 744 (1987). The determination whether the evidence established a prima facie case under the WPA is a question of law to be determined de novo. Terzano, supra, at p. 526, 549 N.W.2d 606. The WPA protects an employee who
reports or is about to report, verbally or in writing, a violation or a suspected violation of a law or regulation or rule promulgated pursuant to law of this state, a political subdivision of this state, or the United States to a public body, unless the employee knows that the report is false, or because an employee is requested by a public body to participate in an investigation, hearing, or inquiry held by that public body, or a court action. [M.C.L. § 15.362; M.S.A. § 17.428(2).]
Here, plaintiff made several reports of "a violation or a suspected violation of a law or regulation or rule." Plaintiff testified that she reported her allegations to many University of Michigan employees: Pam Donaldson, a personnel officer; Dr. Achenbaum, a faculty member of the IOG; Adelman, the director of the IOG; and Verbrugge, the person whom Adelman appointed to investigate *555 plaintiff's allegations. Plaintiff told these employees that Perlmutter was trying to take credit for her research, that Perlmutter was breaking employment contracts with her, and that Perlmutter had stolen data and a test instrument library from her.
Adelman's argument would have this Court hold that larceny, among other applicable regulations and statutes, is not "a violation or a suspected violation of a law or regulation or rule promulgated pursuant to law of this state, a political subdivision of this state, or the United States to a public body." Id. We decline to adopt Adelman's position. See M.C.L. § 750.356 et seq.; M.S.A. § 28.588 et seq.; Dudewicz, supra, at p. 75, 503 N.W.2d 645 (WPA not limited to violations of laws closely connected with the employment setting). In addition, whether plaintiff sought personal gain in making her reports, rather than the public good, is legally irrelevant and need not be addressed except to note that the reporting of misconduct in an agency receiving public money is in the public interest. Accordingly, when the evidence is viewed in the light most favorable to plaintiff, Hatfield, supra, at p. 325, 535 N.W.2d 272; Severn, supra, at p. 412, 538 N.W.2d 50, she made a report of a violation or a suspected violation of a law or regulation or rule.
Second, the WPA requires that a report of a violation or suspected violation be made to a "public body." M.C.L. § 15.362; M.S.A. § 17.428(2). Remedial statutes such as the WPA are to be liberally construed in favor of the persons intended to be benefited. Dudewicz, supra, at p. 77, 503 N.W.2d 645. Although Adelman argues that plaintiff's reports had to be made to a "higher authority," the University of Michigan satisfies the statutory definition of a public body. M.C.L. § 15.361(d)(iv); M.S.A. § 17.428(1)(d)(iv); Const. 1963, art. 8, § 4. In addition, plaintiff's allegations triggered a University of Michigan police investigation. Finally, unlike the plaintiff police officer in Dickson v. Oakland Univ., 171 Mich.App. 68, 71, 429 N.W.2d 640 (1988), it was not plaintiff's "job function" to report violations or suspected violations of law to her employer.
Finally, there was sufficient evidence regarding the nexus between the retaliatory action and the protected activity and regarding whether Adelman's alleged nondiscriminatory reasons for his conduct were a pretext. When Adelman was asked if he had repeatedly expressed to plaintiff the need for her to drop the charges, he replied, "In the context of refocusing her energies on her publication record, yes." Adelman admitted that he told plaintiff that she was jeopardizing her career by focusing on the conflict with Perlmutter. Finally, Adelman stated:
I finally got to the point where I had to use threats rather than begging and cajoling. You know, "Carolyn, please, publish your research." To Carolyn: "Publish your research already or you're gone." Yes. Yes, that's exactly what I did.
Viewing this evidence in a light most favorable to plaintiff, Hatfield, supra, at p. 325, 535 N.W.2d 272; Severn, supra, at p. 412, 538 N.W.2d 50, a jury could reasonably find that Adelman threatened to terminate plaintiff's employment if she did not drop the charges and that the issue of publication was a pretext.
The trial court did not abuse its discretion in denying Adelman's motions for a directed verdict and JNOV. Hatfield, supra, at p. 325, 535 N.W.2d 272; Severn, supra, at p. 412, 538 N.W.2d 50.
XX
Adelman argues that the trial court should have granted his motion for JNOV because plaintiff's construction of the WPA is unenforceable. We disagree. The gist of plaintiff's claim was that Adelman retaliated against plaintiff for raising questions that triggered a university investigation. Plaintiff does not contest whether the investigation was begun pursuant to regulation. Plaintiff did not bring a claim under the Copyright Act. Nor did plaintiff sue to recover lost intellectual property such that her claim would chill expression. Although plaintiff complained of lost intellectual property when she spoke with Adelman, that property was not the subject of plaintiff's complaint against Adelman in this suit. Adelman's argument is without merit.
*556 XXI
Adelman argues that the trial court failed to properly instruct the jury about the quantum of proof. To preserve for review an issue concerning a jury instruction, a party must object on the record before the jury retires to deliberate. MCR 2.516(C); Mina, supra, at p. 680, 555 N.W.2d 1. Here, despite a lengthy conference concerning the jury instructions, Adelman did not raise these objections to the instructions before the jury's retirement to deliberate. Rather, defendant raised these objections as part of his motion for a new trial. This Court will review an unpreserved issue concerning an error in jury instruction only when necessary to prevent manifest injustice. Id. Manifest injustice occurs where the defect in instruction is of such magnitude as to constitute plain error, requiring a new trial, or where it pertains to a basic and controlling issue in the case. Id.
Here, this Court has previously required that a plaintiff establish a claim under the WPA by a preponderance of the evidence. See Hopkins, supra, at p. 378, 404 N.W.2d 744. In any case, the WPA protects an employee who "reports or is about to report" a violation or suspected violation. M.C.L. § 15.362; M.S.A. § 17.428(2). The WPA then states that the clear and convincing evidence standard applies to the "about to report" element. M.C.L. § 15.363(4); M.S.A. § 17.428(3)(4). The language of the statute is clear and unambiguous that the clear and convincing standard applies to the "about to report" element of M.C.L. § 15.362; M.S.A. § 17.428(2) only, and not to other elements of a plaintiff's claim. See Schlinker & Szymanski, Michigan Whistle-Blowers' Protection Act: A Practitioner's Guide, 74 Mich. B J 1192, 1193 (1995). Failure to review this issue would not result in manifest injustice. Mina, supra, at p. 680, 555 N.W.2d 1. Similarly, failure to review the issue of the trial court's failure to instruct the jury sua sponte about the elements of the WPA would not result in manifest injustice. Id.
XXII
Adelman argues that the trial court improperly deferred to the jury's findings. We disagree. The fact that the trial court denied Adelman's motions for a directed verdict and JNOV, but sitting as the Court of Claims found in favor of the university, reflects the trial court's understanding of the differing standards applicable to those separate roles. A trial court sitting as the Court of Claims is not obligated to return a verdict consistent with the jury's verdict in a circuit court action joined with a Court of Claims action. Lumley v. Univ. of Michigan Bd. of Regents, 215 Mich.App. 125, 134-135, 544 N.W.2d 692 (1996). Accordingly, the trial court did not act inconsistently.
XXIII
Adelman argues that he is entitled to a new trial because of several evidentiary errors. We disagree. Objections to the admission of evidence may not be raised for the first time on appeal absent manifest injustice. In re Forfeiture of $19,250, supra, at p. 32, 530 N.W.2d 759.
Here, there were no objections to plaintiff's testimony about an alleged "fraud buster," her testimony that a staff member of Congressman John Dingell maintained an open file against the University of Michigan, or plaintiff's testimony "of vague stories." In addition, only Perlmutter's counsel objected to plaintiff's testimony regarding the comments of Dr. Achenbaum.[4] Adelman has waived each of these issues. Id. Regarding Perlmutter's Exhibit 10, the discussion at trial indicates that the exhibit was part of an earlier exhibit offered by plaintiff. The earlier exhibit was excluded on objection from Adelman's counsel. Error requiring reversal cannot be error to which the aggrieved party contributed by plan or negligence. Harville, supra, at p. 324, 553 N.W.2d 377.
Plaintiff's testimony regarding Marianne Zorza was responsive to the question posed by counsel for Perlmutter. The trial court appropriately limited any resulting prejudice by directing counsel to move to another area of questioning. See Price, supra, at p. 466, *557 502 N.W.2d 337. Similarly, the trial court did not abuse its discretion in limiting the cross-examination of Chiodo. MRE 611(b); Wischmeyer, supra, at pp. 474-475, 536 N.W.2d 760; see issue VI.
The trial court did not abuse its discretion in denying Adelman's motion for a new trial. Mahrle, supra, at p. 351, 549 N.W.2d 56.
XXIV
Adelman argues that the trial court erred in failing to grant remittitur or a new trial. We disagree. First, the amount was not greater than the highest amount the evidence can support. MCR 2.611(E)(1); Palenkas, supra, at pp. 531-532, 443 N.W.2d 354. Although the issue was disputed, plaintiff presented two expert witnesses who testified that plaintiff suffered from posttraumatic stress disorder. Second, the trial court did not abuse its discretion in determining that the jury's verdict was not motivated by impermissible considerations. Palenkas, supra, at p. 532, 443 N.W.2d 354; Howard, supra, at p. 436, 481 N.W.2d 718. Regarding the failure to distinguish between past and future damages, Adelman did not object to the jury verdict form and has waived this issue. Harville, supra, at p. 324, 553 N.W.2d 377.
Adelman also argues that emotional distress damages are not awardable under the WPA. We disagree. In Howard, supra, at pp. 435-436, 481 N.W.2d 718, this Court held that damages for mental anguish, emotional distress, and humiliation are awardable in a claim under the Civil Rights Act. Here, the WPA provides that a "person who alleges a violation of this act may bring a civil action for appropriate injunctive relief, or actual damages, or both." M.C.L. § 15.363(1); M.S.A. § 17.428(3)(1). The statute then defines damages as "damages for injury or loss caused by each violation of this act, including reasonable attorney fees." M.C.L. § 15.363(3); M.S.A. § 17.428(3)(3). The Civil Rights Act uses identical language in describing the remedy for a person alleging a violation of the action and in providing a definition of damages. M.C.L. § 37.2801(1) and (3); M.S.A. § 3.548(801)(1) and (3). Given the fact that the relevant language of the WPA is identical to that of the Civil Rights Act, we hold that emotional distress damages are awardable in a claim brought under the WPA. Howard, supra, at pp. 435-436, 481 N.W.2d 718; see Skene v. Fileccia, 213 Mich.App. 1, 6, 539 N.W.2d 531 (1995). Accordingly, Adelman's claim must fail.
XXV
On cross appeal, plaintiff argues that the trial court abused its discretion by denying attorney fees on the ground that plaintiff received a substantial judgment. We disagree. Awards of costs and attorney fees are recoverable only where specifically authorized by a statute, a court rule, or a recognized exception. Yuhase v. Macomb Co., 176 Mich.App. 9, 14, 439 N.W.2d 267 (1989). The decision whether to award attorney fees is within the trial court's discretion and will be reviewed on appeal for abuse of discretion. See Sanchez v. Lagoudakis (On Remand), 217 Mich.App. 535, 557, 552 N.W.2d 472 (1996); Yuhase, supra, at p. 15, 439 N.W.2d 267.
Here, the WPA states that the "court may also award ... reasonable attorney fees ... if the court determines that the award is appropriate." M.C.L. § 15.364; M.S.A. § 17.428(4). If the language of a statute is clear and unambiguous, the plain meaning of the statute reflects the legislative intent and judicial construction is not permitted. Tryc, supra, at p. 136, 545 N.W.2d 642. The term "may" in a statute ordinarily designates a permissive provision. Jordan v. Jarvis, 200 Mich.App. 445, 451, 505 N.W.2d 279 (1993). Here, that rule of construction is strengthened by the Legislature's use of the conditional word "if." It follows logically from the WPA's language that if the trial court determines that an award of attorney fees is not "appropriate," then it may choose not to award reasonable fees. See Eide v. Kelsey-Hayes Co., 154 Mich.App. 142, 161, 397 N.W.2d 532 (1986), aff'd. in part and rev'd in part on other grounds 431 Mich. 26, 427 N.W.2d 488 (1988); Melchi v. Burns Int'l Security Services, Inc., 597 F. Supp. 575, 586 (E.D.Mich., 1984) (denying attorney fees in a case brought under the WPA); but see Kindig v. Rockwell Int'l Corp., 709 F. Supp. 787, *558 792 (E.D.Mich., 1989) (predicting that the Michigan Supreme Court would reject the reasoning in Eide in civil rights cases).
Because of the private nature of plaintiff's claim, and because of the monetary nature of her damages, this is not a case where it would have been difficult for plaintiff to obtain and compensate competent counsel without some guarantee that her counsel could recover attorney fees and costs if successful. See Eide, supra, at p. 161, 397 N.W.2d 532; see also Howard, supra, at p. 441, 481 N.W.2d 718; Yuhase, supra, at pp. 13-14, 439 N.W.2d 267. In addition, the trial court properly considered the existence of the contingent fee arrangement between plaintiff and her counsel as "merely one of the factors to be considered" in determining whether to award attorney fees. Wilson v. General Motors Corp., 183 Mich.App. 21, 42, 454 N.W.2d 405 (1990). Accordingly, the trial court did not abuse its discretion in denying plaintiff's request for attorney fees.
XXVI
Plaintiff argues that the trial court erred in refusing to grant plaintiff interest from the date of the filing of plaintiff's original complaint. We agree in part. Here, plaintiff did not name Adelman as a defendant until the first amended complaint, which was filed on April 1, 1991. Although plaintiff did not add a WPA claim against Adelman until her fourth amended complaint, the relation back of amendments for other purposes is not analogous to the purposes of prejudgment interest. Rittenhouse, supra, at p. 218, 380 N.W.2d 440 (Riley, J.). Rather, "the complaint" for purposes of this statute is the "formal complaint filed against the defendant upon whom the prejudgment interest is being taxed." Id., at p. 217, 380 N.W.2d 440. Accordingly, we remand with instructions that the trial court recalculate prejudgment interest from the date of the filing of the first amended complaint. In addition, as held in issue XII, plaintiff is entitled to prejudgment interest for future damages when the suit does not result from personal bodily injury. Paulitch, supra, at pp. 662-663, 528 N.W.2d 200.
XXVII
Finally, plaintiff argues that the trial court erred in dismissing her whistleblower claim against defendant Verbrugge because the fraudulent concealment statute, M.C.L. § 600.5855; M.S.A. § 27A.5855, tolled the running of the statute of limitations. We disagree.
Under the fraudulent concealment statute, the limitation period is tolled when a party conceals the fact that the plaintiff has a cause of action. Sills v. Oakland General Hosp., 220 Mich.App. 303, 559 N.W.2d 348 (1996). The plaintiff must plead in the complaint the acts or misrepresentations that comprised the fraudulent concealment and must prove that the defendant committed affirmative acts of misrepresentations that were designed to prevent subsequent discovery. Id.
Here, plaintiff failed to plead sufficient facts to show fraudulent concealment. In addition, plaintiff fails to cite any record evidence that Verbrugge actively concealed the report from her. On the other hand, the record does show that plaintiff knew of the report and that it was critical of her. The trial court did not err in granting Verbrugge's motion for summary disposition. Id.; Witherspoon v. Guilford, 203 Mich.App. 240, 248, 511 N.W.2d 720 (1994).
Docket No. 176940
XXVIII
Plaintiff argues that the trial court clearly erred in finding that plaintiff had failed to establish that defendant board of regents violated the WPA. We disagree.
Under the WPA, the plaintiff has the initial burden of establishing by a preponderance of the evidence a prima facie case of discrimination. Hopkins, supra, at p. 378, 404 N.W.2d 744. If the plaintiff succeeds, the burden shifts to the defendant to articulate some legitimate, nondiscriminatory reason for the adverse action. Id. If the defendant carries this burden, the plaintiff must have an opportunity to prove that the legitimate reason offered by the defendant was not the true reason, but was only a *559 pretext for discrimination. Id. The plaintiff may meet her burden of showing pretext "either directly by persuading the court that a discriminatory reason more likely motivated the employer or indirectly by showing that the employer's proffered explanation is unworthy of credence." Id., at p. 380, 404 N.W.2d 744. After reviewing the record, we believe that the trial court did not clearly err in finding that the board of regents had showed legitimate, nondiscriminatory reasons for the adverse actions and that plaintiff had not adequately showed pretext. To the extent that plaintiff argues that the trial court erred by employing the wrong burden of proof, she failed to preserve this issue by not raising it in the statement of questions presented. MCR 7.212(C)(5); Marx v. Dep't of Commerce, 220 Mich.App. 66, 81, 558 N.W.2d 460 (1996).
XXIX
Plaintiff argues that the court should order appropriate injunctive relief. In addition, the board of regents makes several arguments on cross appeal. In light of our resolution of the previous issue, these issues are moot.
In Docket No. 175485, we affirm in part and remand for a recalculation of the amount of prejudgment interest to which plaintiff is entitled. We do not retain jurisdiction. Plaintiff, being the prevailing party, may tax costs pursuant to MCR 7.219.
In Docket No. 175857, we affirm in part and remand for a recalculation of the amount of prejudgment interest to which plaintiff is entitled. We do not retain jurisdiction. Plaintiff, being the prevailing party, may tax costs pursuant to MCR 7.219.
In Docket No. 176940, we affirm. The board of regents, being the prevailing party, may tax costs pursuant to MCR 7.219.
NOTES
[*] Circuit judge, sitting on the Court of Appeals by assignment.
[1] In issues VII(A), VIII, and IX, Perlmutter makes other arguments regarding damages. In this issue, we analyze only whether there was sufficient evidence such that a jury could reasonably find that plaintiff suffered damages.
[2] We caution that mental distress damages will not always be awardable in a fraud and misrepresentation action. Rather, the focus is on whether, under the circumstances of the case, damages are the legal and natural consequences of the wrongful act and reasonably might have been anticipated. Price, supra, at p. 472, 502 N.W.2d 337; Fagerberg, supra, at pp. 356-357, 416 N.W.2d 438.
[3] In summarily reversing this Court's decision, the Supreme Court did not address the issue whether there is an exception to governmental immunity under the WDCA. Madison, supra. Rather, the Supreme Court stated that the facts of that case did not constitute an intentional tort under the WDCA as a matter of law. Id.
[4] In any case, there is no merit to this issue. See issue VI. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623270/ | 569 So. 2d 778 (1990)
Kenneth Franklin BLALOCK, Jr., BY and through His Plenary Guardian, FIRST UNION NATIONAL BANK OF FLORIDA, and Sharon Blalock, Individually and for the Use and Benefit of the State of Florida Department of Health and Rehabilitative Services, and State of Georgia Department of Medical Assistance, Appellants,
v.
Victor A. PENA, M.D., Appellee.
No. 90-2081.
District Court of Appeal of Florida, First District.
October 4, 1990.
Rehearing Denied December 5, 1990.
Brent M. Turbow, Jacksonville, for appellants.
J. Bruce Bickner of Dawson, Galant, Sulik, Wiesenfeld & Bickner, Jacksonville, for appellee.
ON APPELLANT'S MOTION TO COMPEL COURT REPORTER
PER CURIAM.
Appellants were plaintiffs in the proceedings below. They directed the court reporter to prepare an original only of the transcript at $3.00 per page and tendered a deposit of 50 percent of that estimated cost. The court reporter returned the check, citing to Administrative Order 89-1-CA of the Fourth Judicial Circuit which provides in pertinent part:
3. The compensation for reporting all proceedings in the circuit and county court except as hereafter set forth shall be paid by the party or parties' attorney requesting such service for a particular case and where compensation is not otherwise governed by rule of court, statute or ordinance shall be in the following amounts:
.....
(f) The compensation for all appeal transcripts by the court reporter shall be $4.60 per page. This price will include an original and two copies. Each additional copy shall be $.80 per page.
*779 (g) The compensation for all other transcripts by the court reporter shall be $3.00 per page for the original and $.80 per page for each additional copy.
Appellants' request for relief in the circuit court was denied and they then moved this court to compel the court reporter to comply with their directions.
The appellants rely on a recent amendment to Florida Rule of Appellate Procedure 9.200(b)(2):
Within 30 days of service of a designation, or within the additional time provided for under subsection (b)(3) of this rule, the court reporter shall transcribe and deliver to the clerk of the lower tribunal the designated proceedings and shall furnish copies as requested in the designation. If a designating party directs the court reporter to furnish the transcript to fewer than all parties, that designating party shall serve a copy of the designated portion of the transcript on the parties within five days of receipt from the court reporter.
The underlined language was added and effective on January 1, 1989. See In re The Florida Bar Rules of Appellate Procedure, 529 So. 2d 687, clarified, 536 So. 2d 240 (Fla. 1988). A show cause order issued directing opposing counsel to respond and also stating that this court would entertain a response from the court reporter. Opposing counsel has filed a response stating he takes no position. The court is in receipt of a response prepared by the law clerk for Chief Circuit Judge John Santora, filed on behalf of the court reporter.
It is shown that Administrative Order. 89-1-CA was properly promulgated in the Fourth Judicial Circuit pursuant to Rule 2.070(e), Florida Rules of Judicial Administration. The administrative order provides that compensation for all appeal transcripts shall be $4.60 per page. This price shall include an original and two copies and each additional copy shall be $.80 per page. The compensation for all other transcripts shall be $3.00 per page for the original and $.80 per page for each additional copy. The court reporter argues that the judges of the Fourth Judicial Circuit have found that the rate of $4.60 per page is a fair and reasonable compensation for a court reporter's time and effort. The fee rates in the administrative order are different because the Fourth Circuit judges determined parties in appeal and non-appeal proceedings are subject to different circumstances. There is nothing in Rule 9.200(b)(2), the court reporter asserts, to suggest it was intended to overrule the authority of the circuit judges who set rates in accordance with Rule 2.070(e). Respondent requests this court to interpret and harmonize the rules so as to permit the administrative order to stand and asks us to deny the motion to compel.
We disagree and grant appellant's motion. The circuit court, of course, has the authority to enter an order relating to court reporter fees but it may not be inconsistent with rules promulgated by the Supreme Court. See Fla.R.Jud.Admin. 2.020(c), 2.050(b)(2), and 2.070(e). We find the administrative order conflicts with the controlling appellate rule. Rule 9.200(b)(2), as amended, permits the designating party to order preparation of only the original of an appellate transcript, with copies to be made and distributed by the party if so desired. We are unable to accept the representation that the administrative order can be harmonized with the rule. Despite the phrasing employed in the order, it is clear that the actual result is that a designating party in appellate proceedings must purchase an original at $3.00 per page and a minimum of two copies at $.80 per page. We reject the "finding" that parties in appeal and non-appeal proceedings are subject to different circumstances as self-serving and unsupported by any material facts.
Accordingly, we grant appellants' motion and direct the court reporter to comply with the direction to prepare an original only of the transcript at a cost of $3.00 per page.[1] Fourth Circuit Administrative Order *780 89-1-CA, insofar as it conflicts with Florida Rule of Appellate Procedure 9.200(b)(2) as interpreted herein, is quashed.
ERVIN, JOANOS and BARFIELD, JJ., concur.
NOTES
[1] The original will, of course, be filed with the clerk of the lower tribunal. Appellants will bear the responsibility of obtaining the transcript and making and distributing the copies in a timely manner. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623286/ | 211 Wis. 2d 172 (1997)
564 N.W.2d 326
IN the MATTER OF DISCIPLINARY PROCEEDINGS AGAINST Thomas J. AWEN, Attorney at Law.
No. 96-2520-D.
Supreme Court of Wisconsin.
Filed June 20, 1997.
Attorney disciplinary proceeding. Attorney's license suspended.
*173 ¶ 1. PER CURIAM.
We review the report and recommendation of the referee that the license of Thomas J. Awen to practice law in Wisconsin be suspended for 90 days as discipline for professional misconduct. That misconduct consisted of his charging unreasonable fees and engaging in dishonesty, deceit and misrepresentation in his billings to the State Public Defender (SPD) for services in matters to which it had appointed him. The seriousness and extent of that misconduct would warrant discipline substantially more severe than the suspension recommended by the referee or the six-month license suspension sought by the Board of Attorneys Professional Responsibility (Board) in this proceeding were it not for the presence of mitigating factors to which the referee gave great weight. We accept the referee's assessment of those factors in mitigation of the severity of discipline warranted and impose the license suspension recommended.
¶ 2. Attorney Awen was admitted to practice law in Wisconsin in 1988 and practices in Waukesha. He has not been the subject of a prior disciplinary proceeding. The referee, Attorney Michael Ash, made the findings of fact and conclusions of law based on the stipulation of the parties and evidence presented at the disciplinary hearing.
¶ 3. Following his admission to the practice of law, Attorney Awen spent much of his time on appointments from the State Public Defender to represent indigent criminal defendants. A review conducted by the Board of his bills, records and time sheets relating to SPD work in hundreds of cases between July, 1991 and July, 1993 disclosed that Attorney Awen billed and was paid for a substantial number of hours of work that either had not been performed or had been mischaracterized. *174 For example, in numerous cases he at times billed in excess of 24 hours for a day's work; he billed time for court appearances when court records did not show that a hearing was held or indicated that a hearing was held but for a shorter period of time than claimed; he billed several cases for the same hours he spent waiting in court; he regularly billed more than 18 hours per day for work on numerous cases.
¶ 4. Regarding the matter of his billing of hours spent waiting for court appearances, a judicial court commissioner of the circuit court for Milwaukee county testified at the disciplinary hearing concerning his prior experience serving as SPD-appointed counsel in that county. He described the waiting time for cases to be called as "horrendous." It was customary practice that numerous matters, including trials, would be scheduled for hearing at the same time at the beginning of the morning and at the beginning of the afternoon, but rarely did those matters commence at the time scheduled. Consequently, it was not unusual that lawyers would have to wait several hours for their case or cases to be called.
¶ 5. The court commissioner testified that until late 1993 the written policies and instructions the SPD issued to appointed counsel, which were revised periodically, did not address attorney in-court waiting time, other than expressly to permit it to be billed as "court time," at a higher rate than "out-of-court time." It was his testimony that during 1991 many lawyers acting in SPD-appointed matters in Milwaukee and Waukesha counties believed it was permissible under some circumstances to double or triple bill for court waiting time if the lawyer was waiting for more than one case scheduled for a particular time. It was not until November, 1993, that a revision of the policies *175 expressly limited the billing of waiting time to only one case and prohibited double billing.
¶ 6. Testimony at the disciplinary hearing also established that under SPD policies in effect during the relevant period, it was proper for an appointed attorney to bill the SPD for routine court appearances made by a lawyer other than the one appointed to the case. However, that substitution was done only in non-substantive matters when the appointed lawyer was unable to appear, and the substitute lawyer had to be certified by the SPD. In such cases, the appointed lawyer would bill the SPD for the time and, after the SPD made payment, then would pay the substitute lawyer who had made the appearance.
¶ 7. Regarding his specific billings, Attorney Awen testified that his appearances at probation and parole revocation hearings before an administrative law judge would not be reflected in the court record. As a result, it appeared that he had billed for "court hearings" that were not substantiated by the court record. He also testified that in instances when he claimed eight hours' time for a jury trial but court records indicated that the trial did not last that long, he had included in his calculation the time for pre-trial and post-trial conferences and waiting time as "court time." Also, some of his apparently excessive or duplicate billings for jail interview time or court time reflected the double billing which was then somewhat common practice. Other apparently excessive billings were accounted for as appearances made on a client's behalf by a colleague, for which Attorney Awen billed the time pursuant to the SPD-approved practice. On several occasions he inadvertently billed the same time for the same case on two separate vouchers submitted to the *176 SPD, but the SPD detected and corrected the errors in the supplemental vouchers.
¶ 8. When he learned that the SPD was going to conduct an audit of his invoices for all of his SPD work, including the two-year period considered in this proceeding, Attorney Awen sought to resolve any problems without litigation. While he was attempting to do so, the SPD commenced a civil action against him. That action was settled by Attorney Awen's agreement to make restitution in the amount of $99,672, of which he has made partial payment and continues to be obligated to make periodic payments through March 1, 2000.
¶ 9. The referee concluded, as the parties had stipulated, that Attorney Awen's billing practices violated SCR 20:8.4(c),[1] which proscribes conduct involving dishonesty, fraud, deceit or misrepresentation, and constituted charging unreasonable fees, in violation of SCR 20:1.5(a).[2] In addition to the 90-day license suspension as discipline for that misconduct, *177 the referee recommended that reinstatement of Attorney Awen's license be conditioned on his continuing to make the stipulated restitution payments. Finally, the referee recommended that Attorney Awen be required to pay the costs of this proceeding.
¶ 10. In making that recommendation for discipline, the referee considered several factors as mitigating the seriousness of Attorney Awen's misconduct and the severity of discipline to be imposed for it. During the period relevant to this proceedingJuly, 1991 to July, 1993Attorney Awen was a salaried associate of a law firm, and the payment for his SPD work did not go directly to him but was paid to the law firm. Thus, he did not benefit directly from the fees he charged. Also, his time keeping and invoicing practices were "sloppy and careless." He did not monitor closely the revisions in SPD policies, did not total his daily time records, and did not customarily record his time contemporaneously or even on a daily basis. Also, he did not review closely the invoices and vouchers he had his office staff send to the SPD for payment.
¶ 11. In his report, the referee distinguished this case from In re Disciplinary Proceedings Against Kravat, 193 Wis. 2d 152, 532 N.W.2d 454 (1995), in which the court revoked the license of an attorney for similar professional misconduct, on the basis of the mitigating *178 factors presented here. The referee was impressed particularly with Attorney Awen's prompt acceptance of responsibility for his conduct and his demonstrated, sincere remorse for it.
¶ 12. We adopt the referee's findings of fact and conclusion of law concerning Attorney Awen's professional misconduct and determine that the recommended 90-day license suspension is appropriate discipline to impose for it under the circumstances presented. Further, we accept the referee's recommended condition and direct that in order for his license to practice law to be reinstated following completion of the period of suspension, Attorney Awen must establish that he is in compliance with the terms of the restitution agreement by which the SPD's civil action was settled. We also order that Attorney Awen pay the costs of this proceeding.
¶ 13. IT IS ORDERED that the license of Thomas J. Awen to practice law in Wisconsin is suspended for a period of 90 days, commencing August 4, 1997.
¶ 14. IT IS FURTHER ORDERED that within 60 days of the date of this order Thomas J. Awen pay to the Board of Attorneys Professional Responsibility the costs of this proceeding, provided that if the costs are not paid within the time specified and absent a showing to this court of his inability to pay the costs within that time, the license of Thomas J. Awen to practice law in Wisconsin shall remain suspended until further order of the court.
¶ 15. IT IS FURTHER ORDERED that Thomas J. Awen comply with the provisions of SCR 22.26 concerning the duties of a person whose license to practice law in Wisconsin has been suspended.
NOTES
[1] SCR 20:8.4 provides, in pertinent part:
Misconduct
It is professional misconduct for a lawyer to:
...
(c) engage in conduct involving dishonesty, fraud, deceit or misrepresentation;
[2] SCR 20:1.5 provides, in pertinent part:
Fees
(a) A lawyer's fee shall be reasonable. The factors to be considered in determining the reasonableness of a fee include the following:
(1) the time and labor required, the novelty and difficulty of the questions involved, and the skill required to perform the legal service properly;
(2) the likelihood, if apparent to the client, that the acceptance of the particular employment will preclude other employment by the lawyer;
(3) the fee customarily charged in the locality for similar legal services;
(4) the amount involved and the results obtained;
(5) the time limitations imposed by the client or by the circumstances;
(6) the nature and length of the professional relationship with the client;
(7) the experience, reputation, and ability of the lawyer or lawyers performing the services; and
(8) whether the fee is fixed or contingent. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623285/ | 126 S.W.3d 336 (2004)
James WARREN, Jr., Appellant
v.
The STATE of Texas, Appellee.
No. 05-02-01982-CR.
Court of Appeals of Texas, Dallas.
February 4, 2004.
*337 John H. Hagler, Dallas, for appellant.
William T. (Bill) Hill, Jr., District Attorney, Appellate Section, Tammy Ardolf, Assistant District Attorney, Dallas, for state.
Before Justices WHITTINGTON, WRIGHT, and BRIDGES.
OPINION
Opinion by Justice BRIDGES.
James Warren, Jr., appeals the trial court's order dismissing his motion for post-conviction DNA testing. In two issues, appellant argues the trial court erred in dismissing his motion, and his counsel provided ineffective assistance of counsel in bringing a defective motion for post-conviction DNA testing. We affirm the trial court's judgment.
In November 1999, a jury convicted appellant of sexually assaulting his girlfriend's nine-year-old daughter and sentenced him to nine years' confinement. In June 2001, appellant filed a pro se motion for post-conviction DNA testing. In September 2001, appellant, represented by counsel, filed a second motion for post-conviction DNA testing. On November 4, 2002, the trial court dismissed appellant's motion on the ground that it failed to satisfy the threshold requirements of establishing that appellant was entitled to DNA testing under articles 64.01 and 64.03 of the code of criminal procedure.
In his first issue, appellant argues the trial court erred in dismissing his motion for DNA testing. Under article 64.01 of the code of criminal procedure, a convicted person may request forensic DNA testing of evidence containing biological evidence that was in the State's possession during trial. Tex.Code Crim. Proc. Ann. art. 64.01(b)(1) (Vernon Supp.2004); Dinkins v. State, 84 S.W.3d 639, 641-42 (Tex. Crim.App.2002). The motion must be accompanied by an affidavit sworn to by the convicted person, containing statements of fact in support of the motion. Tex.Code Crim. Proc. Ann. art. 64.01(a); Dinkins, 84 S.W.3d at 642. For evidence that was not previously subjected to DNA testing, the convicted person must demonstrate in his or her motion that: (1) DNA testing was not available; (2) DNA testing was available but not technologically capable of providing probative results; or (3) through no fault of the convicted person, the evidence was not tested but requires testing in order to satisfy the interests of justice. Tex. Code Crim. Proc. Ann. art. 64.01(b)(1); Dinkins, 84 S.W.3d at 641-42. Nothing in chapter 64 requires the trial court to conduct a hearing on a motion for post-conviction DNA testing. See Whitaker v. State, No. 74612, ___ S.W.3d ___, ___, 2004 *338 WL 63981, at *3 (Tex.Crim.App. Jan. 14, 2004).
In this case, appellant first submitted a pro se motion for DNA testing in which he alleged a comforter taken from his bed had not been tested and, if it had been tested, he would have been exonerated. With the assistance of counsel, appellant later filed a motion for DNA testing alleging (1) evidence containing biological material was in the possession of the State at the time of trial, (2) the evidence was not subjected to DNA testing, (3) a substantial likelihood existed that DNA testing would show appellant was not guilty, (4) identity was an issue in the case, and (5) a reasonable probability existed that appellant would not have been prosecuted or convicted if exculpatory results were obtained through DNA testing.
Based on these allegations, appellant requested DNA testing of the comforter removed from the scene of the sexual assault and a milky white discharge recovered from the victim. Appellant's motion was supported by his affidavit in which he stated the comforter and milky white discharge were in the possession of the State at the time of trial, the evidence was not subjected to DNA testing, and DNA testing would show that appellant did not commit the offense. We agree with the trial court that these allegations and affidavit evidence fail to show that, at the time of trial in November 1999, DNA testing was (1) not available; (2) available, but not technologically capable of providing probative results; or (3) through no fault of appellant, not performed but required in the interests of justice. See Tex.Code Crim. Proc. Ann. art. 64.01(b). We overrule appellant's first issue.
In his second issue, appellant argues his counsel was ineffective in failing to comply with the requirements of article 64.01. Assuming for the sake of argument that appellant may raise a claim of ineffective assistance arising from a proceeding under Chapter 64, to prevail on his claims appellant must first prove, by a preponderance of the evidence, that his counsel's representation fell below the objective standard of professional norms. See Bell v. State, 90 S.W.3d 301, 307 (Tex.Crim. App.2002) (citing Strickland v. Washington, 466 U.S. 668, 687, 104 S. Ct. 2052, 80 L. Ed. 2d 674 (1984)). He must then show that this deficient performance prejudiced his defense. Bell, 90 S.W.3d at 307. Nothing in the record shows that, under the facts and circumstances of this case, appellant's counsel could have filed a legally sufficient motion for post-conviction DNA testing. However, assuming appellant's counsel was ineffective in filing a defective motion for post-conviction DNA testing and in failing to amend the motion, we cannot conclude appellant has been harmed. See id. Nothing in the statute precludes appellant from filing a motion for post-conviction DNA testing in compliance with the provisions of article 64.01. We overrule appellant's second issue.
We affirm the trial court's judgment. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1624276/ | 121 S.W.3d 471 (2003)
In re ARTHUR ANDERSEN LLP, Relator
No. 14-03-00572-CV.
Court of Appeals of Texas, Houston (14th Dist.).
October 23, 2003.
*473 Rusty Hardin, Andrew Lee Ramzel, Derek Shane Hollingsworth, Houston, for relator.
G. Sean Jez, George, M. Fleming, Houston, for respondents.
Panel consists of Justices FOWLER, EDELMAN, and SEYMORE.
OPINION
WANDA McKEE FOWLER, Justice.
I. INTRODUCTION
This case relates to the financial demise of Enron Corporation. In August of 1999, *474 Ken Lay, President and CEO of Enron Corporation, visited the City of Brenham, Texas in Washington County. The purpose of his visit was to speak to the Washington County Chamber of Commerce at its annual dinner and tout Enron as a savvy investment. This visit was widely publicized in and around Brenham, both by the newspapers and radio. The Plaintiffs,[1] all potential investors in Enron, either attended the meeting and heard Lay tell what a great investment Enron would be for them individually, for their trusts, and for their employee pension plans, or heard about the meeting later. Plaintiffs claim Lay's statements to the group were backed up by Enron's quarterly and annual reports, which indicated that Enron was rock-solid and highly profitable. After investing, the Plaintiffs alleged they would review press releases touting Enron's financial strength and its expected increases in profits.
Lay had told the Plaintiffs and others that they would make lots of money if they invested in Enron. They did make lots of moneyfor awhile. Then, their stock dropped precipitously. In late 2001, Enron filed for bankruptcyat the time, the largest ever. Many of Enron's top executives and some officers were accused of illegal activities. Daily news reports indicated that the Justice Department was investigating various Enron officials and investigating the accuracy of Enron's financial reports. Ultimately, several Enron officials were indicted.
The Plaintiffs felt they had been betrayed. They sued Ken Lay and two other Enron executives, unknown before, but by then well known because of the Enron debacleAndrew Fastow and Jeffrey Skillingand Arthur Andersen and five of its partners.
Andersen claimed it was just misled just like the Plaintiffs. It tried to join other defendants, namely financial institutions, it claimed were at least partly, if not totally, responsible for Enron's demise. These financial institutions, it claimed, enabled Enron to engage in inappropriate financial deals that masked its economic troubles; without these institutions the Plaintiffs' suit could not be litigated fairly.
But the Plaintiffs claimed that the financial institutions were irrelevant to the lawsuit. They claimed the suit was based on (1) Ken Lay's misrepresentations made that August evening in Brenham, (2) Enron's quarterly and annual financial reports prepared by Andersen, and (3) press releases and other public announcements Enron made concerning its financial strength. They claimed the financial institutions did not misrepresent anything to them the day Ken Lay visited and that their causes of action and petition did not implicate the financial institutions.
The trial court agreed with the Plaintiffs and in April 2003, denied Anderson leave to join the third parties. In July 2003, the trial court also entered a scheduling order that denied joinder of third parties.
In this mandamus, Andersen asks us to hold that the financial institutions are potentially responsible third parties who must be joined, and to set aside the two orders denying joinder. Finally, Andersen asks us to hold that it has no adequate remedy by appeal. Because we agree on all three issues, we conditionally grant the writ of mandamus as to the April 2003 order denying leave to join third parties and the July 2003 scheduling order.
II. BACKGROUND
We turn first to the historical facts. *475 The Plaintiffs sued Andersen[2] and the other defendants[3] for negligent misrepresentation, fraud, and conspiracy. The allegations are extensive and complex, and later we will discuss the relevant allegations in more detail. However, in essence, the Plaintiffs allege that the defendants provided false and misleading public information regarding Enron's financial condition, prompting the Plaintiffs to buy and/or retain existing shares of Enron stock; consequently, their retirement funds were diminished when Enron's true financial condition was eventually revealed and its stock devalued. In particular, the Plaintiffs complain that the defendants failed to disclose Enron's use of "special purpose entities," which concealed Enron's debt and caused its earnings to be overstated.
The procedural history of the suit is complicated; therefore, we will review only those events important to this appeal. In January of 2002, the Plaintiffs filed their original petition. Several months later, Andersen filed its original answer, and a month after that the Plaintiffs filed a first amended petition adding new plaintiffs. Then, in December of 2002,[4] the Plaintiffs filed a second amended petition again adding new plaintiffs and adding significant factual allegations.
Shortly after the Plaintiffs filed the second amended petition, Andersen filed a motion for leave to join Michael Kopper,[5] J.P. Morgan Chase,[6] CSFB,[7] CIBC,[8] Bank of America,[9] Barclays,[10] Lehman Brothers,[11] and Merrill Lynch,[12] claiming that the Plaintiffs' new factual allegations and public disclosures implicated these third parties in the transactions involving the special purpose entities.
Shortly after this, in early 2003, Andersen answered the claims of the new Plaintiffs in the first and second amended petitionsreferring to them as "intervening Plaintiffs." On the same day, Andersen filed its third-party petition.[13]
A month later, the trial court sua sponte severed into a separate suit[14] the claims of *476 the new Plaintiffs in the second amended petition and Andersen's third-party petition. In response to the severance, the Plaintiffs filed a third amended petition to reflect the Plaintiffs left after the severance order; the third amended petition contained essentially all the greatly expanded factual allegations first raised in the second amended petition.
The trial court held a hearing on Andersen's motion for leave to join third parties. On April 29, 2003, the court signed an order denying the motion. In mid-May of 2003, Andersen filed this mandamus petition and an emergency motion to stay the underlying suit.
Meanwhile, the trial court had set trial for September 29, 2003. However, discovery had previously been stayed until April 24, 2003 by a federal court order.[15] Therefore, despite the pending mandamus petition, the parties began discovery to prepare for the September trial. On July 1, 2003, the Plaintiffs filed a motion to extend the discovery period and a motion for entry of a Level 3 discovery control plan. At a July 8, 2003 hearing on these motions, Andersen again attempted to join third parties by requesting that any such discovery control plan include a deadline for joining additional parties. On July 15, 2003, the trial court entered a scheduling order resetting the trial to November 10, 2003, and setting various deadlines, but the court refused to set a deadline for adding third parties. In August of 2003, we stayed the trial and discovery to allow us to consider the mandamus petition.
III. MANDAMUS STANDARD OF REVIEW
Mandamus relief is available if the trial court clearly abuses its discretion, either in resolving factual issues or determining legal principles, and there is no other adequate remedy at law. Walker v. Packer, 827 S.W.2d 833, 839-40 (Tex.1992). A trial court clearly abuses its discretion if "it reaches a decision so arbitrary and unreasonable as to amount to a clear and prejudicial error of law." Id. at 839. However, as to legal issues, an error amounting to an abuse of discretion can be as simple as misinterpreting or misapplying the law. See Triantaphyllis v. Gamble, 93 S.W.3d 398, 402 (Tex.App.-Houston [14th Dist.] 2002, pet. denied)(citing Downer v. Aquamarine Operators, Inc., 701 S.W.2d 238, 241-42 (Tex.1985)). Thus, to show abuse of discretion in determining legal principles, the relator must show the trial court failed to analyze or apply the law correctly. See id; Walker, 827 S.W.2d at 840. A trial court has no "discretion" in determining what the law is or applying the law to the facts. Walker, 827 S.W.2d at 840. Finally, the relator must also show it has no other adequate remedy at law. Id.
IV. THE ISSUES PRESENTED
Andersen contends that the trial court abused its discretion by denying Andersen the right to join the third parties, and that it has no adequate remedy at law. It claims this abuse of discretion is embodied in two orders:
*477 [] the April 2003 order denying leave to join third parties;[16] and
[] the July 2003 scheduling order denying joinder of additional parties.[17]
The Plaintiffs claim these orders were proper because the third parties are not responsible parties, and, even if they are responsible parties, the judge had the discretion to refuse to join them because it would delay the trial.
These essentially are the issues before us. To resolve them, we must review the case law on third parties as well as the allegations in the third amended petition and the third-party petition. Then, even if we decide the financial institutions are responsible third parties, as the Plaintiffs claim, we still must determine whether the trial judge abused his discretion in refusing to add them. If we conclude there was an abuse of discretion, we must consider the last hurdle raised by the Plaintiffs that Andersen has an adequate remedy at law.
A. DENIAL OF LEAVE TO JOIN THIRD PARTIES
Andersen contends that the trial court abused its discretion by denying leave because the third parties are "responsible third parties" under Chapter 33 of the Texas Civil Practice Remedies Code, and, thus, Andersen has the right to have the entire case, including issues of proportionate responsibility and contribution, tried at one time. The Plaintiffs respond that the third parties are not "responsible third parties" under Chapter 33, but even if they are, the trial court had complete discretion to deny joinder.
1. The Definition of "Responsible Third Party"
Chapter 33[18] grants defendants the ability to join "responsible third parties" to a suit.[19] Section 33.004 provides, "on timely motion made for that purpose, a defendant may seek to join a responsible third-party who has not been sued by the claimant." TEX. CIV. PRAC. & REM. CODE ANN. § 33.004 (Vernon 1997). If a "responsible third party" is joined under section 33.004, the trier of fact determines the percentage of responsibility for each claimant, each defendant, each settling person, and each responsible third party. TEX. CIV. PRAC. & REM. CODE ANN. § 33.003 (Vernon 1997). A "responsible third party" is defined as any person to whom all of the following apply:
(i) the court in which the action was filed could exercise jurisdiction over the person;
(ii) the person could have been, but was not, sued by the claimant; and
*478 (iii) the person is or may be liable to the plaintiff for all or a part of the damages claimed against the named defendant or defendants.
TEX. CIV. PRAC. & REM. CODE ANN. § 33.011(6)(A) (Vernon 1997).
Here, the third parties satisfy part (i) of the definition because the trial court could exercise jurisdiction over them. They have apparently generally appeared in the severed suit and removed it to federal court. The parties seem to recognize this and focus on parts (ii) and (iii) of the definition. Because parts (ii) and (iii) overlap somewhat, we will address them together. We are required to review the allegations regarding the third parties' role to determine whether they satisfy parts (ii) and (iii). See Hernandez v. Houston Lighting & Power Co., 795 S.W.2d 775, 776 (Tex.App.-Houston [14th Dist.] 1990, no writ) (considering defendant's pleadings to determine whether third party was a proper defendant); Ryland Group, Inc. v. White, 723 S.W.2d 160, 162 (Tex.App.-Houston [1st Dist.] 1986, orig. proceeding) (citing plaintiffs' pleadings and defendants' claim that third parties also liable to conclude joinder was required); Geophysical Data Processing Center, Inc. v. Cruz, 576 S.W.2d 666, 667 (Tex.Civ.App.-Beaumont 1978, no writ) (stating the propriety of joining parties in any legal proceeding is dependent primarily, although not always exclusively, upon the state of the relevant pleadings).
2. How the Pleadings Implicate the Third Parties
The allegations regarding the third parties center on their role in the Enron transactions that involved special purpose entities.[20] The Plaintiffs allege that the Enron defendants, particularly Fastow, used the special purpose entities to achieve "off-balance sheet" treatment, and, thereby, conceal Enron's debt and artificially inflate its earnings.[21] The Plaintiffs further allege that the use of special purpose entities in these circumstances was improper under generally accepted accounting principles; therefore, Andersen should have consolidated the transactions onto Enron's balance sheets. According to the Plaintiffs, the eventual consolidation of the transactions onto Enron's balance sheets contributed to its financial collapse and the devaluation of the Plaintiffs' stock. The pleadings implicate the third parties in the transactions as follows:
[] Chewco/JEDI (Michael Kopper and Barclays)
The Plaintiffs allege that Enron entered into a partnership called JEDI; Fastow then formed a special purpose entity called Chewco to buy an outside investor's interest in JEDI. The Plaintiffs allege that Kopper was directly involved in and benefitted financially from the Chewco/JEDI *479 transactions, and Fastow used Kopper to control the transactions.[22] The Plaintiffs further allege that Barclays loaned $191.5 million (guaranteed by Enron) to Chewco to purchase the outside investor's interest in JEDI and then continued to fund Chewco by the millions. According to the Plaintiffs, the transactions were conducted so that the loans would be inaccurately reflected as outside equity investments.[23]
[] Mahonia Prepay Transactions (J.P. Morgan Chase)
The Plaintiffs allege that the Enron defendants "in concert with" J.P. Morgan Chase misrepresented billions in loans as legitimate "prepays" from customers. According to the Plaintiffs, Enron's financial statements improperly characterized the loans as energy trading activity with a special purpose entity called "Mahonia" created by J.P. Morgan Chase.[24]
[] CSFB's Prepay Transactions
In its mandamus petition, Andersen asserts that CSFB was engaged in the type of prepay transactions the Plaintiffs allege were fraudulent. The Plaintiffs do not specifically mention CSFB in connection with prepay transactions. However, Andersen alleges in its third-party petition that CSFB was involved in negotiating, structuring, reviewing, financing and/or implementing transactions involving special purpose entities, and profited from the transactions. Also, Andersen presented evidence of CSFB's involvement in prepay transactions.[25]
[] Nigerian Barges (Merrill Lynch)
The Plaintiffs allege that the Enron defendants pressured Merrill Lynch to purchase three Nigerian power generation barges. However, the Enron defendants guaranteed Merrill Lynch it would not lose money and would "be taken out of the deal" within a few months, and Merrill Lynch received an up-front fee of $250,000 plus 15% per annum for the period that it held this investment; as guaranteed, the Enron executives subsequently told Kopper to have another special purpose entity buy Merrill Lynch's interest. The Plaintiffs *480 allege that this fraudulent "sale" of assets enabled Enron to falsely record $12 million in earnings.[26]
[] LJM Partnerships (Kopper, CSFB, J.P. Morgan, Merrill Lynch, Bank of America, Lehman Brothers, and CIBC)
The Plaintiffs allege that special purpose entities called LJM Cayman, L.P. and LJM2 Co-Investment, L.P., run by Fastow, were integral to the scheme to manipulate Enron's financial results.[27] Enron allegedly engaged in twenty-four transactions involving the LJM partnerships, including complex hedging transactions worth billions, which were adverse to Enron's interests. According to the Plaintiffs, the LJM transactions enabled the defendants to move poorly performing assets off-balance sheet, manufacture earnings, and improperly inflate the value of investments by back-dating documents. In addition, Fastow allegedly had a secret agreement that ensured the LJM partnerships would not lose money in their dealings with Enron. The Plaintiffs further allege the LJM transactions were tainted by a conflict between Fastow's fiduciary duties to the LJM partnerships and his fiduciary duties to Enron, and an LJM2 offering memorandum to investors expressly acknowledged this conflict of interest but represented that it would benefit Fastow and the investors. According to the Plaintiffs, Fastow and the other LJM investors profited by the millions through the LJM transactions. Kopper and CSFB are the only potential third parties that the Plaintiffs mention as LJM investors or partners.[28] However, in its motion for leave and third-party petition, Andersen pleads that J.P. Morgan, Merrill Lynch, Bank of America, Lehman Brothers, CIBC, and/or their executives, were also LJM investors or partners.[29]
3. With These Allegations, the Plaintiffs Could Have Sued the Third Parties and the Third Parties May Be Liable to Them.
In spite of these broad, sweeping allegations, the Plaintiffs still claim this suit is not about the financial institutions. They still claim this suit is about Ken Lay's visit to Brenham and the representations he made there,[30] which enticed the Plaintiffs to invest initially, plus the representations Lay, Andersen and the other *481 primary defendants made through press releases and financial reports to entice the Plaintiffs to continue holding their Enron stock. For this reason, they say, the suit is not about the financial institutions, but about the conduct in Washington County, and so, they could not have sued the third parties and the third parties could not be liable to the Plaintiffs. For several reasons, we think they are wrong.
First, based on these pleadings, we do not agree that these suits are not in any way about the financial institutions. We would not go so far as to say that they are all about the financial institutions, but, certainly, the financial institutions play a pivotal role in the stories the Plaintiffs will tell the jury. The Plaintiffs seem to be saying that they will have the jurors put on blinders so that they can see only the alleged bad acts of Lay, Andersen, and a few others. But, as the brief history of this debacle shows and these pleadings allege, the fall of Enron is not about one person, or even a few people; it is the story of a host of actors. On these pleadings, asking the jury, or us, to look only at Lay, Fastow, Skilling, Andersen, and some of its partners, is like asking someone to look only at the eye of the hurricane and to ignore the furor surrounding it. Neither is an accurate picture.
Second, for the third parties to be liable for fraud, they need not have made representations directly to the Plaintiffs. Texas case law has held that each party to a fraudulent scheme is responsible for the acts of the other participants done in furtherance of the scheme and liable for fraud. See Skrepnek v. Shearson Lehman Bros., Inc., 889 S.W.2d 578, 580 (Tex. App.-Houston [14th Dist.] 1994, no writ); Corpus Christi Teachers Credit Union v. Hernandez, 814 S.W.2d 195, 202 (Tex. App.-San Antonio 1991, no writ). Further, a party who benefits from a fraudulent transaction may be a principal in the fraud and liable as such. First State Bank of Miami v. Fatheree, 847 S.W.2d 391, 396 (Tex.App.-Amarillo 1993, writ denied) (citing Corpus Christi Teachers, 814 S.W.2d at 202). In fact, a party has been liable for the fraudulent misrepresentations of a third party by mere silent acquiescence when he benefitted from the fraud. See Bransom v. Standard Hardware, Inc., 874 S.W.2d 919, 924 (Tex.App.-Fort Worth 1994, writ denied); Corpus Christi Teachers, 814 S.W.2d at 202. Therefore, although the third parties may not have misrepresented anything to the Plaintiffs, they may be liable for fraud because they allegedly participated in the fraudulent transactions and reaped the benefits.[31]
Third, the Plaintiffs also argue that the third parties cannot be liable for conspiracy to commit fraud without being liable for the underlying fraud because conspiracy is a derivative tort. See Tilton v. Marshall, 925 S.W.2d 672, 681 (Tex. 1996) (defining the derivative tort of civil conspiracy as a combination of two or more persons to accomplish an unlawful *482 purpose, or to accomplish a lawful purpose by unlawful means). Plaintiffs are mistaken. A party may be liable for conspiracy to commit fraud without being liable for the underlying fraud. A defendant's liability for conspiracy depends on "participation in some underlying tort for which the plaintiff seeks to hold at least one of the named defendants liable." See id. (emphasis added). Civil conspiracy "came to be used to extend liability in tort beyond the active wrongdoer to those who have merely planned, assisted, or encouraged his acts." See Carroll v. Timmers Chevrolet, Inc., 592 S.W.2d 922, 925 (Tex. 1979) (quoting W. PROSSER, HANDBOOK OF THE LAW OF TORTS § 46, at 293 (1971)). Once a conspiracy is proven, each co-conspirator is responsible for all acts done by any of the conspirators in furtherance of the unlawful combination. See id. (citing State v. Standard Oil Co., 130 Tex. 313, 107 S.W.2d 550, 559 (1937)). Therefore, the third parties may be liable to the Plaintiffs for conspiracy to commit fraud because the Plaintiffs seek to hold at least one of the defendants liable for fraud.[32]
In sum, Andersen has shown that the third-party defendants are implicated in the Plaintiffs' pleadings to such an extent that the Plaintiffs could have sued each third party, and that each third party "may" be liable to the Plaintiffs for all or a part of the "damages claimed" against Andersen and the other defendants. Thus, Andersen has met its burden to show that the third parties are "responsible third parties" under Chapter 33.[33] We now turn to the penultimate issue: whether the trial court abused its discretion.
B. ABUSE OF DISCRETION
*483 Andersen contends the trial court abused its discretion by denying leave to join these "responsible third parties" because it denied Andersen the right to have one jury apportion liability among all potentially responsible parties. The Plaintiffs contend that, even if the third-party defendants are potentially responsible third parties, the trial court acted within its broad discretion in denying joinder. They claim joinder is a bad choice because it will delay the trial, because Andersen waited almost a year after Plaintiffs filed suit to file the third-party action and has waived its right to join third parties, and because adding them will increase costs, confuse the jury, and prejudice the Plaintiffs.[34]
The Plaintiffs are correct that a trial court ordinarily has great discretion regarding joinder of third parties. See TEX. R. CIV. P. 38; TEX. CIV. PRAC. & REM. CODE ANN. § 33.004 (requiring timely motion to join responsible third parties); Valley Indus., Inc. v. Martin, 733 S.W.2d 720, 721 (Tex.App.-Dallas 1987, orig. proceeding); Threeway Constructors, Inc. v. Aten, 659 S.W.2d 700, 701 (Tex. App.-El Paso 1983, no writ). However, mandamus relief is appropriate if the trial court abuses that discretion. See, e.g., Jones v. Ray, 886 S.W.2d 817, 822-23 (Tex. App.-Houston [1st Dist.] 1994, orig. proceeding) (granting mandamus relief because severance of the plaintiffs' claims against some defendants from claims against other defendants would prohibit jury from apportioning appropriate percentage of responsibility for each defendants' conduct); see also Ryland, 723 S.W.2d at 163 (granting mandamus relief because severance of defendants' third-party claims violated the defendants' right to have the liability of all original and third-party defendants determined in the primary suit under then version of Chapter 33).
As to joinder of third parties, "[o]ne leading commentator in Texas procedural law states, `[l]eave should be liberally granted.'" See David F. Johnson, Paying For The Sins of AnotherParental Liability in Texas for the Torts of Children, 8 TEX. WESLEYAN L. REV. 359, 377 (2002) (quoting ROY W. MCDONALD, TEXAS CIVIL PRACTICE § 5:75 (1992)). Joinder rests on the concept of judicial efficiency and the policy of providing full and adequate relief to the parties. See id. (citing OKC Corp. v. UPG Inc., 798 S.W.2d 291, 293 (Tex.App.-Dallas 1984, no writ)). A court's decision on joinder should be based on practical considerations with a view to what is fair and orderly. See id. at 378 (citing Fireman's Fund Ins. Co. v. McDaniel, 327 S.W.2d 358, 373 (Tex.Civ.App.-Beaumont 1959, no writ)). The court may indeed consider whether joinder will delay the trial. See id. (citing Valley Indus., 733 S.W.2d at 721). However, the key is whether a delay is reasonable under the facts and circumstances of the suit, keeping in mind the history of the suit, and not simply that a delay will occur. See id. at 377-78; TEX. R. CIV. P. 37 (allowing additional parties to be brought in ... "but not at a time or in a manner to unreasonably delay the trial of the case") (emphasis added).
Here, the extraordinary facts and circumstances surrounding the Enron collapse dictate joinder and far outweigh any delay the joinder may cause.[35] As we have *484 discussed, the Plaintiffs allege that numerous, complex, fraudulent transactions heavily contributed to the collapse and their resulting damages. The Plaintiffs and Andersen allege the third parties were intimately involved in the transactions, invested millionsand billions in some casesand benefitted financially from them. Most significantly, the Plaintiffs and Andersen allege the third parties were involved in concealing the transactions from stockholders such as the Plaintiffs.[36] Yet, Andersen has been denied the opportunity to have the jury in this suit determine whether the third parties may also be liable to the Plaintiffs. Based on judicial efficiency and the policy of providing full and adequate relief to the parties, Andersen has the right to have the entire case tried at one time and have one jury apportion liability among all responsible parties.
The Plaintiffs urge several other reasons that the trial court acted within its discretion by denying leave. For instance, they assert that Andersen did not seek to join the third parties until nearly a year after the Plaintiffs filed suit. However, due to the enormity and complexity of the Enron collapse, we reject the suggestion that Andersen should have known the extent of the third parties' involvement sufficiently to join them only two months after the Enron collapse.[37] Instead, knowledge of the third parties' alleged role unfolded over time.[38] Most significantly, the Plaintiffs first implicated the third parties in their second amended petition; Andersen moved for leave to join them three days later. Consequently, we find no delay in seeking joinder that justifies the trial court's denying leave.
Next, the Plaintiffs argue that joining the third parties will multiply the costs of litigation and discovery. However, the Plaintiffs, not Andersen, interjected these transactions into the suit. Moreover, even if the financial institutions are not joined, the pleadings and allegations concerning the financial institutions will force the parties to obtain discovery from the third parties.[39] In particular, Andersen notes it needs discovery from the third parties to show the transactions were appropriate and properly recorded, or that critical information was not disclosed to Andersen. The discovery to be conducted is potentially massive regardless of the joinder.
*485 The Plaintiffs further argue that joining the third parties will confuse the jury. Again, the Plaintiffs interjected the extensive and complex facts regarding the transactions into the suit. Therefore, even without joinder, the Plaintiffs will presumably introduce the transactions to the jury because they are at the heart of the Plaintiffs' claims. Again, Andersen will also presumably rely on the transactions to defend itself. Therefore, we reject the argument that any potential jury confusion justifies the denial of joinder.
Finally, the Plaintiffs generally assert they will be prejudiced by the joinder. To the contrary, for the reasons we have discussed, Andersen could be unfairly prejudiced if denied the right to join the third parties.
In sum, because we conclude that the decision to deny leave to join third parties amounted to a clear and prejudicial error of law, the trial court abused its discretion.
C. NO ADEQUATE REMEDY AT LAW
Having found an abuse of discretion, we consider whether Andersen has an adequate remedy at law. Andersen asserts it does not because it may be foreclosed in the future from obtaining contribution from the third parties. We say "may be foreclosed" because the law on this issue is not settled. In Casa Ford, Inc. v. Ford Motor Co., 951 S.W.2d 865, 877 (Tex.App.-Texarkana 1997, pet. denied), the court held that Chapter 33 does not permit a tortfeasor subject to a judgment to bring a post-judgment contribution claim against a tortfeasor who was not a party to the primary suit. However, the Plaintiffs assert that the Texas Supreme Court suggested the opposite in dicta in Ingersoll-Rand Co. v. Valero Energy Corp., 997 S.W.2d 203, 208 (Tex.1999). There, the court addressed contractual indemnitynot contribution for a tort judgment. See id. Nevertheless, the court stated "[i]n a suit for either contribution or indemnity the injury upon which suit might be based does not arise until some liability is established. In this case, as in a contribution claim against a joint tortfeasor, liability could not have been established until judgment was rendered." See id. (emphasis added). Because this issue is not settled, Andersen must gamble on how a court considering a later contribution action might rule on the issue. Therefore, we cannot state with certainty that Andersen will have an adequate remedy in a separate suit against the third parties.[40]
Even if Andersen could prosecute a separate suit against the third parties, it is the opportunity to have one jury apportion liability among all responsible third parties that Andersen seeks.[41]
*486 Relator has a substantial right to present the complete set of intertwined facts and issues germane to his claims, to one factfinder, in one proceeding, rather than in two separate suits that are all but foreordained to generate, collectively, a decision destined to fail in the appellate process. The denial of that right would introduce the "empty chair defense," and thereby skew the progress and entire conduct of the proceedingswith the resultant potential to affect the outcome of the litigation profoundly, and to compromise the presentation of the parties' respective claims or defenses in ways unlikely to be apparent in the appellate record.
Jones, 886 S.W.2d at 822 (citations omitted).
Similarly, due to the third parties' alleged role in the Enron collapse, their absence would likely profoundly affect the conduct and outcome of this suit in ways unlikely to be apparent in the appellate record. Moreover, due to the enormity of the facts surrounding the collapse, any separate action against the third parties, or even a successful appeal in this suit, would result in an enormous waste of resources. The additional expense and effort of preparing for and participating in two separate trials does not, standing alone, justify mandamus relief. See id. at 822 n. 9 (citing Walker v. Packer, 827 S.W.2d at 842). However, when a trial court's error will cause a waste of judicial resources, we may properly consider that factor in determining the adequacy of an appeal. See id. Therefore, the potential waste of resources, when combined with the possibility that Andersen may not be able to prosecute a separate suit against the third parties, or successfully appeal in this suit, supports our conclusion that Andersen has no adequate remedy at law.
V. CONCLUSION
Having found that the trial court abused its discretion in denying Andersen leave to join the third parties, and Andersen has no adequate remedy at law, mandamus relief is appropriate. Accordingly, we sustain Andersen's second issue. Because we sustain Andersen's second issue, we need not consider its first issue challenging the February 14, 2003 severance order. We also sustain in part Andersen's supplemental challenge to the July 15, 2003 scheduling order and hold that it is vacated to the extent it conflicts with our ruling that Andersen be allowed to join the third parties.
We are confident the trial court will (1) vacate its April 29, 2003 order and enter an order granting Andersen leave to join the third parties addressed in this opinion and (2) amend the July 15, 2003 scheduling order to allow the addition of the new parties and corresponding changes in the pretrial deadlines. Therefore we conditionally issue this writ. If the trial court fails to follow this order, the writ will issue. Having disposed of this original proceeding, we lift the stay imposed by our order of August 7, 2003.
NOTES
[1] Although the Plaintiffs are the "real parties in interest" in this mandamus proceeding, we will refer to them as "the Plaintiffs" for consistency.
[2] Cause No. 32,716; Bullock, et al. v. Arthur Andersen LLP, et al.; in the 21st Judicial District of Washington County, Texas.
[3] The Andersen individual defendants are D. Stephen Goddard, Jr., David B. Duncan, Debra A. Cash, Roger Willard, and Thomas H. Bauer; the Enron individual defendants are Andrew S. Fastow, Kenneth L. Lay, and Jeffrey J. Skilling.
[4] Between the original petition and this second amended petition, the case was removed twice and then remanded to the state court.
[5] Michael Kopper was an assistant to Fastow.
[6] J.P. Morgan Chase includes J.P. Morgan Chase & Co., J.P. Morgan Securities, Inc., J.P. Morgan Chase Bank, and Chase Securities, Inc.
[7] CSFB includes Credit Suisse First Boston, Credit Suisse First Boston (USA), Inc., Credit Suisse First Boston Corp., and Donaldson, Lufkin & Jenrette Securities Corporation.
[8] CIBC includes Canadian Imperial Bank of Commerce, CIBC Inc., and CIBC World Markets Corp.
[9] Bank of America includes Bank of America Corp., Bank of America, N.A., and Banc of America Securities LLC.
[10] Barclays includes Barclays PLC and Barclays Bank PLC.
[11] Lehman Brothers includes Lehman Brothers Holding, Inc. and Lehman Brothers, Inc.
[12] Merrill Lynch's full name is Merrill Lynch, Pierce, Fenner & Smith Incorporated a/k/a Merrill Lynch & Co.
[13] The petition also contained a cross-claim against Fastow.
[14] The severed suit is entitled Choucroun, et al. v. Arthur Andersen LLP, et al. The third parties subsequently removed it to federal court, and it was then transferred to the Judicial Panel for Multidistrict Litigation.
[15] The Plaintiffs' law firm represents stockholders in numerous other suits based on substantially the same facts and claims. Several such suits are pending before the Honorable Melinda Harmon of the United States District Court for the Southern District of Texas, including a securities class action entitled Mark Newby, et al. v. Enron Corporation, et al. Judge Harmon stayed discovery in the underlying suit from May 1, 2002 until April 24, 2003, while she ruled on motions to dismiss filed by the third parties in Newby.
[16] Andersen also attacks the February 14, 2003 severance order, but we need not address that order in light of our holding concerning the April 29, 2003 and July 15, 2003 orders.
[17] Although this order was entered after Andersen filed the mandamus, Andersen filed a supplement to its mandamus petition, claiming that the trial court abused its discretion in its entry of this order. Because it directly impacts Anderson's ability to join third parties, we have considered it.
[18] Several sections of Chapter 33 cited in this opinion were recently amended. See An Act Relating to Reform of Certain Procedures and Remedies in Civil Actions, 78th Leg., R.S., ch. 204, art. 4, §§ 4.01, 4.02, 4.03, 4.04, 4.05, 2003 Tex. Sess. Law Serv. (Vernon) (to be codified as amendments to TEX. CIV. PRAC. & REM. CODE ANN. §§ 33.002, 33.003, 33.004, 33.011). However, the amendments apply only to suits filed on or after July 1, 2003, and, therefore, do not apply to this suit. See id. § 23.02(c).
[19] With limited exceptions not applicable here, Chapter 33 applies to all tort actions. See Tex. Civ. Prac. & Rem.Code Ann. § 33.002 (Vernon Supp.2003).
[20] We make no conclusions regarding the truth of these allegations or whether the third parties will ultimately be found liable. See TEX. CIV. PRAC. & REM. CODE ANN. § 33.002(f) (providing that nothing in this section regarding the applicability of Chapter 33 requires submission to the jury of a question regarding conduct by any party absent sufficient evidence to support the submission). Instead, we consider whether the allegations, if true, show that they may be liable. See Ryland, 723 S.W.2d at 162 (concluding joinder required based on plaintiffs' and defendants' claims although whether plaintiffs' theory of recovery will be submitted to the jury can only be determined after the evidence is closed).
[21] A criminal complaint has been filed against Fastow in the United States District Court for the Southern District of Texas in connection with the Enron transactions charging, among other offenses, securities fraud, money laundering, and conspiracy to commit fraud.
[22] The Plaintiffs also discuss transactions involving special purpose entities called "RADR ZWS, L.L.C." and "RADR ZWS MM, L.L.C.," which were allegedly concealed from stockholders. Although Andersen does not specifically outline the RADR transactions in its mandamus petition, the Plaintiffs implicate Kopper in these transactions.
[23] In addition, Andersen presented a newspaper report that according to congressional testimony, the Barclays' loans were structured to hide them from Enron's auditors, and their subsequent discovery played a central role in the Enron financial collapse.
[24] Andersen included in this record testimony before the United States Senate of Robert Roach, the senate investigator on "The Role of the Financial Institutions in Enron's Collapse." Mr. Roach reported that the financial institutions involved (including J.P. Morgan Chase) funded the prepays, participated in the required trades, and allowed Enron to use offshore entities that they controlled as sham trading partners "for the explicit purpose of allowing Enron to disguise multi-million-dollar loans as trading activity." He further testified these financial institutions understood Enron's goal was to increase operating cash flow without reporting debt, and designed and implemented the financial structures to help Enron achieve its objective.
[25] Robert Roach testified that to help Enron characterize prepay funds as coming from energy trades, several financial institutions (including CSFB) were careful not to include requirements or descriptive language in the prepay documentation that would disclose the true nature of the transaction. In particular, CSFB instructed its lawyers, "very important for them [Enron] is that the docs are as standard as possible and DO NOT include any representations on accounting driven transactions." Roach concluded that the prepays intentionally made it impossible for investors, analysts, and other financial institutions to uncover Enron's true indebtedness.
[26] Andersen presented a Wall Street Journal article reporting that Merrill Lynch agreed to pay $80 million to resolve SEC charges that it aided Enron in fraudulently overstating its earnings through the Nigerian barge project; Senate investigations revealed that Merrill Lynch "temporarily" purchased the barges from Enron and questioned whether the sale was truly a loan; and a senator characterized some of the financial institutions as "parties to Enron's financial deceptions."
[27] The criminal complaint against Fastow also cites his alleged involvement in the LJM transactions.
[28] The Plaintiffs note that Kopper pleaded guilty to criminal conspiracy to commit wire fraud and money laundering with respect to the Enron transactions and agreed to pay proceeds to the government.
[29] In its mandamus petition, Andersen asserts that CIBC was also involved in off-balance sheet transactions called "Hawaii" and "Braveheart." However, the Plaintiffs do not detail any "Hawaii" or "Braveheart" transactions. Instead, Andersen relies mostly on evidence that is not a part of the mandamus record to explain these transactions. Regardless, we may conclude CIBC is a "responsible third party" based on its alleged involvement in the LJM transactions.
[30] The Plaintiffs stress that they received Enron's financial reports in Washington County, and Lay represented in his speech "just what a great investment Enron was and how much he expected the stock price to increase."
[31] The Plaintiffs argue that their "factual background allegations make reference to the third parties" only to emphasize the types of transactions the defendants failed to disclose; they claim they do not show that the third parties may be liable to the Plaintiffs. We disagree. The discussion regarding the third parties is more than simply background material. If proved, the transactions, by their nature, were a means to conceal Enron's true financial condition. The Plaintiffs use the words "fraud" and "conspired" in some instances when describing the third parties' roles. In fact, in her order staying discovery in this and other shareholder cases, Judge Harmon rejected the Plaintiffs' attempts to "repeatedly characterize their cases as grounded in representations" made by Lay at the Washington County meeting because the discovery requested by the Plaintiffs "reveals that the case may begin with a meeting in Brenham, but certainly does not end there."
[32] The Plaintiffs also maintain that an actionable conspiracy requires a "meeting of the minds"; thus, Andersen's claim that the third parties may be liable for conspiracy is inconsistent with its claim that it was ignorant of the transactions and was misled. However, Andersen can deny liability for conspiracy but allege, in the alternative, that the third parties are also liable for conspiracy. See TEX. R. CIV. P. 48 (allowing alternative defenses). Nevertheless, the third parties may be liable for conspiring with the Enron executives.
[33] In its mandamus petition, Andersen also seeks to join the third parties as "contribution defendants." There is a distinction between a "contribution defendant" and a "responsible third party." A "contribution defendant" means "any defendant, counter-defendant, or third-party defendant from whom any party seeks contribution with respect to any portion of damages for which that party may be liable, but from whom the claimant seeks no relief at the time of submission." TEX. CIV. PRAC. & REM. CODE ANN. § 33.016(a) (Vernon 1997) (emphasis added). The jury determines the percentage of responsibility of a "contribution defendant" separately for purposes of contribution to the defendants, and not as part of the global apportionment of responsibility. See TEX. CIV. PRAC. & REM. CODE ANN. § 33.016(c) (Vernon 1997). On the other hand, the trier of fact determines the percentage of responsibility of a "responsible third party" as part of the global apportionment of responsibility. See TEX. CIV. PRAC. & REM, CODE ANN. § 33.003. Andersen continually refers to its desire to have one jury apportion percentages of responsibility "among" all potentially responsible parties. Therefore, we interpret the mandamus petition as primarily seeking leave to join the third parties as "responsible third parties," and secondarily as "contribution defendants." The requirements for joinder of a "contribution defendant" are less stringent than the requirements for joinder of a "responsible third party." Compare TEX. CIV. PRAC. & REM. CODE ANN. § 33.016(b) (Vernon 1997) (providing defendant may assert the right to contribution "against any such person as a contribution defendant in the claimant's action") with TEX. CIV. PRAC. & REM. CODE ANN. § 33.011(6)(A) (prescribing three-part definition of "responsible third party"). Consequently, the following reasons for allowing Andersen to join the third parties as "responsible third parties" apply if Andersen, alternatively, seeks to join them as "contribution defendants."
[34] Although the Plaintiffs argue joinder will delay the trial, after they filed their response to the mandamus petition, the trial court delayed the trial to enable them to timely designate experts.
[35] In her opinion on the third parties' motion to dismiss in Newby, Judge Harmon recognized that the rapid collapse of Enron and the resulting scope, variety, and severity of losses are unprecedented in American corporate history. See Newby, 235 F.Supp.2d 549, 565 (S.D.Tex.2003).
[36] Andersen also presented evidence that some of the transactions may have been intentionally concealed from it. Lynn Turner, former SEC chief accountant, reported to the United States Senate that Andersen gave some good guidance regarding treatment of the prepay transactions, and it appeared "like some people almost attempted to mislead Andersen, which is highly unfortunate."
[37] According to the Plaintiffs, Enron unraveled and its stock plummeted in October and November 2001. Enron filed bankruptcy on December 2, 2001. The Plaintiffs filed suit on January 24, 2002.
[38] The Senate reports regarding the role of the third parties were not issued until July 2002. Kopper did not plead guilty to criminal charges until August 2002. The criminal complaint against Fastow was not filed until October 2002. The first settlement by a financial institution (Merrill Lynch) with the SEC regarding the transactions at issue occurred in February 2003.
[39] The Plaintiffs have stated that they do not necessarily need discovery from the third parties. However, in ordering the stay of discovery, Judge Harmon stated the Plaintiffs had undertaken a "massive amount of discovery" including subpoenas requesting all records pertaining to numerous LJM partnerships.
[40] We question whether Ingersoll-Rand is even contrary to Casa Ford. The court may have meant that a claim for contribution against a joint tortfeasor, whose percentage of responsibility was already determined in the primary suit, does not accrue until judgment is rendered. See TEX. CIV. PRAC. & REM. CODE ANN. § 33.015 (Vernon Supp.2003). Further, we note that despite its dicta in Ingersoll-Rand, the court previously denied review of Casa Ford. In addition, after Ingersoll-Rand, another court relied on Casa Ford, albeit in an unpublished case, and the Supreme Court denied review. See BDO Seidman, LLP v. Bracewell & Patterson, LLP, No. 05-02-00636-CV, 2003 WL 124829, at *2 (Tex. App.-Dallas, January 16, 2003, pet.denied). For these reasons, we cannot rely on Ingersoll-Rand to rule that Andersen could bring a separate suit for contribution against the third parties if they are not joined here.
[41] The Plaintiffs also assert that Andersen can obtain contribution from the third parties in Newby. However, any such right would not rectify the lack of opportunity to have one jury apportion liability among all responsible parties in this suit. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1555070/ | 46 F.Supp. 780 (1942)
UNITED STATES
v.
O'HARA et ux.
No. 2319.
District Court, E. D. Michigan, S. D.
September 19, 1942.
*781 John C. Lehr, Kenneth D. Wilkins, and Constantine T. Dinu, all of Detroit, Mich., for plaintiff.
Harry J. Merritt, of Royal Oak, Mich., for defendants.
LEDERLE, District Judge.
1. The United States Government, as owner and holder of a negotiable promissory note, instituted this action thereon against the makers, John P. O'Hara and Netina O'Hara, residents of this District.
2. The note in suit is joint and several in form, bears date of May 13, 1938, and by its terms is payable in stated monthly installments over a period of thirty-six months, to the order of Maxwell Construction Company. The execution and delivery of the note were admitted, although defendants testified that this occurred on Sunday, May 8, 1938, rather than on Friday, May 13, 1938. The note bears the endorsements of the payee, Maxwell Construction Company, and the intermediate holder, Industrial Morris Plan Bank of Detroit.
3. At the time of the execution and delivery of the note the defendants were, and are now, husband and wife.
4. The consideration for the note was an eleven hundred dollar contract for renovation and modernization work at defendants' home to be performed by the Maxwell Construction Company. Defendants proferred testimony to the effect that Maxwell Construction Company abandoned the work during the course of the contract, did not complete the services nor furnish all the material covered by the contract, completing only about half the contract, and that defendants had to complete the work independently. During the course of this litigation and at the date of the trial defendants tendered what appeared to be the price of the work actually performed by Maxwell Construction Company, which tender plaintiff consistently refused. No proffer of proof was made to contradict defendants' claims regarding nonperformance of the contract and the amount defendants paid to secure completion of the work.
5. The note is complete and regular on its face. In this condition the Industrial Morris Plan Bank of Detroit purchased it over the counter for cash on May 13, 1938, before it was either overdue or dishonored. This bank took the note in good faith and for value, without notice of any infirmity in it or any defect in the title of the person negotiating it, and without notice or knowledge of any facts regarding breach or contemplated breach of the modernization contract which would put a purchaser upon inquiry. There is no question nor evidence of any bad faith on the part of any officer, agent or employee of said bank.
6. This note was insured by the Federal Housing Administration under the provisions of 12 U.S.C.A. § 1703. Shortly after negotiation to said bank the defendants disclaimed liability on the note because of nonperformance of the modernization contract. Upon notice of such default, the total amount due on the note was paid to said bank by the Government as an insured loss, and the note was negotiated to the Government, in accordance with the terms of the National Housing Act on or about July 22, 1938. On that date the first installment specified in said note had not been paid.
*782 7. The amount due and owing according to the terms of said note is $1,221.40 which includes principal and interest to this date.
Conclusions of Law.
1. This is a civil suit brought by the United States Government against residents of this District over which this court has jurisdiction. 28 U.S.C.A. § 41(1); United States v. Hansett, 2 Cir., 1941, 120 F.2d 121.
2. The Morris Plan Bank of Detroit was a holder in due course of the note in suit. 1929 Compiled Laws of Michigan § 9301, M.S.A. 19.94, et seq.; Miller v. Ottaway, 1890, 81 Mich. 196, 45 N.W. 665, 8 L.R.A. 428, 21 Am.St.Rep. 513; United States v. Hansett, supra.
3. Sunday contracts are void in Michigan; however, if a negotiable instrument, in fact executed on Sunday, but bearing a secular date, reaches the hands of a holder in due course, the maker of such note is estopped to repudiate the apparent date, and the note is a valid and enforceable obligation to the same extent as if it had been executed on a secular date. 1929 Compiled Laws of Michigan § 9078, M.S.A. 18.851; Garwood v. Burton, 1933, 265 Mich. 408, 251 N.W. 564.
4. Where a holder of a negotiable instrument, not a party to any fraud or illegality affecting the instrument, derives title through a holder in due course, as did plaintiff here, such holder has all the rights of such former holder in due course in respect to all parties. 1929 Compiled Laws of Michigan § 9307, M.S.A. 19.100; Kost v. Bender, 1872, 25 Mich. 515; Shaw v. Clark, 1882, 49 Mich. 384, 13 N.W. 786, 43 Am. Rep. 474. See note following Kotzman v. Condit, 1934, 169 Okl. 422, 37 P.2d 412, 98 A.L.R. 290.
5. A holder in due course holds the instrument free from any defect of title of prior parties and free from defenses available to prior parties among themselves, and may enforce payment of the instrument for the full amount thereof against any party liable thereon, and plaintiff, by virtue of taking from a holder in due course, has like rights against the defendants herein. 1929 Compiled Laws of Michigan § 9306, M.S.A. 19.99.
6. In cases where the sole and separate estate of a married woman is not benefited, the common law disability of coverture has been relaxed in Michigan to the extent of permitting a married woman to become jointly liable with her husband upon a written instrument, such liability extending only to joint and entirety property, enforceable under a judgment reciting that such parties were husband and wife at the time of their execution and delivery of such instrument, which recital of fact for the guidance of a levying officer must be endorsed upon any process issued thereon. 1929 Compiled Laws of Michigan § 13062, M.S.A. 26.181, et seq.
7. Accordingly, judgment shall be entered herein in favor of plaintiff and against defendants, John P. O'Hara and Netina O'Hara, husband and wife, jointly, and against John P. O'Hara individually, for the sum of $1,221.40, together with plaintiff's costs to be taxed, for which execution may issue, such liability not to extend to the sole and separate estate of defendant Netina O'Hara, but in accordance with the provisions of Sections 13062-13066, Compiled Laws of Michigan for 1929, such judgment to contain a recital that defendants were husband and wife at the time of the execution and delivery of the written instrument which is the subject matter of this litigation. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1555074/ | 46 F.Supp. 385 (1942)
ALABAMA STATE FEDERATION OF LABOR
v.
KURN et al.
No. 5288.
District Court, N. D. Alabama, S. D.
September 8, 1942.
John L. Busby, of Birmingham, Ala., for plaintiff.
Cabaniss & Johnston and Lucien D. Gardner, Jr., all of Birmingham, Ala., for defendants.
MURPHREE, District Judge.
This action is brought to enforce an order of the National Railroad Adjustment Board (hereinafter referred to as the Board), as provided in the Railway Labor Act, 45 U.S.C.A., § 153(p) et seq. The facts stated in the complaint as the basis for this relief are that plaintiff Salter was discharged from the service of "Defendant Company" after becoming a member of a certain union, and that thereafter the Board made an award and order that "Defendant Carrier" restore Salter to service and compensate him for time lost less compensation received in other employment, a copy of the said award, order and an opinion upon which they were based being attached to and incorporated in the complaint. The award, order and opinion disclose that the proceedings before the Board were not against the present defendants in this Court, but were *386 against the St. Louis-San Francisco Railway Company itself.
The defendants have filed an answer, the first defense of which is that: "The complaint fails to state a claim against defendants upon which relief can be granted." This is verbatim the first defense set out in official form 20, appended to the Federal Rules of Civil Procedure, 28 U. S.C.A. following section 723c. The note following official form 20 states: "The first defense raises the legal sufficiency of the complaint. Its effect is equivalent to a general demurrer or a motion to dismiss."
We will, therefore, consider this defense as a motion to dismiss because of such legal insufficiencies as appear on the face of the complaint.
The defendants have directed the attention of the Court to two such legal insufficiencies. One is the failure of the complaint to allege a causal connection between Salter's affiliation with the labor union and his discharge. In this respect the complaint is deficient. It is not enough that the annexed award, order and opinion of the Board disclose what undoubtedly is the basis of plaintiff's claim for relief the complaint itself must state "the causes for which he claims relief", by the terms of the Railway Labor Act itself. See System Federation v. Louisiana & A. Ry. Co., D.C.La.1940, 30 F.Supp. 909.
However, this defect in the complaint is probably not fatal because an amendment could easily be framed to assert a causal connection between union affiliation and discharge.
The same is not true of the other defect urged by defendants. While this action is brought against "J. M. Kurn and John G. Lonsdale as Trustees for St. Louis-San Francisco Railway Company", the complaint discloses, especially by its exhibits, that the proceedings before the Board were against the "St. Louis-San Francisco Railway Company." No justification for this variance appears in the complaint. It is the rule, as stated in 2 Remington on Bankruptcy, § 1386, that "A suit brought against the bankrupt after adjudication will not bind the trustee, who was not a party thereto * * *". Citing: Hull v. Burr, 61 Fla. 625, 55 So. 852; In re Lavery & Son, D.C.Mass.1916, 235 F. 910.
Construing the complaint against the pleader, and indeed in the most reasonable manner, we can only conclude that the proceedings before the Board fall within this rule, and the trustees defendant to the present action are not bound by the proceedings before the Board. Since by the terms of the Act itself, proceedings against a carrier are not authorized in this Court unless an order of the Board against that carrier has previously been made by the Board, the proceedings against the trustees are not authorized here, there having been no effective order against them by the Board.
An order will be entered dismissing the proceedings. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1555080/ | 46 F.Supp. 937 (1942)
McCLASKEY
v.
HARBISON-WALKER REFRACTORIES CO.
Civil Action No. 1813.
District Court, W. D. Pennsylvania.
August 17, 1942.
Clarke & Doolittle, Miller & Nesbitt, and Harvey A. Miller, all of Pittsburgh, Pa., for plaintiff.
Brown, Critchlow & Flick and Fulton B. Flick, all of Pittsburgh, Pa., for defendant.
GIBSON, District Judge.
Complainant seeks to recover a certain sum from the defendant upon a claim based upon an alleged right to royalties arising from infringement of Patent No. 1,525,328, issued February 3, 1925. Defendant has moved to dismiss the action upon the ground that the complaint, and facts admitted by complainant pursuant to Rule, disclose that complainant had no legal title to the patent in question.
Shortly after issue of the patent in 1925, it was assigned to the Superior Basic Brick Company, of Pittsburgh. In 1933 the Duquesne Light Company obtained a judgment against the Superior Basic Brick Company, which it later assigned to the present complainant. Certain physical assets of Superior were later sold under a writ of fieri facias issued by the complainant, who, after return upon that writ, issued an alias fieri facias and pursuant to it the Sheriff levied upon the patent and sold it to complainant for $15, giving his deed therefor.
The defendant asserts that patent rights cannot be seized and sold by the Sheriff upon a writ of fieri facias, and therefore the complainant has no title to the patent upon which he has based his suit.
That a patent right, owing to its intangible nature, could not be sold upon an ordinary execution at common law, cannot be questioned. Nevertheless it could be subjected by a bill in equity to the payment of a judgment debt of its owner. Ager v. Murray, 105 U.S. 126, 26 L.Ed. 942. Pennsylvania State Courts, as well as Federal Courts, may enforce their judgments by equity procedure. Act of May 9, 1889, P.L. 172, 17 P.S.Pa. § 294.
In the instant case, however, the complainant, assignee of the judgment against the patent owner, did not proceed by bill in equity to acquire title to the patent, but resorted to the Pennsylvania Act of June 16, 1836, 12 P.S.Pa. § 1332, as amended by *938 the Act of April 7, 1870, 12 P.S.Pa. § 1337. By the Act of 1836 the owner of a judgment, not satisfied after levy and sale of the property seized, might apply for a writ of sequestration to subject to the judgment "any personal * * * property, franchises and rights of such corporation". By the Act of 1870 the judgment creditor, after a like original return, in lieu of the writ of sequestration, was given the right to a special fieri facias issued from the court which should command the sheriff to levy upon such personal property franchises and rights of the corporation debtor. Pursuant to such a writ the patent in suit was sold by the sheriff to the complainant.
As to the sufficiency of a title so obtained decisions differ. In Flagg v. Farnsworth, 12 W.N.C. 500, Judge Mitchell, then in the Common Pleas Court of Philadelphia but later a Judge of the Pennsylvania Supreme Court, held such a title to a patent to be valid, as also did Judge Acheson of the Circuit Court for this District, in Erie Wringer Mfg. Co. v. National Wringer Co., 63 F. 248. Subsequent to these decisions Judge Archbald, then Common Pleas Judge but later District Judge in the Middle District of Pennsylvania, held that a sale of a patent under the special writ of fieri facias did not convey a legal title.
The very high regard of this court for the opinions of both Judge Acheson and Judge Mitchell caused it to hesitate in advancing a contra opinion upon like subject matter, and it is only after more than casual consideration of the question that it ventures to do so.
A number of cases may be cited to sustain such an opinion, but the substance of them may be found in the opinion in Ager v. Murray, 105 U.S. 126, 26 L.Ed. 942, and the cases therein quoted. That case is authority for the proposition that a patent conveys a monopoly to a patentee which exists not only in the State of the patentee's residence but throughout the Union. It is an incorporeal right conferred by the Government and is transferable only according to the laws of its creation. Its nature and scope make the right granted by it impossible of seizure upon an execution. It may be subjected to a judgment against its owner, but only by an action in personam and not by one in rem. A sheriff or marshal cannot seize that which is without body, but the owner of an incorporeal right may be required to assign it by an order of court pursuant to a proceeding in equity. If the owner of a patent, after such an order, fails to obey it, a Trustee might be appointed, who, as his legal representative, would assign the patent.
The statutes of the United States provide for the issuance of a patent to an inventor upon certain conditions, and the transfer of his right upon his death or incapacity to his legal representative and upon his bankruptcy to his Trustee, and beyond such reversions of title the only other transfer of title from the patentee provided by statute is by assignment. The equity proceeding by which a patent is subjected to the lien of a judgment has assignment as its foundation.
Other than the reversion of the patentee's title upon his death or bankruptcy, the provision for the transfer of his patent right is found in Sec. 4898, R.S., as amended, 35 U.S.C.A. § 47, which in part follows:
"Every patent or any interest therein shall be assignable in law by an instrument in writing, and the patentee or his assigns or legal representatives may in like manner grant and convey an exclusive right under his patent to the whole or any specified part of the United States.
"An assignment, grant, or conveyance shall be void as against any subsequent purchaser or mortgagee for a valuable consideration, without notice, unless it is recorded in the Patent Office within three months from the date thereof or prior to such subsequent purchase or mortgage."
So far as we have been able to perceive, the reasons which impelled all courts to hold that a patent right could not be levied upon under a fieri facias are just the same reasons which must influence this court in respect to the alias fieri facias.
The complaint will be dismissed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623281/ | 126 S.W.3d 618 (2004)
Jorge Nalda ORTEGA, Appellant,
v.
The STATE of Texas, Appellee.
No. 14-03-00185-CR.
Court of Appeals of Texas, Houston (14th Dist.).
January 20, 2004.
Rehearing Overruled February 26, 2004.
*619 Joseph Leo Lanza, Houston, for appellant.
Lori DeAngelo Fix, Houston, for appellee.
Panel consists of Justices YATES, HUDSON, and FOWLER.
OPINION
WANDA McKEE FOWLER, Justice.
The jury found appellant guilty of the misdemeanor offense of assaulting a family member. The trial court assessed punishment at confinement for one year in the Harris County Jail and a $2,000 fine. In three issues, appellant contends that (1) the trial court erred in admitting hearsay testimony without requiring the State to give an exception to the hearsay rule, (2) the evidence was legally insufficient to support his conviction, and (3) during the punishment phase, the trial court improperly admitted evidence of threats made by appellant. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
On September 17, 2002, appellant and complainant, appellant's sixteen-year-old son, had a verbal confrontation in the parking lot of a strip club. Appellant and complainant left the parking lot in separate vehicles and returned to their apartment.
At the apartment, appellant went to complainant's room and pushed complainant in the chest three times and punched him in the mouth, knocking complainant onto his bed. Appellant twice threw a wooden stool at complainant, but complainant deflected it both times. At that point defendant held complainant down with one arm, told him "Don't stand up to me," and punched him in the face. Complainant then called the police.
At trial, the State called an arresting officer as its sole witness. Appellant repeatedly objected to testimony from the officer as to what complainant told him at the scene on the ground that the testimony *620 was hearsay. The trial court immediately overruled the objections, without any response from the State. The jury found appellant guilty. During the punishment phase, the State did not call any witnesses, but cross-examined appellant regarding threats he allegedly made toward his wife, the officer who investigated a claim made by his wife, and the officers who arrested him for the current offense. Appellant denied making the threats. The trial court assessed punishment at confinement for one year, the statutory maximum, and a fine of $2,000.
ANALYSIS
I. Alleged hearsay testimony.
In his first issue, appellant contends the court erred in admitting hearsay testimony. The trial court admitted the testimony over appellant's objection without requesting a response from the State. Because the parties do not contest that the testimony was hearsay or that it fell within the excited utterance exception, the only issue before us is whether the trial court erred in not requiring the State to respond that the testimony fell within the exception.
The decision to admit evidence is within the discretion of the trial court. Weatherred v. State, 15 S.W.3d 540, 542 (Tex.Crim.App.2000). If a party raises an objection to hearsay testimony, the burden shifts to the offeror to show the testimony is admissible pursuant to an exception to the hearsay rule. Cofield v. State, 891 S.W.2d 952, 954 (Tex.Crim.App.1994). Even if an offered exception to the hearsay does not apply, we will affirm if the evidence is admissible on any ground. Kipp v. State, 876 S.W.2d 330, 337 (Tex.Crim. App.1994).
Relying on two cases from the Beaumont Court of Appeals, appellant claims the trial court erred when it did not require the State to respond to appellant's objection. We acknowledge the Beaumont Court of Appeals has held that when the State has not met its burden of showing an exception to the hearsay rule when the trial court admits the hearsay testimony without requiring the State to respond.[1]Patterson v. State, 980 S.W.2d 529, 532 (Tex.App.-Beaumont 1998, no pet.); Kroopf v. State, 970 S.W.2d 626, 629 (Tex. App.-Beaumont 1998, no pet.). However, one justice dissented in the Patterson case; we agree with that dissent in which he concluded that "absent a specific request, or a mandatory statute or rule explicitly to the contrary" a party proffering hearsay is not required to volunteer how the hearsay is admissible. Patterson, 980 S.W.2d at 535 (Walker, C.J., dissenting).
There seems to be no compelling reason to require the proponent of hearsay testimony to provide an exception to the hearsay rule when the trial court immediately rules in the proponent's favor. If the trial court is already prepared to rule in the proponent's favor, the issue must be clear to the court without additional clarification. Cf. Long v. State, 800 S.W.2d 545, 548 (Tex.Crim.App.1990) ("[E]ven a general objection will not waive error if the complaint is obvious to the trial court and the State."). This is especially so considering that we are to affirm even if the proponent provides an inapplicable exception to the *621 hearsay rule. See Kipp v. State, 876 S.W.2d 330, 337 (Tex.Crim.App.1994). When it is not error for the trial court to rule based on incorrect additional information, we fail to see how it could be error for the court to rule based on no additional information.
Although Chief Justice Walker thoroughly analyzed the cases on which the Patterson majority relied, we will address them again here to answer appellant's concerns. See id. at 534-35 (Walker, C.J., dissenting).
In Long v. State, the defendant objected to testimony as hearsay. 800 S.W.2d 545, 548 (Tex.Crim.App.1990). The Court of Criminal Appeals acknowledged that the burden then shifted to the State to demonstrate an exception to the hearsay rule. Id. The Court also stated, however, that "because the trial court immediately overruled the objection, ... the State was not required to indicate whether any exception was applicable, or to even show it had complied with the provisions of the statute." Id. The Court appears to acknowledge a distinction between the burden of proving the hearsay exception and the burden appellant urges us to acknowledge of asserting the particular hearsay exception to the court.
In Dorado v. State, the State failed to comply with the mandatory notice requirements of article 38.072 of the Texas Code of Criminal Procedure. 843 S.W.2d 37, 38 (Tex.Crim.App.1992). The Court held that "the State failed to lay the proper mandatory predicate for achieving admissibility of testimony that is otherwise inadmissible hearsay." Id. There were no similar allegations of failure to comply with any statutory requirements in this case, and Dorado is therefore inapplicable to this case.
In Smith v. State, the Court of Criminal Appeals noted that the disputed testimony may have been admissible as an exception to the hearsay rule, but that "the State did not invoke this exception." 779 S.W.2d 417, 430 (Tex.Crim.App.1989). The Court expressly did not reach the issue of whether the testimony was admissible, however, because it found the error was harmless beyond a reasonable doubt. Id. Because the Court did not address the admissibility issue, notation that the State did not invoke the exception is not noteworthy.
In Cofield v. State, the Court of Criminal Appeals stated that since the defendant properly objected to the hearsay, "the burden then became the State's to show that the evidence was admissible pursuant to some exception to the hearsay rule." 891 S.W.2d 952, 954 (Tex.Crim.App.1994). The Court did not, however, go on to say whether the State had the burden of naming the exception as well as proving it.
In Moreno v. State, the State contended that the disputed evidence was not hearsay because it was not offered to show the truth of the matter asserted. 858 S.W.2d 453, 465 (Tex.Crim.App.1993). The Court of Criminal Appeals said that the State's assertion at trial that the evidence showed the condition of the crime scene was "of little worth." Id. The Court went on to hypothesize that the trial court instead considered the evidence as relevant to connect the victim to the abandoned car. Id. Thus, although the burden was on the State to demonstrate how the evidence was relevant other than to show the truth of the matter asserted, the trial court was not required to rely on the reason the State gave for its admissibility.
Appellant cites to two additional cases from the courts of appeals for support, but neither case applies, because in both cases the hearsay evidence was inadmissible because the State failed to prove the elements of an exception, not because the State failed to name an exception.
*622 In Martinez v. State, the El Paso Court of Appeals correctly noted that the burden of invoking an exception to the hearsay rule rested on the State, as the proponent of the evidence. 993 S.W.2d 751, 758 (Tex.App.-El Paso 1999), rev'd on other grounds, 22 S.W.3d 504 (Tex. Crim.App.2000) (en banc). In the particular situation at issue in Martinez, the State was required to qualify its witness as an expert. Id. Although the State did not tender its witness as an expert and the parties did not stipulate that he was an expert, the trial court implicitly found that he was qualified as an expert. Id. at 758-59. The Martinez court held that this implicit finding was erroneous, not because the State failed to tender him as an expert, but because the finding was not supported by the record. Id. at 759.
In Mosley v. State, the State actually responded that the hearsay testimony met the outcry exception. 960 S.W.2d 200, 203 (Tex.App.-Corpus Christi 1997, no pet.). Because the record did not contain any evidence the State complied with article 38.072 of the Texas Code of Criminal Procedure, however, the evidence was not admissible as outcry testimony. Id. The Mosley court went on to consider whether the evidence may have been admissible under the excited utterance exception, even though the State apparently did not voice that exception at trial. Id. at 203-04. We do not see how hearing the State assert the inapplicable outcry exception would provide the trial court with a better basis for its decision than if it had made its decision with no assertion by the State at all.
Thus, to summarize, we conclude that there is no requirement that the proponent of hearsay testimony voice an exception to the hearsay rule when the trial court immediately rules in the proponent's favor. Appellant's first issue is overruled. Because appellant's second issue is predicated on his first issue, appellant's second issue is also overruled.
III. Evidence of threats.
In his third issue, appellant contends that evidence of threats allegedly made by him was improperly admitted during the punishment phase of the trial. This "evidence" came in through a series of questions the district attorney asked appellant as to whether on various occasions he threatened to kill his wife, threatened to kill the officer investigating his wife's complaint, and threatened the officers who arrested him for the current offense. The State presented no additional evidence supporting these allegations.
When punishment is assessed by the trial court, it may determine that evidence of an extraneous offense or bad act is relevant to sentencing and admit it, but the trial court must find that the evidence was proven beyond a reasonable doubt before considering that evidence in assessing punishment. Williams v. State, 958 S.W.2d 844, 845 (Tex.App.-Houston [14th Dist.] 1997, pet. ref'd); see also Tex.Code Crim. Proc., art. 37.07, § 3(a).
In order to preserve an issue for appeal, a defendant must make a timely objection that specifically states the legal basis for the objection. Rezac v. State, 782 S.W.2d 869, 870 (Tex.Crim.App.1990). An objection stating one legal basis may not be used to support a different legal theory on appeal. Id.
Appellant did not object to any questions as to whether he threatened to kill his wife or threatened to kill the officer investigating his wife's complaint.[2] Appellant *623 therefore waived any error regarding these questions. See id.
During questioning as to threats directed at the arresting officers for the current offense, appellant only objected that a question was "beyond the scope of the evidence that was introduced in trial." This objection does not comport with appellant's argument on appeal that the threats were not proved beyond a reasonable doubt. Appellant therefore waived any error regarding these questions. Appellant's third issue is overruled.
The judgment of the trial court is affirmed.
NOTES
[1] We note that two courts have disagreed with the Beaumont Court of Appeals on this matter. See Anderson v. State, 2001 WL 1555302, at * 2 (Tex.App.-Houston [1st Dist.] Dec. 6, 2001, pet. ref'd) (not designated for publication); Romero v. State, 2000 WL 1711816 at * 3 (Tex.App.-Dallas Nov.14, 2000, pet. ref'd) (not designated for publication). Neither opinion was designated for publication, however, and we do not rely on them in our analysis.
[2] In response to a question regarding whether appellant threatened to kill his wife, his counsel stated, "I might want to lodge an objection that the proper predicate has not been laid yet on this matter." No objection was ever made, however. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623289/ | 569 So. 2d 276 (1990)
STATE of LOUISIANA, Appellee,
v.
Johnny Ray ASHLEY, Appellant.
No. 21873-KA.
Court of Appeal of Louisiana, Second Circuit.
October 31, 1990.
*278 Jerry L. Jones, Monroe, for appellant.
James A. Norris, Jr., Dist. Atty., Mark Donahoe, Asst. Dist. Atty., Monroe, for appellee.
Before SEXTON, NORRIS and LINDSAY, JJ.
LINDSAY, Judge.
The defendant, Johnny Ray Ashley, appeals his conviction and sentence for forcible rape, a violation of LSA-R.S. 14:42.1. The defendant was ordered to serve fifteen years at hard labor, five years of which are to be served without benefit of parole, probation or suspension of sentence. We affirm.
FACTS
On the evening of February 14, 1989, the defendant invited a group of people to his apartment to watch a rented movie on his video cassette recorder. Among this group was the victim of this offense, a 33-year-old divorced mother of three children. The victim was not well-acquainted with the defendant, but agreed to attend the movie because others were present with whom she was acquainted. The victim took her seven-year-old and four-year-old daughters to the defendant's apartment. Her fifteen-year-old son went upstairs to watch television with another tenant of the apartment complex.
During the course of the evening, the victim's four year-old daughter fell asleep and was placed in one of the bedrooms in the defendant's apartment. The victim's seven-year-old daughter fell asleep beside her mother on the sofa.
After the movie ended, the victim and other guests in the apartment began preparing to depart. The defendant asked the victim to stay for a moment because he wanted to talk to her. The victim sat down on the sofa beside her child. The defendant then began making advances toward the victim which the victim resisted. The defendant then picked up the victim, who weighed approximately ninety-five pounds, carried her to his bedroom and raped her. The victim claimed that, due to her small size, she was overpowered by the much larger and stronger defendant.
The seven-year-old child awakened and saw her mother attempting to resist the defendant and saw the defendant carry the victim to the bedroom. The seven-year-old child became upset, went upstairs and persuaded her brother to come with her to the defendant's apartment. The victim's son testified that he could hear his mother crying in the defendant's bedroom but was *279 prevented from rendering aid because he was afraid of the defendant's dog. After some time, the defendant came out of the bedroom. The victim then came out of the room, disheveled and upset, gathered up her children and fled the apartment.
The victim did not have a telephone in her apartment and was not able to report the incident to the police until the day after the attack, February 15, 1989. The victim was examined by her doctor on February 16, 1989. The doctor testified that the victim exhibited symptoms of traumatic sexual intercourse.
On May 9, 1989, the defendant was indicted by a grand jury for forcible rape. On July 11, 1989, he was tried by jury and found guilty as charged. The defendant appeared before the court for sentencing on October 26, 1989. The defendant was sentenced to serve fifteen years at hard labor, five years of which must be served without benefit of parole, probation or suspension of sentence. The defendant has appealed his conviction and sentence. The defendant argues that the trial court erred in failing to grant a continuance, that there was insufficient evidence upon which to base a conviction and that the sentence imposed was excessive.
MOTION FOR CONTINUANCE
The defendant was represented by retained counsel.[1] When the defendant and his counsel appeared for trial on July 11, 1989, numerous other cases were also on the docket for trial. However, the defendant's case was the one ultimately chosen to be tried. Defense counsel filed a written motion for continuance on the morning of trial. Defense counsel asserted that defense witnesses had not been subpoenaed and that since this was the first trial date set for this case, he did not expect the case to be tried and therefore he was not prepared for trial.
The trial court determined that the witnesses the defendant claimed were necessary had in fact been subpoenaed by the prosecution and were present to testify. The court denied the defendant's motion to continue and ordered that the trial proceed.
On appeal, the defendant contends that the trial court erred in denying the motion for continuance. Defense counsel claims he did not have time to confer with his client prior to trial. He also argues that he was not unreasonable in failing to prepare for this trial date because, he claims, it is rare for a case to actually be tried on the first date set for trial. Defense counsel contends that the trial court's action in forcing him to go forward with a trial for which he was not prepared denied the defendant his right to a fair trial. Defendant's arguments are meritless.
LSA-C.Cr.P. Art. 712 provides:
A motion for continuance, if timely filed, may be granted, in the discretion of the court, in any case if there is good ground therefor.
The granting or denial of a motion for continuance rests within the trial court's sound discretion. Whether refusal to grant a continuance was justified depends primarily on the circumstances of the particular case. State v. Sensley, 460 So. 2d 692 (La.App. 1st Cir.1984), writ denied 464 So. 2d 1374 (La.1985). Denial of a motion for continuance will not be disturbed on appeal absent an abuse of discretion and a showing of specific prejudice resulting from the denial. State v. Knighton, 436 So. 2d 1141 (La.1983), cert. denied 465 U.S. 1051, 104 S. Ct. 1330, 465 U.S. 1051, 79 L. Ed. 2d 725 (1984); State v. Benoit, 440 So. 2d 129 (La.1983); State v. Robinson, 423 So. 2d 1053 (La.1982); State v. Hall, 549 So. 2d 373 (La.App. 2d Cir.1989), writ denied 556 So. 2d 1259 (La.1990).
Where a motion for continuance is based upon the want of time for preparation by counsel, this specific prejudice requirement has been disregarded only in cases where the preparation time was so minimal as to call into question the basic fairness of the proceeding. State v. Jones, 395 So. 2d 751 (La.1981); State v. Sampson, 480 So. 2d 952 (La.App. 2d Cir.1985).
*280 In the present case, it cannot be said that the time afforded defense counsel to prepare for trial was so minimal as to undermine the basic fairness of the proceeding. Defense counsel was retained by the defendant shortly after his arrest. He appeared in court with the defendant on May 15, 1989. At that time, defense counsel formally enrolled on behalf of the defendant. The defendant entered a plea of not guilty. A hearing on pre-trial motions was set for June 8, 1989 and the defendant's trial was set for July 10, 1989.
After arraignment, defense counsel unsuccessfully attempted to negotiate a plea bargain agreement for the defendant. Defense counsel knew of the trial date approximately two months in advance. Further, he was informed on Friday before the Monday trial date that the case was a priority case which would probably be called for trial on Monday. This afforded defense counsel the type notice required in State v. Ray, 474 So. 2d 954 (La.1985). Therefore, these facts show that defense counsel was not surprised as to the trial date or the fact that the case most probably would go to trial on the date originally set.
The defendant further argues that, since this was the first date on which the trial was set, he thought the case would be passed over in favor of a case that had been on the docket longer. However, this argument does not justify an attorney's failure to prepare for trial. The record shows that defense counsel had adequate time for trial preparation.
This case is factually similar to State v. Haarala, 398 So. 2d 1093 (La.1981), in which defense counsel claimed the court erred in failing to grant a continuance because counsel was told that some other case would be tried before his client's case. When the other case was continued, defense counsel contended that he was not prepared to go to trial. In State v. Haarala, supra, the Louisiana Supreme Court upheld the trial court's action in failing to grant the defendant's motion for continuance. The court noted that defense counsel had been involved in the case for ten weeks and had been aware of the trial date for approximately two months.
Because defense counsel in the present case was aware of the trial date well in advance, and knew of its status on the Friday before the Monday trial date, it cannot be argued that he had so little time to prepare that the fairness of the proceedings is called into question. Cf. State v. Parrish, 434 So. 2d 475 (La.App. 2d Cir. 1983), writ denied 440 So. 2d 760 (La.1983); State v. Simpson, 403 So. 2d 1214 (La. 1981).
In addition, the defendant has failed to show any specific prejudice resulting from the trial court's denial of the motion for continuance. The witnesses which defendant wanted to subpoena were present and testified at trial. Defense counsel examined and cross-examined witnesses and was obviously familiar with the facts of the case and presented a defense. Considering all these circumstances, we conclude that the defendant has not shown that he was prejudiced by the denial of his motion for continuance or that the trial court abused its discretion. Therefore, we affirm the trial court's ruling denying the continuance.
SUFFICIENCY OF THE EVIDENCE
The defendant argues that "[t]he verdict of the jury in which the defendant was found guilty was against the overwhelming weight of the evidence presented at the trial of this matter." This argument is meritless.
In reviewing sufficiency challenges, an appellate court must determine whether, when viewing the evidence in the light most favorable to the prosecution, a rational fact finder could have found that the state proved beyond a reasonable doubt that the defendant committed acts necessary to constitute every element of the offense charged. Jackson v. Virginia, 443 U.S. 307, 99 S. Ct. 2781, 61 L. Ed. 2d 560 (1979); State v. Doby, 540 So. 2d 1008 (La. App. 2d Cir.1989), writ denied 544 So. 2d 398 (La.1989); State v. Lewis, 535 So. 2d 943 (La.App. 2d Cir.1988), writ denied 538 So. 2d 608 (La.1989).
*281 The offense of forcible rape is defined in LSA-R.S. 14:42.1 as follows:
A. Forcible rape is a rape committed where the anal or vaginal sexual intercourse is deemed to be without the lawful consent of the victim because the victim is prevented from resisting the act by force or threats of physical violence under circumstances where the victim reasonably believes that such resistance would not prevent the rape.
At trial, the defendant testified in his own behalf. He admitted that sexual intercourse occurred with the victim on the night in question. However, he testified that the victim consented up to a point and that, when she asked him to stop, he complied with her wishes. The defendant claims that the prosecution failed to sufficiently prove that the victim was prevented from resisting by force or threats of physical violence under circumstances where she reasonably believed that resistance would not prevent the rape.
The defendant claims that the victim made no attempt to get away from him or to exit from the apartment. The defendant admitted taking the victim to his room but contends that she did not try to escape, she did not bite, kick or strike the defendant and that she did not scream. The defendant contends that the victim voluntarily removed part of her own clothing while he removed her jeans. The defendant contends that during their encounter, the victim became concerned about becoming pregnant, began to cry and asked the defendant to stop. The defendant claimed that he immediately complied with this request and left the room.
The testimony of the victim and her children set forth a different version of the evening's events. The victim testified that when the defendant began trying to kiss her while they were in the living room, she attempted to push him away. This is corroborated by her seven-year-old daughter who had been sleeping on the sofa. The defendant then forcibly carried the ninety-five pound victim to his bedroom and closed the door. This fact was also corroborated by the seven-year-old child.
The victim testified that after being carried to the bedroom and thrown onto the bed, the defendant then forcibly removed her clothing while she cried and asked him to stop. The defendant then climbed on top of the victim and held her down on the bed with her legs over her shoulders in such a position that she could not move. At that point the defendant raped the victim. The victim testified that when she attempted on several occasions to scream, the defendant placed his hand around her throat and told her to "shut-up".
The seven-year-old child testified that she could hear her mother crying after being carried away by the defendant. Upon hearing her mother's cries, the child went in search of her older brother.
The victim was later seen by her children in a disheveled and upset condition. After returning to her own apartment, the victim was afraid to leave for fear of again being accosted by the defendant. She testified that she had no phone in her apartment and because she was afraid to leave, she did not report the attack until the next day. She did report the attack to the police the next day and was later examined by her physician. The doctor corroborated the victim's statement that she had engaged in a traumatic sexual encounter.
The jury in this case was confronted with a conflict between the testimony offered by the defendant and that offered by the victim and her children. In the present case, the conviction turned on the credibility of the witnesses. Such credibility is legally and properly determined by the trier of fact. When testimony is conflicting, the credibility of witnesses is a matter within the discretion of the trier of fact. Such determinations will not be disturbed on review unless clearly contrary to the evidence. State v. Rogers, 519 So. 2d 246 (La.App. 5th Cir.1988); State v. Richardson, 425 So. 2d 1228 (La.1983).
Based upon the testimony of the victim and her children, which was obviously accepted by the jury, there was sufficient evidence of all elements of the offense of forcible rape. In addition, the defendant's *282 testimony was impeached by his numerous convictions which are outlined below in the discussion of the sentence imposed. This assignment of error has no merit.
EXCESSIVE SENTENCE
The defendant was sentenced to serve 15 years at hard labor for the present offense. Five years of the sentence were ordered to be served without benefit of parole, probation or suspension of sentence. The defendant argues that the sentence pronounced by the court was unconstitutionally excessive.
In determining whether a sentence is excessive, the test imposed by the reviewing court is two-pronged. First, the record must show that the trial court took cognizance of the factors set forth in LSA-C. Cr.P. Art. 894.1 which enumerates criteria to consider in determining whether a sentence is excessive. State v. Sepulvado, 367 So. 2d 762 (La.1979); State v. Hammonds, 434 So. 2d 452 (La.App. 2d Cir. 1983), writ denied 439 So. 2d 1074 (La.1983); State v. Tully, 430 So. 2d 124 (La.App. 2d Cir.1983), writ denied 435 So. 2d 438 (La. 1983).
While the trial court need not articulate every aggravating and mitigating circumstance outlined in LSA-C.Cr.P. Art. 894.1, the record must reflect that the court adequately considered those guidelines in particularizing the sentence to the defendant. State v. Smith, 433 So. 2d 688 (La.1983); State v. Hammonds, supra; State v. Cunningham, 431 So. 2d 854 (La. App. 2d Cir.1983), writ denied 438 So. 2d 1112 (La.1983).
The articulation of the factual basis for a sentence is the goal of LSA-C. Cr.P. Art. 894.1, not rigid or mechanical compliance with its provisions. Where the record clearly shows an adequate factual basis for the sentence imposed, remand is unnecessary even when there has not been full compliance with LSA-C.Cr.P. Art. 894.1. State v. Lanclos, 419 So. 2d 475 (La. 1982). Important elements which should be considered are the defendant's personal history (age, family ties, marital status, health, employment record), prior criminal record, seriousness of the offense and likelihood of rehabilitation. State v. Jones, 398 So. 2d 1049 (La.1981); State v. Hudgins, 519 So. 2d 400 (La.App. 2d Cir.1988), writ denied 521 So. 2d 1143 (La.1988).
After determining whether the provisions of LSA-C.Cr.P. Art. 894.1 have been complied with by the trial court, the reviewing court must then determine whether the sentence imposed is too severe given the circumstances of the case and the background of the defendant.
The sentencing court is given wide discretion in imposing a sentence within the statutory limits and such a sentence should not be set aside as excessive in the absence of a manifest abuse of discretion by the sentencing court. State v. Square, 433 So. 2d 104 (La.1983); State v. Hammonds, supra; State v. Brooks, 431 So. 2d 865 (La. App. 2d Cir.1983).
A sentence is unconstitutionally excessive in violation of La. Const. 1974 Art. 1, § 20 if the sentence is grossly out of proportion to the severity of the offense or nothing more than the needless and purposeless imposition of pain and suffering. State v. Bonanno, 384 So. 2d 355 (La.1980); State v. Cunningham, supra. A sentence is considered grossly disproportionate if, when the crime and punishment are considered in light of the harm done to society, it is so disproportionate as to shock the sense of justice. State v. Lewis, 430 So. 2d 1286 (La.App. 1st Cir.1983), writ denied 435 So. 2d 433 (La.1983).
In selecting a proper sentence, a trial judge is not limited to considering only a defendant's prior convictions, but may properly review all prior criminal activity. State v. Palmer, 448 So. 2d 765 (La.App. 2d Cir.1984), writ denied 452 So. 2d 695 (La. 1984).
A trial court is not required to render a suspended sentence or probation on a first felony offense, but may consider whatever factors and evidence are deemed important to a determination of the best interest of the public and the defendant. *283 State v. McKethan, 459 So. 2d 72 (La.App. 2d Cir.1984); State v. Tully, supra.
In the present case, the sentencing court adequately articulated the factors which it considered in the imposition of sentence as required by LSA-C.Cr.P. Art. 894.1. The court noted that the defendant was married and had two children.[2] The defendant had an eighth grade education and was employed. The court noted that the defendant was once the victim of a robbery and was stabbed during the course of a robbery.
The court also outlined numerous aggravating factors, including the defendant's extensive criminal record. The defendant's record included five convictions for theft, eleven convictions for issuing worthless checks, two convictions for disturbing the peace, three convictions for driving while intoxicated, one conviction for possession of drug paraphernalia, one conviction for loitering, and one conviction for criminal trespass. One month before sentencing, the defendant had been arrested for simple battery. That charge was still pending at the time the defendant was sentenced for the present offense.
The court stated that the defendant had committed a serious offense in this case and that the victim did not facilitate the commission of the crime. The court found that there was an undue risk that the defendant would commit another offense and that he was in need of correctional treatment. The court found that a probated sentence could not be justified in this case and that a lesser sentence than that imposed would deprecate the seriousness of the offense.
In light of the factors outlined above, the court has more than adequately complied with the provisions of LSA-C.Cr.P. Art. 894.1.
In reviewing the sentence, we must also determine whether the sentence imposed is too severe given the circumstances and background of the defendant. The penalty for forcible rape under LSA-R.S. 14:42.1 is a hard labor sentence of not less than five nor more than forty years, with at least two years to be served without benefit of probation, parole or suspension of sentence.
The defendant's sentence of fifteen years at hard labor falls within the middle range for sentences for this offense. Under the circumstances of this case, the trial court did not abuse its discretion in imposing sentence upon the defendant. The defendant had an extensive criminal record. Given the seriousness of this offense, the emotional impact of this crime upon the victim and the defendant's prior criminal record, the sentence was tailored to both the offender and the offense. The sentence imposed does not shock our sense of justice and was well within the trial court's discretion.
CONCLUSION
For the reasons stated above, we affirm the conviction and sentence of the defendant, Johnny Ray Ashley.
AFFIRMED.
NOTES
[1] We note that present counsel did not represent the defendant at trial.
[2] The record shows that at the time of the offense, the defendant was then divorced from his first wife, the mother of his two children. He was sharing the apartment with his mother. The defendant married his second wife while these charges were pending. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623611/ | 360 S.W.2d 883 (1961)
Curtis Ray ROBERTS, Appellant,
v.
STATE of Texas, Appellee.
No. 33404.
Court of Criminal Appeals of Texas.
June 21, 1961.
Rehearing Denied February 7, 1962.
Certiorari Denied October 8, 1962.
*884 Lucius Bunton, Odessa, Murray J. Howze, Monahans, for appellant.
Thomas L. White, former Dist. Atty., R. B. McGowen, Jr., Dist. Atty., Monahans, H. D. Glover, County Atty., Reeves County, Pecos, and Leon B. Douglas, State's Atty., Austin, for the State.
Certiorari Denied October 8, 1962. See 83 S. Ct. 83.
BELCHER, Commissioner.
The conviction is for robbery with firearms; the punishment, death.
The trial was had in Ward County on a change of venue from Reeves County.
The testimony of Kenny Richards, the assaulted party, that of Officer Gilbert who saw the appellant and his companion leaving a service station, and of Highway Patrolmen Blanchard and Martin, who apprehended appellant and his companion at a road-block, and appellant's written statement, show that appellant and his companion entered a service station where the assaulted party was on duty alone about 1:30 A.M.; that appellant, while pointing a pistol toward Richards, ordered him into the rest room and to lie on the floor and later said to Richards "That's right, you better look at me good because you won't remember me". Upon their failure to open the cash register, which according to the testimony of Richards contained "between $40 and $50 * * * mostly in bills," the appellant ordered Richards to open it which he did and resumed his position on the floor in the rest room. Next, Richards heard the appellant say "How much is in there?" which was followed by "two shots". At once, Richards realized he had been shot because he began "quivering all over and I saw stars" and was bleeding from the back of the head. As appellant and his companion left Officer Gilbert drove into the station, observed Richard's condition and by radio notified other officers, and then pursued the two men he saw leaving the station but they soon evaded him and he returned to the station. An ambulance soon arrived and took Richards to a hospital.
In response to a call, two highway patrolmen shortly after 5 A.M. apprehended the appellant and his companion when they stopped a motorist with whom the appellant and his companion had obtained a ride a short time before. Upon searching the appellant, they found a .22 pistol containing two spent and 4 live shells in his right front pocket, and a search of the companion showed that he had $45 or $47 or $48 "* * * in bills" and some change.
Deputy Sheriff Briggs of Reeves County in which the robbery occurred, testified that Highway Patrolmen Blanchard and Martin delivered the appellant and his companion to him and Officer Ingram in Pecos, and also delivered to them a .22 pistol and two spent and four live shells and "43 $-bills, 5 half-dollars, 3 quarters, 11 nickles, and 3 dimes".
Appellant's written statement made to H. D. Glover, County Attorney, pertaining to the robbery of Kenny Richards and witnessed by Glover and Deputy Sheriff Gilbert was introduced in evidence by the state and omitting the formal parts reads:
"* * * My name is Curtis Roberts and I am 19 years of age; I was born in Hillsboro, Texas and at present I consider the following address my home: Midland, Texas.
"On the 12th of June, 1960, Bennie drove us to Pecos. When we got to Pecos, we pulled into a station and got some gas. We left the station and went over to another station to rob the old boy there. We parked the car behind the building and went inside to where the man was. When we got inside, I pulled a gun on the fellow and told him it was a hold-up. Then Bennie unlocked the cash register got the money. I was holding the gun on the man there. I then told the man to lay down on the floor and he did. The cash register was opened by the man there first and not by Bennie. The boy started to get up and I shot him three times. I do not know where I shot *885 him. Bennie gave me the gun when we got ready to go into the station. Then we went out the door and started to go to the car and saw the police and then we started to run and went to the tracks and then went east till we got to a road side park and saw a man going to Alabama and he gave us a ride. We hadn't been gone long when the highway patrol stopped us and arrested us.
"When I shot the man, I meant to kill him so that he could not identify us. I thought he was dead when we left the station. Just before I shot the man, Bennie said, `Shoot him Curtis, Shoot him'."
Testifying in the absence of the jury, the appellant admitted signing the statement introduced in evidence by the state, but said the statement is not true; that it was made through fear and promises and that at the time in question he was drunk due to the use of marihuana and he did not know whether he robbed or shot the boy.
Appellant called one witness who testified that he was in jail when appellant was first brought in; that appellant's face was bruised and swollen, and his skin had been peeled over his ribs, back and arms, and that his nose was bleeding.
The voluntary character of appellant's written statement was submitted to the jury in the court's charge.
The evidence sufficiently warrants the jury's finding that the appellant committed the offense of robbery with firearms as alleged in the indictment.
Appellant contends that the indictment is fatally defective because the property description: "U. S. Currency" is insufficient. It complies with language of the robbery statute which prohibits in the ways therein described the taking from the possession of another any property with the intent to appropriate it to the use of the taker. The taking of any sum of U. S. currency by robbery is an offense. Art. 1408, Vernon's Ann.P.C.
It is insisted that the court erred in admitting in evidence the testimony of the physician who examined the injured party shortly after 2 A.M. over his objection to any evidence of his condition with reference to the bullet wounds in the head on the ground that it was not material to any issue in the case and was inflammatory and prejudicial.
The physician testified that his examination of the injured party showed he had been shot twice in the back of the head, that powder burns were found in the area, that one bullet passed out but left small metal fragments and the other lodged below the skull which he did not remove as it would cause excessive bleeding. By using an X-ray plate he pointed out the entry and the location of the metal fragments and the bullet.
The indictment charged robbery by assault, violence, and putting in fear by use of a pistol. To which charge the appellant entered a plea of not guilty.
In Fields v. State, 160 Tex. Crim. 498, 272 S.W.2d 120, 121, we said:
"Appellant further contends that, since the `State had abundantly and completely established every essential element of * * * the count charging Robbery with a Deadly Weapon,' then it constituted error for the court to admit evidence as to the injuries received by the injured party during the course of the robbery. He relies upon those authorities which hold that the exhibition to the jury of scars which tend to solve no disputed issue constitutes error but such authorities are not deemed applicable here.
"The indictment charged robbery by assault, violence, and putting in fear. The state had the right to prove all three. On the allegation of violence the State may prove the injuries sustained as the result of such violence. In fact, such is the best proof thereof."
*886 The admission of the testimony of the physician under the allegations of the indictment does not show error.
It is insisted that the trial court erred in overruling the motion for new trial in which the appellant alleged that one of the jurors was prejudiced against him and concealed this fact on his voir dire examination thereby preventing a fair and impartial trial. This allegation was not presented by an affidavit attached or referred to in the motion for new trial and said motion was not sworn to.
This complaint is not presented by a formal bill of exception. In order to preserve the matter complained of for review, a formal bill of exception is required. Waggoner v. State, 161 Tex. Crim. 242, 275 S.W.2d 821; Alejandro v. State, 161 Tex. Cr.R. 411, 277 S.W.2d 717.
Appellant contends that the trial court erred in refusing his motion for a new trial which alleged that the jury during their deliberations discussed whether the appellant had been in trouble before, his failure to testify in the presence of the jury, the effect of parole on their verdict, and the expense of the trial or retrial of the case and that such discussions require a reversal.
In support of his allegations of misconduct of the jury while deliberating the appellant first called Juror Hill. He testified that someone in the jury room said something about the expense of the trial, and also about how soon appellant would get out if they assessed the punishment at a term of years, and that they asked the judge about the parole system and he did not give them any information.
Juror Cameron, one of the affiants, stated in her affidavit that the appellant's failure to testify was only casually mentioned in the jury room, yet, it remained in her mind.
The affidavit of Juror Thresher shows that the jury discussed the effect of parole on their verdict, that no evidence was offered to refute the confession, and they also discussed whether he had previously been in trouble as there was no evidence he had not.
Juror Wells in his affidavit states that the jury discussed the parole system and the effectiveness of certain sentences.
In rebuttal the state called as a witness Juror Cameron whose affidavit was attached to appellant's first amended motion for new trial, and she testified that there was no discussion of appellant's failure to testify; and that they did not talk about whether this was appellant's first or second offense.
The state also called Juror Wells whose affidavit the appellant had offered in evidence. He testified that there was no further discussion on the effect of the parole system after their appearance before the judge in response to the jury's written inquiry about parole.
The evidence raised fact issues as to the allegations of jury misconduct, therefore the decision on the motion for new trial was within the sound discretion of the trial court who heard and observed the jurors who testified at the hearing together with the consideration of the affidavits introduced in evidence, and in the absence of an abuse of discretion, this court would not be justified in reversing the judgment. It is concluded that the action of the trial court is supported by the evidence presented and that he did not abuse his discretion in overruling the motion for a new trial. Smith v. State, 167 Tex. Crim. 454, 320 S.W.2d 680.
The judgment is affirmed.
Opinion approved by the court.
ON APPELLANT'S MOTION FOR REHEARING
WOODLEY, Presiding Judge.
Appellant urges that there is no evidence outside of the confession that any robbery occurred or, in other words, that there was *887 no proof of the corpus delicti. We do not agree.
Kenny Richards was the night attendant at the Conoco Station and, after 8 P.M., was on duty alone. He testified that he had custody, management and control of all money taken in and on hand; that he had between $40 and $50 in the cash register, mostly in bills. He was ordered to open the cash register after appellant's companion was unable to get it open. After he had resumed his position on the floor in the rest room, as he was directed to do, he heard appellant ask his companion who was at the cash register after he had opened it "How much is in there?" Then he was shot. From this time Richards directed his attention to saving his life and did not notice the cash register again.
Officer Gilbert saw appellant and his companion walk out of the front door of the station. "They walked very nonchalant like. They didn't allow me to see their face, but I was able to see they were negroes. And they didn't run immediately. They walked very nonchalantly around the corner as I turned, and when I drove into the station is when they ran." As he drove in he saw Kenny Richards crawling out of the rest room in a dazed and bloody condition. He called headquarters and pursued the men he had seen running, and after receiving a report from another unit in regard to them, returned to the Conoco Station and found Kenny Richards staggering, dazed and incoherent.
Officer Gilbert testified that the cash register drawer was open and appeared to be empty. He further testified that to his knowledge there was no one around the station from the time he saw the Negro boys run out of it, other than Kenny Richards.
We do not regard the fact that neither Kenny Richards nor Officer Gilbert made a detailed examination of the cash register, so as to be in position to testify that the money was gone, as fatal to the state's case. As Officer Gilbert testified, he was "a great deal more alarmed and concerned about the condition of the boy thanabout the contents of that cash register."
While the 40 one dollar bills taken from the pocket of appellant's companion could not be identified, the evidence mentioned aided by appellant's confession is, we hold, sufficient to sustain the conviction for the offense of robbery as charged.
The confession may be used in connection with other facts to establish the corpus delicti. Hignett v. State, Tex.Cr. App., 341 S.W.2d 166; Watson v. State, 154 Tex. Crim. 438, 227 S.W.2d 559, and cases there cited.
Appellant's learned counsel forcefully argues that, this being a death penalty case, we should consider his contention that appellant was denied due process of law because one of the jurors was prejudiced to the extent of corrupting the panel.
As pointed out in our original opinion, the complaint that the juror was prejudiced against appellant and concealed this fact on his voir dire examination is not presented by formal bill of exception. We note further that the record does not show the voir dire examination of the jurors, and the only reference to the complaint that the juror was prejudiced appears in the motion for new trial and the evidence introduced in connection with the claim of jury misconduct.
Appellant's counsel has presented a supplemental transcript including a bill of exception he has presented to the trial court since our original opinion was handed down. He presents affidavits in connection therewith which he contends show sufficient reason why the late filing thereof should be excused.
We have examined the tendered bill of exception and note that the trial judge has certified that had it been presented to him during the time allowed by statute it would have been approved with the qualification that the court found and determined *888 that the juror in question was not a prejudiced juror.
We remain convinced that the record before us does not show that the juror was prejudiced against appellant and concealed such fact on his voir dire examination.
It would avail appellant nothing if we could consider his bill of exception with the trial court's qualification. He would be bound by the certification that the juror was not a prejudiced juror.
We commend court appointed counsel for his earnest efforts in appellant's defense, but are unable to agree that the conviction should be set aside.
Appellant's motion for rehearing is overruled. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1624098/ | 15 So. 3d 642 (2009)
ABBOTT LABORATORIES, Appellant,
v.
MYLAN PHARMACEUTICALS, INC., Appellee.
No. 1D08-0602.
District Court of Appeal of Florida, First District.
June 22, 2009.
*644 Michael J. Glazer and John R. Beranek of Ausley & McMullen, Tallahassee, for Appellant.
William E. Williams and Amy W. Schrader of GrayRobinson, P.A., Tallahassee, for Appellee.
VAN NORTWICK, J.
Abbott Laboratories (Abbott), the manufacturer of a levothyroxine sodium (LS) drug product, Synthroid®, appeals a summary final order of an administrative law judge (ALJ) in a rule challenge proceeding brought by Mylan Pharmaceuticals, Inc. (Mylan), appellee, the manufacturer of a competing generic drug. In the summary final order, the ALJ ruled that Florida Administrative Code Rule 64B16-27.500(6), which was part of the negative drug formulary (NDF) rule established pursuant to section 465.025(6), Florida Statutes (2007), and which listed LS on the NDF, was invalid on the grounds that it constituted an invalid exercise of legislative delegated authority because it conflicted with the provisions of section 465.0251(1), Florida Statutes (2007). Section 465.0251(1) removes a generic drug from the NDF if the generic drug is "A" rated as therapeutically equivalent to a reference listed drug as referred to in the "Orange Book"[1] published by the United States Food and Drug Administration (FDA). The ALJ's order, in effect, removes LS from the NDF and permits Florida pharmacists to substitute Mylan's generic LS product for a prescription for Synthroid® or any other "A" rated LS drug product, except as provided in section 465.025(2), Florida Statutes (2007). Because the ALJ erred in interpreting section 465.0251(1) to apply to editions of the *645 Orange Book subsequent to the date of the 2001 enactment of the statute, we reverse and remand. Finally, we reject the contention of Mylan that Abbott lacks standing to bring this appeal and that the mootness doctrine should apply to this appeal.
Regulatory Background
As is undisputed from this record, approval by the FDA is required before a prescription drug product may be marketed, distributed, or sold in the United States. 21 U.S.C. § 355(a) (2006). When a product contains a new active ingredient or otherwise differs significantly from previously approved products, the sponsor must provide the FDA with data demonstrating the product's safety and effectiveness for the intended use. See 21 U.S.C. § 355(b) (2006). When a product is a copy of a previously approved productwhat is commonly called a "generic" version of the original drugproof of safety and effectiveness is not required. Instead, the FDA requires a showing that, with regard to certain characteristics, the proposed generic product is essentially the same as the approved product it purports to copy, which is referred to as the "listed drug." See 21 U.S.C. § 355(j) (2006) (because of the language in section 465.0251(1), we will refer to a "reference listed drug"). The FDA's previous finding that the reference listed drug is safe and effective is then imputed to the generic product.
Levothyroxine sodium (LS) is a leading treatment for hypothyroidism, which is the failure of the thyroid gland to produce sufficient thyroid hormone. In 1979, the Florida Legislature directed the Board of Medicine and the Board of Pharmacy to establish by rule a list of those drugs that "demonstrate clinically significant biological or therapeutic inequivalence and which, if substituted, would pose a threat to the health and safety of patients receiving prescription medicine." § 465.025(6), Fla. Stat. (1979). The rule establishing the NDF is Florida Administrative Code Rule 64B16-27.500. LS has been listed on the NDF since 1984. The NDF rule, prior to the action taken by the ALJ, provided, in pertinent part, as follows:
The negative drug formulary is composed of medicinal drugs which have been specifically determined by the Board of Pharmacy and the Board of Medicine to demonstrate clinically significant biological or therapeutic inequivalence and which, if substituted, could produce adverse clinical effects, or could otherwise pose a threat to the health and safety of patients receiving such prescription medications.... The generic name of a drug shall be applicable to and include all brand-name equivalents of such drug for which a prescriber may write a prescription. Substitution by a dispensing pharmacist on a prescription written for any brand name equivalent of a generic named drug product listed on the negative formulary or for a drug within the class of certain dosage forms as listed, is strictly prohibited. In cases where the prescription is written for a drug listed on the negative drug formulary but a brand name equivalent is not specified by the prescriber, the drug dispensed must be one obtained from a manufacturer or distributor holding an approved new drug application or abbreviated new drug application issued by the Food and Drug Administration, United States Department of Health and Welfare permitting that manufacturer or distributor to market those medicinal drugs or when the former is non-applicable, those manufacturers or distributors supplying such medicinal drugs must show compliance with other applicable Federal Food and Drug Administration marketing requirements. The following *646 are included on the negative drug formulary:
* * *
(6) Levothyroxine Sodium.
* * *
Fla. Admin. Code R. 64B16-27.500(6).
"Until the mid-1970s, nearly all states required pharmacists to dispense the exact drug specified by the prescribing physician, even if equivalent generic products were available." Jessie Cheng, An Antitrust Analysis of Product Hopping in the Pharmaceutical Industry, 108 Colum. L. Rev. 1471, 1479 (2008). Currently, with the advent of strict federal drug laws, most states more freely allow substitution in order to contain the high cost of drugs. Id. Thus, in Florida, when a patient receives a prescription for a brand name drug and takes it to a Florida pharmacy, the pharmacist is required by law to substitute a less expensive generic drug unless: (1) the patient requests otherwise; (2) the doctor directs otherwise; or (3) the drug is listed on Florida's NDF. § 465.025(2), Fla. Stat. Because LS was listed on the NDF, prior to the invalidation of rule 64B16-27.500(6), when a doctor prescribed a specific LS drug product, the patient would only receive that product, whether it was a brand name or a generic. § 465.025(6)(b), Fla. Stat. As a result of the order under review, except as provided in section 465.025(2), Florida pharmacists may substitute Mylan's generic LS product for a prescription for Synthroid® or any of the other brand name or generic LS products.
The ALJ's decision invalidating rule 64B-27.500(6) rests on the interpretation and application of section 465.0251, enacted in 2001, and section 465.025 first enacted in 1979. Section 465.025, Florida Statutes (2007), entitled "Substitution of Drugs" provides, in pertinent part, as follows:
(1) As used in this section:
(a) "Brand name" means the registered trademark name given to a drug product by its manufacturer, labeler, or distributor.
(b) "Generically equivalent drug product" means a drug product with the same active ingredient, finished dosage form, and strength.
(c) "Prescriber" means any practitioner licensed to prescribe medicinal drugs.
(2) A pharmacist who receives a prescription for a brand name drug shall, unless requested otherwise by the purchaser, substitute a less expensive, generically equivalent drug product that is:
* * *
(b) Listed in the formulary of generic and brand name drug products as provided in subsection (5) for the brand name drug prescribed, unless the prescriber writes the words "MEDICALLY NECESSARY," in her or his own handwriting, on the face of a written prescription; unless, in the case of an oral prescription, the prescriber expressly indicates to the pharmacist that the brand name drug prescribed is medically necessary; or unless, in the case of a prescription that is electronically generated and transmitted, the prescriber makes an overt act when transmitting the prescription to indicate that the brand name drug prescribed is medically necessary. When done in conjunction with the electronic transmission of the prescription, the prescriber's overt act indicates to the pharmacist that the brand name drug prescribed is medically necessary.
(3)(a) Any pharmacist who substitutes any drug as provided in subsection (2) shall notify the person presenting the prescription of such substitution, together *647 with the existence and amount of the retail price difference between the brand name drug and the drug substituted for it, and shall inform the person presenting the prescription that such person may refuse the substitution as provided in subsection (2).
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(5) Each community pharmacy shall establish a formulary of generic and brand name drug products which, if selected as the drug product of choice, would not pose a threat to the health and safety of patients receiving prescription medication. In compiling the list of generic and brand name drug products for inclusion in the formulary, the pharmacist shall rely on drug product research, testing, information, and formularies compiled by other pharmacies, by states, by the United States Department of Health, Education, and Welfare, by the United States Department of Health and Human Services, or by any other source which the pharmacist deems reliable. Each community pharmacy shall make such formulary available to the public, the Board of Pharmacy, or any physician requesting same. This formulary shall be revised following each addition, deletion, or modification of said formulary.
(6) The Board of Pharmacy and the Board of Medicine shall establish by rule a formulary of generic drug type and brand name drug products which are determined by the boards to demonstrate clinically significant biological or therapeutic inequivalence and which, if substituted, would pose a threat to the health and safety of patients receiving prescription medication.
(a) The formulary may be added to or deleted from as the Board of Pharmacy and the Board of Medicine deem appropriate. Any person who requests any inclusion, addition, or deletion of a generic drug type or brand name drug product to the formulary shall have the burden of proof to show cause why such inclusion, addition, or deletion should be made.
(b) Upon adoption of the formulary required by this subsection, and upon each addition, deletion, or modification to the formulary, the Board of Pharmacy shall mail a copy to each manager of the prescription department of each community pharmacy licensed by the state, each nonresident pharmacy registered in the state, and each board regulating practitioners licensed by the laws of the state to prescribe drugs shall incorporate such formulary into its rules. No pharmacist shall substitute a generically equivalent drug product for a prescribed brand name drug product if the brand name drug product or the generic drug type drug product is included in the said formulary.
Reading section 465.025(6) in its entirety, a party seeking to remove a drug product from the NDF has the burden of proof to show that the removal would not "pose a threat to the health and safety of patients receiving prescription medication."
Section 465.0251, Florida Statutes (2007), permits removal from the NDF under specific circumstances and states:
465.0251 Generic drugs; removal from formulary under specified circumstances.
(1) The Board of Pharmacy and the Board of Medicine shall remove any generic named drug product from the formulary established by s. 465.025(6), if every commercially marketed equivalent of that drug product is "A" rated as therapeutically equivalent to a reference listed drug or is a reference listed drug as referred to in "Approved Drug Products with Therapeutic Equivalence Evaluations" (Orange Book) published by the *648 United States Food and Drug Administration.
(2) Nothing in this act shall alter or amend s. 465.025 as to existing law providing for the authority of physicians to prohibit generic drug substitution by writing "medically necessary" on the prescription.
Although subsection (1) of section 465.0251 requires removal of a drug product from the NDF without an express finding that the removal will not pose a threat to the health and safety to patients as required by section 465.025, subsection (2) emphasizes that section 465.0251 does not "alter or amend s. 465.025."
Section 120.56 Proceeding
This proceeding began on August 17, 2007, when Mylan filed a petition seeking to have rule 64B16-27.500(6) declared invalid. The respondents were the Board of Medicine and Board of Pharmacy since each agency must authorize changes to the rule. Abbott was allowed to intervene. Subsection 120.56(1)(a), Florida Statutes (2007), provides that "[a]ny person substantially affected by a rule ... may seek an administrative determination of the invalidity of the rule on the ground that the rule is an invalid exercise of delegated legislative authority." Subsection 120.52(8), Florida Statutes (2007), defines "invalid exercise of delegated legislative authority," in pertinent part, as follows:
"Invalid exercise of delegated legislative authority" means action which goes beyond the powers, functions, and duties delegated by the Legislature. A proposed or existing rule is an invalid exercise of delegated legislative authority if any one of the following applies:
* * *
(c) The rule enlarges, modifies, or contravenes the specific provisions of law implemented, citation to which is required by s. 120.54(3)(a)1....
Mylan, as the petitioner, had the "burden of proving by a preponderance of the evidence that the existing rule is an invalid exercise of delegated legislative authority as to the objections raised." § 120.56(3)(a), Fla. Stat. (2007).
Mylan contended that the inclusion of LS on the NDF in rule 64B16-27.500(6) contravenes subsection 465.0251(1), which requires that a drug be removed from the NDF "if every commercially marketed equivalent of that drug product is `A' rated as therapeutically equivalent to a reference listed drug or is a reference listed drug as referred to in" the Orange Book. In response, Abbott argued that it would be unconstitutional to utilize the Orange Book as it exists in 2007 and that the 2001 Orange Book, in effect when section 465.0251 was enacted, must be used to determine the validity of rule 64B16-27.500(6).
The distinction made by Abbott is significant because the record reflects that the 2001 Orange Book did not include any "A" rated LS products and did not list most of the LS drug products that were being commercially marketed at the time. Only two reference listed LS drugs were included in the 2001 Orange Book, and they were given the therapeutic equivalence code of BX, which communicated the determination of the FDA that the products had not been shown to be therapeutically equivalent to each other. On the other hand, the 2007 Orange Book lists five reference listed LS drug products: Levoxyl®, Levo-T®, Levothroid®, Unithroid®, and Synthroid®. The 2007 Orange Book also lists two generic drugs manufactured by Mylan and Genpharm International, Inc. The 2007 Orange Book also states that all of the listed LS drugs are "A" rated by the FDA, but the FDA has determined *649 that not all of these LS products are therapeutically equivalent to each other.
As previously noted, for a generic product to be approved by the FDA, it must be therapeutically equivalent to a reference listed drug. 21 U.S.C. § 355(j). To be "therapeutically equivalent," the generic drug must be both pharmaceutically equivalent and bioequivalent. Rebecca S. Yoshitani, J.D., Ellen S. Cooper, J.D., L.L.M, Pharmaceutical Reformulation: The Growth of Life Cycle Management, 7 Hous. J. Health L. & Pol'y 379, 384 (2007). Products are pharmaceutically equivalent if they contain the same active ingredient and the same strength, and are in the same dosage form (tablet, capsule, solution, etc.). Id., citing Drugs @ FDA Glossary of Terms, http://www.fda.gov/cder/ drugsatfda/glossary.htm. Products are bioequivalent if they release the active ingredient into the bloodstream at essentially the same rate and essentially to the same extent. See 21 U.S.C. § 355(j)(8)(B) (2006).
In addition, section 465.025(5) provides that each community pharmacy must establish "a formulary of generic and brand named drug products, which, if selected as the drug of choice, would not pose a threat to the health and safety of patients...." Although a pharmacist is required to rely on drug product research, testing, information, and formularies by other agencies, including the FDA, under the statute the pharmacist's formulary is not required to be consistent with the Orange Book formulary. Id. Under section 465.025(2), pharmacists are required to substitute a "less expensive, generically equivalent drug product" for a brand name, unless the prescriber expressly indicates the brand named drug is medically necessary or the purchaser requests otherwise. Section 465.025(1)(b) defines "generically equivalent drug product" as a drug product with the same active ingredient, finished dosage form, and strength. Abbott asserted that, as a result of these statutory provisions, for products not included in the NDF, Florida law would permit substitution of drug products which are pharmaceutically equivalent, but not necessarily bioequivalent. As a result, a substituted generic product could differ materially from the prescribed drug in the manner in which the active ingredient is released into the bloodstream. Of course, drug products listed in the NDF may not be substituted. Fla. Admin. Code R. 64B16-27.500.
As noted, pursuant to section 465.025(6), a person seeking to remove a drug from the NDF has the burden of demonstrating that substitution of the drug would not "pose a threat to the health and safety of patients." The record reflects that previous efforts to remove LS from the NDF utilizing that standard have been unsuccessful. In this proceeding, Mylan has argued that, by operation of law, LS must be removed from the NDF because section 465.0251, Florida Statutes (2007), requires removal as a matter of law. Although Abbott submitted evidence by affidavit in the proceeding below that substituting generic LS drugs could be harmful to patients, that evidence was not considered by the ALJ, because the ALJ determined that section 465.0251(1) required removal as a matter of law.
Below, as here, Abbott argued that the legislature may adopt federal agency rules and laws that are in existence at the time the legislature enacts the statute incorporating federal law, but that the legislature is precluded from adopting federal agency rules or federal laws that take effect after the enactment of the Florida Statute. See Fla. Indus. Comm'n v. State, 155 Fla. 772, 21 So. 2d 599 (1945); Freimuth v. State, 272 So. 2d 473 (Fla.1972).
*650 Abbott also argued that section 465.0251 was ambiguous and should be construed to require that "A" rated reference listed drugs and generic drugs must be therapeutically equivalent to all the other reference listed drugs. The ALJ rejected this interpretation of the statute, reasoning, as follows:
The plain and obvious meaning of Subsection 465.0251(1), Florida Statutes, is that a generic named drug product is to be removed from the negative drug formulary if the generic equivalent is "A" rated as therapeutically equivalent to a reference listed drug as referred to in the Orange Book. The statute does not state that all generic drug products must be "A" rated as therapeutically equivalent to all the reference listed drugs in the Orange Book listed for a specific generic named drug product. It just requires that every commercially marketed generic drug be "A" rated as therapeutically equivalent to a reference listed drug in the Orange Book. [The underlined "a"] is singular, meaning one.
The parties filed separate motions for summary final order asserting that there were no genuine issues of material fact. See § 120.57(1)(h), Fla. Stat. (2007). Following a hearing on December 11, 2007, the ALJ found that an evidentiary hearing was not necessary and issued a summary final order on January 28, 2008.
In the summary final order, the ALJ accepted Mylan's argument that the 2007 version of the Orange Book could be used in applying section 465.0251 on the authority of Eastern Air Lines, Inc. v. Department of Revenue, 455 So. 2d 311 (Fla.1984). In Eastern Air Lines, the court created an exception to the general rule that a statute may only incorporate federal law in effect at the date the incorporation is made. There, the airline sought a declaratory judgment that a fuel tax calculated by reference to the federal Consumer Price Index (CPI) then in effect was unconstitutional. Eastern contended that the use of the varying price component of the CPI issued by the United States Department of Labor in determining the amount of the fuel tax was an improper delegation of legislative authority because the CPI which was being used was not in existence at the time the provisions of chapter 83-3, Laws of Florida, were enacted. Rejecting Eastern's argument, the Florida Supreme Court explained that:
Here, the legislature is merely setting forth the manner in which the department is to determine the appropriate total motor fuel and special fuel retail price. The department is directed with precision how to make such a determination. We think the language of [State v.] Welch [279 So. 2d 11 (Fla.1973)] and Freimuth [272 So. 2d 473 (Fla.1972)] should be interpreted to apply to statutes which incorporate federal statutes or administrative rules which substantively change the law, and not to a statute which incorporates a federal index to provide aid in making a ministerial determination.
Id. at 316.
The ALJ found the FDA revisions to the Orange Book analogous to the CPI index in Eastern Air Lines. In the order under review, the ALJ explained her reasoning:
In section 465.0251, Florida Statutes, the Legislature has set out specific standards, which when met require the removal of a drug product from the negative drug formulary. It is akin to the use of the CPI in Eastern Air Lines. The standards which the FDA used in 2001 to determine whether a drug product is therapeutically equivalent are essentially the same standards used in 2007.... Naturally, as new drugs are *651 sought to be approved, the list of reference listed, "A" rated, and therapeutically equivalent drug products will vary, like the CPI will vary. When drug products meet the criteria listed in section 465.0251, Florida Statutes, the removal becomes a ministerial duty.
As a result, because Mylan had demonstrated that LS under the 2007 Orange Book now meets the criteria of section 465.0251(1), the ALJ ruled that rule 64B16-27.500(6) was invalid and that LS must be removed from the NDF. Abbott sought a stay below, which was denied. Abbott's motion for review in this court was denied.
Standing
As a threshold matter, Mylan argues that Abbott lacks standing to maintain this appeal because it has not demonstrated that it "is adversely affected by final agency action" as required by section 120.68(1) (emphasis added).[2] The test for determining whether a party has standing in appellate proceedings, governed by the quoted language in section 120.68(1), is different from the standing test required to participate in an administrative hearing. To have standing to challenge the validity of an administrative rule in a rule challenge proceeding before an ALJ, a person must be "substantially affected." § 120.56(1)(a), Fla. Stat. An intervenor, like Abbott, must similarly be "substantially affected" to participate in the rule challenge proceedings. § 120.56(1)(e), Fla. Stat.
In this case under review, Abbott has alleged that it is adversely affected because the final order will directly lead to significant market share losses. Mylan contends, however, that economic injury suffered by Abbott is insufficient to establish standing on appeal under Florida Society of Ophthalmology v. State Board of Optometry, 532 So. 2d 1279, 1284 (Fla. 1st DCA 1988). Abbott responds that Mylan is confusing and intermingling the different tests for standing that exist at the trial and appellate levels of the administrative process. More importantly, Abbott argues that this is a rule challenge proceeding and economic injury may be a basis for establishing standing in such a proceeding. See Peace River/Manasota Reg'l Water Supply Auth. v. IMC Phosphates Co., ___ *652 So.3d ___, ___ (Fla. 2d DCA 2009) ("standing depends on the nature of the injury asserted and the purpose and scope of the administrative proceeding").
Florida Society of Ophthalmology v. State Board of Optometry provides that "party status will be accorded only to those persons who will suffer an injury to their substantial interests in a manner sought to be prevented by the statutory scheme," 532 So.2d at 1284, for purposes of a section 120.57(1) hearing. That case does not involve a rule challenge, however. As this court explained in Department of Professional Regulation, Board of Dentistry v. Florida Dental Hygienist Association, Inc., 612 So. 2d 646, 651 (Fla. 1st DCA 1993):
Moreover, it should be noted that unlike Florida Society of Ophthalmology v. State Board of Optometry, 532 So. 2d 1279, 1284 (Fla. 1st DCA 1988), the present case is a rule challenge proceeding, not an attempt to gain access to a 120.57(1) licensing proceeding. This distinction is significant. Prior decisions in licensing or permitting cases have made it clear that a claim of standing by third parties based solely upon economic interests is not sufficient unless the permitting or licensing statute itself contemplates consideration of such interests, or unless standing is conferred by a rule, statute, or based on constitutional grounds. Florida Medical Association, 426 So.2d at 1117-118; Florida Society of Ophthalmology, 532 So.2d at 1287. Further, as we reiterated in State Board of Optometry, standing in a licensing proceeding may well have to be predicated on a somewhat different basis than standing in a rule challenge proceeding, because there can be a difference between the concept of "substantially affected" under section 120.56(1) and "substantial interest" under section 120.57(1). 538 So.2d at 880.
(Emphasis added); see also Fla. Med. Assn, Inc. v. Dep't of Prof'l Regulation, 426 So. 2d 1112, 1115 (Fla. 1st DCA 1983) (recognizing that an interest economic in nature can furnish the basis for standing to challenge a proposed or adopted agency rule).
Standing at the appellate level is governed by section 120.68(1). Under this statute, Abbott has standing if four conditions are satisfied: "(1) the action is final; (2) the agency is subject to the provisions of the [Administrative Procedure] Act; (3) [the person seeking review] was a party to the action which he seeks to appeal; and (4) [the party] was adversely affected by the action." Daniels v. Florida Parole and Probation Comm'n, 401 So. 2d 1351, 1353 (Fla. 1st DCA 1981). The first three requirements are not at issue in this case and Abbott satisfies the fourth requirement under the case law. See Indian Trail Improvement Dist. v. Dep't of Cmty. Affairs, 946 So. 2d 640, 641 (Fla. 4th DCA 2007) (recognizing that the adverse effect of an agency decision increasing competition in a service area is sufficient to support appellate standing). Abbott's stake in this appeal extends beyond a mere "generalized interest" in the NDF. By removing LS from the NDF, the ALJ's order would require a pharmacist to dispense generic LS products to patients whose physicians have written a prescription for Synthroid®, which Abbott manufactures. Abbott is adversely affected because the final order will directly lead to significant market share losses.
Finally, we reject Mylan's argument that Abbott lacks standing on appeal based upon this court's decision in Florida Chapter of the Sierra Club v. Suwannee American Cement Company, Inc., 802 So. 2d 520, 521 (Fla. 1st DCA 2001). In Suwannee American, the Sierra Club and Save Our *653 Suwannee, Inc. (SOS), two environmental advocacy organizations, possessed standing at the administrative level by virtue of their compliance with section 403.412(5). On appeal, this court held that the Sierra Club and SOS did not possess standing to challenge the administrative order at the appellate level because neither Sierra Club nor SOS had shown that the agency action "created an `injury in fact' or impending injury to its interest or an adverse effect with respect to any of its individual members." 802 So.2d at 522 (citations omitted). An assertion of standing based on a generalized interest in the environment was not sufficient. Id. at 522-23; see also Legal Envtl. Assistance Foundation, Inc. v. Clark, 668 So. 2d 982, 986-87 (Fla.1996). Unlike the environmental groups in Suwannee American, here Abbott has a very specific interest that is adversely affected by the order under review.
Mootness
While this appeal was pending, Mylan filed a suggestion of mootness arguing that rule 64B16-27.500(6) became void by operation of law under section 120.56(3)(b). That statute provides:
The administrative law judge may declare all or part of a rule invalid. The rule or part thereof declared invalid shall become void when the time for filing an appeal expires. The agency whose rule has been declared invalid in whole or in part shall give notice of the decision in the Florida Administrative Weekly in the first available issue after the rule has become void.
(Emphasis added). Mylan reasoned that, because neither the Board of Medicine nor the Board of Pharmacy has filed an appeal from the ALJ's determination that rule 64B16-27.500(6) was an invalid exercise of delegated legislative authority, the rule became void. As a result, Mylan points out, the Board of Pharmacy has issued a notification that LS has been deleted from Florida's NDF. Mylan asserts that this court cannot order the Board of Pharmacy to readopt a rule, adoption of which is not mandated by statute.
Abbott responds that the Board of Pharmacy took no action on rule 64B16-27.500(6), but simply provided notice of the decision by the ALJ. Further, Abbott argues that the plain language of section 120.56(3)(b) states that the rule becomes void if "the time for filing an appeal expires." Thus, if an appeal is filed, "the time for filing an appeal" does not "expire" and the statute does not apply. We agree.
As this court recognized in State Board of Optometry v. Florida Society of Ophthalmology, 538 So. 2d 878, 889 (Fla. 1st DCA 1988):
The statutory scheme [of section 120.56(3)] is obviously intended to avoid the chaotic uncertainty that would necessarily flow from retroactively invalidating agency action taken in reliance on the presumed validity of its rule prior to a proper rule challenge proceeding holding the rule invalid. Applying the underlying section 120.56(3) to this case, we hold that rule 21Q-10.001, which was held invalid by the hearing officer and our opinion, will become void and ineffective as of the date the decision of this court becomes final.
(Emphasis added). Thus, section 120.56(3) delays the date on which a rule shall become void until after appellate proceedings have ended. To interpret this statute in any other manner would deny a party the right to appellate review of an ALJ order invalidating a rule in the absence of a stay. Such a result is not supported by any authority.
Section 465.0251
We now turn to the merits of the parties' arguments with respect to section *654 465.0251. We review an ALJ's conclusions of law de novo. Steward v. Dep't of Children & Families, 865 So. 2d 528, 530 (Fla. 1st DCA 2003). Further, because the issues we consider here are primarily those of statutory or constitutional interpretation, our standard of review for those issues is also de novo. Fla. Hosp. Waterman, Inc. v. Buster, 984 So. 2d 478, 485 (Fla.2008). Below, the parties agreed that there were no disputed issues of material fact and that the ALJ could resolve the case by summary final order pursuant to section 120.57(1)(h).[3] To the extent that we find that the ALJ's action is based upon a finding of fact, section 120.68(7)(b), Florida Statutes, we may set aside the ALJ's order if it depends upon any finding of fact that is not supported by competent, substantial evidence established in the record of the administrative hearing. Wise v. Dep't of Mgmt. Servs., Div. of Ret., 930 So. 2d 867, 870-71 (Fla. 2d DCA 2006).
As it did below, on appeal Abbott asserts that, because section 465.0251 provides that "if every commercially marketed equivalent of that drug product is `A' rated as therapeutically equivalent to a reference listed drug ..." (emphasis applied), every commercially marketed LS product must be "A" rated to all of the reference listed drugs. If that position had been accepted by the ALJ, the ALJ would have been required to leave LS on the NDF because it is uncontroverted that no generic LS is "A" rated to Levothroid®. We hold that the ALJ correctly interpreted section 465.0251(1) in ruling that the statute is clear and unambiguous and provides that a generic drug product is to be removed from the NDF list if the generic equivalent is "A" rated as therapeutically equivalent to any single reference listed drug in the Orange Book. The use of the indefinite article "a" in the statute requires a reading of "reference listed drug" as a singular noun. See Webster's Third New Int'l Dictionary 1 (1966) ("a" is "used as a function word before most singular nouns other than proper and mass nouns...."). Accordingly, we reject Abbott's contention that a named drug product like LS can be removed from the negative drug formulary only if all generic LS products are "A" rated as to each reference listed drug.
Alternatively, Abbott argues that reversal is nonetheless required because the ALJ unconstitutionally applied section 465.0251. Abbott contends that the legislature could not have intended to incorporate updated editions of the Orange Book to govern section 465.0251 because of the long-established constitutional rule in Florida that the legislature's adoption "in advance [of] any federal act or ruling of any federal administrative body which may be adopted in the future would amount to an unlawful delegation of legislative authority." State v. Rodriquez, 365 So. 2d 157, 160 (Fla.1978).
Article II, § 3 of the Florida Constitution provides:
The powers of the state government shall be divided into legislative, executive and judicial branches. No person belonging to one branch shall exercise any power appertaining to either of the other branches unless expressly provided therein.
This constitutional provision has been construed "to prohibit the legislature, absent constitutional authority to the contrary, from delegating its legislative power to others." Gallagher v. Motors Ins. Corp., 605 So. 2d 62, 71 (Fla.1992). Under this non-delegation principle, Florida courts have long held that while the legislature *655 may enact laws that adopt provisions of federal statutes or other regulations of a federal administrative body that are in existence and in effect at the time the legislature acts, where the legislature incorporates in a Florida statute a future federal act or ruling of a federal administrative body, such incorporation constitutes unconstitutional delegation of legislative power. See, e.g., Fla. Indus. Comm'n v. State, 21 So.2d at 603 (holding that chapter 19637, Laws of Florida (1939), which excluded from its application any employer who was "within the operation of Title IX of the Federal Social Security Act, or amendments thereto," must be confined to the federal act as it existed when the exception clause was enacted in 1939); State v. Welch, 279 So.2d at 13-14 (upholding the determination of the trial court that section 404.015 stating "the intent of the legislature that all drugs controlled by the drug abuse laws of the United States, now or in the future, shall, in addition to the drugs specified by the laws of Florida, be controlled by the terms of this chapter" was susceptible to a constitutional challenge because it sought "to incorporate by reference future legislative and/or administrative actions of jurisdictions outside of Florida"); State v. Camil, 279 So. 2d 832 (Fla.1973) (holding that the defendant could not be convicted of possessing PCP, when PCP was not a prohibited drug when section 404.01(3) was enacted in 1967; that statute defined "hallucinogenic drug" as "any other drug to which the drug abuse laws of the United States apply" and PCP was not outlawed by United States law until after 1967); Dep't of Legal Affairs v. Rogers, 329 So. 2d 257, 265 (Fla.1976) (construing Florida's "little FTC act," which required rules adopted pursuant to the act to be consistent with decisions of the Federal Trade Commission and federal courts interpreting provisions of the Federal Trade Commission Act, to require compliance with the federal trade law standard in effect on or before the effective date of the act); State v. Rodriquez, 365 So.2d at 160 (construing section 409.325(2)(a) as incorporating federal food stamp law "in effect at the time Section 409.325(2)(a) was enacted"); Hughes v. State, 943 So. 2d 176, 190 (Fla. 3d DCA 2006) (holding that, because section 860.13 governing operation of aircraft while intoxicated was last reenacted without any amendments in 1983, "incorporation of a federal standard that did not come into existence until after 1983 would be unconstitutional"); Brazil v. Div. of Admin., State Dep't of Transp., 347 So. 2d 755, 757-58 (Fla. 1st DCA 1977) (holding that it would be permissible for DOT to remove a sign which violated the spacing requirement which was part of the federal regulations when section 479.02, containing the phrase "subject to current federal regulations," became effective, but it would be unconstitutional to construe the statute as allowing the legislature to adopt, in advance, any federal act or ruling); see generally F. Scott Boyd, Looking Glass Law: Legislation by Reference in the States, 68 La. L. Rev. 1201, 1251-1280 (2008).
Where a statute generally incorporates a federal law or regulation, to avoid holding the subject statute unconstitutional, Florida courts interpret the statute as incorporating only the federal law in effect on the date of adoption of the Florida Statute. Rodriquez, 365 So.2d at 160. As the Florida Supreme Court has explained, "the legislature is presumed to have intended to enact a valid and constitutional law and ... we will construe a statute, if possible, in such a manner as will be conducive to its constitutionality." Rogers, 329 So.2d at 265. For example, in Rodriquez, the entire court agreed that section 409.325(2)(a), Florida Statutes, which purported to incorporate into the *656 statute future changes to the federal food stamp laws, provided for an unconstitutional delegation. Four justices concluded that the statute should be interpreted only to incorporate federal law as it existed when the Florida statute was enacted, and, as a result, held the statute constitutional. 365 So.2d at 160. As the majority explained:
Since the Legislature is presumed to have enacted a valid and constitutional law and since statutes are to be construed, when reasonably possible and consistent with protection of constitutional rights, in such a manner so as to avoid conflict with the Constitution, we conclude that the Legislature intended to incorporate federal law and regulations in effect at the time section 409.325(2)(a) was enacted.
The incorporation of only the federal law in effect at the time of the enactment of section 409.325 may appear unworkable because changes in the federal law would not take effect in Florida. The Legislature, however, to avoid this problem, may update Chapter 409 each year, as they update Florida's corporate income tax statute by bringing forward the Internal Revenue Code each year.
Id. (citations and footnote omitted). Three justices dissented and would have held the Florida statute unconstitutional as an unlawful delegation of legislative authority because it incorporated future federal law. Id. at 161-62. Similarly, in Freimuth, the court interpreted section 404.01(3), Florida Statutes (1969), which defined "hallucinogenic drug" by reference to federal law, as not incorporating those drugs listed in federal law adopted after the date of enactment of section 404.01 in 1967.272 So.2d at 476.
In Eastern Air Lines, the court explained that this well-established non-delegated principle applies "to statutes which incorporate federal statutes or administrative rules which substantively change the law ..." 455 So.2d at 316. The court did not apply this principle in Eastern Air Lines, however, because it found that the statute directing the use of the CPI in calculating a Florida fuel tax "merely set forth the manner in which the department is to determine the appropriate total motor fuel and special full retail price [and] [t]he department is directed with precision how to make such a determination." Id.
We agree with Abbott that the CPI index is similar to a mathematical formula which the state agency could use to arrive at the fuel price. Nothing in this record, however, leads us to the conclusion that the Orange Book and the complex science which the FDA uses to develop the list of generic drugs included in the Orange Book is similar in nature to the CPI at issue in Eastern Air Lines. While the FDA standards require therapeutic equivalence for drug products to be "A" rated in the Orange Book, and these standards did not change from 2001 to 2007, this fact is not determinative. The record here is clear that the scientific methodology applied by the FDA in approving drug products for inclusion in editions of the Orange Book is not static and unchanging. The FDA has revised and will revise its methodology to reflect scientific developments. In short, we conclude that the drug products listed in the Orange Book are much more like the list of hallucinogenic drugs in Freimuth than the CPI index in Eastern Air Lines. Because the FDA makes substantive changes to the Orange Book, to interpret section 465.0251 as allowing the FDA's Orange Book to determine which drugs should be on the NDF would constitute an unlawful delegation of legislative authority to the FDA. See Freimuth.
Moreover, we are persuaded that, when the legislature enacted section 465.0251, it did not intend the result obtained *657 by the ALJ's order. Subsection (2) of that statute clearly states the legislative intent that the statute was not meant to override section 465.025. "It is axiomatic that statutes must be read with other related statutes and other related portions of the same statute." State v. Negrin, 306 So. 2d 606, 607 (Fla. 1st DCA 1975). "Where possible, courts must give effect to all statutory provisions and construe related statutory provisions in harmony with one another." Forsythe v. Longboat Key Beach Erosion Control Dist., 604 So. 2d 452, 455 (Fla.1992).
With these principles in mind, we read section 465.0251 as only applying the edition of the Orange Book in effect on or before the date on which the statute was enacted. This interpretation leaves in full force and effect the provisions of section 465.025(6), which delegates the authority to establish the NDF to the Board of Pharmacy and the Board of Medicine. Thus, those Boards are left with the authority to determine whether certain drug substitutions would pose a threat to the health and safety of Florida patients. We cannot accept that in section 465.0251 the legislature intended to delegate to the FDA the legislative authority to determine, on a continuing basis, which drug substitutions would pose a threat to health and safety of Florida patients. If, indeed, the legislature intends the NDF to be governed by the revised versions of the Orange Book, as Mylan asserts, then the legislature can update section 465.0251 each year "by bringing forward [the Orange Book] each year." Rodriquez, 365 So.2d at 160.
REVERSED.
KAHN and WEBSTER, JJ., concur.
NOTES
[1] Ctr. For Drug Evaluation and Research, U.S. Food & Drug Admin., Approved Drug Products with Therapeutic Equivalence Evaluations (2007), commonly known as the "Orange Book," see 21 U.S.C. § 355(j)(7)(A)(i) (2006), identifies drug products approved on the basis of safety and effectiveness by the FDA under the Federal Food, Drug and Cosmetic Act. It also includes therapeutic equivalence (TE) evaluations for approved multisource prescription drug products. The Orange Book is updated annually and is supplemented with monthly cumulative updates. It can be found online at FDA, Electronic Orange Book, http://www.fda.gov/cder/ob/ (last visited May 4, 2009) and that version is updated daily.
[2] Mylan admits that standing was not raised as an issue by either party in the proceeding below. Interestingly, as pointed out by Abbott, Mylan did not challenge Abbott's standing below, because Mylan's standing to initiate this rule challenge proceeding was also based on its financial interests. Nevertheless, Mylan asks this court to deny Abbott standing to bring this appeal on the ground that Abbott's only interest in the proceeding is financial and to overlook that both parties based their standing below on their financial interests at stake in the implementation of the generic substitution law. As recognized by this court in Grand Dunes Ltd. v. Walton County, 714 So. 2d 473, 475 (Fla. 1st DCA 1998), standing in the administrative context is a matter of subject matter jurisdiction and cannot be conferred by consent of the parties. Thus, if indeed economic interest was not sufficient to grant these parties the necessary standing to participate in the rule challenge proceeding below, the ALJ would have lacked jurisdiction to rule on the merits of the rule challenge and her order would have been a nullity. Examining the case law, we are satisfied that the act of removing LS from the NDF, which has the effect of allowing pharmacists to freely substitute generic drugs for Abbott's brand name drug Synthroid®, is a direct injury in fact "of sufficient immediacy and reality" to grant Abbott (and Mylan) standing in the rule challenge proceeding. Fla. Bd. of Med. v. Fla. Acad. of Cosmetic Surgery, Inc., 808 So. 2d 243, 250 (Fla. 1st DCA 2002). See also Florida Dep't of Offender Rehabilitation v. Jerry, 353 So. 2d 1230, 1236 (Fla. 1st DCA 1978). It cannot be disputed that both parties' interests are within the zone of interest regulated by §§ 465.025 and 465.0251 and rule 64B16-27.500.
[3] The parties have not raised, and we do not address, whether disputed issues of fact do exist or whether the proceeding was appropriate for resolution by summary final order. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623291/ | SHERMAN AUGUSTINE
v.
DEPARTMENT OF PUBLIC SAFETY AND CORRECTIONS LOUISIANA STATE PENITENTIARY
No. 2008 CA 2024
Court of Appeals of Louisiana, First Circuit.
August 6, 2009
Not Designated for Publication
SHERMAN AUGUSTINE Cottonport, LA, Plaintiff-Appellant In Proper Person.
TERRI CANNON, Baton Rouge, LA, Attorney for Defendant-Appellee Department of Public Safety and Corrections-Louisiana State Penitentiary.
Before: PARRO, McCLENDON, and WELCH, JJ.
PARRO, J.
This is an appeal from a final decision of the Louisiana State Civil Service Commission (Commission) that summarily dismissed Sherman Augustine's appeal based on the lack of subject matter jurisdiction. For the following reasons, we affirm.
Background
Sherman Augustine (Augustine) was employed by the Louisiana State Penitentiary (LSP) as a master sergeant with permanent status. On January 29, 2008, Augustine completed an employee leave request form seeking approval for use of 14 days of vacation time. After examining Augustine's absences in 2007, his supervisor recommended that his leave request be denied. Nonetheless, the assistant warden approved the use of only 5 days of leave time, noting that Augustine had 4 unscheduled absences and had taken 123.30 hours of unscheduled sick leave and 12.33 hours of unscheduled annual leave. From the agency's decision, Augustine filed a petition for appeal with the Commission, contending that he was denied 9 days of accrued yearly vacation.
On January 11, 2007, the LSP had issued Directive Number 03.013 to address employee leave usage, which in pertinent part provides:
A. GENERAL
Any absence from duty can be considered when evaluating other requests for leave.
B. LEAVE HISTORY
Each Unit Manager/Department Head will maintain a leave register and absentee calendar ... on each employee in his/her unit/department. This leave register will be reviewed by supervisors when considering requests for vacation leave.
* * *
C. VACATION: ANNUAL AND/OR "K" LEAVE
Annual Leave is provided primarily for vacations, handling personal business, or attending to family illness. K-leave may also be used for this purpose. Employees must apply for annual and/or K-leave in advance, requesting the use of such leave on a leave slip which is available through the employee's supervisor. Security employees must secure leave approval from the Shift Supervisor. Non-security employees must secure leave approval from their immediate supervisor. Unit Wardens, Shift Supervisors, and Department Heads will equitably allocate annual and K-leave to ensure that critical institutional operations continue uninterrupted.
1. The amount of time an employee may be granted annual leave for a vacation each calendar year will be based on his/her length of continuous service, a review of the use of all types of leave in the previous twelve-month period, and the need of the institution to maintain adequate staffing.
* * *
[D.] SICK/MATERNITY LEAVE (EMPLOYEE)
1. Employees who are unable to report for duty due to illness must follow the following procedures.
a. Security employees are required to contact a Shift Supervisor at least two hours prior to the start of the employee's work schedule on the first day of illness. If required by a physician to be absent for more than one workday, the employee must again call to notify a Shift Supervisor at least two hours prior to the start of the second scheduled work period and each workday thereafter until the employee returns to duty. The employee must indicate the length of time the physician has determined that he/she must be absent from work.
* * *
[N.] UNSCHEDULED ABSENCE/NON DISCIPLINARY REMOVALS
1. When an employee is absent from work without prior approval, the leave shall be considered an unscheduled absence. The supervisor responsible for reviewing the leave request is to mark clearly on the Application for Leave (SF-6) "Unscheduled" on top of the form regardless of whether the leave is approved or denied. A copy of the Application for Leave marked "Unscheduled" shall be given to the employee.
* * *
3. The first three consecutive days of an unscheduled absence will be counted as three separate unscheduled absences, unless the Warden (or designee) determines otherwise. In make such a determination, the Warden (or designee) should consider such mitigating factors as obvious legitimate accidental injury or catastrophic illness.
4. An unscheduled absence history will be recorded on the employee's leave register and absentee calendar in accordance with Section A.
5. When an employee has accumulated five unscheduled absences in less than a 26-week period, the employee shall be counseled by his/her supervisor and a letter of warning issued to the employee and filed in his/her performance appraisal file.
* * *
8. The Deputy Warden(s), Assistant Wardens, Unit Managers, and Department Heads are responsible for ensuring that these provisions are strictly adhered to.
* * *
Furthermore, on December 27, 2007, the assistant warden for Camp C of the LSP at Angola, Louisiana, sent the following memo to all Camp-C supervisors concerning 2008 vacations:
1- All vacation [requests] must be turned in to my office for review at least two months prior to the employees requested [vacation] dates.
2- Shift majors cannot be off during a [holiday] shift.
3- Carefully review those employees in the above leave usage category with five unscheduled absences, since they get no approved time off and any vacation or k-time scheduled will be denied. A [letter] must be turned [into] my office on these employees.
4- Shift majors will turn all vacation [requests] with 2007-2008 attendance rosters to their Lt. Col. for review and approval before being sent to my office.
5- Remind everyone and watch that [no one] puts in for vacation or K-days from December 15, 2008[,] [through] January 5, 2009.
Under his employment contract, Augustine was allegedly entitled to 14 days of vacation per calendar year. He claimed that the denial of the other 9 days of vacation time constituted disciplinary action and resulted in a breach of his employment contract. Augustine urged that the application of the 2008 vacation guidelines to deny his requested vacation time was an abuse of authority and resulted in a violation of several enumerated State Civil Service Rules pertaining to leave time. Augustine urged that the discretion to use accrued sick leave under specified conditions is given to the employee, not the employer. Augustine sought to receive all 14 of his requested vacation days for 2008. He also demanded rescission of the 2008 guidelines on the grounds of unlawfulness or unreasonableness.
After reviewing Augustine's petition, the referee appointed by the Commission notified him that his petition lacked sufficient allegations to establish his right to appeal. He was given 15 calendar days to amend his petition. Augustine responded by filing a motion for recusation of the Commission's referee who had issued the notice of possible defects in his appeal, contending that she had committed a federal crime in depriving him of his constitutional right to a public hearing. He also filed a response to the notice of possible defects in his appeal.
In ruling on Augustine's motion to recuse, the referee found that Augustine failed to set forth any affirmative allegations of fact to establish a valid and recognized ground for recusal. Accordingly, his motion was denied. As to the merits of his petition, the referee then determined that the denial of annual leave/vacation days was neither a disciplinary action under State Civil Service Rule 12.2(b) nor a discipline in disguise. Therefore, the referee concluded that Augustine did not have a right to appeal to the Commission. See LSA-Const. art. X, § 8(A). From that decision, Augustine filed an application for review with the Commission, which request was denied. Therefore, the decision of the referee became the final decision of the Commission, from which Augustine appealed.[1]
Discussion
The question of whether an employee has the right to appeal is analogous to the question of whether a plaintiff has a cause of action. When a petition states a cause of action as to any ground or portion of a demand, an exception raising the objection of no cause of action must be overruled as to that distinct cause of action. Similarly, if the classified employee has alleged grounds on which appeals are allowed, the employee has the right to appeal. Bass v. Department of Public Safety and Corrections, 95-2499 (La. App. 1st Cir. 6/28/96), 676 So. 2d 1178, 1180; Ramirez v. Department of Social Services, 603 So. 2d 795, 798 (La. App. 1st Cir.), writ denied, 608 So. 2d 195 (La. 1992). The correctness of conclusions of law is not conceded for the purposes of a ruling on an exception raising the objection of no cause of action. Kyle v. Civil Service Commission, 588 So. 2d 1154, 1159 (La. App. 1st Cir. 1991), writ denied, 595 So. 2d 654 (La. 1992).
The Louisiana Constitution gives the Commission exclusive jurisdiction in all removal and disciplinary cases. LSA-Const. art. X, § 12(A). Further, the constitution specifically gives classified employees the right of appeal to the Commission in disciplinary actions and in cases alleging discrimination because of their political or religious beliefs, sex, or race. LSA-Const. art. X, § 8. Article X, Section 10 of the Louisiana Constitution further authorizes the Commission to adopt rules for the administration and regulation of the classified service. Pursuant to this authority, the Commission adopted State Civil Service Rule 12.2(b), which contains an exclusive list of disciplinary actions that may be imposed by an appointing authority. Rule 12.2(b) provided: "Disciplinary actions can only include: reassignments; suspensions without pay; reductions in pay; involuntary demotions and dismissals."[2] The determination of what constitutes a disciplinary action is within the authority of the Commission through its rule-making powers granted by LSA-Const. art. X, § 10. King v. LSU Health Sciences Center, 03-1138 (La. App. 1st Cir. 4/2/04), 878 So. 2d 544, 547.
Annual and sick leave shall be earned by each full-time and each part-time employee who has a regular tour of duty. State Civil Service Rule 11.5(a). The earning of such leave shall be based on the equivalent of years of full-time state service and shall be creditable at the end of each calendar month or at the end of each regular pay period. State Civil Service Rule 11.5(b). Nonetheless, annual leave must be applied for by the employee and may be used only when approved by the appointing authority or his designated representative.[3] State Civil Service Rule 11.7(a). The appointing authority, the LSP, has adopted LSP Directive No. 03.013 to further address the approval of employee leave usage. According to the directive, employees are required to request approval for the use of annual and/or K-leave in advance on a leave slip, which is available through the employee's supervisor.[4] Augustine's failure in 2007 to comply with that mandate resulted in the approval by the LSP of his use of only 5 days of leave time for 2008, as opposed to the 14 days that had been requested.
Accrued unused annual and sick leave earned by an employee shall be carried forward to succeeding calendar years. State Civil Service Rule 11.6(a). Therefore, LSP's refusal to approve Augustine's request for an additional 9 days of leave was not tantamount to a forfeiture of leave time as asserted by Augustine. The payment of annual leave upon separation is specifically addressed in State Civil Service Rule 11.10, and the payment of sick leave when an employee is non-disciplinarily removed under State Civil Service Rule 12.6(a) is addressed in State Civil Service Rule 11.10.1. As a result of the accrual of unused leave time, LSP's refusal to fully approve Augustine's 2008 request for use of leave time did not constitute a disciplinary action, as found by the referee.[5]
Accordingly, we find no error in the Commission's determination that the allegations of Augustine's petition did not state any of the grounds for an appeal to the Commission. Therefore, we affirm the decision of the State Civil Service Commission. The costs of this appeal are assessed to Sherman Augustine.
AFFIRMED.
NOTES
[1] On appeal, Augustine also challenged the denial of his motion to recuse. The recusal of a referee is governed by the grounds for recusal of a judge of the courts of the State of Louisiana. State Civil Service Rule 13.32. In the absence of the assertion of a valid ground for recusation as set forth in LSA-C.C.P. art. 151, we find no error or abuse of discretion in the referee's denial of Augustine's motion. See State v. Williams, 601 So. 2d 1374, 1375 (La. 1992).
[2] Subsequently, Chapter 12 of the State Civil Service Rules was amended, and the substance of Rule 12.2(b) was moved to Rule 12.3(a).
[3] The use of sick leave is governed by State Civil Service Rule 11.13, which provides:
(a) Sick leave may be utilized by an employee who has sufficient leave to his credit for necessary absence from duty because of:
1. Illness or injury which prevents him from performing his usual duties.
2. Medical, dental, or optical consultation or treatment.
(b) Sick leave shall not be charged for non-work days.
(c) Each appointing authority shall select a method to charge the sick leave records of all employees. The minimum charge to sick leave records shall be not less than one-tenth hour (6 minutes) nor more than one-half hour.
* * *
(e) The appointing authority shall use the same method for charging to leave records for both annual and sick leave.
Nonetheless, when sick leave is taken by an employee, State Civil Service Rule 11.14 requires the filing of a certificate with his appointing authority stating the cause of his absence and the amount of time taken. The appointing authority may require a statement from a registered physician or some other acceptable proof that the employee was ill and unable to report to work. State Civil Service Rule 11.14.
[4] Furthermore, any absence from duty can be considered when evaluating requests for leave. LSP Directive No. 03.013(A).
[5] Since LSA-Const. art. X, § 12(A) authorizes appeals to the court of appeal with respect to removal and disciplinary cases, it is questionable whether this court has subject matter jurisdiction to consider that portion of the referee's decision addressing LSP's alleged violation of civil service rules. However, we find no error in the referee's finding that Augustine failed to establish a right of appeal to the Commission on the basis of a rule violation. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623466/ | 15 So. 3d 625 (2009)
Cesar RIVERO, Appellant,
v.
The STATE of Florida, Appellee.
No. 3D08-340.
District Court of Appeal of Florida, Third District.
June 17, 2009.
Rehearing Denied July 13, 2009.
*626 Carlos J. Martinez, Public Defender, and Marti Rothenberg, Assistant Public Defender, for appellant.
Bill McCollum, Attorney General, and Natalia Costea, Assistant Attorney General, for appellee.
Before SHEPHERD, CORTIÑAS, and SALTER, JJ.
SALTER, J.
Cesar Rivero appeals a circuit court order denying his motion for relief under Florida Rule of Criminal Procedure 3.850 without an evidentiary hearing. We affirm.
Rivero claimed in a motion filed in August 2007 that "newly discovered evidence" regarding plea negotiations in 1999 warranted an evidentiary hearing. The procedural history of his trial and conviction, together with the equivocal nature of the comments alleged to constitute the "newly discovered evidence," demonstrate that no new evidentiary hearing was required.
In 1999, Rivero was convicted of second-degree murder with a firearm and was sentenced to 34 years in state prison. This Court affirmed the conviction and sentence the following year. Rivero v. State, 763 So. 2d 336 (Fla. 3d DCA 2000). In 2002, Rivero filed a motion under Rule 3.850 claiming ineffective assistance of his trial counsel. During an evidentiary hearing on that motion in 2005, Rivero's trial counsel said:
But again, your plea was, at the time I think was very high. I even thought it was high, and I tried to get it lower. You wouldn't go lower. I think we even approached Judge Rothenberg at the last minute, but she wasn't very receptive to offering something, and Mr. Rivero was not interested in taking a plea. I mean, obviously if it was probation or five years, maybe he would have taken it, but if I go off memory, I think your plea offer was maybe you went down to 18 years. I'm not sure, but it was around 20 years, around there (emphasis supplied).
Following the evidentiary hearing, the trial court denied the motion. Rivero appealed, and we affirmed. Rivero v. State, 939 So. 2d 109 (Fla. 3d DCA 2006).
In 2007, Rivero filed another motion under Rule 3.850, this time alleging that his trial counsel's 2005 testimony was newly-discovered evidence of ineffective assistance of counsel during the 1999 plea negotiations. The motion included affidavits from Rivero, his mother, and his sisters, all of which stated that they were advised of pretrial plea offers carrying a sentence of more than 20 years, particularly in a range from 24 to 32 years, and that they were never advised of an offer carrying an 18 to 20 year sentence. No affidavit from Rivero's trial counsel was attached to confirm *627 with any degree of certainty[1] that a plea offer of 18, 20, or any other number of years less than 24, was ever made by the State.
The circuit court denied the 2007 motion because there was no allegation or proof that the "newly discovered evidence" was unknown to the court, parties, or counsel at the time of trial and could not have been discovered with due diligence within the two year period allowed by Rule 3.850. Morgan v. State, 912 So. 2d 642 (Fla. 5th DCA 2005) (citing State v. Gunsby, 670 So. 2d 920 (Fla.1996)).[2] We agree.
Affirmed.
CORTIÑAS, J., concurs.
SHEPHERD, J., dissenting.
For the reasons set forth below, I would reverse the summary denial of Rivero's Florida Rule of Criminal Procedure 3.850 motion for further proceedings.
In 1999, Rivero was convicted of second-degree murder with a firearm and was sentenced to thirty-four years in state prison. On June 28, 2000, we affirmed Rivero's conviction and sentence. Rivero v. State, 763 So. 2d 336 (Fla. 3d DCA 2000). Our mandate issued on July 18, 2000. In October 2002, Rivero filed a Rule 3.850 motion, alleging his trial counsel was ineffective by failing to adequately develop his defenses and failing to present a self-defense theory at trial. On September 15, 2005, the trial court held an evidentiary hearing on the motion. While testifying at the hearing, Joel Defabio, Rivero's trial counsel, remarked, "[I]f I go off memory, I think your plea offer was maybe you went down to 18 years. I'm not sure, but it was around 20 years, around there." (emphasis added). The trial court denied the pending motion,[3] and we affirmed. See Rivero v. State, 939 So. 2d 109 (Fla. 3d DCA 2006).
A year later, on August 31, 2007, Rivero filed another Rule 3.850 motion, this time alleging newly discovered evidence on the ground that Defabio never conveyed a plea offer to him in the range stated at the September 15, 2005 evidentiary hearing, and that he first became aware of this fact on that date.[4] He further alleged that if his attorney had communicated the offer to him before trial, he would have accepted it. Four affidavits were attached to Rivero's motionhis own, his mother's, and his two sisters'all of which stated they were advised of plea offers carrying a sentence of more than twenty years, particularly in the range from twenty-four to thirty-two years, but were never advised of an offer *628 carrying an eighteen to twenty-year sentence.
The trial court denied Rivero's Rule 3.850 motion without evidentiary hearing. In its written order, the trial court noted "there is no newly discovered evidence." In support of its finding, the court placed its sole reliance upon Morgan v. State, 912 So. 2d 642 (Fla. 5th DCA 2005). The majority does the same here. However, as the State concedes, Morgan does not support affirmance in this case.
In Morgan, Morgan claimed the court should have considered his claim of "`newly discovered evidence,' based upon his allegation that the [S]tate presented him with a plea offer of 17 to 22 years, but his trial counsel failed to communicate the offer to him and had he done so, Morgan would have accepted it." Id. at 643. The Fifth District Court of Appeal expressed no concern over the "degree of certainty" of the offer. See supra p. 627. Instead, the court focused on the second prong of the "newly discovered evidence" exception to the two-year limit for filing a motion to vacate a judgment under Florida Rule of Criminal Procedure 3.850(b),[5] whether the evidence "could ... have been ascertained with the exercise of due diligence." Morgan, 912 So.2d at 643. Noting that "Morgan's motion was filed fourteen years ... after the issuance of the mandate" in the case, and that "Morgan offer[ed] no allegation about how he obtained the information about a plea offer[or] why he could not have obtained it earlier," the court affirmed the trial court's denial of relief. See id. at 643. In our case, of course, Rivero acted well within two years after he knew of the alleged failure of his counsel and fully explained why he could not have ascertained the alleged failure at an earlier time.[6]Morgan is not apposite.
As an alternative ground for affirmance, the State argued below that the statement by Defabio, and those contained in the affidavits, do not demonstrate the State made a firm offer that was not communicated. Although not relying on this argument for affirmance, the majority expresses a similar discomfort. The range expressed by counsel for Rivero was less than half of that alleged by Morgan in Morgan, the case relied upon by the majority. While it is true Rivero did not obtain an affidavit from his former trial counsel, there is nothing to be made of that at this pointabsent perhaps engaging in impermissible evidence weighing or a credibility ascription.[7] Unlike in *629 Morgan, here, the defendant states he was unaware of the eighteen to twenty-year plea offer at the time of trial and only became aware of it September 15, 2005. Neither the trial court order nor the attachments refute his claim.
On appeal from a summary denial, this Court must reverse unless the record shows conclusively that the appellant is entitled to no relief. See Fla. R.App. P. 9.141(b)(2)(A). I would reverse and remand for an evidentiary hearing to resolve whether a firm offer was made, and, if so, the credibility of Rivero's contention that he was unaware of the offer until September 15, 2005. I would further order the trial court to attach record excerpts conclusively showing Rivero is entitled to no relief if it were to again summarily deny the postconviction motion. See Langdon v. State, 947 So. 2d 460 (Fla. 3d DCA 2006).
NOTES
[1] The 2005 testimony "going off memory" and "around 20 years, around there" was actually unrelated to the subject matter of the first Rule 3.850 motion (decisions by counsel during the trial six years earlier). Rivero's trial counsel did not provide an affidavit to reflect any review of his file or notes, or to add specificity to his unrefreshed 2005 recollection about the plea negotiations.
[2] In this case, Rivero and his second set of attorneys (who filed the first motion under Rule 3.850 in 2002) also did not explain how the alleged miscommunication of a more favorable plea offer was missed in their interviews with trial counsel as they drafted the 2002 motion and prepared for the evidentiary hearing on the motion.
[3] In so doing, the trial court apparently did not consider that the motion was, in any event, untimely.
[4] Rivero meets the requirement that motions based upon newly discovered evidence be made within two years of the time the facts become known or the defendant discovers such facts, since his motion was filed on August 31, 2007, within two years of the September 15, 2005 evidentiary hearing. See Slaton v. State, 985 So. 2d 1151 (Fla. 3d DCA 2008).
[5] Florida Rule of Criminal Procedure 3.850(b) reads as follows:
(b) Time Limitations. A motion to vacate a sentence that exceeds the limits provided by law may be filed at any time. No other motion shall be filed or considered pursuant to this rule if filed more than 2 years after the judgment and sentence become final in a noncapital case ... unless it alleges that
(1) the facts on which the claim is predicated were unknown to the movant or the movant's attorney and could not have been ascertained by the exercise of due diligence.... (emphasis added). Of course, counsel's knowledge of a plea offer cannot be used to defeat a defendant's claim that he was unaware of a plea offer when the basis for the motion is that counsel was ineffective for failing to timely disclose the offer. See Osborne v. State, 958 So. 2d 1017, 1019 (Fla. 5th DCA 2007); Heard v. State, 824 So. 2d 965, 965 (Fla. 4th DCA 2002).
[6] Rivero did aver that immediately upon hearing the testimony of Defabio at the 2005 post-conviction hearing, he told his counsel for that hearingwho was different than his initial defense counselthat the offer had never been presented to him, but counsel advised him that "[it] was not the proper time to address the matter."
[7] It is perhaps noteworthy that Morgan likewise did not include an affidavit from his former defense counsel in his filing, a fact of no moment to the Morgan court. Ordinarily, defense counsel are called to testify at the evidentiary hearing to either support or refute the defendant's claim. Defense counsel are under no legal obligation to provide affidavits in support of a former client's pro se postconviction motion. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623467/ | 569 So. 2d 17 (1990)
FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION
v.
Salvatore BROCATO, Yvonne Laborde, Wife of/and Eddy Rutman, Marks H. Bagalman, Rose Mary Bertrand, Wife of/and Bertrand J. Breaux, Jr., and Kathryn Cimini, Wife of/and Robert J. Fabacher, Jr.
No. 90-CA-0057.
Court of Appeal of Louisiana, Fourth Circuit.
October 11, 1990.
*18 Nathan T. Gisclair, Jr., Stephen P. Schott, Montgomery, Barnett, Brown, Read, Hammond & Mintz, New Orleans, for plaintiff/appellee.
Frank G. Desalvo, New Orleans, for defendants/appellants.
Before GARRISON, BARRY and CIACCIO, JJ.
BARRY, Judge.
This appeal is from a summary judgment in favor of the Federal Savings & Loan Insurance Corporation (FSLIC) Resolution Fund as Receiver for Alliance Federal Savings & Loan Association (Alliance) on five promissory notes and a collateral mortgage executed by the eight appellants. Federal Deposit Insurance Corporation (FDIC), the Managing Agent for FSLIC Resolution Fund has been substituted as plaintiff/appellee.
Appellants entered into an agreement with Alliance to borrow money to purchase land and construct a residential condominium development. Appellants executed the following promissory notes ("Notes"):
(a) One certain hand note, dated December 23, 1983, made and subscribed by appellant, Salvatore Brocato, in the principal amount of ONE MILLION TWO HUNDRED TEN THOUSAND AND NO/100 ($1,210,000.00) DOLLARS;
(b) One certain hand note, dated December 23, 1983, made and subscribed by appellants, Yvonne Laborde, wife of/and Eddy Rutman, in the principal amount of ONE MILLION TWO HUNDRED TEN THOUSAND AND NO/100 ($1,210,000.00) DOLLARS;
(c) One certain hand note, dated December 23, 1983, made and subscribed by appellant, Marks H. Bagalman, in the principal amount of ONE MILLION ONE HUNDRED TEN THOUSAND AND NO/100 ($1,110,000.00) DOLLARS;
(d) One certain hand note, dated December 23, 1983, made and subscribed by appellants, Rose Mary Bertrand, wife of/and Bertrand J. Breaux, Jr., in the principal amount of ONE MILLION TWO HUNDRED TEN THOUSAND AND NO/100 ($1,210,000.00) DOLLARS; and
(e) One certain hand note, dated December 23, 1983, made and subscribed by appellants, Kathryn Cimini, wife of/and Robert J. Fabacher, Jr., in the principal amount of ONE MILLION ONE HUNDRED TEN THOUSAND AND NO/100 ($1,110,000.00) DOLLARS.
The Notes are secured by a collateral mortgage note dated December 23, 1983 ("Mortgage Note"), payable on demand, made and subscribed by appellants to the order of Bearer in the principal amount of $7,000,000.00 with annual interest of 17 per cent until paid. The Notes are payable to Alliance in twenty-four (24) monthly installments: twenty-three (23) interest only payments plus a final payment of all principal and accrued interest. The Mortgage Note is paraphed for identification with and secured by a collateral mortgage dated December 23, 1983 on immovable property which appellants own in Orleans Parish ("Collateral Mortgage").
*19 Appellants received approximately $5,100,000 from Alliance and substantially completed construction of the project. Funding was discontinued due to appellants' failure to make interest payments.
In August, 1985 the Federal Home Loan Bank Board appointed FSLIC as receiver for Alliance. FSLIC took possession of all assets of Alliance including the Notes and Mortgage Note. On September 23, 1985 FSLIC repudiated its obligation to fund the Notes pursuant to the Rules and Regulations for the Federal Savings and Loan System. On January 22, 1986 FSLIC filed suit on the Notes and Mortgage Note and for recognition of the Collateral Mortgage. Appellants denied liability and set forth affirmative defenses including failure of consideration, misrepresentation and breach of contract. They did not deny their signatures or dispute the validity of the Notes.
The trial court granted FSLIC's motion for summary judgment, recognized the Collateral Mortgage, and entered judgment against appellants, jointly, severally and in solido in the amount of $4,260,672.79 plus accrued interest of $1,816,637.02 through March 15, 1988 and 14 per cent interest on $4,260,672.79 from March 16, 1988 until paid. We affirm.
In reviewing a summary judgment we are required to determine whether "[t]he pleadings, depositions, answers to interrogatories, admissions on file, together with the affidavits, if any, show that there is no genuine issue as to material fact, and that the mover is entitled to judgment as a matter of law." C.C.P. Art. 966.
Summary judgment is appropriate as a matter of law if contested facts present no legal issues. Unsubstantiated allegations will not preclude summary judgment. Metropolitan Bank of Jefferson v. Summers, 257 So. 2d 179 (La.App. 4th Cir.1972), writ refused 259 So. 2d 914 (1972).
The trial court granted summary judgment because appellants' claims against FSLIC were unliquidated. The court noted the longstanding Louisiana rule that compensation can only take place between debts which are unliquidated and presently due. See American Bank and Trust Company in Monroe v. Carson Homes, Inc., 344 So. 2d 456 (La.App. 2d Cir.1977), writ denied, 346 So. 2d 221 (La.1977); C.C. Art. 1893. American Bank held that an unliquidated reconventional demand cannot defeat a motion for summary judgment based on promissory notes and mortgages.
Appellants argue that the trial court incorrectly analyzed the relationship between negotiable instrument law and compensation. Although their defenses are almost identical to the claims made by the debtors in American Bank, appellants characterize their admittedly unliquidated claims as affirmative defenses rather than reconventional demands. They argue that due to this distinction the rule forbidding the maker of a facially valid note from using unliquidated claims against the lender to defeat a motion for summary judgment is inapplicable.
Whether Louisiana law allows a debtor to defeat summary judgment based on an unliquidated claim characterized as an affirmative defense is not dispositive of this case. It is not necessary to address appellants' arguments concerning compensation and offset.
Appellants also claim that Alliance and/or FSLIC breached a contract to loan them "a sum of money not less than $5,850,000" and that material legal issues exist as to whether FSLIC had the authority to repudiate the contract. They allege that material factual issues exist in that there is a question whether Alliance refused to advance additional funds prior to FSLIC's September, 1985 repudiation of the financing agreement.
Appellants' submit a loan commitment letter from Alliance dated December 10, 1983 and accepted by them on that date. The letter states that it is the entire agreement between the parties and that there are no other oral or written agreements. Appellants' claims of breach of contract are based on incorrect assumptions concerning Alliance's contractual obligations under this agreement. The letter states:
*20 Amount: The loan shall not exceed the lesser of the following (emphasis added):
(A) $5,850,000
(B) 66 per cent of the Fair Market Value of the property to be taken as collateral at the time of funding this commitment....
Alliance made no contractual commitment to loan appellants $5,850,000 regardless of circumstances. Appellants were informed in writing at the outset that $5,850,000 was in excess of Alliance's legal loan limit and that funding the entire loan would be contingent upon Alliance's receipt of funds from other participating lending institutions. Appellants do not dispute that Alliance advanced them approximately $5,100,000.
At the time FSLIC refused to advance additional funds, a receiver of a federal savings and loan association had the power to "repudiate any lease or contract he considers burdensome." See, 12 C.F.R. §§ 548.2(k) and 549.3(a) (1985).
Appellants argue that the trial court's decision is contrary to Louisiana's negotiable instrument statutes. Louisiana distinguishes between the rights of a holder and a holder in due course of an instrument. A holder in due course takes an instrument for value, in good faith, without notice that it is overdue or has been dishonored or of any defenses against it or claims to it. La.R.S. 10:3-302(1).
La.R.S. 10:3-305 provides, in pertinent part, that one who is a holder in due course takes an instrument free from:
(1) all claims to it on the part of any persons; and
(2) all defenses of any party to the instrument with whom the holder has not dealt except ...
(b) such ... incapacity or duress or illegality of the transaction, as renders the obligation an absolute nullity; and
(c) such misrepresentation as has induced the party to sign the instrument with neither knowledge nor reasonable opportunity to obtain knowledge of its character or its essential terms; and...
(e) any other discharge of which the holder has notice when he takes the instrument.
The holder of a negotiable instrument is subject to any valid claim by any person as well as all defenses which could be asserted in an action on a simple contract and the defenses of want or failure of consideration and non-performance of any condition precedent. La.R.S. 10:3-306(a), (b), (c). Parol evidence may be admitted between parties to an instrument to prove fraud, mistake, failure of consideration, to explain ambiguities not inconsistent with the written terms or to show that the writing is only a part of an overall oral agreement between the parties. Scafidi v. Johnson, 420 So. 2d 1113 (La.1982).
FDIC and FSLIC do not meet the technical requirements of a holder in due course under Louisiana law. La.R.S. 3-302(3)(c) provides that a holder does not become a holder in due course by purchasing an instrument as part of a bulk transaction not in the regular course of business of the transferor.
In D'Oench, Duhme & Co. v. Federal Deposit Insurance Corporation, 315 U.S. 447, 62 S. Ct. 676, 86 L. Ed. 956 (1942), Reh. den. 315 U.S. 830, 62 S. Ct. 910, 86 L. Ed. 1224 (1942), the maker of a facially valid promissory note defended the FDIC's suit for collection by alleging failure of consideration, arguing that the note had been given with the understanding that it would not be collected. The Supreme Court found a federal public policy to protect the FDIC, as regulator and insurer of the nation's financial institutions, "against misrepresentation as to the securities or other assets in the portfolios of the banks which [it] insures or to which it makes loans." 315 U.S. at 457, 62 S.Ct. at 679. D'Oench estops debtors from defending notes based on agreements that are not apparent from the face of a banking institution's records and assets. Such "secret agreements" cannot be used to nullify the effect of an otherwise binding written obligation. 315 U.S. at 458-59, 62 S.Ct. at 679-80.
*21 Congress codified the policies enunciated in D'Oench at 12 U.S.C. § 1823(e) which reads in pertinent part:
No agreement which tends to diminish or defeat the interest of the Corporation [the FDIC] in an asset acquired by it under this section ..., either as security for a loan or by purchase or as receiver of any insured depository institution shall be valid against the Corporation unless such agreement (1) is in writing, (2) was executed by the depository institution and any person claiming an adverse interest thereunder, including the obligor, contemporaneously with the acquisition of the asset by the depository institution, (3) was approved by the board of directors of the depository institution or its loan committee, which approval shall be reflected in the minutes of said board or committee, and (4) has been, continuously, from the time of its execution, an official record of the depository institution.
Section 1823(e) applies to the FDIC when acting in its corporate capacity.[1] Federal jurisprudence has extended the D'Oench doctrine to the FDIC when it acts as receiver of a failed bank. Beighley v. FDIC, 868 F.2d 776 (5th Cir.1989).
Regardless of whether the FDIC is a holder in due course under Louisiana law, federal common law interpreting D'Oench accords holder in due course status to the FDIC when it acquires a note in its corporate capacity through a purchase and assumption transaction with a failed financial institution. FDIC v. Wood, 758 F.2d 156 (6th Cir.1985), cert. denied 474 U.S. 944, 106 S. Ct. 308, 88 L. Ed. 2d 286 (1985).
In FSLIC v. Murray, 853 F.2d 1251 (5th Cir.1988) (related to the failure of Alliance), the U.S. Fifth Circuit found that although FSLIC was not a holder in due course under R.S. § 10:3-302(3)(c), due to "the sensitive federal interests implicated when FSLIC rescues an insolvent savings and loan," it should be treated as a holder in due course of notes it acquired through its purchase and assumption of Alliance's assets. 853 F.2d at 1256. Although Murray deals with FSLIC's corporate capacity, our Second Circuit relied on Murray in finding that a corporation appointed as receiver for the Federal Land Bank of Jackson was entitled to the benefits of the D'Oench doctrine in order to protect the creditors and stockholders of the failed institution. See, Grant v. Federal Land Bank of Jackson, 559 So. 2d 148, 153 (La.App. 2d Cir. 1990), writs denied 563 So. 2d 886 (La.1990) and 563 So. 2d 887 (La.1990).
Appellants' defenses to the notes are barred regardless of whether they are asserted against FSLIC as receiver for Alliance or against the FDIC as corporate purchaser of the failed institution's assets.
The summary judgment is affirmed.
AFFIRMED.
NOTES
[1] FDIC and FSLIC act in dual capacities as receivers of failed financial institutions and as deposit insurers. As receiver of Alliance, FSLIC assumed all of that institution's assets and liabilities and marshalled its assets for the benefit of its unsecured creditors and shareholders. The Notes and other assets which could not be sold to another financial institution were purchased by the FDIC in its corporate capacity as deposit insurer. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623465/ | 564 N.W.2d 467 (1997)
222 Mich. App. 20
Donna L. POLEN and James H. Polen, individually, Plaintiffs-Appellees,
v.
Anthony E. Melonakos, M.D., Anthony E. Melonakos, M.D., P.C., a Michigan Professional Corporation, and Health Alliance Plan of Michigan, a Michigan Corporation, Defendants, and
Edward C. REYNOLDS, Jr., and Gleicher & Reynolds, P.C., Intervening Plaintiffs-Appellants.
Docket No. 189715.
Court of Appeals of Michigan.
Submitted November 20, 1996, at Detroit.
Decided February 25, 1997, at 9:15 a.m.
Released for Publication May 15, 1997.
*468 Mark Granzotto and Edward C. Reynolds, Jr., Detroit, for Edward C. Reynolds, Jr., and Gleicher & Reynolds, P.C.
Fieger, Fieger & Schwartz, P.C. by Michael Alan Schwartz, Southfield, for Donna L. Polen and James H. Polen.
Before TAYLOR, P.J., and MARKMAN and P.J. CLULO[*], JJ.
MARKMAN, Judge.
Intervening plaintiffs, Edward C. Reynolds, Jr., and Gleicher & Reynolds, P.C. (G & R), appeal as of right a September 28, 1995, order disbursing attorney fees. We reverse and remand.
This matter stems from a dispute between G & R and the firm of Fieger, Fieger & Schwartz, P.C. (FF & S) regarding attorney fees arising out of an underlying medical malpractice suit. G & R initially represented Donna and James Polen pursuant to a contingent fee agreement. After discovery (including *469 the retention of expert witnesses) and mediation, the Polens terminated the services of G & R and retained FF & S under a contingent fee agreement.
The following circumstances surrounded the Polens' termination of G & R. Pursuant to an official trial notice, March 6, 1995, was one of several alternate dates set for the Polens' trial. G & R knew at least two weeks before that date that they had a possible scheduling conflictan ongoing trial that required both of G & R's trial attorneys to be in another courtroom.[1] However, they did not inform the court of this conflict until Thursday, March 2, 1995, in response to a call from the court informing G & R that the Polen trial would begin on March 6, 1995. On Friday, March 3, 1995, G & R filed an emergency motion to adjourn that the trial court denied. G & R informed the Polens on the same day that no one from G & R would be able to be present to start trial on March 6, 1995, but that they would prepare an interlocutory appeal to this Court and that another attorney would be present in their stead to again move for an adjournment. This was apparently acceptable to the Polens at the time. However, on Sunday, March 5, 1995, the Polens discharged G & R. Despite the discharge, the attorney arranged for by G & R appeared on the Polens' behalf on March 6, 1995, to again move for an adjournment. On March 16, 1995, the trial court issued an order permitting the withdrawal of G & R and adjourning the trial date. FF & S filed an appearance on March 30, 1995.
In June 1995, FF & S negotiated a $133,000 settlement on behalf of the Polens.[2] At a hearing, the parties agreed that the total costs were $9,852.72 and that the net recovery was therefore $123,147.28, of which the Polens' share was $82,098.19. The court immediately awarded the Polens their share of the recovery. G & R and FF & S agreed that the Polens should be awarded their share of the settlement and that any compensation due G & R should come from the portion of the recovery to be awarded to FF & S under its contingent fee agreement.[3] After a separate hearing regarding costs and attorney fees, the trial court awarded G & R $9,825.08 in costs but declined to award them any attorney fees. It awarded FF & S $27.64 in costs and $41,049.09 in attorney fees. On appeal, G & R argue that the trial court erred in refusing to award them attorney fees on a quantum meruit basis.
We begin with the premise that "[t]he law creates a lien of an attorney upon the judgment or fund resulting from his services." Ambrose v. Detroit Edison Co., 65 Mich.App. 484, 487-488, 237 N.W.2d 520 (1975). In Plunkett & Cooney, P.C. v. Capitol Bancorp Ltd., 212 Mich.App. 325, 331, 536 N.W.2d 886 (1995), which addressed the issue of compensation for a law firm under a fixed-fee agreement, this Court stated:
[A] client has the right to discharge a lawyer at any time. However, the client is subject to liability for payment for the lawyer's services.
The decision whether to impose an attorney's lien lies within the trial court's discretion. Ambrose, supra at 489, 237 N.W.2d 520, and such decisions are reviewed for abuse of discretion.
A clear line of authority indicates that when a client wrongfully terminates an attorney or an attorney rightfully withdraws from a matter, recovery of attorney fees on a *470 quantum meruit basis is appropriate. The Ambrose Court stated, at 488, 237 N.W.2d 520:
When an attorney withdraws from a case, his reasons for doing so determine whether the lien will be preserved:
"An attorney who withdraws from a suit without cause loses his inchoate right to a lien on the ultimate recovery.... But where an attorney is justified in refusing to continue in a case, he does not forfeit his lien for services already rendered." 7 CJS, Attorney and Client, § 220, pp. 1164-1165.
"[A]n attorney on a contingent fee arrangement who is wrongfully discharged, or who rightfully withdraws, is entitled to compensation for the reasonable value of his services based upon quantum meruit, and not the contingent fee contract." Ambrose, supra at 491, 237 N.W.2d 520. See also Plunkett & Cooney, supra at 329-330, 536 N.W.2d 886; Morris v. City of Detroit, 189 Mich.App. 271, 278, 472 N.W.2d 43 (1991); Ecclestone, Moffett & Humphrey, P.C. v. Ogne, Jinks, Alberts & Stuart, P.C., 177 Mich.App. 74, 76, 441 N.W.2d 7 (1989); Law Offices of Stockler, P.C. v. Semaan, 135 Mich.App. 545, 550, 355 N.W.2d 271 (1984). The Plunkett & Cooney Court explained that recovery in such circumstances is based on quantum meruit rather than the amount provided for in a contingent fee agreement because a client has an absolute right to discharge an attorney and is therefore not liable under the contract for exercising that right. Plunkett & Cooney, supra at 330, 536 N.W.2d 886, citing Ambrose.
There is also authority indicating circumstances under which quantum meruit recovery for legal services is inappropriate. Hightower v. Detroit Edison Co., 262 Mich. 1, 247 N.W. 97 (1933), involved an attorney-client relationship established by inappropriate solicitation of an accident victim by a middleman. The Court denied quantum meruit recovery to the attorney on the basis that "the judgment of the court will not be given in aid of or to encourage unprofessional conduct infringing the integrity of judicial proceedings." Hightower, supra at 13, 247 N.W. 97. In Rippey v. Wilson, 280 Mich. 233, 273 N.W. 552 (1937), the plaintiffs, patent attorneys, represented the defendant in connection with several inventions. The defendant claimed that plaintiffs forfeited all compensation by abandoning him and engaging in misconduct. The Court reduced the amount of the judgment for plaintiffs to cover only services that "produced definite valuable results to plaintiff" and held at 245, 273 N.W. 552:
An attorney may lost his right to fees for unprofessional conduct or abandonment of his client's case. But we find no authority that where the services are severable, misconduct as to one phase forfeits fees as to another. Such a rule would be generally unfair and is contrary to the authorities. [Citations omitted.]
In Kukla v. Perry, 361 Mich. 311, 105 N.W.2d 176 (1960), through a series of transactions, an attorney ended up as the controlling shareholder of his client's corporation, with ownership of the corporation's physical property, and with ownership of the client's real property. The Court quoted the chancellor's conclusions with approval at 326, 105 N.W.2d 176:
[T]he conduct of [the attorney] in this matter did not measure up to the standard required of an attorney toward his client. By such conduct, an attorney may lose his right to any fee.
These cases indicate that quantum meruit recovery of attorney fees is barred when an attorney engages in misconduct that results in representation that falls below the standard required of an attorney (e.g., disciplinable misconduct under the Michigan Rules of Professional Conduct) or when such recovery would otherwise be contrary to public policy.
These two lines of authority, however, cover only those cases at the two ends of the spectrum in which the appropriateness or lack of appropriateness of quantum meruit recovery is relatively clear. These correspond with expectations that an attorney who is wrongfully discharged or who rightfully withdraws from representation would be entitled to quantum meruit recovery; similarly, one would expect that an attorney who engaged in disciplinable misconduct prejudicial to his client or conduct contrary to public *471 policy would be ineligible for such recovery. These authorities, however, do not address the "in-between" situations in which a client terminates an attorney-client relationship for reasons that contain some justification but in which the attorney has not engaged in misconduct that makes it inappropriate to award quantum meruit recovery. While Ambrose announced the rule that an attorney "who is wrongfully discharged, or who rightfully withdraws" is entitled to quantum meruit recovery of attorney fees, we note that in Ambrose and all the cases following it cited above, quantum meruit attorney fees awards were found appropriate. Nor did these cases establish any rule precluding a quantum meruit award of attorney fees under different circumstances. Because a client has an implied right to discharge an attorney, see Plunkett & Cooney, supra, it will frequently be the case that a client's termination of an attorney-client relationship will not be "wrongful" but that the attorney's conduct will also not be "wrongful" to the extent that it should bar quantum meruit recovery of attorney fees. In such circumstances, it would be unfair not to compensate the attorney for work completed before the discharge under the equitable doctrine of quantum meruit. Like other persons who provide services for a fee, an attorney who is discharged before completing contracted-for work is generally entitled to payment for valuable services rendered before the discharge.[4] We conclude that as long as a discharged attorney does not engage in disciplinable misconduct prejudicial to the client's case or conduct contrary to public policy that would disqualify any quantum meruit award, a trial court should take into consideration the nature of the services rendered by an attorney before his discharge and award attorney fees on a quantum meruit basis.
Here, the trial court issued a written opinion in which it concluded:
Alerting this Court of a scheduling conflict at the last minute before trial in the hopes of adjournment is ... unreasonable. This Court therefore agrees that Gleicher & Reynolds did not withdraw for good cause.
Thus, Gleicher & Reynolds is not entitled to receive fees based on quantum meruit....
This opinion indicates that the trial court found that the Polens' discharge of G & R was not wrongful.[5] However, the opinion also indicates that the court found that G & R did not engage in any disciplinable misconduct or conduct contrary to public policy that would make quantum meruit recovery inappropriate. The court simply found G & R's behavior "unreasonable." Even if we accept this characterization of G & R's conduct, we find that G & R is entitled to quantum meruit recovery of attorney fees for work performed.
We accordingly remand this matter for determination of the quantum meruit attorney fee recovery to which G & R is entitled. We note that quantum meruit is generally determined by simply multiplying the number of hours worked by a reasonable hourly fee. See, e.g., Ecclestone, supra at 76, 441 N.W.2d 7. Recently, a panel of this Court attempted to refine the process of determining quantum meruit recovery by referring to the terms of the underlying contract rather than deciding what constitutes reasonable compensation for services rendered in the abstract. Morris, supra.[6] In a case involving a contingent fee agreement, *472 the Morris Court stated, at 278-279, 472 N.W.2d 43:
We recognize that there is no precise formula for assessing the reasonableness of an attorney's fee. Nevertheless, in Crawley v. Schick, 48 Mich.App. 728, 737, 211 N.W.2d 217 (1973), this Court enumerated several nonexclusive factors appropriately considered for such a determination, including:
(1) the professional standing and experience of the attorney; (2) the skill, time and labor involved; (3) the amount in question and the results achieved; (4) the difficulty of the case; (5) the expenses incurred; and (6) the nature and length of the professional relationship with the client.
While the trial court should consider these factors, its decision need not be limited to these guidelines. We believe that the trial court may also properly consider that the attorney originally agreed to render services on a contingency basis. Such a consideration would allow the court to consider the degree of risk undertaken by an attorney who was prematurely discharged. Accordingly, it would be appropriate for the court to award the attorney a larger fee, provided that the fee was not in excess of that permitted under MCR 8.121....
... [O]ur review of the trial court's findings leads us to conclude that [discharged counsel] was ... entitled to the lion's share of the fee. The record discloses that the trial court carefully considered a variety of factors regarding the quality of [discharged counsel's] representation and the magnitude of his success.... On the basis of the record before us, we conclude that the trial court's finding that [discharged counsel] had completed 99 44/100 percent of the services contemplated by the contingency fee agreement was not clearly erroneous. We find, therefore, that the trial court should have awarded [discharged counsel] 99 44/100 percent of the one-third contingency fee. [Citations omitted.]
We believe that a trial court is in the best position to assess an attorney's contribution to a case because trial courts are aware of the strengths and weaknesses of cases before them, the time and effort expended by the attorneys, and changes in the parties' leverage resulting from changes in counsel (e.g., due to attorneys' skill or reputation). We believe that the Morris approach to quantum meruitone compensates an attorney for completed work on the basis of evaluating as closely as possible the actual deal struck between the client and the attorney rather than an assessment of reasonable compensation in the abstractis also the proper means of evaluating quantum meruit in cases such as the instant one.
One factor not addressed in Morris that must be considered in cases where the discharge of counsel is not wrongful relates to burdens upon the client and the successor counsel that result from changes in counsel. Changes in counsel generally result in some duplication or modification of work by new counsel. Who should bear the costs of this duplicate work depends on the circumstances surrounding the change in counsel. Where the trial court determines that discharged counsel bears substantial responsibility for the change in counsel, it should deduct the costs of work that had to be duplicated or modified from the discharged counsel's quantum meruit recovery. However, no such deduction needs to be made when the client bears substantial responsibility for the change in counsel.
For these reasons, we reverse the order denying attorney fees to G & R and remand for determination of a proper quantum meruit award of attorney fees to G & R. On remand, we direct the trial court to follow Morris and determine the percentage of the one-third fee that represents G & R's overall contribution to the settlement.
Reversed and remanded. We do not retain jurisdiction.
NOTES
[*] Circuit judge, sitting on the Court of Appeals by assignment.
[1] The trial judge in the other matter ordered that both trial attorneys from G & R be present on March 6, 1995, and offered to contact the judge in the present matter to so inform him.
[2] A mediation evaluation of $150,000 obtained during G & R's representation had been rejected earlier by both parties.
[3] Accordingly, the present case comes to us in a posture where anything awarded to G & R on a quantum meruit basis will come directly out of the share of FF & S. Whether there are circumstances in which successive attorneys might not be limited to competing with one another for a proportion of a fixed share but in which a client who bears some responsibility for an attorney's discharge might be liable in quantum meruit to successive attorneys in an amount greater than negotiated with either one individually is an issue that we need not address in this case. However, until this issue is resolved, a successor attorney in a case such as the instant one will be compelled to recognize that his share of the client's recovery may be determined to a significant degree by the valuable work put into the case by the attorney's predecessor.
[4] We note that, unlike other situations involving the provision of services under a contract, in the attorney-client context a client may terminate an attorney-client relationship without breaching the contract. See Plunkett & Cooney, supra at 330, 536 N.W.2d 886, and the comment to MRPC 1.16.
[5] G & R argue that they were either wrongfully terminated or that they rightfully withdrew in response to being discharged. We find no clear error in the trial court's implicit determination that the Polens did not wrongfully discharge G & R. Because G & R were discharged, the appropriateness of their subsequent withdrawal would not bring them within the purview of the Ambrose rule regarding quantum meruit recovery of attorney fees.
[6] Similarly, with respect to a fixed-fee agreement for legal services, this Court determined that the value of the services at issue was the percentage of the services completed multiplied by the contract price. Plunkett & Cooney, supra at 331, 536 N.W.2d 886. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2861730/ | TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-97-00320-CR
NO. 03-97-00321-CR
Bryson McClinton, Appellant
v.
The State of Texas, Appellee
FROM THE DISTRICT COURT OF TOM GREEN COUNTY,
119TH & 51ST JUDICIAL DISTRICTS
NOS. B-95-0334-S & A-95-0463-S, HONORABLE JOHN E. SUTTON, JUDGE PRESIDING
These are appeals from orders revoking community supervision. On June 12,
1996, appellant, Bryson McClinton, entered pleas of guilty to two indictments each charging theft,
a state jail felony. See Tex. Penal Code Ann. § 31.03(e)(4)(D) (West Supp. 1998). (1) The guilty
pleas were accepted by a visiting judge in a bench trial. The trial court assessed punishment at
two years' confinement and a $250 fine in each case. The imposition of the sentences was
suspended and appellant was placed on community supervision in each case subject to certain
conditions.
Subsequently, the State filed motions to revoke community supervision. These
motions alleged that appellant had violated the conditions of his community supervision by (1)
failing to pay the required monthly payment of $30.00 for the months July, August, and
September, 1996 (2) and (2) by possessing and using cocaine during the period of community
supervision on or about August 28, 1996.
On January 24, 1997, Judge John E. Sutton of the 119th District Court conducted
a hearing on the revocation motions. At the conclusion of the hearing, Judge Sutton revoked
community supervision in each case by finding that appellant had failed to make the required
monthly payment for the month of September 1996, and that appellant had possessed and used
cocaine as alleged. The sentences were thereafter imposed.
Points of Error
Appellant advances three points of error. In the first and third points, appellant
contends that the trial court abused its discretion in revoking the community supervision on
grounds of failure to make the September 1996 required payment and on possession and use of
cocaine on or about August 28, 1996. The second point of error contends that the trial court erred
in overruling the motion for new trial because Judge Sutton should have been disqualified from
hearing the revocation motions.
Facts--The Third Point of Error
Ruben Robles, Community Supervision Officer, testified that on August 28, 1996,
in accordance with the conditions imposed upon appellant, he obtained a urine specimen from
appellant and submitted it to the Accu--Chem Laboratory for an urinalysis. Dr. John Laseter,
director of the laboratory, conducted the urinalysis and reported that test "clearly confirmed a
positive breakdown of cocaine in the urine." Appellant testified that he was at a barbecue and
inhaled secondhand crack cocaine smoke which resulted in the positive urinalysis for cocaine.
Revocation Procedure
In a proceeding to revoke community supervision, the burden of proof is upon the
State to show by a preponderance of evidence that the "probationer" (3) has violated the conditions
of community supervision as alleged in the motion to revoke. See Cobb v. State, 851 S.W.2d
871, 873 (Tex. Crim. App. 1993); Jenkins v. State, 740 S.W.2d 435, 437 (Tex. Crim App.
1983). If the State sustains its burden, the decision whether to revoke is within the trial court's
discretion. Flournoy v. State, 589 S.W.2d 705, 707 (Tex. Crim. App. 1979); Ortega v. State,
860 S.W.2d 561, 564 (Tex. App.--Austin 1993, no pet.). In a revocation proceeding, the trial
court is the trier of fact and the judge of the credibility of the witnesses and of the weight of the
testimony. See Garrett v. State, 619 S.W.2d 172, 174 (Tex. Crim. App. 1981); Hays v. State,
933 S.W.2d 659, 660 (Tex. App.--San Antonio 1996, no pet.). On appeal, we review the evidence
in the light most favorable to the trial court's order revoking probation. See Ortega, 860 S.W.2d
at 564; Galvan v. State, 846 S.W.2d 161, 162 (Tex. App.--Houston [1st Dist.] 1993, no pet.).
The only question presented on appeal is whether the trial court abused its discretion in revoking
community supervision. See Jackson v. State, 645 S.W.2d 303, 305 (Tex. Crim. App. 1983);
Stevens v. State, 900 S.W.2d 348, 351 (Tex. App.--Texarkana 1995, pet. ref'd).
Conclusion--The Third Point of Error
In the instant case, appellant acknowledges the facts produced before the trial court,
but urges that it was an abuse of discretion for the trial court to revoke community supervision
on the basis of one failed drug urinalysis. We do not agree. The third point of error is overruled.
First Point of Error
The general rule is that if one violation of the conditions of community supervision
is supported by the evidence, it is unnecessary to consider the sufficiency of the evidence to
support the other violation found by the trial court. See Sanchez v. State, 603 S.W.2d 869, 871
(Tex. Crim. App. 1980); Moses v. State, 590 S.W.2d 469, 470 (Tex. Crim. App. 1979); Jones
v. State, 571 S.W.2d 191, 193-94 (Tex. Crim. App. 1978); Burke v. State, 930 S.W.2d 230, 232
(Tex. App.--Houston [14th Dist.], pet. ref'd). Therefore, we do not reach appellant's point of
error one in light of our disposition of point of error three.
Judicial Disqualification
In his second point of error, appellant urges that the trial court erred in denying the
motion for new trial based on the ground that Judge Sutton was disqualified to conduct the
revocation hearing. The basis of such motion was that appellant had written Judge Sutton a letter
in March 1994 advising the judge that appellant intended to file a lawsuit against the judge for
violations of the Texas Deceptive Trade Practices Act and violations of appellant's civil rights.
Judge Sutton voluntarily disqualified himself from hearing the new trial motion. The hearing was
conducted before a different district judge.
No rule requires the trial court to consider a motion for new trial after revocation
of probation or community supervision. See Ausborne v. State, 499 S.W.2d 179, 180 (Tex. Crim.
App. 1973); Munoz v. State, 233 S.W.2d 494, 496 (Tex. Crim. App. 1950); see also Ochoa v.
State, 536 S.W.2d 233, 345 (Tex. Crim. App. 1976); Casey v. State, 519 S.W.2d 559, 560 n.1
(Tex. Crim. App. 1975); Crosley v. State, 648 S.W.2d 434, 436 (Tex. App.--Fort Worth 1983,
no pet.). In the instant case, appellant's motion for a new trial was considered.
When asked at the hearing why the matter was not raised in advance of the
revocation hearing, appellant explained that he informed his attorney, but no action was taken.
Appellant acknowledged that after writing the letter or presenting his "claim," he did not file a
lawsuit or take other action. He explained that Judge Sutton had been the trial judge when he had
been convicted several years before and had refused upon request to appoint different counsel for
him, and that he had been displeased with counsel's action at trial and on appeal. He had
threatened to sue both the judge and appointed counsel. It was stipulated that Judge Sutton had
received the letter. Finding no basis to support the ground stated in the new trial motion, it was
denied.
Article V, section 11 of the Texas Constitution provides in pertinent part:
No judge shall sit in any case wherein he may be interested, or where either of the
parties may be connected with him, either by affinity or consanguinity, within such
a degree as may be prescribed by law, or when he shall have been counsel in the
case.
Article 30.01 of the Texas Code of Criminal Procedure provides:
No judge or justice of the peace shall sit in any case where he may be the party
injured, or where he has been of counsel for the State or the accused, or where the
accused or the party injured may be connected with him by consanguinity or
affinity within the third degree.
Tex. Code Crim. Proc. Ann. art. 30.01 (West 1989).
The Court of Criminal Appeals has held that the grounds of disqualification stated
in the Texas Constitution and the Code of Criminal Procedure are exclusive. See Ricondo v.
State, 657 S.W.2d 439, 447 (Tex. App.--San Antonio 1983, no pet.) (citing Ex parte Largent, 162
S.W.2d 419, 426 (Tex. Crim. App. 1942) (op. on reh'g)). These provisions have been held
mandatory. Gamez v. State, 737 S.W.2d 315, 318 (Tex. Crim. App. 1987). It would appear then
that a disqualification of a trial judge in a criminal matter must comply with the strict requirements
of the constitutional and statutory criminal procedure provisions. See Elam v. State, 841 S.W.2d
937, 939 (Tex. App.--Austin 1992, no pet.).
In the past it was held that bias and prejudice of a trial judge not based on
"interest" was not a legal disqualification. Zima v. State, 553 S.W.2d 378, 380 (Tex. Crim. App.
1977). These earlier cases have been overruled, and to the list of constitutional and statutory
prohibitions, the Court of Criminal Appeals has added "judicial bias" so long as it is shown to
be of such extent as to deny a defendant due process of law. See McClenan v. State, 661 S.W.2d
108, 109 (Tex. Crim. App. 1983); Elam, 841 S.W.2d at 940; Cumpian v. State, 812 S.W.2d 88,
91 (Tex. App.--San Antonio 1991, no pet.). It is not necessary that an objection be made, nor may
the disqualification of a judge be waived, even by consent of the parties. Gamez, 737 S.W.2d at
318. The issue may be raised at any time. Id.; Madden v. State, 911 S.W.2d 236, 240 (Tex.
App.--Waco 1995, pet. ref'd).
Appellant relies upon McClenan alleging judicial bias of such extent as to deny him
due process of law. There was no motion to disqualify or recuse Judge Sutton prior to the
revocation hearing and the issue was not raised during the hearing. Since the issue may be raised
at any time, appellant based his motion for new trial on this ground. See State v. Evans, 843
S.W.2d 576, 578 (Tex. Crim. App. 1992) (not necessary that grounds for new trial be one of
those listed in Tex. R. App. P. 21.3 (formerly Rule 30(b))). Appellant's claim of "judicial bias"
set forth in his new trial motion is bottomed solely on the fact that in 1994 he sent the judge a
letter threatening a lawsuit. No lawsuit was ever filed.
In Chamberlain v. State, 453 S.W.2d 490, 492 (Tex. Crim. App. 1970), it was
held that the filing of civil action by a robbery defendant against a prosecutor and the trial judge
did not disqualify the trial judge. The Court added:
If the mere filing of a civil action against a judge presiding at a criminal case
would disqualify him, then any judge would be subject to disqualification at the
whim of a defendant. Such practice, if followed, could delay or prevent the trial
of a case.
Id. at 492.
In the instant case all that was shown was that several years before the revocation
hearing, appellant threatened a lawsuit and that the judge received the letter. A trial judge ruling
on a question of bias as a ground for disqualification must decide whether the movant has
provided facts sufficient to establish that a reasonable person knowing all the circumstances
involved, would harbor doubts as to the impartiality of the trial judge whose disqualification is
sought. Kemp v. State, 846 S.W.2d 289, 305 (Tex. Crim. App. 1992), cert. denied, 113 S. Ct.
2361 (1993). There was no showing by appellant of "judicial bias" to the extent that he was
denied due process of law. The trial court did not abuse its discretion in overruling the motion
for new trial.
In his brief, appellant notes that there was also bias because Judge Sutton, in
announcing his findings at the conclusion of the revocation hearing, had referred to appellant's
defense of "second-hand crack cocaine smoke" as "ludicrous" and referred to appellant as "a
person with your background" without any evidence of background being in the record. This
claim of bias was not included in the motion for a new trial, the overruling of which is complained
of in this point of error. Judge Sutton had personal knowledge or could have taken judicial notice
of the two state jail felony convictions in which appellant had been granted community
supervision. Appellant himself proved that Judge Sutton had been the trial judge at the time of
a previous felony conviction. Before alleged bias becomes sufficient to warrant the
disqualification of a judge, it "must stem from an extra judicial source and result in an opinion
on the merits on some basis other than what the judge learned from his participation in the case."
Kemp, 846 S.W.2d at 306 (quoting United States v. Grinnell Corp., 384 U.S. 563, 583 (1966)).
Under the circumstances, this belated claim does not show that appellant was deprived of the due
process of law. The second point of error is overruled.
The orders revoking community supervision are affirmed.
John F. Onion, Jr., Justice
Before Justices Powers, Jones and Onion*
Affirmed on both causes
Filed: January 8, 1998
Do Not Publish
* Before John F. Onion, Jr., Presiding Judge (retired), Court of Criminal Appeals, sitting by
assignment. See Tex. Gov't Code Ann. § 74.003(b) (West 1988).
1. The current code is cited for convenience. The law applicable at the time of the offenses
(May 13 and 25, 1995) was Act of May 29, 1993, 73d Leg. R.S., ch. 900, § 1.01, 1993 Tex.
Gen. Laws 3586, 3636-38 (Tex. Penal Code § 31.03(e)(4)(D), since amended but unchanged).
2. Under the conditions of community supervision, the monthly payments were to be
applied toward the total amount of restitution, the fine imposed, and community supervision fees.
3. The terms "probation" and "community supervision" generally mean the same thing and
are used interchangeably. See Rodriguez v. State, 939 S.W.2d 211, 220 (Tex. App.--Austin 1997,
no pet.).
P> If the mere filing of a civil action against a judge presiding at a criminal case
would disqualify him, then any judge would be subject to disqualification at the
whim of a defendant. Such practice, if followed, could delay or prevent the trial
of a case.
Id. | 01-03-2023 | 09-05-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/1920566/ | 107 B.R. 599 (1989)
In re David J. SLUSS & Patricia S. Sluss, Debtors.
Bankruptcy No. 1-89-02768.
United States Bankruptcy Court, E.D. Tennessee.
November 20, 1989.
*600 Harold L. North, Jr., of Ray & North, Chattanooga, Tenn., for debtors.
*601 Bruce C. Bailey of Chambliss, Bahner, Crutchfield, Gaston & Irvine, Chattanooga, Tenn., for creditor, David L. Harris.
MEMORANDUM
RALPH H. KELLEY, Chief Bankruptcy Judge.
A creditor, David Harris, has filed a motion for relief from the automatic stay so that he can collect a debt by withholding payment to the debtor of commissions that he would otherwise pay to the debtor. The facts are as follows.
The debtor owes two debts to Harris.
One debt is a debt for a personal loan from Harris to the debtor. Harris does not seek to recover it by setoff or recoupment. He will be paid as provided in the debtor's chapter 13 plan.
The other debt arose out of one or two contracts between the debtor and Harris, as general agent for Massachusetts Mutual Life Insurance Company.
The debtor became an agent for the insurance company by entering into a Career Contract with Harris as general agent. The Career Contract entitles the debtor to commissions on insurance sold by him and to renewal commissions.
The Career Contract also provides that commissions are not payable to the debtor until payment to the insurance company of the premiums on which the commissions are based. Though this rule is subject to contrary rules of the insurance company, the stipulations of fact do not say that the company's rules are different. The contract's general rule is also subject to two other exceptions, but they are irrelevant.
Under the Career Contract Harris can set off against any commissions due the debtor any debts the debtor owes to Harris under either the Career Contract or any other contract between the debtor and Harris as general agent.
After a few years, the debtor entered into the District Manager Contract with Harris. Under the District Manager Contract, the debtor undertook to recruit new agents and supervise them in return for override commissions on the new agents' sales.
The debtor terminated the District Manager Contract in December, 1988, before he filed his chapter 13 case in August, 1989.
The debtor's other debt to Harris is for advance payment of commissions. Harris has not divided the debt into advance payment of override commissions under the District Manager Contract and advance payment of ordinary commissions under the Career Contract.
The debtor's chapter 13 plan provides for the debts to Harris as general unsecured claims to be paid 100%. The plan was confirmed on September 27, 1989, without any objections by Harris.
Harris has withheld payment of renewal commissions on renewal premiums paid after the debtor filed his chapter 13 case. In some instances, the renewal due dates were before the debtor filed his chapter 13 case, but the renewal premiums were paid afterward. In those cases renewal of the policy was retroactive to the renewal due date.
DISCUSSION
The court begins with an explanation of the distinction between prepetition and postpetition debts. A prepetition debt is a debt incurred before the debtor began his chapter 13 case by filing a chapter 13 petition. Postpetition debts are debts incurred after filing of the bankruptcy petition.
Bankruptcy Code § 553 allows set-off of mutual prepetition debts between the creditor and the debtor. Section 553, however, does not allow a creditor to collect the prepetition debt to it by withholding payment of its postpetition debt to the debtor. 11 U.S.C.A. § 553(a) (West 1979); Prudential Ins. Co. v. Nelson, 101 F.2d 441, 39 Am.Bankr.Rep. (N.S.) 173 (6th Cir.1939), cert.den. 308 U.S. 583, 60 S. Ct. 106, 84 L. Ed. 489 (1939); Paris v. Transamerica Ins. Group (In re Buckley & Associates), 67 B.R. 331 (Bankr.E.D.Tenn.1986), rev'd on other points, 78 B.R. 155 (E.D.Tenn. 1985).
*602 In this case, the debtor argues that the creditor wants permission to violate this rule by setting off his postpetition debt to the debtor for renewal commissions against the debtor's prepetition debt to him for the commission advance. The creditor argues that this is an allowable recoupment instead of a prohibited set-off.
The argument for recoupment, as opposed to setoff, has been popular with creditors attempting to avoid one or more of the restrictions on set-off under Bankruptcy Code § 553. The court has already mentioned one restriction the rule that a creditor cannot set-off a postpetition debt to the debtor against the debtor's prepetition debt to it. Section 553 imposes other limitations. Set-off after the filing of a bankruptcy petition requires relief from the automatic stay. Some set-offs before bankruptcy can be recovered as preferential payments. Furthermore, set-off can be denied in the sound discretion of the court even though set-off would be allowed if there were no bankruptcy case. 11 U.S.C.A. § 553(a), (b) (West 1979 & Supp.1989); Duvoisin v. Foster (In re Southern Industrial Banking Corp.), 809 F.2d 329 (6th Cir.1987).
The usual distinction between set-off and recoupment is that recoupment arises out of a single contract or transaction between the parties whereas set-off can be based on unrelated transactions between the same parties. Paris v. Transamerica Ins. Group (In re Buckley & Assoc., Inc.), 67 B.R. 331 (Bankr.E.D.Tenn. 1986), rev'd on other points, 78 B.R. 155 (E.D.Tenn.1987).
The argument can be made that § 553 does not apply whenever a single contract or transaction is involved because § 553 applies only to set-off rather than recoupment. Waldschmidt v. CBS, Inc., 14 B.R. 309 (Bankr.M.D.Tenn.1981).
The problem is defining recoupment. Courts have allowed recoupment as a remedy distinct from set-off when the debtor failed to meet the conditions to make the creditor liable or when the creditor had already paid its debt to the debtor.
In one case a record company advanced royalties to a singer before his bankruptcy and retained royalties it received after his bankruptcy. The trustee in the singer's bankruptcy case argued that this was an unallowable set-off of the record company's postpetition debt to the debtor for royalties against his debt to the record company for the prepetition advance of royalties. The district court disagreed. It held that the record company had already paid the debtor the royalties it was retaining and was not liable a second time for the same royalties. Waldschmidt v. CBS, Inc., 14 B.R. 309 (M.D.Tenn.1981).
The no-double-payment theory of recoupment was explained in Ashland Petroleum Co. v. Appel (In re B & L Oil Co.), 782 F.2d 155, 14 Bankr.Ct.Dec. 133 (10th Cir. 1986). The theory has been applied or distinguished in other cases. Electronic Metal Products, Inc. v. Honeywell, Inc., 95 B.R. 768 (D.Colo.1989); United States v. Midwest Service & Supply Co., 44 B.R. 262 (D.Utah 1983); In re Yonkers-Hamilton Sanitarium, Inc., 22 B.R. 427, 9 Bankr.Ct.Dec. 505 (Bankr.S.D.N.Y.1982), aff'd 34 B.R. 385 (S.D.N.Y.1983); Towne Realty, Inc. v. A-1 Hydro-Mechanics Corp., 92 B.R. 451 (Bankr.D.Hawaii 1988).
This kind of recoupment may apply only when the contract is still executory, and the debtor assumes it in order to collect the postpetition benefits from the creditor. See Ashland Petroleum Co. v. Appel, cited above, and Lee v. Schweiker, 739 F.2d 870, 11 Collier Bankr.Cas.2d 834 (3d Cir.1984).
The other, and more difficult, concept of recoupment as a remedy distinct from set-off can be illustrated by a breach of contract case. The debtor sues the creditor for the full contract price, and the creditor counter-sues for breach of contract. To the extent the creditor proves failure of the debtor to perform the contract, the debtor's right to payment is reduced, and the creditor does not owe a debt to the debtor. Cf. Rakozy v. Reiman Construction (In re Clowards, Inc.), 42 B.R. 627 (Bankr.D.Idaho 1984). The problem in this kind of case is that a creditor's damages for breach of contract may include more than a reduction *603 in liability of the creditor to the debtor. 4 J. Moore, Collier on Bankruptcy ¶ 68.03 at 856-858 (14th ed.1979) (discussion of counterclaims).
The debtor in this case has done everything to make Harris liable for the renewal commissions except pay the prior debt to Harris for the commission advances.
This case is not like a breach of contract case in which recoupment can be treated as a distinct remedy from set-off on the ground that the creditor is not liable to debtor for some reason other than failure of the debtor to pay a debt to the creditor. The creditor's only ground for denying liability to the debtor is that the debtor owes him a debt for the advanced commissions and the debt should be set-off. The set-off provision in the Career Contract is no more than a written agreement to the creditor's right to offset mutual debts.
The facts also do not fit the pattern of the double-payment cases. The postpetition renewal commissions are not commissions that the creditor advanced to the debtor earlier and should not be required to pay again.
The court's reasoning does not run afoul of the concept of § 553 that it only preserves set-off rights under non-bankruptcy law. The court has reached the conclusion that "any right . . . to offset a mutual debt," as used in § 553, may include rights under a single contract involving multiple transactions, despite the loose characterization of such rights as recoupment rather than set-off. 11 U.S.C.A. § 553(a) (West 1979).
The Bankruptcy Appellate Panel for the Ninth Circuit reached a similar conclusion in California Canners & Growers v. Military Distributors of Virginia, Inc., 62 B.R. 18 (9th Cir.B.A.P.1986).
The concurring opinion by Judge Elliott proposes the same rule for recoupment as for set-off. Even if only one contract is involved, the creditor cannot collect a prepetition debt by refusing to pay its postpetition debt to the debtor. Judge Elliott may be right. The proposed rule appears to be workable in single contract-multiple transaction cases such as this one and the case before the appellate panel. There can be a problem distinguishing this kind of case from the no-double-payment cases. The case relied upon by Judge Elliott suggests that the no-double-payment cases are wrong. Quittner v. Los Angeles Steel Casting Co., 202 F.2d 814 (9th Cir. 1953). Part of the problem is that the no-double-payment cases involve executory contracts. Also, the no-double-payment cases might be classified as involving neither set-off nor recoupment. In any event, the court believes that Harris's rights should be treated as set-off rather than recoupment, since the debts arose from separate transactions, even assuming they arose under only one contract.
Harris's debt to the debtor for renewal commissions is clearly a postpetition debt. The Career Contract provides that commissions are not payable to the debtor until the premiums are paid. Thus, it does not make a difference that some of the renewal due dates were prepetition. If the premium was paid postpetition, Harris's debt for the commission is a postpetition debt.
The result is that Harris is not allowed to retain the renewal commissions because he would be collecting the debtor's prepetition debt to him by setting off his postpetition debt to the debtor.
The court also finds this case to be indistinguishable from In re Buckley & Associates, Inc. to some extent. Paris v. Transamerica Ins. Group (In re Buckley & Associates, Inc.), 67 B.R. 331 (Bankr.E.D. Tenn.1986), rev'd on other points 78 B.R. 155 (E.D.Tenn.1987).
The court assumes that the debt for the commission advances arose at least partly from advance payment of override commissions under the District Manager Contract. Collecting this debt under the District Manager Contract by withholding renewal commissions under the Career Contract is set-off of debts under separate contracts rather than recoupment under a single contract or transaction.
*604 Putting the right to set-off in writing in the Career Contract does not change set-off into recoupment or make the two contracts one. Likewise, the two contracts are not one on the theory that the debtor had to be an agent in order to be a district manager. The debtor could never have become liable for an advance on override commissions without voluntarily choosing to enter into the District Manager Contract.
Thus, to the extent the debtor owes Harris advance override commissions under the District Manager Contract, Harris is asking for set-off of debts under different contracts, not recoupment. Set-off is not allowable because Harris's debt to the debtor for renewal commissions is a postpetition debt.
The courts have held that a debtor must provide adequate protection when a creditor is denied set-off. Hoffman v. Portland Bank (In re Hoffman), 51 B.R. 42 (Bankr.W.D.Ark.1985); In re Braniff Airways, Inc., 42 B.R. 443 (Bankr.N.D.Tex. 1984); In re Perry, 26 B.R. 599 (Bankr.E. D.Pa.1983). A creditor who is forced to pay its prepetition debt to the debtor is in effect giving up the collateral securing the debtor's prepetition debt to it. 11 U.S.C.A. § 506(a) (West 1979). However, the requirement of adequate protection applies only when the creditor has a right of set-off under § 553. Since Harris does not have a right to set-off mutual prepetition debts under § 553, adequate protection is not required. 11 U.S.C.A. §§ 553(a) & 506(a) (West 1979); In re Braniff Airways, Inc., 42 B.R. 443 (Bankr.N.D.Tex.1984).
The last question is whether Harris is entitled to adequate assurance that the debt to him will be promptly paid. The debtor assumed the Career Contract as an executory contract. The debtor can assume an executory contract only if he cures any existing default or provides adequate assurance that he will cure the default promptly. 11 U.S.C.A. § 365(b) (West Supp.1989); see also 11 U.S.C.A. §§ 1321 & 1322(b)(7) (West 1979 & Supp.1989).
The set-off provision in the Career Contract allows Harris to argue that the debtor is in default under the Career Contract if he owes a debt under the District Manager Contract.
The right to set-off debts under two different contracts, even if the right is written into both contracts, does not automatically make a debt under one contract a debt or a default under the other contract. To the extent the debt to Harris arose under the District Manager Contract, Harris is not entitled to adequate assurance because the debt is not a debt or a default under the Career Contract that was assumed.
To the extent the debt to Harris arose from advance payment of commissions under the Career Contract, Harris might be entitled to adequate assurance of payment.
Harris has two problems with arguing that he is entitled to adequate assurance.
First, Harris may be bound by the confirmed chapter 13 plan. United States v. Norton, 717 F.2d 767, 10 Bankr.Ct.Dec. 1337, 9 Collier Bankr.Cas.2d 336 (3rd Cir. 1983).
Second, adequate assurance is required when there is a default. The debt to Harris is not a default to be cured as far as the court can tell. The Career Contract assumes that the debtor may owe a debt to Harris and provides for its collection by withholding commissions. It does not say that owing a debt is a default or that failure to pay the debt on demand is a default.
Harris so far has not proved that he is entitled to adequate assurance. Accordingly, the court will not at this time hold that adequate assurance is required.
The court will enter an order denying relief from the automatic stay, denying adequate protection, and denying adequate assurance of prompt payment of the debt for advance commissions.
This memorandum constitutes findings of fact and conclusions of law. Bankruptcy Rule 7052. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2861734/ | twc v. twr
IN THE COURT OF APPEALS, THIRD DISTRICT OF TEXAS,
AT AUSTIN
NO. 3-91-279-CV
TEXAS WATER COMMISSION, TRINITY WATER RESERVE, INC.,
d/b/a DEVERS CANAL SYSTEM AND DEVERS CANAL RICE PRODUCERS
ASSOCIATION, INC.
APPELLANTS
vs.
BOYT REALTY CO., J & E FARMS, INC., THREE DAILEY FARMS, INC.,
J. M. FROST, III AND FORD J. FROST,
APPELLEES
FROM THE DISTRICT COURT OF TRAVIS COUNTY, 126TH JUDICIAL DISTRICT
NO. 91-1519, HONORABLE JOE DIBRELL, JUDGE PRESIDING
The Texas Water Commission ("the Commission") set rates for distribution of
water for irrigation purposes from the Devers Canal System ("the Canal"), effective for 1990 and
thereafter. The Canal is owned by Boyt Realty Company ("Boyt") and leased by Trinity Water
Reserve, Inc. ("TWR"). The Commission and Devers Canal Rice Producers Association, Inc.
("the Association") assert on appeal that the lower court erred in ruling that the Commission
lacked jurisdiction to set prospective rates for the years following 1990. TWR raises by cross-appeal multiple points of error regarding the court's affirmance of the Commission's order setting
1990 rates, claiming evidentiary, procedural, and constitutional violations. We reverse that
portion of the district court's judgment concerning post-1990 rates and affirm the remainder of
the judgment.
BACKGROUND
In 1990, TWR began leasing the Canal, a two-hundred-mile network of waterways
flowing through Liberty, Chambers, and Jefferson Counties. TWR posted a schedule proposing
contract rates for the year 1990 averaging $97 per acre for supplying water to neighboring land.
Because the parties could not agree on a contract price, the Association, a group of customers in
the Canal area, petitioned the Commission to review the reasonableness of TWR's proposed rates
pursuant to chapters 11 and 12 of the Water Code. (1) After hearing evidence on what expenses
should be included in the rates, the Commission ordered that for 1990 TWR should charge $79.37
for water from the main canal and $84.37 for water from a relift station, the difference reflecting
additional costs needed to pump the water from the main canal. It added a surcharge of $6.29 for
1990 to recoup expenses for the rate case and repairs made to a damaged flume. The Commission
further ordered that the base rates for 1990 would continue in effect until the parties agreed upon
a different rate or until the Commission set different rates in a future proceeding.
TWR and Boyt filed an action in the district court challenging the Commission's
order. The trial court upheld the order regarding the 1990 rates but held the Commission's
decision to extend these rates beyond 1990 exceeded its statutory authority under chapters 11 and
12 of the Water Code.
PROSPECTIVE RATEMAKING
Chapters 11 and 12 are the provisions of the Water Code dealing with "raw" water,
which is usually used for irrigational purposes. These chapters provide the framework governing
the rights of parties to use such water and the manner in which rates for the water's use are set.
TWR had proposed rates for only one year, 1990. It contends that the Commission
is limited to reviewing the reasonableness of those rates and setting reasonable rates only for the
time period of the proposed contract challenged by the Association in their petition. It contends
the Commission must wait until the Association or another consumer challenges future proposed
rates before setting rates for years following the contractual period at issue in this case. TWR
notes chapters 11 and 12 of the Water Code give the Commission no express authority to set
future rates.
To resolve this appeal, we must decide whether chapters 11 and 12 of the Water
Code authorize the Commission to set prospective rates under these facts. Other regulatory
agencies and the Commission itself, under various sections of the Water Code not in issue, (2) have
the express power to set rates beyond the immediate year during which an order takes effect. In
several instances the Commission or its predecessor agency set rates effective for multiple years,
but no party challenged this authority on appeal. See Knight v. Oldham, 210 S.W. 567 (Tex. Civ.
App.--El Paso 1919, writ ref'd); Trinity River Auth. v. Texas Water Rights Comm'n, 481 S.W.2d
192 (Tex. Civ. App.--Austin 1972, writ ref'd n.r.e.); American Rio Grande Land & Irrigation Co.
v. Karle, 237 S.W. 358 (Tex. Civ. App.--Austin 1922, writ dism'd).
The Legislature granted the Commission broad authority in this area: "The
commission shall fix reasonable rates for the furnishing of raw or treated water for any purpose
mentioned in Chapter 11 or 12 of this code." Water Code § 12.013 (emphasis added). Further,
the Legislature impliedly intends an administrative agency to have the necessary powers to
perform its required functions. Sexton v. Mount Olivet Cemetery Ass'n, 720 S.W.2d 129, 137
(Tex. App.--Austin 1986, writ ref'd n.r.e.).
We stated in Trinity River that "it is only after the proprietor of an irrigation system
has set water rates that the customer may present a petition to the Commission invoking its
jurisdiction." Trinity River, 481 S.W.2d at 195. Section 11.041(a) outlines the requirements for
the filing of the customer's petition. This statute provides an avenue for a party who has no
contract for the use of raw water. The party is nonetheless entitled to the water if (1) the supplier
has not contracted to sell this water to third persons and (2) the supplier refuses to contract with
the party at a reasonable rate. Lacour v. Devers Canal Co., 319 S.W.2d 951, 953 (Tex. Civ.
App.--Beaumont 1959, writ ref'd n.r.e.). There is no dispute that the initial petition filed by the
Association complied with the requirements of section 11.041(a). The question is whether, in a
proceeding reviewing the petition, the Commission has the authority to set rates not only for the
proposed contractual period but also to make them effective prospectively beyond this period.
Trinity River, unlike TWR suggests, does not hold that the Commission cannot set
rates beyond the term provided by the proposed contract. This court there held that rates were
subject to the Commission's jurisdiction but noted that water users must wait until their suppliers
propose rates before petitioning the Commission under section 11.041(a) of the Water Code.
Trinity River, 481 S.W.2d at 195. We did not hold that a new petition was required to invoke the
Commission's jurisdiction for every year following the period in dispute.
Section 11.038(b) of the Water Code provides that if two parties cannot agree on
a contract price, the supplier, if his water is not contracted to others, "shall furnish the water
necessary for these purposes at reasonable and nondiscriminatory prices." Section 11.036(b)
further provides that "if any person uses the stored or conserved water without first entering into
a contract . . . the user shall pay for the use at a rate determined by the commission to be just and
reasonable." One court of appeals has noted that
[section] 11.036 [of the Water Code] does not mandatorily require a written
contract to supply water. Nor does this section give to the supplier the power and
prerogative to demand a written contract before supplying water . . . . [I]f a
contract cannot be agreed upon, then those owning or holding a possessory right
or title to the land adjoining the canal or any of its parts, are entitled to water at
just and reasonable rates. American Rio Grande Land & Irrigation Co. v.
Mercedes Plantation Co., 208 S.W. 904 (Tex. Comm'n App. 1919, judgm't
adopted).
Trinity Water Reserve, Inc., v. Evans, 829 S.W.2d 851, 859-61 (Tex. App.--Beaumont 1992, no
writ). So long as TWR was not contractually committed to other third parties, the Association
members had a statutory right under the Water Code to use water after 1990, the period of TWR's
proposed contract, and pay reasonable rates for this water.
Here, the Commission's order stated that the approved rates "shall continue in
effect unless and until the parties agree upon different rates or the Commission sets other rates in
a future proceeding." The rates which had been set for 1990 were established as "just and
reasonable" rates which would initially apply to post-1990 use of water. By its order, the
Commission also recognized the Association's right to use water in the future at reasonable rates,
as long as TWR has not contracted all its water to other customers. However, the Commission
made no attempt to override the negotiation-review procedures outlined in chapter 11 of the Water
Code. The parties were free to contract with each other for different rates. The Commission's
reference to a "future proceeding" recognized that the Association may file a petition under
section 11.041(a) to challenge the established rates; moreover, TWR may propose higher rates
and cause the Association to challenge these rates by a new petition. (3) The Commission had the
authority to enforce the Association's statutory right to raw water at a reasonable rate so long as
TWR made no other contractual commitments. See Water Code §§ 11.036(b), 12.013(a).
TWR suggests that the Commission might have had authority to set future rates had
it used a different methodology to calculate post-1990 rates. This issue does not affect the
jurisdictional question, which turns on the plain words of the statute and their ordinary meaning.
We hold that a customer may contest the rates proposed by a water supplier by
filing a petition under section 11.041(a) of the Water Code and invoking the Commission's
jurisdiction to set reasonable rates. Once its jurisdiction is invoked, the Commission may set
reasonable rates in the manner it did and is not restricted by the period of the proposed contract
in dispute. The supplier, however, is not prevented from contracting with the petitioning
customer or other customers in the future at any rate agreed upon by the contracting parties. The
Association and TWR may thus enter into a new contract for future water rates if they find the
Commission's rates unacceptable; if they cannot agree on a new price, the Commission retains
the authority to review the reasonableness of its rates under a section 11.041(a) proceeding.
We sustain the Commission's and the Association's point of error and turn to the
multiple points of error raised on cross-appeal that attack the district court's judgment upholding
the Commission's 1990 rates.
1990 RATES
Standards of Review
Section 19(e) of the Texas Administrative Procedure and Texas Register Act
(APTRA) (4) sets out the grounds on which a party may seek to reverse an administrative order.
TWR claims in several points of error that portions of the order are not reasonably supported by
substantial evidence and are arbitrary and capricious, separate grounds under section 19(e) of
APTRA for judicial review. Id., (5), (6).
In City of League City v. Texas Water Commission, 777 S.W.2d 802 (Tex.
App.--Austin 1989, no writ), this Court summarized the substantial evidence test: (1) The findings,
inferences, conclusions, and decisions of an agency are presumed to be supported by substantial
evidence, and the burden is on the party contesting the order to prove otherwise; (2) in applying
the test, the reviewing court is prohibited from substituting its judgment for that of the agency as
to the weight of the evidence of questions committed to agency discretion; (3) substantial evidence
is more than a scintilla, but the evidence in the record may preponderate against the decision of
the agency and nonetheless amount to substantial evidence; (4) the true test is not whether the
agency reached the correct conclusion, but whether some reasonable basis exists in the record for
the action taken by the agency; and (5) the agency's action will be sustained if the evidence is such
that reasonable minds could have reached the conclusion that the agency must have reached in
order to justify its action. Id. at 805 (citing Texas Health Facilities Comm'n v. Charter Medical-Dallas, Inc., 665 S.W.2d 446, 452-53 (Tex. 1984)). Where evidence in the record will support
either an affirmative or a negative finding, the agency order must be upheld. Any conflict in the
evidence must be resolved in favor of the agency's decision. Lone Star Salt Water Disposal Co.
v. Railroad Comm'n, 800 S.W.2d 924, 928 (Tex. App.--Austin 1990, no writ).
An agency's actions are generally considered arbitrary and capricious if they are
not supported by substantial evidence. Charter-Medical, 665 S.W.2d at 454. Even if supported
by substantial evidence, though, an agency action may be arbitrary and capricious (1) when the
agency has denied the litigant due process, Lewis v. Metropolitan Savings & Loan Association,
550 S.W.2d 11, 16 (Tex. 1977); (2) when the agency has totally failed to make findings of fact
and instead based its decision on findings in another case, Railroad Commission v. Alamo Express,
308 S.W.2d 843, 846 (Tex. 1958); (3) when the agency has improperly based its decision on non-statutory criteria, Public Utility Commission v. South Plains Electric Cooperative, Inc., 635
S.W.2d 954, 957 (Tex. App.--Austin 1982, writ ref'd n.r.e.); or (4) when the agency has based
its decision on legally irrelevant factors, or failed to consider legally relevant factors. Consumers
Water, Inc. v. Public Util. Comm'n, 774 S.W.2d 719, 721 (Tex. App.--Austin 1989, no writ).
Future Rates
In TWR's first two points of error, it attacks the Commission's order as requiring
"continuous" service "in perpetuity" to the Association. It claims this action was arbitrary and
capricious, constituted an unlawful taking, and violated its right to contract. (5) This issue has been
addressed above in our treatment of the Commission's point of error.
The Commission's order acknowledges the Association's statutory right to receive
water from the Canal in the future at reasonable rates. The order is not arbitrary; it recognizes
the parties' right to agree to different rates in future years. The order does not interfere with
TWR's right to contract; it remains free to enter into agreements with the Association or other
customers, and at rates it may propose.
Further, the order does not unconstitutionally deprive TWR of property without
compensation. So long as rates are reasonable, they easily meet constitutional muster. In Texas
Water Rights Commission v. Wright, 464 S.W.2d 642 (Tex. 1971), the Texas Supreme Court
upheld a statute that provided for cancellation of a water permit upon ten years of non-use. It
pointed out that surface water belongs to the state, which may issue permits for the water's
beneficial use. Id. at 647. The Commission may regulate the use of water owned by the state as
long as it does so reasonably. TWR complains that the order requires it to service the Association
in perpetuity, even though it may no longer have the statutory right to use the Canal's water in
the future. The order, however, makes clear that only qualified customers have such a right. (6)
TWR also asserts that no substantial evidence in the record supports the
Commission's rates for post-1990 service. TWR fails to brief this point. We note that the
Commission's order merely provides an initial rate found to be reasonable for 1990 but
contemplates future negotiations and agency proceedings in later years. The Commission's order
does not foreclose further review and rate-setting for future years. We overrule TWR's first and
second points of error.
The 1986 Note
TWR's next three points of error attack the decision of the Commission to exclude
from the rate calculation principal and interest payments on a 1986 note that Boyt owed the Trinity
River Authority (TRA), a governmental unit. TWR asserts this action was (1) not based on
substantial evidence, (2) arbitrary and capricious, (3) based on ad hoc rulemaking, (4) a
retroactive decision, and (5) precluded by a previous order of the Commission. (7) The decision
TWR complains about was based on historical facts, apparently undisputed, that require some
explanation.
The Boyt family owned the Canal from the 1920's until 1969, when TRA
purchased it by issuing revenue bonds to the Boyts. In 1986, TRA sold the Canal to Boyt Realty,
a company consisting of many of the original bondholders, in return for the note at issue. Interest
payments on the note and the bonds were equalized, and the two debts will have the same balloon
payment at their end in 2009. The record reflects the Boyts have not canceled these reciprocal
debts, possibly due to advantageous federal taxation treatment.
The Commission argues TWR has actually recovered the amount it seeks. The
Commission included TWR's 1990 lease of the Canal from Boyt Realty in cost of service in
Finding of Fact 33. The lease payment equalled the payments due on the note and bonds in 1990.
TWR does not dispute this contention. It attacks other findings that prohibited it from including
principal and interest payments on the 1986 note, which it had assumed from Boyt, in cost of
service. Even if its attack had merit, TWR provides no reason why customers should in effect
have to assume double payments on the note. (8)
The Commission did not allow TWR to include payments on the note because it
considered the debt arrangement between TRA and the Boyts to be unreasonable, in part because
it was an interested or "affiliated" transaction. TWR complains the Commission used ad hoc
rulemaking by applying section 13.002 of the Water Code, which defines an affiliate as a person
holding indirect control of the voting securities of a utility, as well as those related by blood to
such affiliates. While this definition does not directly apply to chapters 11 and 12, the
Commission employed its common usage (9) in reaching its determination in Finding of Fact 31 that
TWR's rates were unreasonably discriminatory in violation of section 11.038(b) of the Water
Code. This finding is what we must review. The affiliated nature of the debt arrangement was
merely one factor in this determination.
The Commission feared inclusion of note payments in cost of service would pass
on the cost of Boyt's acquisition of the Canal from TRA to water customers. The Commission
was concerned with the propriety of a debt structure that continues to exist merely for the benefit
of private parties, the Boyt family members, who both own the bonds and owe the note. It
considered these arrangements to be interested transactions that are disfavored under the Water
Code. Substantial evidence, in the form of undisputed facts, supports the Commission's finding
that the payments were unreasonable.
TWR claims the Commission may not retroactively apply the affiliated transaction
standard to void the 1969 bonds. The Commission did not "void" the bonds using such a
standard; it determined that inclusion of the 1986 note payments in 1990 cost of service was
unreasonable.
The Commission also found the capitalized cost of the Canal had already been
recovered through depreciation allowances before 1969. Substantial evidence in the record
supports this finding. (10) The Commission's findings were not arbitrary or capricious, either; TWR
asserts no additional grounds supporting this contention.
TWR contends that the Commission was barred by res judicata from disallowing
the payments on the 1986 note by an order it issued in 1971 regarding the value of the TRA bonds
and our decision in Trinity River. This decision merely affirmed the trial court's temporary
injunction that granted water customers relief according to the terms of the Commission's order.
We noted the Commission had determined the value of the bonds and agreed that some of this
value was recoverable because of the publicly-owned nature of the Canal; however, the
Commission rejected the suggestion that the total value must be deemed a reasonable expense.
Trinity River, 481 S.W.2d at 197-98. The Commission's 1971 order does not preclude its action
in the present case. First, different customers and suppliers are involved. TWR and Boyt are not
public entities; hence, the earlier reasoning does not apply. Second, the 1971 order apparently
did not include the entire cost of the bonds in cost of service. Third, the 1990 proceeding did not
involve whether it was appropriate to include the value of the bonds in cost of service in 1971;
it addressed whether TWR could include payments on the note in 1990. Finally, the debt
arrangements the Commission found unreasonable occurred in 1986, long after the first
proceeding. The order did not prevent TRA from meeting payments on the bond; it prevented
TWR from charging customers twice the amount necessary to maintain a debt arrangement that
existed for the sole benefit of the Boyts. We overrule TWR's third, fourth, and fifth points of
error.
Burden of Proof
TWR's sixth point of error contends that the Commission erroneously placed the
burden of proof upon it in the rate proceedings. It does not cite any record references supporting
this contention. Moreover, it apparently complains that it bore the burden of production. It does
not explain how this assignment violated a statute or agency rules. We overrule this point.
TWR's seventh and eight points of error state that either the Association failed to
meet its burden of proof or, alternatively, TWR carried its burden. The Water Code and
Commission rules do not expressly assign the burden of proof for chapter 11 proceedings, and the
record does not address the placement of this burden. TWR concedes it must show that particular
findings by the Commission violate section 19(e) of APTRA; the relevant question is whether
TWR's rates were reasonable, as required by sections 11.036 and 11.041 of the Water Code.
TWR's points six through eight are overruled, as is its thirteenth point, which asserts cumulative
error regarding the first six points.
TWR's Expenses
TWR's ninth and eleventh points of error assert that the Commission's decision to
disallow various expenses requested by TWR in calculating the final rate was not based on
substantial evidence and instead was arbitrary and capricious.
This Court may only overturn an agency decision for lack of substantial evidence,
not because it may disagree with the result. League City, 777 S.W.2d at 805. When weighing
expert testimony, the Commission may accept or reject part or all of each witness's conclusions.
It is the final judge regarding the credibility and validity of such testimony. Southern Union Gas
Co. v. Railroad Comm'n, 692 S.W.2d 137, 141-42 (Tex. App.--Austin 1985, writ ref'd n.r.e.).
Each item disallowed by the Commission was a new expense incurred by TWR that
had not previously been included in calculating water rates for the Canal. The record contains
substantial evidence to sustain the Commission's findings.
TWR requested the inclusion of a substantial "raw water" fee, alternatively
characterized as a "beginning balance," to sustain them during the off-season when no water
would be used for irrigation. The record does not indicate that any such fee has ever been
charged or that TWR ever paid a fee for raw water flowing from the Trinity River to the Canal.
The Commission rejected what amounted to a request for added profits; it had already allowed
recovery of both TWR's lease payments to Boyt and an additional "management fee" to further
TWR's economic incentive to operate the canal system. (11)
The Commission denied TWR's request for $150,000 for expenses incurred in the
course of this rate case and awarded $45,000 instead, $20,000 for consultation fees and $25,000
for attorney's fees. Bernard Erwin, the Commission's staff expert, and Jacob Pous, the
Association's expert, both testified that the amount requested by TWR was too high. The
Commission weighed conflicting expert testimony on this issue before reaching its decision.
TWR's costs of purchasing a trackhoe and new trucks were excluded from the final
rates. Evidence as to the need for these items was disputed, and the Commission found these
expenses had not been shown to be necessary and reasonable because existing equipment or used
purchases could adequately perform the same functions. Furthermore, it found the purchases were
imprudently incurred by TWR because it was only leasing the Canal and it was unclear whether
TWR would purchase the Canal from Boyt. The testimony of Jack Pous and statements of TWR's
president, Paul Glass, supported these findings.
TWR's request for including an employee pay raise not yet implemented also was
rejected by the Commission. The Commission thus denied a hypothetical expense not actually
incurred; furthermore, the evidence did not prove the reasonableness of such a raise.
At the hearing before the Commission, TWR filed a supplemental request seeking
an increase in its previously requested amount for power costs. The Commission rejected this
request, citing its tardy filing and the need to normalize historical power costs. The record also
contains evidence that actual 1990 power costs were consistent with the amount included in the
rates.
TWR's tenth point of error asserts it was denied due process when the Commission
refused to hold further hearings and cross-examination of the Commission's staff regarding two
conclusions in the Examiner's Report that were modified by the full Commission. The first item
involved recouping two costs, flume repairs and rate case expenses, by means of a one-time
surcharge in 1990 rather than including them in a future rate base. The second issue involved
reducing the fee charged to users of the relift station, from $16 to $5, over the rate charged to
users of the main canal. Both modifications came as a result of exceptions to the Examiner's
Report the Association filed and the Commission adopted.
These two findings are supported by substantial evidence, including expert
testimony favoring the $5 differential. TWR does not dispute the amount assessed for the flume's
repair, and we have already upheld the Commission's award of the appropriate amount of
litigation and consulting expenses TWR could recover from customers for this rate case.
Allocating specific costs to 1990 customers alone prevents TWR from recognizing a possible
windfall in future years for one-time expenses.
TWR contends the Commission used a new methodology in calculating these
expenses and, therefore, should have held additional hearings before the examiner. In regard to
the flume repairs and rate case expenses, the Commission merely deducted these costs from rate
base and calculated a surcharge so only 1990 users would bear these one-time charges: this does
not constitute a new methodology. When determining the excess amount chargeable to users of
the relift station, the Commission was faced with widely varying calculations by the examiner and
parties. (12) Both the Commission's staff and the Association eventually urged continuation of the
historical differential of $5 which had previously been recognized in water rates. TWR could
hardly have been surprised by the Commission's adoption of the same differential that had always
been assessed. Again, this analysis does not constitute a new methodology. Further, Pous's
calculations provided evidentiary support for the $5 figure.
The evidentiary support for these two findings distinguishes this case from a
decision of this court cited by TWR, Railroad Commission v. Lone Star Gas Co., 611 S.W.2d 908
(Tex. Civ. App.--Austin 1981, writ ref'd n.r.e.). This court held there that the aggrieved party
had been denied appropriate procedural safeguards when the Commission had not permitted a
party to respond to the use of a methodology unsupported by evidence in the record. Id. at 910.
TWR's argument would require the Commission to hold another hearing before the
examiner when it sustains a party's exceptions to the Examiner's Report. The Commission is not
bound by this report, and it is the Commission's findings which are subject to review. TWR had
a chance to respond to the Association's exceptions in writing and also argued against their
adoption in the open hearing before the Commission.
TWR cites section 13 of APTRA as allowing parties an unlimited right to cross-examination and multiple hearings. We do not interpret the statute as mandating such
procedures. (13) The expenses at issue had been disputed in the hearing before the examiner and
substantial time had passed before the open hearing with the Commission was held. TWR had
ample opportunity to present its evidence.
We hold that substantial evidence supports the Commission's findings disallowing
the expenses discussed above. We further hold these findings were not arbitrary and capricious,
and the Commission did not deny TWR due process. We overrule TWR's ninth, tenth, and
eleventh points of error.
TWR's twelfth point asserts the Commission's denial of requested expenses
unlawfully deprived TWR of its property. We have found that the evidence does not support
TWR's claims these expenses were reasonably incurred. Rates are nonconfiscatory as long as
they establish a reasonable return for the regulated party, and the state may exclude "dishonest
or obviously wasteful or imprudent expenditures." Missouri ex rel. Southwestern Bell Tel. Co.
v. Public Serv. Comm'n, 262 U.S. 276, 289 n.1 (1923) (Brandeis, J., concurring); see also
Railroad Comm'n v. Houston Natural Gas Corp., 289 S.W.2d 559, 573 (Tex. 1956). Further,
the state has wide latitude in the regulation of surface water. See n.7, supra. We overrule this
point.
DISPOSITION OF CAUSE
Having sustained the Commission's and Association's point of error and overruled
TWR's points on cross-appeal, we must decide the disposition of this cause. The district court
stated in its conclusions of law that it was reserving the issue of whether post-1990 rates were
supported by adequate findings of fact and substantial evidence. Ordinarily, we would remand
the cause so the lower court could resolve this unanswered issue. In this particular instance,
however, such an action would be fruitless. The district court has affirmed the 1990 rate base,
which is identical to future rates, as well as the 1990 surcharge. The evidence which the district
found supported the Commission's 1990 rates also supports the Commission's decision that such
rates would apply in the future, as long as the parties could adjust these rates if circumstances
justifying the 1990 rates changed. We have construed the Commission's order as allowing the
parties to freely negotiate for different rates or litigate the issue of reasonable post-1990 rates
before the Commission in the future. We need not remand the cause to the district court to review
evidence it has already found sufficient.
Accordingly, we reverse that portion of the district court's judgment that reverses
the portion of the Commission's order setting rates beyond 1990 and render judgment that this
portion of the Commission's order be affirmed. We affirm the remainder of the district court's
judgment. (14)
Marilyn Aboussie, Justice
[Before Chief Justice Carroll, Justices Aboussie and B. A. Smith]
Reversed and Rendered in Part; Affirmed in Part
Filed: June 23, 1993
[Publish]
1. All further references to the Water Code are from Tex. Water Code Ann. (West
1988).
2. Section 13, for example, explicitly allows the Commission to set prospective rates for
the sale of potable water. § 13.186.
3. We interpret the Commission's order to allow TWR to propose new contractual
rates, and thus potentially initiate a new proceeding, in order to prevent the order from
establishing, in effect, indefinite maximum rates which TWR may charge. Nothing in the
Water Code suggests the Commission has the power to mandate long-term rates on its
own initiative. Further, TWR notes that raw water market prices are especially subject
to change from year to year. This fact, which no party disputes, persuades us that the
Legislature did not impliedly grant the Commission such power, either.
The Commission suggests TWR also has the right to petition the Commission for
review of post-1990 rates. Section 11.041(a) of the Water Code details a customer's right
of petition; the Code does not contain an express analogous right for the seller. Of course, the
seller actually controls the process by proposing new rates. In any event, we need not decide
the matter in this proceeding.
4. All further references to APTRA are from Tex. Rev. Civ. Stat. Ann. art. 6252-13a
(West Supp. 1993).
5. TWR also asserts the district court erred in failing to hold the Commission had no
jurisdiction to set future rates. As the district court actually found in TWR's favor, we
overrule this contention; moreover, we have already addressed this issue in regard to the
Commission's appeal.
6. Conclusion of Law 8 states:
The owners and/or lessee (if applicable) of the canal system are obligated
under 11.036-11.041 of the Texas Water Code to provide continuing service
under terms and conditions that are just, reasonable and nondiscriminatory
to members of the [Association] and other customer farmers who meet the
qualifications of Section 11.038 of the Texas Water Code.
The order then commands: "The owners and/or lessee (if applicable) of the canal
system shall supply water through the Devers Canal System on a continuing basis to
customer irrigators." It does not order TWR to supply the Association if its members no
longer qualify under the Water Code.
7. TWR also asserts, but does not brief, that the action unlawfully deprived it of its
property without compensation. As the state is broadly empowered to license the use of
surface water, we do not see how setting conditions for this use in the form of ratemaking
constitutes such a taking. See Wright, 464 S.W.2d at 647.
8. Since TWR recovered its lease payments, which made payments on the note current,
it apparently wishes customers to pay the cost of purchasing an already-built canal from
Boyt. TWR does not suggest why this would be a reasonable expense.
9. 9 The idea of an affiliate is found in many regulatory acts. See Public Utility Regulatory
Act, Tex. Rev. Civ. Stat. Ann. art. 1446c, § 3(i) (West Supp. 1993); see also Gas Utility
Regulatory Act, Tex. Rev. Civ. Stat. Ann. art. 1446e, § 1.03(8) (West Supp. 1993).
10. The testimony of Association's expert witness, Jack Pous, supports the
Commission's finding that all invested capital costs had previously been recovered. TWR
complains that exhibits Pous used were improperly admitted. TWR does not, however,
point out any affirmative evidence of such capital costs and that these costs were
reasonably incurred.
11. The Commission used a cash flow methodology, which allows recovery of
reasonable expenses plus a reasonable amount of profit. Recovery of the lease and
management expenses totalled $220,000 in profits. The Commission supported this figure
by calculating that if it used a utility basis methodology, which allows a reasonable rate of
return on invested capital plus costs of service, TWR would receive $111,000 in
depreciation recovery plus a 10% return on $1,071,000, which would total $218,000. See
Finding of Fact 36. TWR does not dispute this finding.
12. TWR requested a $52 differential. The Association calculated a $3.81-$5 excess
charge. The Examiner's Report suggested $16.18.
13. Section 13(a) of APTRA provides, "In a contested case, all parties must be
afforded an opportunity for hearing after reasonable notice." Section 13(d) provides,
"Opportunity must be afforded all parties to respond and present evidence and argument
on all issues involved."
14. The Court originally rendered judgment and handed down an opinion in this cause on
April 7, 1993. At that time the Court was unaware that on March 31, 1993, TWR filed a
petition for bankruptcy under chapter 11 of the Bankruptcy Code. In re Trinity Water
Reserve, Inc., No. 93-10408-S-11 (Bankr. E.D. Tex.). The April 7th opinion and judgment
were nullities because of the existence of the automatic stay in bankruptcy. See 11 U.S.C. §
362 (1988). The bankruptcy court has now lifted the automatic stay to allow this Court to
render judgment and hand down its opinion, and we do so today. See Trinity Water Reserve,
Inc. v. Devers Canal Rice Producers Ass'n (In re Trinity Water Reserve, Inc., No.
93-10408-S-11) No. A-93-1032 (Bankr. E.D. Tex. June 11, 1993). | 01-03-2023 | 09-05-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/2861769/ | TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-98-00412-CR
Jeffery Steven Marx, Appellant
v.
The State of Texas, Appellee
FROM THE DISTRICT COURT OF BURNET COUNTY, 33RD JUDICIAL DISTRICT
NO. 7723, HONORABLE GUILFORD L. JONES III, JUDGE PRESIDING
After finding appellant guilty of two counts of aggravated sexual assault of a child
younger than fourteen years of age, (1) the jury assessed punishment on each count at confinement
for life and a fine of $10,000. Appellant asserts five points of error, contending that the trial
court erred by: (1) failing to grant appellant's motion for instructed verdict on the anal
penetration count; (2) allowing medical testimony regarding oral statements made to the doctor
during a physical examination; (3) failing to grant appellant's motion for mistrial when the
prosecutor commented on appellant's failure to testify; (4) allowing the mother of a victim to
testify as an outcry witness regarding an extraneous offense; and (5) allowing the testimony of a
witness who did not meet the requirements of article 37.07 of the Texas Code of Criminal
Procedure. We will affirm.
In his first point of error, appellant contends that there was no evidence of
appellant's penetration of the victim's anus with his finger other than appellant's extrajudicial
confession. (2) Appellant urges that the trial court erred in failing to grant his motion for instructed
verdict on this count.
Under the corpus delicti rule, our task as a reviewing court is to consider all the
evidence other than the accused's extrajudicial confession in the light most favorable to the
conviction to determine whether the evidence tended to show that the crime was committed. See
Fisher v. State, 851 S.W.2d 298, 303 (Tex. Crim. App. 1993). Such evidence need not be
sufficient by itself to prove the corpus delicti. See Valore v. State, 545 S.W.2d 477, 479 (Tex.
Crim. App. 1977). Even though the circumstances are ambiguous in some respects and far from
adequate to support the conclusions, "the evidence for corroboration of an extrajudicial confession
need only render the corpus delicti more probable than it would be without the evidence."
Gribble v. State, 808 S.W.2d 65, 73 (Tex. Crim. App. 1990).
Dr. Sandra Thomas, a specialist in pediatrics testified that she examined J.M. when
she was five and a half years old. J.M. told Dr. Thomas that her uncle (appellant) put his pee pee
into hers; it happened several times; it hurt and she cried. Dr. Thomas stated that J.M. further
told her that appellant went inside her many times. Dr. Thomas said the victim expressed concern
that Thomas would be mad at her if she told Thomas about what had happened. An examination
of the victim's hymen revealed that it was ruptured in several places. Dr. Thomas opined that this
was consistent with sexual abuse. An examination of the anus revealed no tears. However, Dr.
Thomas related that penetration could occur without tearing because a lot of penises are about the
same size as a child's stools.
J.M. testified that appellant raped her. In response to numerous questions J.M.
answered that she did not remember. She testified that appellant would prevent her from leaving
his room, but she did not remember what he did. Appellant told her that he would hurt her and
her cousins after he got out of jail if they ever told anyone. At the time of her testimony, J.M.
stated that she was afraid of appellant; he said that "he would come back and get me."
J.M.'s grandmother, Wanda Sue Smith, testified that J.M. wanted to tell her
something if she would not tell her daddy. J.M. said that her Uncle Jeffery (appellant) had "put
his ding-ding in my pee pee till I had to go potty." Smith stated that at that time J.M. was not
familiar with terms for female and male body parts; "she didn't know what was what." Dr. Anita
Calvert, a psychotherapist, started seeing J.M. in 1994 and testified as to problems J.M. had
experienced since her initial examination. J.M. had shown anger, lack of trust, aggressive
behavior, nightmares and inappropriate conduct at school that were consistent with a child who
had suffered sexual abuse.
While the circumstances are ambiguous and inadequate to support the corpus
delicti, we hold that the evidence furnished sufficient corroboration of appellant's extrajudicial
confession in that it rendered the corpus delicti more probable than it would have been without
the evidence. Appellant's point of error is overruled.
In his second point of error, appellant contends that the examination of J.M. by Dr.
Sandra Thomas was strictly for investigation and statements made to Dr. Thomas were not
admissible under Texas Rule of Evidence 803(4). Rule 803(4) provides:
Statements made for purposes of medical diagnosis or treatment and describing
medical history, or past or present symptoms, pain, or sensations, or the inception
or general character of the cause or external source thereof insofar as reasonably
pertinent to diagnosis or treatment.
Tex. R. Evid. 803(4) (emphasis added). Appellant's argument is based on Dr. Thomas having
made her examination at the request of the sheriff's department. Appellant urges that the purpose
of the examination was for obtaining evidence rather than for the treatment of J.M. Appellant
notes that the examination was made on August 17, 1994, sometime after J.M. had reported the
offense to her grandmother the first part of August 1994.
Appellant likens the instant cause to Cole v. State, 839 S.W.2d 798 (Tex. Crim.
App. 1990). The letter report of the D.P.S. chemist in Cole was excluded as not falling within
any exception for the hearsay rule. See at 806. The court reasoned that the chemists in Cole were
"certainly important participants in the investigative and prosecutorial effort." Id. at 803. The
court held that the "absent chemist reports . . . were matters observed by law enforcement
personnel and were therefore inadmissible as an exception to the hearsay rule. . . ." Id. at 806.
Dr. Thomas testified that she was not the treating physician for J.M. prior to or
following the examination. However, the exception to the hearsay rule contained in Rule 803(4)
applies to medical diagnosis as well as treatments. Clearly, Dr. Thomas could not be
characterized as an agent of law enforcement. We hold that the testimony of Dr. Thomas relative
to the statements made to her by J.M. was admissible under Rule 803(4). Appellant's second
point of error is overruled.
In his third point of error, appellant urges that the trial court erred in not granting
appellant's motion for mistrial when the prosecutor commented on appellant's failure to testify
in jury argument at the punishment phase of the trial. The following transpired during the
prosecutor's argument that forms the basis of appellant's complaint.
[Prosecutor]: There is a common theme that runs through defense's argument he
just made and the crimes that Jeffrey Marx committed, I would suggest to you
there is.
How about selfishness?
How about selfishness to serve his own twisted, sexual fantasies, his own sexual
desires and then what does he come up here and say to you.
Does he say, "I'm sorry"?
Does he say, "Do whatever is best for society"?
Defense counsel's objection that the prosecutor had commented on the defendant's failure to
testify was overruled. Motion for instruction to disregard was denied. (3)
A prosecutor cannot comment on the lack of evidence presented where the comment
necessarily refers to the defendant's failure to testify, but language that can be reasonably
construed as a failure to present evidence other than the defendant's testimony is not a comment
on the failure to testify. See Wolfe v. State, 917 S.W.2d 270, 279 (Tex. Crim. App. 1996). That
such language might be construed as an implied or indirect allusion to the defendant's failure to
testify is not enough to warrant exclusion. Id.
Defense witness Dr. David Poole, a psychologist with memberships in associations
having to do with child abuse, opined that his examination of appellant showed that he was in the
regressed category, and as such, was a better subject for rehabilitation than a person who is a
pedophile. Dr. Poole testified that the first step toward rehabilitation for a regressed person is
to admit the problem. Dr. Poole concluded his direct testimony by stating that appellant had a
reasonably good prospect for rehabilitation. Under cross-examination, Dr. Poole testified that
appellant had not expressed any remorse to him. Prior to the prosecutor's argument, defense
counsel argued that Dr. Poole's examination showed that appellant was regressed, and a good
candidate for rehabilitation. Defense counsel urged the jury to consider probation if it found
punishment on the lower end.
In the instant cause, the prosecutor prefaced his argument by stating that there is
a "common theme that runs through defense's argument he just made . . . ." Defense counsel had
asked the jury to consider probation based on the psychologist's testimony. However, the
psychologist had testified that admission of guilt was necessary for rehabilitation, and that
appellant had not shown remorse. In light of the foregoing factors it can reasonably be construed
that the prosecutor was referring to defense counsel's argument. See Lipscomb v. State, 467
S.W.2d 417, 420 (Tex. Crim. App. 1971). We hold that the language used was not such as to
constitute a necessary reference to appellant's failure to testify. Appellant's third point of error
is overruled.
In his fourth point of error, appellant contends that the trial court abused its
discretion in allowing Donna Barber to testify at the punishment stage of the trial as an outcry
witness to her daughter K.E.'s statement about appellant abusing her. Appellant urges that K.E.'s
statement was not reliable as to time, content and circumstances as required by article 38.072 of
the Texas Code of Criminal Procedure because the alleged outcry was made in response to
Barber's interrogating phone call to K.E.
At the outset it should be noted that article 38.072 expressly provides this article
"applies only to statements that describe the alleged offense." Tex. Code Crim. Proc. Ann. art.
38.072, § 2(a) (West Supp. 1999); see also Beckley v. State, 827 S.W.2d 74, 78 (Tex. App.--Fort
Worth 1992, no pet.). However, nothing is preserved for review unless defense counsel asks the
trial court to exclude this testimony because it describes events other than the alleged offense. On
appeal, as in the trial court, appellant asks that the testimony be excluded because it was given in
response to Barber's questions. See Gallegos v. State, 918 S.W.2d 50, 56 (Tex. App.--Corpus
Christi 1996, pet. ref'd).
Barber testified that she learned that complaints had been made by children against
appellant when she was at the jail to secure the release of her sister, the wife of appellant.
Knowing that K.E. had spent time at appellant's house, she called K.E. to ask if anything had
happened to her when she was at her uncle's (appellant's) house. K.E., age nine at the time,
initially gave answers that did not relate to anything of a sexual nature. However, when Barber
asked, "What did Jeff [appellant] do," K.E. replied "he touched me." When Barber asked
"where," K.E. replied that appellant "stuck his finger down her pants." Barber also related that
the next day K.E. told her that appellant put his hands down her and up in her. None of Barber's
questions suggested what answers K.E. should give.
A common thread running through child abuse cases is the victims' fear they may
be punished or harmed by the accused if they tell about the abuse. Such reluctance to tell is a
rational reason courts have held that the trial court is afforded broad discretion to determine if the
complainant's statement falls within the article 38.072 hearsay exception. The exercise of that
discretion will not be disturbed unless the record shows a clear abuse of discretion. We hold that
the trial court did not abuse its discretion in admitting the complained of testimony.
In his fifth point of error, appellant contends that the trial court erred in admitting
the testimony of A.W. at the punishment phase of the trial because it did not meet the
requirements of Mitchell v. State, 931 S.W.2d 950 (Tex. Crim. App. 1996), and article 38.072
of the Code of Criminal Procedure. See Tex. Code Crim. Proc. Ann. art. 38.072(3)(a) (West
Supp. 1999). In Mitchell, the court held that the trial court has the responsibility of determining
the threshold admissibility of extraneous offenses at the punishment phase; however, the jury as
the exclusive judge of the facts is to determine whether the State has proved the extraneous offense
beyond a reasonable doubt and should be so instructed when requested. See Mitchell, 931 S.W.2d
at 954.
A.W. testified at the Mitchell hearing that in 1994 appellant "pulled down my pants
and he put his finger in my private." Dr. Sandra Thomas, M.D., testified at the Mitchell hearing
that she did a sexual abuse examination on A.W. on April 3, 1995. While Dr. Thomas said A.W.
was reluctant to talk about it, but told her that her uncle (appellant) had touched her several times
over the spring and summer of 1994. Dr. Thomas' examination showed "She [A.W.] had several
tears, hymenal remnant. The examination was consistent with abuse." A.W. and Dr. Thomas
repeated their foregoing testimony before the jury.
Appellant urges that the trial court should not have admitted the evidence because
the State did not meet its threshold burden at the Mitchell hearing because no dates were given and
A.W.'s answers were contradictory. Mitchell held that the trial court was the exclusive judge of
the law when making a judgment on the threshold admissibility test, and the trial court's action
as to admissibility is reviewed under an abuse of discretion standard. See Mitchell, 931 S.W.2d
at 955. We hold that the trial court did not abuse its discretion in allowing the evidence of the
extraneous offense to be introduced before the jury. Appellant's fifth point of error is overruled.
The judgment is affirmed.
Tom G. Davis, Justice
Before Justices Jones, Kidd and Davis*
Affirmed
Filed: December 2, 1999
Do Not Publish
* Before Tom G. Davis, Judge (retired), Court of Criminal Appeals, sitting by assignment. See
Tex. Gov't Code Ann. § 74.003(b) (West 1998).
1. See Tex. Penal Code Ann. § 22.021(a)(1)(B)(i) (West Supp. 1999).
2. The trial court's admission into evidence of appellant's confession was affirmed by this
Court in Marx v. State, 953 S.W.2d 321 (Tex. App.--Austin 1997), aff'd, Marx v. State, 987
S.W.2d 577 (Tex. Crim. App. 1999).
3. Appellant also includes the prosecutor's argument that followed in this point of error.
His objection in the trial court that the prosecutor was striking at his client over counsel's
shoulders does not conform to his point of error on appeal and will not be considered.
. told her that appellant put his hands down her and up in her. None of Barber's
questions suggested what answers K.E. should give.
A common thread running through child abuse cases is the victims' fear they may
be punished or harmed by the accused if they tell about the abuse. Such reluctance to tell is a
rational reason courts have held that the trial court is afforded broad discretion to determine if the
complainant's statement falls within the article 38.072 hearsay exception. The exercise of that
discretion will not be disturbed unless the record shows a clear abuse of discretion. We hold that
the trial court did not abuse its discretion in admitting the complained of testimony.
In his fifth point of error, appellant contends that the trial court erred in admitting
the testimony of A.W. at the punishment phase of the trial because it did not meet the
requirements of Mitchell v. State, 931 S.W.2d 950 (Tex. Crim. App. 1996), and article 38.072
of the Code of Criminal Procedure. See Tex. Code Crim. Proc. Ann. art. 38.072(3)(a) (West
Supp. 1999). In Mitchell, the court held that the trial court has the responsibility of determining
the threshold admissibility of extraneous offenses at the punishment phase; however, the jury as
the exclusive judge of the facts is to determine whether the State has proved the extraneous offense
beyond a reasonable doubt and should be so instructed when requested. See Mitchell, 931 S.W.2d
at 954.
A.W. testified at the Mitchell hearing that in 1994 appellant "pulled down my pants
and he put his finger in my private." Dr. Sandra Thomas, M.D., testified at the Mitchell hearing
that she did a sexual abuse examination on A.W. on April 3, 1995. While Dr. Thomas said A.W.
was reluctant to talk about it, but told her that her uncle (appellant) had touched her several times
over the spring and summer of 1994. Dr. Thomas' examination showed "She [A.W.] had several
tears, hymenal remnant. The examination was consistent with abuse." A.W. and Dr. Thomas
repeated their foregoing testimony before the jury.
Appellant urges that the trial court should not have admitted the evidence because
the State did not meet its threshold burden at the Mitchell hearing because no dates were given and
A.W.'s answers were contradictory. Mitchell held that the trial court was the exclusive judge of
the law when making a judgment on the threshold admissibility test, and the trial court's action
as to admissibility is reviewed under an abuse of discretion standard. See Mitchell, 931 S.W.2d
at 955. We hold that the trial court did not abuse its discretion in allowing the evidence of the
extraneous offense to be introduced before the jury. Appellant's fifth point of error is overruled.
The judgment is affirmed.
Tom G. Davis, Justice
Before Justices Jones, Kidd and Davis*
Affirmed
Filed: December 2, 1999
Do Not Publish
* Before Tom G. Davis, Judge (retired), Court of Criminal Appeals, sitting by assignment. See
Tex. Gov't Code Ann. § 74.003(b) (West 1998).
1. See Tex. Penal Code Ann. § 22.021(a)(1)(B)(i) (West Supp. 1999).
2. The trial court's admission into evidence of appellant's confession was affirmed by this
Court in Marx v. State, 953 S.W.2d 321 (Tex. App.--Austin 1997), aff'd, Marx v. State, 987
S.W.2d 577 (Tex. Crim. App. 1999).
3. Appe | 01-03-2023 | 09-05-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/1920669/ | 107 B.R. 225 (1989)
In the Matter of E. James KULA, Debtor.
Bankruptcy No. BK86-159.
United States Bankruptcy Court, D. Nebraska.
September 28, 1989.
*226 W. Eric Wood, Omaha, Neb.
John Hahn, Lincoln, Neb.
Chris Connolly.
Patricia Dugan, Omaha, Neb., Asst. U.S. Trustee.
Michael Heavey, Omaha, Neb.
MEMORANDUM
JOHN C. MINAHAN, Jr., Bankruptcy Judge.
This Chapter 11 case is before the court for consideration of an Objection to Claim (Fil. # 265) and Resistance by the debtor's children (Fil. # 272).
A creditor's plan was confirmed in this case on February 5, 1987, under which an examiner was appointed. The plan provided that the examiner "shall have the right to begin or continue any adversary proceeding or contested matter permitted under the Bankruptcy Code." The plan further provided that the Examiner "shall have all the rights and powers of an Examiner under Chapter 11 of the Bankruptcy Code and all the rights and powers of a Trustee under Title 11, United States Code."
The examiner filed an Objection to the Claims of the debtor's children (Fil. # 265) on June 16, 1989. This objection was filed approximately two years and four months after the date of confirmation.
The resistance raises two preliminary issues which are now before the Court. First, does the examiner in this case have standing to object to claims? Second, was the objection to claims filed too late?
The first issue is readily resolved as it appears that the examiner in this case clearly has standing to object to claims. Any party in interest may object to the allowance of a claim. See, 11 U.S.C. § 502(a); 3 Collier on Bankruptcy ¶ 502.01[2] (15th ed. 1988). A trustee is a party in interest and the examiner in this case has the rights of a trustee.
The second issue is more cumbersome as it involves the issue of whether there is a deadline for objecting to claims in a Chapter 11 case. Bankruptcy Rule 3007 provides no deadline for filing objections to claims. Although a plan of reorganization may set a deadline for filing objections to claims, the plan in this case provides no deadline. Counsel for the debtor's children argues that objections to claims must be filed before confirmation of a Chapter 11 plan, and he relies heavily upon the fifth circuit decision of In re Simmons, 765 F.2d 547 (5th Cir.1985).
I conclude that the rule of decision in In re Simmons should not apply in this case. In re Simmons involved a Chapter 13 case in which the confirmed plan treated a claim as unsecured and the treatment was inconsistent with a previously filed proof of secured claim. The fifth circuit held that the creditor was not bound by the confirmed plan. In In re Simmons, the court reasoned that a debtor should not be permitted to circumvent the objection to claims procedure, which involves the commencement of a contested matter, by simply filing a Chapter 13 plan which was inconsistent with the proof of claim. Under those circumstances the confirmation of the plan is not res judicata on the validity of the proof of claim. Thus, if a creditor files a proof of a secured claim and the confirmed Chapter 13 plan provides the creditor with only an unsecured claim, the creditor is not bound by the plan's treatment of the claim. In re Simmons, 765 F.2d at 555-56; Matter of Stein, 63 B.R. 140 (Bkrtcy.D.Neb.1985). The rule of decision of In re Simmons should be restricted to its facts. It would be erroneous to conclude, as a general matter, that objections to claims must be filed before confirmation in a Chapter 11 case. It "would not seem appropriate to fix confirmation as a deadline for claim objections in a Chapter 11, 12 or 13 case." 8 Collier on Bankruptcy ¶ 3007.03[5] (15th ed. 1988). This is particularly true in a case, like this one, which involves a creditor's plan which provides that the confirmation date shall serve as the bar date for filing claims and that an examiner would be appointed with the power to begin or continue contested matters. The confirmed plan permits the examiner *227 to object to claims. Since, under the plan, the confirmation date is the deadline for filing a proof of claim, logic requires that the deadline, if any, for filing an objection to claim be on some date after the confirmation date.
Given the conclusion that confirmation does not provide a deadline for objecting to claims in a Chapter 11 case, and given the fact that Rule 3007 imposes no deadline for filing an objection to claim, may the examiner file an objection some two years and four months after confirmation? On the facts of this case, I conclude that the Objection to Claim was timely filed and that it should be considered on its merits. Several factors weigh in favor of permitting the objection to be made more than two years after confirmation.
First, the plan contemplates that the examiner may commence contested matters. Second, the plan provides that the court retain jurisdiction to, among other things, allow claims and hear objections. Third, under the plan, the confirmation date was the claims bar date. Fourth, the examiner has not completed administration of the estate under the plan and the examiner still holds funds for distribution to creditors. Fifth, although distributions of funds have been made to some creditors, no distributions have been made to the debtor's children on account of the disputed claims. There is no estoppel argument. Sixth, the debtor's children have not asserted the doctrine of laches, and there appears to be no basis for invocation of that doctrine. Seventh, the time for asserting the underlying claims by the debtor's children against the debtor has not expired under the applicable state statute of limitations.
A separate order will be entered consistent herewith.
ORDER
For the reasons set forth in the court's Memorandum of today's date entered contemporaneously herewith,
IT IS ORDERED, ADJUDGED AND DECREED, that
1. The Objection to Claims (Fil. # 265) was timely filed and the Resistance is hereby overruled to the extent provided herein.
2. The Clerk shall issue a pretrial order in accordance with my prior order (Fil # 277). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2861775/ | TEXAS COURT OF APPEALS, THIRD DISTRICT, AT AUSTIN
NO. 03-98-00281-CR
Chris Otting, Appellant
v.
The State of Texas, Appellee
FROM THE DISTRICT COURT OF WILLIAMSON COUNTY, 368TH JUDICIAL DISTRICT
NO. 97-882-K368, HONORABLE BURT CARNES, JUDGE PRESIDING
Appellant Chris Otting was charged in count one of the indictment with capital
murder of a child under the age of six years. (1) Count two alleged that the appellant intentionally
or knowingly caused serious bodily injury to a child under the age of fourteen years by
smothering, suffocating, or choking the child with a blanket, hand, or unknown object. (2) The jury
convicted appellant of reckless injury to a child, a lesser included offense under count two, and
made an affirmative finding that a deadly weapon had been used as alleged in the indictment. The
jury assessed punishment at 20 years' imprisonment and a fine of $10,000.
On appeal, appellant presents three issues for consideration. First, appellant
challenges the factual sufficiency to support the conviction for reckless injury to a child. Second
and third, appellant contends that the trial court erred in refusing to submit to the jury the offenses
of manslaughter (3) and criminally negligent homicide (4) as lesser included offenses of capital murder
as charged in count one.
Facts
A recitation of the facts will place the issues in proper perspective. The victim was
Jordan Otting, the year-old daughter of the 20-year-old appellant. At the time of the offense, on
or about August 12, 1997, appellant lived at the Chisholm Trail Apartments in Williamson County
with his girlfriend, Krystal Garland, their child Jordan, three-week-old baby Nathan, and
appellant's mother, Debra Otting. Jaime Piedras, a paramedic with EMS, responded to a call on
the morning of August 12, 1997. Upon arriving at the Chisholm Trial Apartments, he observed
a hysterical Krystal Garland holding Jordan, Debra Otting crying hysterically, and appellant
looking nervous. When Piedras took the child from its mother, he could tell the child was dead.
Piedras was shown a play pen in the back of the apartment. Appellant told Piedras that this was
where Jordan slept; that Jordan was put to bed about 8:45 p.m. the previous evening and was
found dead about 8:30 a.m.; and that "they" never checked on the child during the night. Piedras
noticed that appellant was not crying and made a comment about that fact. Appellant then made
an effort to cry, but Piedras saw no tears.
Round Rock Police Officer James Chansley was the first officer on the scene at
apartment 17. He found the mother of the child wailing, sobbing, and pleading with the child in
her arms to wake up. Appellant was somber and distraught but not crying. Later, when Chansley
spoke to appellant outside of the apartment, appellant was smoking a cigarette and appeared in
control of his emotions.
Lieutenant Mary Ryle with the Round Rock Police Department was called to the
scene to investigate the child's death. Appellant and Krystal Garland told her that appellant put
Jordan to bed about 8:30 or 9:00 p.m. the previous evening and that he went into the bedroom
the next morning about 9 a.m. because Jordan had not awakened. Appellant told Ryle that, upon
entering the room, he saw Jordan's hand protruding out from under the bed cover. The hand was
cold and he knew something was wrong. He went to get his mother. Appellant told Ryle: "I
know it's weird, but I just can't touch a dead kid." He did not explain how he knew at that time
that Jordan was dead.
Detective Helen Keesee came to the apartment on August 12, 1997, and spoke with
appellant. She testified that appellant had a very "flat affect." Keesee noticed a scrape or a burn
on Jordan's nose, but appellant and Krystal both said they did not observe the mark when Jordan
was put to bed the evening before.
The State introduced three written statements given by appellant. The first
statement was given on the early afternoon of August 12, 1997. The statement principally
reiterated what appellant had told the officers earlier. Appellant did add that after he came home
from work he was playing with Jordan when she hit him in the eye with a TV remote control unit,
that he yelled at her, and then told her that he was sorry. In the second statement, taken on August
13, 1997, appellant admitted that he had scared Jordan when he yelled at her. He also
acknowledged that there was tension between Krystal and him about the baby Nathan that evening.
Appellant explained that Nathan was still awake when Jordan was put to bed; that Nathan
awakened shortly after he had been put in bed; that Krystal accused him of having put Nathan
down when the baby was still awake; that Nathan was fed and put back to bed; that he and Krystal
argued about the matter and then went to bed; that sometime in the night Nathan awakened and
appellant got up and fed Nathan before placing him back in his crib; that about 7:30 a.m. Krystal
awakened appellant and told him to feed Nathan; that he was a "little bothered but not really
mad"; that he gave Nathan half of a bottle before Nathan fell asleep; that Krystal later "got mad"
because he had not given Nathan the full bottle; that they did not really argue "but just blew each
other off"; and it was after he had showered that he had discovered Jordan was not alive.
Sergeant Klingensmith, who had taken appellant's statements, was concerned that
appellant had failed to mention in his first statement that he had been up during the night to feed
Nathan. Captain Dan LeMay was concerned about the stressful events in the apartment on the
night in question. The two police officers decided to talk with appellant again.
Later on August 13, 1997, LeMay told appellant that he believed appellant had
something to do with Jordan's death. Appellant responded that he thought he had killed Jordan;
that when he put her to bed he held her down about a minute because he wanted her to go to
sleep. Appellant pushed on LeMay's shoulder to demonstrate how he had held the child down.
When asked what the police response should be, appellant stated that he should be allowed to
attend the funeral and that a lesser charge of "involuntary manslaughter" should be filed.
Appellant told the officers that he believed he would receive the death penalty. A third written
statement was taken from appellant following this interview. It tracked much of what appellant
told LeMay orally.
The written statement in part stated:
I feel that I may have had something to do with Jordan's death. I think I killed her
. . . . I was trying to put her to bed and did not want her to get up. So I think I
killed her. I am not a murderer. . . . I am so sorry. I did not mean to hurt her.
I love her . . . . So I took her to her room and laid her down. . . . She wanted to
get back up. So I put my hand on her back to let her know that she needs to lay
down and go nite-nite. I ran out of the room so she would not see me and start
crying. . . . I did not know anything was wrong until in the morning when I found
her. I had no idea that I killed her if I did. But I started feeling really guilty about
it 1 hour after.
Cheryl Lawrence, an investigator with the Texas Department of Protective and
Regulatory Services, testified that on August 13, 1997, she interviewed Krystal Garland and
informed her that appellant had admitted suffocating Jordan. Shortly afterwards, Lawrence and
Krystal Garland met appellant. When he was made aware that Krystal knew of his admission,
appellant did not deny it. Appellant reiterated that he had placed his hand on Jordan's back and
held her so she would understand it was time to go to sleep. Appellant then volunteered to
Lawrence: "It takes at least thirty seconds to kill an animal and longer than that to kill a human
being."
Dr. Robert Bayardo, Travis County Medical Examiner, testified that he performed
the autopsy on Jordan and determined that the cause of death was asphyxial death by suffocation.
He explained that it would take three to five minutes to suffocate a person. The autopsy was
performed at 11:50 a.m. on August 12, 1997. Dr. Bayardo reexamined the body on August 15,
1997, when it was reported that an officer had observed bruises on the body at the funeral home.
He found bruising on the body including a spot in the middle of the forehead and one on the back
of the body. Dr. Bayardo explained that bruises sometime do not appear until two or three days
after death. It was his opinion that the bruises occurred at the time of death although there was
a possibility that they were caused by the embalming process. Dr. Nizan Peerwani, a medical
examiner for Tarrant County, reviewed the files, photographs, police reports, and the autopsy
report. She agreed with Dr. Bayardo except that she would use "smothering" rather than
"suffocation."
Appellant did not testify but called Krystal Garland and his mother as witnesses.
Krystal testified that on the evening in question Jordan was getting "cranky" so appellant put her
to bed. Appellant came out of Jordan's room running and smiling, and stated: "I didn't want her
to see me." Krystal heard Jordan cry for a few minutes after appellant left the room. Krystal
related that before she went to bed at 11:30 p.m. she looked in on Jordan and saw her asleep on
her stomach; that she and appellant were awake at 4:00 a.m. to feed Nathan; and that it was after
8:00 a.m. when appellant came to the bedroom and told her something was wrong with Jordan.
On cross-examination, Krystal denied telling Justice of the Peace Patricia Ott that
Jordan was put down at 8:30 p.m. and that she did not check on Jordan until the next morning.
Krystal stated that at the time of the offense she was suffering from depression, was not working,
and was on probation for writing hot checks. She added that appellant paid the rent and his
mother contributed her disability check for family expenses. Krystal acknowledged that appellant
had emotional difficulties, and she admitted that she and appellant had argued on the evening in
question.
Debra Otting testified that she was disabled, was confined to a wheel chair, and
slept on the living room floor. She related that appellant came home happy on August 11, 1997,
after his first day at a new job at a convenience store; that appellant spent a minute or forty-five
seconds in Jordan's room putting her in bed and that he "dashed" out of the room laughing; that
she heard Jordan crying after appellant left the room; and that Krystal checked on Jordan before
Krystal went to bed.
Debra Otting also testified that appellant got up between 1:00 and 1:30 a.m. and
appeared exasperated. He was mumbling that he had worked all day, that he had to feed Nathan,
and that he was tired. She did not see appellant go into Jordan's room.
In rebuttal, Justice of the Peace Ott testified that Krystal Garland told her that
Jordan had been put down at 8:30 p.m. and that she (Krystal) had not checked on Jordan during
the night.
The Jury Charge and Verdict
The trial court charged the jury on capital murder as alleged in count one of the
indictment, but rejected the requested instructions on the lesser included offenses of manslaughter
and criminally negligent homicide. The trial court also submitted injury to child by intentionally
or knowingly causing serious bodily harm as alleged in count two. The lesser included offenses
of count two--reckless injury to a child and injury to a child by criminal negligence were also
submitted. The jurors were instructed that they could not convict appellant of both capital murder
and injury to a child.
The jury rejected the capital murder count and the count that appellant intentionally
or knowingly caused serious bodily injury to a child. It found appellant guilty of recklessly
causing serious bodily injury to a child.
Factual Sufficiency
The first issue presented is appellant's challenge to the factual sufficiency of the
evidence to support the conviction. A factual sufficiency review begins with the presumption that
the evidence supporting the judgment was legally sufficient. See Clewis v. State, 922 S.W.2d
126, 134 (Tex. Crim. App. 1996). Appellant does not challenge the legal sufficiency of the
evidence. In a challenge to the factual sufficiency of the evidence, we view the evidence without
employing the prism of "in the light most favorable to the verdict." Id. at 129. A reviewing
court must consider all of the evidence impartially, comparing evidence that tends to prove the
existence of a disputed fact or facts with evidence that tends to disprove the fact or facts. See
Santellan v. State, 939 S.W.2d 155, 164 (Tex. Crim. App. 1997). The verdict or judgment is to
be set aside only when the factual finding is so against the great weight and preponderance of the
evidence so as to be clearly wrong and unjust. See Clewis, 922 S.W.2d at 129; Stone v. State,
823 S.W.2d 81, (Tex. App.--Austin 1992, pet. ref'd untimely filed).
In the factual sufficiency analysis, it must be remembered that the trier of fact is
the sole judge of the credibility and weight of the testimony. See Santellan, 939 S.W.2d at 164.
An appellate court should be on guard not to substitute its own judgment in these matters for that
of the trier of fact. See id. One principle of the factual sufficiency analysis is deference to the
findings of the jury or other fact finder. See Cain v. State, 958 S.W.2d 404, 407 (Tex. Crim.
App. 1997). "A decision is not manifestly unjust merely because the jury [or fact finder] resolved
conflicting views of the evidence in favor of the State." Id. at 410. A court of appeals is not at
liberty to "engage in fact-finding." Id. at 409.
Appellant recognizes that a defendant who invokes the benefit of a lesser included
offense at trial is estopped from complaining on appeal that the evidence is legally insufficient to
support a conviction of the lesser offense. See State v. Lee, 818 S.W.2d 778, 781 (Tex. Crim.
App. 1981), overruled on other grounds, Moore v. State, 969 S.W.2d 4, 10 (Tex. Crim. App.
1998); see also State v. Yount, 853 S.W.2d 6, 9 (Tex. Crim. App. 1993); Taylor v. State, 947
S.W.2d 698, 702 (Tex. App.--Fort Worth 1997, pet. ref'd); Scott v. State, 867 S.W.2d 148, 154
(Tex. App.--Austin 1993, no pet.); Tamez v. State, 865, S.W.2d 518, 519-20 (Tex. App.--Corpus
Christi 1993, pet. ref'd). Appellant agrees that the reasoning behind the rule is sound. The case
law is clear that in a situation where a defendant requests or does not object to the submission of
a lesser included offense, and thereby accepts the benefit of such a charge in the trial court's jury
instructions, the defendant is estopped from thereafter challenging the legal sufficiency of the
evidence. See Taylor, 947 S.W.2d at 702 (citing Grant v. State, 950 S.W.2d 450, 451 (Tex.
App.--Beaumont 1997, pet. ref'd)); see also Torres v. State, 979 S.W.2d 668, 671 (Tex. App.--San
Antonio 1998, no pet.) (involving reckless injury to a child conviction).
Appellant contends that it makes no sense to extend the rule of estoppel to a factual
sufficiency challenge. Cases, however, have been decided contrary to appellant's contention. See
Reaves v. State, 970 S.W.2d 111, 118 (Tex. App.--Dallas 1998, no pet.); Bisco v. State, 964
S.W.2d 29, 30 (Tex. App.--Tyler 1997, pet. ref'd). We conclude that appellant is estopped from
challenging the factual sufficiency of his conviction for reckless injury to a child because he did
not object to and received the benefit of the instruction on the lesser included offense.
Moreover, even if the rule of estoppel is not applicable, we have applied the factual
sufficiency standard of review to the instant case. We have examined all of the evidence
impartially, and giving due deference to the jury's verdict, we conclude that the verdict is not so
contrary to the overwhelming weight of evidence as to be clearly wrong and unjust. Issue one as
presented is without merit. The first issue is overruled.
Failure to Charge on Lesser Included Offenses
The second and third issues present the question whether the trial court erred in
refusing to charge the jury on the lesser included offenses of capital murder--manslaughter and
criminally negligent homicide. Appellant urges that with regard to these lesser included offenses,
the Royster test was met. See Royster v. State, 622 S.W.2d 442, 446 (Tex. Crim. App. 1981);
see also Rousseau v. State, 855 S.W.2d 666, 672-73 (Tex. Crim. App. 1993). (5) Moreover, the
record reflects that appellant timely objected to the failure to include the lesser included offenses
and presented special requested charges. See Tex. Code Crim. Proc. Ann. arts. 36.14, 36.15
(West Supp. 1999).
The State does not take issue with appellant about the satisfaction of the
Royster--Rousseau test or that appellant timely preserved error if there was one. The State takes
the position that the age of the child-victim was undisputed (one year and 25 days), and if the
offense was not capital murder of a child under the age of six years as alleged in count one, the
more specific lesser offense would be injury to a child of the age of 14 years or younger as
provided by section 22.04(a)(1) of the Penal Code. The State appears to argue that the submission
of the alternative second count--intentionally or knowingly causing serious bodily injury to a
child--and the lesser included offenses to that count eliminated the necessity of charging on
manslaughter and criminally negligent homicide as requested by appellant. This "special controls
over the general" type of argument was also presented to the trial judge who thereafter denied
appellant's special requested jury charges. The State cites no authority on point that evidence of
an undisputed element of a capital murder charge may limit or eliminate the necessity of the
submission of lesser included offenses (to which a party may be otherwise legally entitled) because
the undisputed element of capital murder is not part and parcel of the lesser included offenses
requested.
Article 37.09 provides in pertinent part: "An offense is a lesser included offense
if: (1) it is established by proof of the same or less than all the facts required to establish the
commission of the offense charged . . . (3) it differs from the offense charged only in respect that
a less culpable mental state suffices to establish its commission." Tex. Code Crim. Proc. Ann.
art. 37.09(1) (West 1981). The word "individual" is used in both the manslaughter and criminally
negligent homicide statutes. See Tex. Penal Code Ann. §§ 19.04, 19.05 (West 1994).
"Individual means a human being who has been born and is alive." Tex. Penal Code Ann. §
1.07(a)(26) (West 1994). An individual includes a child under the age of six. If evidence from
any source raises the issue of a lesser included offense or a defensive theory, it must be included
in the court's charge. See Marras v. State, 741 S.W.2d 395, 405 (Tex. Crim. App. 1987). This
is particularly true where the defendant objects to the omission of the charge or presents a special
requested charge. See Posey v. State, 966 S.W.2d 57, 61 (Tex. Crim. App. 1998). Moreover,
if it be the State's position that the offense of injury to a child is a lesser included offense of
capital murder of a child under the age of six, it has made no effort to demonstrate the same. We
do not reach that issue in view of the State's pleadings and the circumstances of the instant case.
We do not agree with the State's contention. We conclude that it was error for the trial court to
have refused to charge on the lesser included offenses of manslaughter and criminally negligent
homicide.
Having determined that there was error in the charge, we must now decide if
sufficient harm was caused by the error to require a reversal. See Hutch v. State, 922 S.W.2d
166, 170 (Tex. Crim. App. 1996). The error, being a jury charge error, must be reviewed for
harm under article 36.19 of the Code of Criminal Procedure (6) as interpreted by Almanza v. State,
686 S.W.2d 157, 171 (Tex. Crim. App. 1984) (op. on reh'g). As Almanza explains, article 36.19
separately contains the standard for both fundamental error and ordinary reversible error. See id.
Error properly preserved by an objection will require reversal "as long as the error is not
harmless." Id. This has been interpreted to mean any harm regardless of degree. See Hutch, 922
S.W.2d at 171 (citing Arline v. State, 721 S.W.2d 348, 351 (Tex. Crim. App. 1986)). If no
proper objection is made and the error is not preserved, a greater degree of harm is required. The
accused must claim "fundamental" error, and he will obtain a reversal only if the error is
egregious and creates such harm that he has been deprived of "a fair and impartial trial--in short
'egregious harm.'" Almanza 686 S.W.2d at 171; see also Bailey v. State, 867 S.W.2d 42, 43
(Tex. Crim. App. 1993).
In both situations, the actual degree of harm must be assayed in light of the entire
jury charge, the state of the evidence, including the contested issues and weight of
probative evidence, the argument of counsel and any other relevant information
revealed by the record of the trial as a whole.
Almanza, 686 S.W.2d at 171.
Even though a defendant preserves error by timely objection or requested
instructions, as in the instant case, the burden of proof lies with the defendant to persuade the
reviewing court that he suffered some actual harm as a consequence of the charging error. If he
does not sustain his burden, the error will not result in the reversal of the conviction. See Abdnor
v. State, 871 S.W.2d 726, 732 (Tex. Crim. App. 1994). The error's harmfulness must be
measured, at least in part, against the likelihood that the jury's verdict was actually based on
another theory of culpability unaffected by the erroneous jury charge. See Atkinson v. State, 923
S.W.2d 21, 27 (Tex. Crim. App. 1996); Govan v. State, 682 S.W.2d 567, 570-71 (Tex. Crim.
App. 1986), overruled on other grounds, Brown v. State, 716 S.W.2d 939, 945 (Tex. Crim. App.
1986); Scott v. State, 768 S.W.2d 308, 309-10 (Tex. Crim. App. 1989). Thus, the defendant may
prevail on appeal only if he shows some actual harm regardless of the theory on which the jury
based its verdict. See Atkinson v. State, 934 S.W.2d 896, 897 (Tex. App.--Fort Worth 1996, no
pet.).
If the absence of instructions on the lesser included offenses requested and to which
the defendant is entitled, leaves the jury with the sole option either to convict the defendant of the
charged offense or to acquit him, a finding of harm is essentially automatic because the jury was
denied the opportunity to convict him of the lesser included offenses. See Saunders v. State, 913
S.W.2d 564, 571 (Tex. Crim. App. 1995). This is true because the jury, believing the accused
to have committed some crime but given the option only to convict him of the greater offense,
may choose to convict him of the greater offense, rather than acquit altogether, even though it had
a reasonable doubt he really committed the greater offense. See id. at 571 (citing Beck v.
Alabama, 447 U.S. 625, 634 (1980)).
A different situation may occur as explained in Jiminez v. State:
A different situation is presented if the trial court submitted one lesser included
offense raised by the evidence while declining to submit another that was also
raised. Under this circumstance, the jury's options were not limited to conviction
of the greater offense or acquittal, and the risk that the jury convicted of the
greater offense despite a reasonable doubt is not so apparent. If the jury harbored
a reasonable doubt as to the defendant's guilt of the charged offense but at the same
time believed him guilty of some offense, it was not forced to choose between
conviction and acquittal, but had the option of convicting him of a lesser offense
that was submitted. That it did not do so may indicate that the failure to give the
other lesser included offense instruction was harmless error. Saunders, 913
S.W.2d at 572.
Jiminez, 953 S.W.2d 293, 300 (Tex. App.--Austin 1997, pet. ref'd).
In Saunders, it was held that the failure to instruct on one lesser included offense
(criminally negligent homicide) did not per se engender some harm to the defendant convicted of
the greater offense charged (murder of a five-month-old infant) where the court did charge on a
different lesser included offense of murder (involuntary manslaughter). The reviewing court
reasoned that the charge error was harmless because the jury convicted the defendant of the
greater offense of murder and not the lesser offense of involuntary manslaughter. Thus, since the
jury would not have convicted Saunders of murder if it had harbored a reasonable doubt as to
Saunders's intent, the omission of the charges on criminal negligent homicide was harmless. See
Saunders, 913 S.W.2d 573-74; see also Jiminez, 953 S.W.2d at 300; Irizarry v. State, 916
S.W.2d 612, 615 (Tex. App.--San Antonio 1996, pet. ref'd). Cf. Montelongo v. State, 681
S.W.2d 47, 54-55 (Tex. Crim. App. 1984).
In the instant case, the jury was not required by the court's charge to convict on
the greater offense or to acquit. Unlike the foregoing cases, the instant case did not involve a
conviction on the greater offense despite any flaw in submitting lesser included offenses. The
cases are, however, instructive.
Here, the trial court submitted the greater offense (capital murder of a child) as
alleged in count one as well as the offense of intentionally or knowingly causing serious bodily
injury to a child as alleged in count two. The jury convicted appellant of recklessly causing
serious bodily injury to a child, a lesser included offense to the offense charged in the second
count which had been submitted with another lesser included offense of the second count--causing
serious bodily injury to a child by criminal negligence. Appellant was entitled to jury instructions
on manslaughter and criminally negligent homicide, both lesser included offenses of capital
murder, but we conclude that the error was harmless for the reasons which follow.
Manslaughter and recklessly causing serious bodily injury are both second degree
felonies (7) and carry the same range of penalty. (8) Both offenses involve the same culpable mental
state of "reckless" or "recklessly." Criminally negligent homicide and causing serious bodily
injury to a child by criminal negligence are both state jail felonies (9) and carry the same range of
penalty. (10) Both involve the same culpable mental state--criminal negligence. The jury by its
verdict obviously rejected the offenses with culpable mental states of "intentionally or
knowingly"-- capital murder and injury to a child both as charged and submitted to the jury. The
jury chose to convict on the lesser included offense of the second count--recklessly causing serious
bodily injury to a child--although it had the option of convicting on causing serious bodily injury
to a child by criminal negligence. If appellant was guilty of the excluded manslaughter offense,
he was also guilty of recklessly causing serious bodily injury to a child as found by the jury, an
offense with the same penalty range. If appellant was guilty of criminally negligent homicide, he
was also guilty of causing serious bodily injury to a child by criminal negligence, an offense with
the same penalty range which the jury chose to by-pass. This demonstrates the likelihood that the
jury's verdict was unaffected by the erroneous jury charge. See Atkinson, 923 S.W.2d at 27.
Nonetheless, appellant contends the jury charge error resulted in some harm
because the jury assessed the maximum punishment of 20 years' imprisonment. We find that
there were factors involved other than any jury charge error. At the penalty stage of the trial,
Lieutenant Mary Ryle testified that appellant's reputation for being a peaceful and law-abiding
citizen was bad. Captain LeMay, another police officer, confirmed that fact and described
appellant as having been dangerous for a long time. LeMay testified that appellant, as a juvenile,
had been adjudicated for a series of sexual offenses involving younger children. Appellant's
mother related that in 1990 she had reported appellant to the police for exposing himself to other
children and for setting fires. She acknowledged that appellant had an impulse control problem
and experienced extreme temper outbursts. She contended, however, that after three years in a
residential treatment center as a result of juvenile adjudication, appellant no longer had such
problems.
This evidence as well as the evidence at the guilt-innocence stage of the trial was
before the jury when it assessed punishment and would have been before the jury if manslaughter
had been submitted and the jury had convicted appellant of that offense at the first stage of the
bifurcated trial.
Appellant still urges "some harm" because of the prosecutor's argument at the
penalty stage of the trial. Appellant calls attention to three unobjected-to portions of the argument
lifted out of context. We have examined the same and find the argument to have been a proper
summation of the evidence and a plea for law enforcement. See Norris v. State, 902 S.W.2d 428,
444-45 (Tex. Crim. App. 1995); Cook v. State, 855 S.W.2d 467, 476-77 (Tex. Crim. App.
1993); Gravis v. State, 982 S.W.2d 933, 936-37 (Tex. App.--Austin 1998, pet. ref'd). The
argument was within the four permissible areas of prosecutorial argument. See Sterling v. State,
830 S.W.2d 114, 121 (Tex. Crim. App. 1992); Alejandro v. State, 493 S.W.2d 230, 231 (Tex.
Crim. App. 1973). A prosecutor may argue opinions concerning the issues in the case so long
as the opinions are based on the evidence in the record and do not constitute unsworn testimony.
See Wolfe v. State, 917 S.W.2d 270, 281 (Tex. Crim. App. 1996). Appellant has failed to show
how this now complained-of argument could not have been made if the trial court had charged on
manslaughter or criminally negligent homicide at the guilt-innocence stage of the trial.
Appellant's reliance upon Chase v. State, 968 S.W.2d 943 (Tex. App.--Eastland 1998, pet. ref'd)
is misplaced. In Chase, it was held that the prosecutor's jury argument could not have been made
at the penalty stage of the trial even if the requested lesser included offense had been submitted
at the guilt-innocence stage. Id. at 946. Even if that reasoning is sound, the instant argument is
clearly distinguishable from the one in Chase. (11) Appellant's second and third issues are overruled
after considering all the factors of Almanza.
The judgment is affirmed.
John F. Onion, Jr., Justice
Before Chief Justice Aboussie, Justices B. A. Smith and Onion*
Affirmed
Filed: December 2, 1999
Publish
* Before John F. Onion, Jr., Presiding Judge (retired), Court of Criminal Appeals, sitting by
assignment. See Tex. Gov't Code Ann. § 74.003(b) (West 1998).
1. See Tex. Penal Code Ann. § 19.03(a)(8) (West 1994).
2. See Tex. Penal Code Ann. § 22.04(a)(1) (West 1994).
3. See Tex. Penal Code Ann. § 19.04 (West 1994).
4. See Tex. Penal Code Ann. § 19.05 (West 1994).
5. The Royster--Rousseau test requires that the lesser included offense must be included
within the proof necessary to establish the offense charged, and some evidence must exist in the
record that would permit a jury rationally to find that, if the defendant is guilty, he is guilty only
of the lesser offense. See Rousseau, 855 S.W.2d at 672-73; see also Skinner v. State, 956 S.W.2d
21, 24 (Tex. Crim. App. 1997).
6. Tex. Code Crim. Proc. Ann. art. 36.19 (West 1981). Article 36.19 is applicable to any
violation of the requirements of articles 36.14 to 36.18 of the Code of Criminal Procedure.
Article 36.14 requires the trial court to deliver to the jury "a written charge distinctly setting forth
the law applicable to the case." Tex. Code Crim. Proc. Ann. art. 36.14 (West Supp. 1999).
7. See Tex. Penal Code Ann. §§ 9.04(b); 22.04(e) (West 1994).
8. See Tex. Penal Code Ann. § 12.33 (West 1994). An individual guilty of a second
degree felony shall be punished by imprisonment for not more than 20 years or less than 2 years,
and by a fine not to exceed $10,000.
9. See Tex. Penal Code Ann. §§ 19.05; 22.04(g) (West 1994).
10. See Tex. Penal Code Ann. § 12.35 (West 1994). An individual guilty of a state jail
felony shall be punished by confinement in a state jail for not more than two years or less than
180 days, and by a fine not to exceed $10,000. A deadly weapon finding as in the instant case
would make the offense a third degree felony. See Tex. Penal Code Ann. § 12.35(c)(1).
11. Chase involved a one-count indictment charging the defendant with capital murder of
a child under the age of six. At the guilt-innocence stage of the trial, the trial court charged the
jury on capital murder, and at the defendant's request, without regard to whether injury to a child
was a lesser included offense to capital murder, charged on "intentionally," "recklessly," and
"negligently" causing serious bodily injury. The trial court then refused to charge on involuntary
manslaughter, a lesser included charge of capital murder supported by the evidence when
requested by the defendant. The jury convicted the defendant of recklessly causing serious bodily
injury to a child and assessed the maximum punishment. The reviewing court held that the refusal
to charge on involuntary manslaughter was error. Noting that a timely objection had been made,
the court concluded "some harm" had been shown because of the length of deliberations at the
guilt-innocence stage of the trial and the prosecutor's argument at the penalty stage. The
prosecutor had argued, inter alia, that: "There is no more serious injury than what we have here
[the death of the child]" and "there is no more extreme injury that could be caused. What we
have here is the death of a child." Chase, 968 S.W.2d at 946. The court obviously did not
examine the statutory definition of "serious bodily injury" which includes death. See Tex. Penal
Code Ann. § 1.07(a)(46) (West 1994). Moreover, no mention was made of Saunders, Irizzary,
or Jiminez. We do not deem Chase controlling and decline to follow it.
affirmed.
John F. Onion, Jr., Justice
Before Chief Justice Aboussie, Justices B. A. Smith and Onion*
Affirmed
Filed: December 2, 1999
Publish
* Before John F. Onion, Jr., Presiding Judge (retired), Court of Criminal Appeals, sitting by
assignment. See Tex. Gov't Code Ann. § 74.003(b) (West 1998).
1. See Tex. Penal Code Ann. § 19.03(a)(8) (West 1994).
2. See Tex. Penal Code Ann. § 22.04(a)(1) (West 1994).
3. See Tex. Penal Code Ann. § 19.04 (West 1994).
4. See Tex. Penal Code Ann. § 19.05 (West 1994).
5. The Royster--Rousseau test requires that the lesser included offense must be included
within the proof necessary to establish the offense charged, and some evidence must exist in the
record that would permit a jury rationally to find that, if the defendant is guilty, he is guilty only
of the lesser offense. See Rousseau, 855 S.W.2d at 672-73; see also Skinner v. State, 956 S.W.2d
21, 24 (Tex. Crim. App. 1997).
6. Tex. Code Crim. Proc. Ann. art. 36.19 (West 1981). Article 36.19 is applicable to any
violation of the requirements of articles 36.14 to 36.18 of the Code of Criminal Procedure.
Article 36.14 requires the trial court to deliver to the jury "a written charge distinctly setting forth
the law applicable to the case." Tex. Code Crim. Proc. Ann. art. 36.14 (West Supp. 1999).
7. See Tex. Penal Code Ann. §§ 9.04(b); 22.04(e) (West 1994).
8. See Tex. Penal Code Ann. § 12.33 (West 1994). An individual guilty of a second
degree felony shall be punished by imprisonment for not more than 20 years or less than 2 years,
and by a fine not to exceed $10,000.
9. See Tex. Penal Code Ann. §§ 19.05; 22.04(g) (West 1994).
10. See Tex. Penal Code Ann. § 12.35 (West 1994). An individual guilty of a state jail
felony shall be punished by confinement in a state jail for not more than two years or less than
180 days, and by a fine not to exceed $10,000. A deadly weapon finding as in the instant case
would make the offense a third degree felony. See Tex. Penal Code Ann. § 12.35(c)(1).
11. Chase involved a one-count indictment charging the defendant with capital murder of
a child under the age of six. At the guilt-innocence stage of the trial, the trial court charged the
jury on c | 01-03-2023 | 09-05-2015 |
https://www.courtlistener.com/api/rest/v3/opinions/2637919/ | 35 P.3d 624 (2001)
The PEOPLE of the State Of Colorado, Complainant.
v.
Mark O. TIDWELL, Respondent.
No. 00PDJ094.
Office of the Presiding Disciplinary Judge of the Supreme Court of Colorado.
June 25, 2001.
*626 Amended Opinion by Presiding Disciplinary Judge ROGER L. KEITHLEY and Hearing Board members, DEENA RAFFE, Ph.D, a member of the public, and JERRY W. RAISCH, a member of the bar.
AMENDED REPORT, DECISION AND IMPOSITION OF SANCTION
SANCTION IMPOSED: ATTORNEY DISBARRED
A sanctions hearing pursuant to C.R.C.P. 251.15(b) was held on May 8, 2001, before the Presiding Disciplinary Judge ("PDJ") and two hearing board members, Deena Raffe, Ph.D, a member of the public and Jerry W. Raisch, a member of the bar. Gregory G. Sapakoff, Assistant Attorney Regulation Counsel, represented the People of the State of Colorado (the "People"). Mark O. Tidwell ("Tidwell"), the respondent, appeared on his own behalf.
The Complaint in this action was filed December 18, 2000. Tidwell did not file an Answer to the Complaint. On February 1, 2001 the People filed a Motion for Default. Tidwell did not respond. On February 22, 2001, the PDJ issued an Order granting default, stating that all factual allegations set forth in the Complaint were deemed admitted and that all violations of The Rules of Professional Conduct ("Colo.RPC") alleged in the Complaint were also deemed established, see e.g., People v. Richards, 748 P.2d 341 (Colo.1987).
At the sanctions hearing, the People presented no additional testimonial evidence. Tidwell testified on his own behalf. Exhibit 1 was offered by the People and admitted into evidence.
The PDJ and Hearing Board considered the People's argument, Tidwell's testimony in mitigation, the facts established by the entry of default, the exhibit admitted, and made the following findings of fact which were established by clear and convincing evidence.
I. FINDINGS OF FACT
Tidwell has taken and subscribed to the oath of admission, was admitted to the bar of the Supreme Court on October 17, 1980 and is registered upon the official records of this court, registration number 10724. Tidwell is subject to the jurisdiction of this court pursuant to C.R.C.P. 251.1(b).
All factual allegations set forth in the Complaint were deemed admitted by the entry of *627 default, and have therefore been established by clear and convincing evidence. See Complaint attached hereto as attachment 1. The Order entering default also granted default as to all alleged violations of The Rules of Professional Conduct set forth in the individual claims.
II. CONCLUSIONS OF LAW
The Complaint in this disciplinary case asserts nine claims against Tidwell involving three different clients. The first three claims arise from Tidwell's representation of Frances Merner in post-decree proceedings following a dissolution of marriage. Although Tidwell initially performed the services he agreed to undertake on Merner's behalf, an additional dispute arose, Tidwell agreed to take specific actions on his client's behalf and failed to do so. Notwithstanding Merner's repeated efforts to discuss the progress of the case with Tidwell, he failed to return her phone calls for several months.
In addition, Merner asked Tidwell to represent her in a separate county court civil matter in which she had been named a defendant on a corporate obligation of her business, L & F Merner, Inc. Tidwell had previously represented the corporation and, at the time of the suit, served as corporate secretary. Tidwell agreed to undertake that additional representation, but subsequently took no action on Merner's behalf, failed to appear in court, allowed a default judgment to be entered against Merner and failed to inform her of the court's judgment. On August 24, 1999, Merner forwarded correspondence to Tidwell terminating his services and requesting that he make the files in her cases available for new counsel. Tidwell took no action. He neither withdrew in the pending post-decree matters nor returned Merner's files or otherwise communicated with Merner.
Tidwell's misconduct violated Colo. RPC 1.3(a lawyer shall not neglect a legal matter entrusted to the lawyer), Colo. RPC 1.4(a)(a lawyer shall keep a client reasonably informed about the status of a matter and promptly comply with reasonable requests for information from a client) and Colo. RPC 1.16(d)(upon termination of representation, a lawyer shall take steps to the extent reasonably practicable to protect the client's interests, such as surrendering papers and property to which the client is entitled).
Claims four, five and six arise out of Tidwell's representation of Claudette Gray in an uncontested divorce. Lorraine Montoya, Gray's mother, retained Tidwell in August 1998 and paid him $500.00 in advance to represent her daughter. The fee was to cover the entire representation unless a dispute regarding custody arose. Thereafter, Tidwell was informed to delay further action on the divorce until July 1999 at which time he was instructed to proceed. Tidwell forwarded paperwork to Gray's husband concerning financial matters. The husband completed the forms and returned them to Tidwell. From September 1999 to August 2000, Tidwell took no further action on Gray's divorce. On August 9, 2000, Gray sent a letter to Tidwell terminating his representation and demanding a refund of the advance payment made on her behalf. At the time the demand was made, Tidwell had not earned the entire $500 fee received on Gray's behalf. Tidwell did not return any portion of the advance fee.
Although Tidwell testified at the sanctions hearing that he had expended at least six hours of his time and $120 of the funds in connection with the representation, the findings of fact admitted by the entry of default established that the $500 fee was the full fee for completion of the divorce proceeding absent a custody dispute and requires the PDJ and Hearing Board to conclude that some portion of the $500 advance fee was unearned following his termination. Tidwell, however, credibly testified that he understood the $500 fee to be a retainer against which hourly billings were to be deducted. The findings of fact, in light of Tidwell's expressed understanding of the fee agreement, do not support a conclusion that Tidwell knew, following termination, that some portion of the $500 remained unearned and still belonged to the client. The state of mind of the attorney is a crucial factor in determining whether the conversion is knowing or technical. People v. Varallo, 913 P.2d 1, 11(Colo.1996). Tidwell's conversion must *628 be considered technical or negligent, and constitutes a violation of Colo. RPC 8.4(c).
Tidwell's failure to promptly proceed with the Gray divorce once authorized to do so constituted neglect and violated Colo. RPC 1.3(a lawyer shall not neglect a legal matter entrusted to the lawyer). Tidwell's failure to promptly refund the unearned portion of the $500 advance fee, even though negligent, violated Colo. RPC 1.16(d)(upon termination of representation, a lawyer shall take steps to the extent reasonably practicable to protect the client's interests, such as surrendering papers and property to which the client is entitled).
Claims seven, eight, and nine arise from Tidwell's representation of Renee St. Peter in a personal bankruptcy matter. In September 1999, St. Peter hired Tidwell to file a personal bankruptcy for her, provided the requisite documentation to him and paid him $550 to cover the bankruptcy filing and to pay the necessary costs. Tidwell recommended that the bankruptcy filing be delayed until after St. Peter had received her 1999 tax refund and St. Peter agreed. By April 2000, she had received her tax refund and there was no further reason to delay the bankruptcy filing. However, as late as early June 2000, Tidwell had not yet made the filing. On June 6, 2000, St. Peter sent a letter to Tidwell complaining about the delay and demanding a refund of her $550. Tidwell did not respond to St. Peter's correspondence. Thereafter, Tidwell did not file the bankruptcy case nor communicate with St. Peter. Tidwell moved his office to a new location and did not inform St. Peter. On September 8, 2000, St. Peter hand delivered a letter to Tidwell terminating his services and demanding a refund of the $550. As of the date of termination, Tidwell had not earned any portion of the $550 fee. Tidwell failed to promptly refund any portion of the $550 fee.[1]
As in the Merner and Gray cases, Tidwell's misconduct in the St. Peter matter violated Colo. RPC 1.3(a lawyer shall not neglect a legal matter entrusted to the lawyer) and Colo. RPC 1.16(d)(upon termination of representation, a lawyer shall take steps to the extent reasonably practicable to protect the client's interests, such as surrendering papers and property to which the client is entitled). Tidwell's failure to promptly refund the $550 fee in the St. Peter matter is, however, much more serious. From September 1999, through the time of the filing of the Complaint in this action, Tidwell knew that he held $550 of St. Peter's money, knew that he had not earned those funds and, notwithstanding that knowledge, when he was discharged by St. Peter, did not promptly refund the unearned fees. In People v. Varallo, 913 P.2d 1, 11 (Colo. 1996), the Colorado Supreme Court clearly defined the difference between knowing conversion and "technical" or negligent conversion:
Knowing misappropriation [for which the lawyer is almost invariably disbarred] "consists simply of a lawyer taking a client's money entrusted to him, knowing that it is the client's money and knowing that the client has not authorized the taking." In re Noonan, 102 N.J. 157, 160, 506 A.2d 722 (1986). Misappropriation includes "not only stealing, but also unauthorized temporary use for the lawyer's own purpose, whether or not he derives any personal gain or benefit therefrom." In re Wilson, 81 N.J. 451, 455 n. 1, 409 A.2d 1153 (1979). The motive of the lawyer is irrelevant in determining the appropriate discipline for knowing misappropriation.
Moreover, "[i]ntent to deprive permanently a client of misappropriated funds, however, is not an element of knowing misappropriation." In re Barlow, 140 N.J. 191, 657 A.2d 1197, 1201 (1995).
A "technical conversion," usually warranting suspension rather than disbarment, is a conversion or misappropriation where the complainant either concedes that the misappropriation was negligent, People v. Dickinson, 903 P.2d 1132, 1138 (Colo.1995), or it cannot be proven by clear and convincing *629 evidence that the respondent knowingly converted the funds.
Tidwell exercised dominion and control over St. Peter's money for at least five months after he had been terminated with full knowledge that he had not earned those funds and that he was obligated to refund the money to his former client. Such conduct requires a conclusion that he engaged in the knowing conversion of St. Peter's funds. Tidwell's knowing conversion of his client's finds was dishonest and violated Colo. RPC 8.4(c)(conduct involving dishonesty, fraud, deceit or misrepresentation).
III. SANCTION/IMPOSITION OF DISCIPLINE
The ABA Standards for Imposing Lawyer Sanctions (1991 & Supp.1992) ("ABA Standards") is the guiding authority for selecting the appropriate sanction to impose for lawyer misconduct.
ABA Standard 4.11 provides "[d]isbarment is generally appropriate when a lawyer knowingly converts client property and causes injury or potential injury to a client."
ABA Standard 4.41(b) and (c), and 4.42(a) and (b) provide:
4.41. Disbarment is generally appropriate when:
(b) a lawyer knowingly fails to perform services for a client and causes serious or potentially serious injury to a client; or
(c) a lawyer engages in a pattern of neglect with respect to client matters and causes serious or potentially serious injury to a client.
4.42 Suspension is generally appropriate when:
(a) a lawyer knowingly fails to perform services for a client and causes injury or potential injury to a client, or
(b) a lawyer engages in a pattern of neglect and causes injury or potential injury to a client.
Tidwell's knowing conversion of St. Peter's money falls squarely under ABA Standard 4.11. Neither Tidwell's pattern of neglect nor the individual instances of neglect found in all three cases caused injury to the clients of such a degree to find that the injury sustained to be serious as envisioned by ABA Standards 4.41(b) or (c).
Under the ABA Standards, the presumptive discipline for Tidwell's knowing conversion is disbarment and the presumptive discipline for neglect and failure to communicate with his clients is suspension.
An examination of Colorado law supports the similar presumptive sanctions of disbarment for knowing conversion of client funds and suspension or disbarment for serious neglect of client matters. See People v. Elliott, 99PDJ059, slip op. at 8 (consolidated with 99PDJ086) (Colo. PDJ March 1, 2000), 29 Colo. Law. 112, 114 (May 2000)(disbarring attorney for his accepting advance fees from two clients, performing some but not all of the services for which he was paid, retaining the fees for one year in one matter and two years in another matter, and abandoning the clients, citing People v. Singer, 897 P.2d 798, 801 (Colo.1995)(holding that extensive and prolonged neglect is considered willful misconduct)); People v. Reynolds, 933 P.2d 1295, 1305 (Colo.1997) (respondent attorney suspended for three years and thirty days for, among other rule violations, repeatedly neglecting numerous client matters, and engaging in dishonesty, misusing client funds); People v. Coyne, 913 P.2d 12, 14 (Colo.1996)(disbarring lawyer who, in one matter, misappropriated client funds for his own use and neglected a legal matter); People v. Young, 864 P.2d 563, 564 (Colo.1993)(holding that disbarment is the presumed sanction for knowing conversion barring significant factors in mitigation); In re Righter, 992 P.2d 1147, 1148 (Colo.1999)(suspending attorney for three years for neglecting client's case, failing to communicate, and engaging in misrepresentations).
The PDJ and Hearing Board considered aggravating and mitigating factors pursuant to ABA Standards 9.22 and 9.32 respectively. The People's evidence in aggravation demonstrated that Tidwell had a prior disciplinary offense (a letter of admonition in 1995 for neglect), see id. at 9.22(a); he had a dishonest or selfish motive, see id. *630 at 9.22(b); he demonstrated a pattern of misconduct; see id. at 9.22(c); he engaged in multiple offenses, see id. at 9.22(d); and had substantial experience in the practice of law, see id. at 9.22(i). and. In mitigation, Tidwell stated and exhibited genuine remorse, id. at 9.32(i). Although Tidwell testified that he suffered from and took medication for depression[2], no evidence was presented from which it can be concluded that his depression caused the misconduct, that he has either recovered from the depression or that the depression has been arrested, or that there has been a sustained period of recovery. See id. at 9.32(i). Absent such proof, a mental disability may not be considered as a mitigating factor in attorney disciplinary proceedings.
In addition, Tidwell testified and the People confirmed that Tidwell refunded the advance fees to both Gray and St. Peter after the Complaint was filed in this action. ABA Standard 9.4(a) provides that forced or compelled restitution should not be considered as either aggravating or mitigating in arriving at the appropriate sanction. Tidwell's refund to Gray and St. Peter was not "forced" or "compelled." Although there was certainly some incentive to do so as a result of the disciplinary investigation and subsequent prosecution, those events alone did not force or compel Tidwell to refund the advance fees. That he failed to refund the advance fees until after the Complaint was filed in this case, does not deprive Tidwell of the mitigation attendant in his efforts to make restitution; rather, it bears upon the weight to be accorded for the act. Tidwell's delayed rectification of his misconduct does provide some measure of mitigation, though limited. See id. at 9.32(d).
IV. ORDER
It is therefore ORDERED:
1. MARK OWEN TIDWELL, registration number 10724, is DISBARRED from the practice of law effective thirty-one days from the date of this Order, and his name shall be stricken from the roll of attorneys licensed to practice law in this state;
2. TIDWELL is ORDERED to pay the costs of these proceedings.
3. The People shall submit a Statement of Costs within ten (10) days of the date of this Order. Respondent shall have five (5) days thereafter to submit a response thereto.
EXHIBIT 1
THIS COMPLAINT is filed pursuant to the authority of C.R.C.P. 251.9 through 251.14, and it is alleged as follows:
3. JURISDICTION
1. The respondent has taken and subscribed the oath of admission, was admitted to the bar of this court on October 17, 1980, and is registered upon the official records of this court, registration No. 10724. He is subject to the jurisdiction of this court in these disciplinary proceedings. The respondent's current registered business address is 1645 Court Place, Suite 319, Denver, Colorado 80202.
4. Merner Matter
5. CLAIM I
[Neglect of a Legal Matter Colo. RPC 1.3]
2. In approximately June 1997, Frances Merner, a complaining witness in this matter, retained the respondent to represent her in post-dissolution disputes with her former husband.
3. Initially, the respondent represented Ms. Merner with respect to a contempt citation issued to Ms. Merner. The respondent was successful in negotiating a resolution of the contempt issues and the parties reached a stipulation concerning child support payable by Ms. Merner and marital debts payable by her former spouse.
4. By late 1998, however, Ms. Merner's former spouse was not complying with his *631 obligations under the stipulation reached by the parties.
5. Ms. Merner met with the respondent and requested that he file a motion for a contempt citation against her former spouse.
6. In approximately February 1999, Ms. Merner met with the respondent at his office and provided to him all of the documents she had to demonstrate her former spouse's failure to comply with his obligation to pay specified marital debts.
7. Over the next several months, Ms. Merner attempted to contact the respondent frequently by telephone to find out the status of the motion to compel.
8. The respondent generally failed to return Ms. Merner's telephone calls, and he did not provide Ms. Merner with any information concerning the status of the motion to compel.
9. In April 1999, Ms. Merner received a letter from a collection agency concerning a debt owed by L & F Merner, Inc., a corporation in which Ms. Merner formerly had an ownership interest. The demand letter was sent to Ms. Merner because she had personally guaranteed L & F Merner's obligation to Transmedia Restaurant Company, Inc. ("Transmedia").
10. The respondent had previously represented L & F Merner and, at the time Ms. Merner received the collection letter, was the corporate secretary for L & F Merner.
11. Ms. Merner referred the collection agency to the respondent, but the collection agency was unable to get the respondent to return their telephone calls.
12. In late April 1999, Ms. Merner called the respondent's office and left a message for him asking him to contact the collection agency and deal with the collection agency concerning L & F Merner's debt.
13. On or about May 5, 1999, Ms. Merner sent a letter to the respondent urging him to serve the contempt papers on her former spouse immediately. She also urged the respondent to contact the collection agency for Transmedia and inform them the debt they were seeking to collect was a corporate obligation of L & F Merner.
14. In June 1999, Ms. Merner was served with a Denver County Court Summons and Complaint in an action brought by Transmedia against L & F Merner and Ms. Merner personally. The summons required an answer or other appearance on July 6, 1999.
15. After she received the Summons and Complaint in the Denver County Court matter, Ms. Merner spoke to the respondent by telephone concerning the Transmedia matter.
16. The respondent assured Ms. Merner that the Transmedia debt was a corporate obligation and would be resolved.
17. During the conversation with the respondent, Ms. Merner informed the respondent that she was moving out of state and would not be in Colorado for the July 6th court date.
18. The respondent assured Ms. Merner that he would resolve the Transmedia matter or appear on her behalf on or before the July 6th return date.
19. The respondent failed to appear on behalf of Ms. Merner or L & F Merner in the Transmedia case on July 6, 1999.
20. A default judgment was entered in favor of Transmedia and against L & F Merner and Ms. Merner in the amount of $2,271.08.
21. Throughout the rest of July 1999, Ms. Merner did not receive any further information from the respondent concerning either the Transmedia matter or the domestic relations matters concerning her former spouse.
22. In late July 1999, Ms. Merner contacted the Denver County Court and learned, for the first time, that a default judgment had been entered against her.
23. In August 1999, Ms. Merner left several voice mail messages at the respondent's office, seeking information concerning both the Transmedia matter and the status of contempt proceedings against her former spouse.
24. On some occasions, the respondent's phone service was disconnected and Ms. Merner was unable to leave any message.
*632 25. The respondent did not return any of the telephone messages left by Ms. Merner in August 1999.
26. On or about August 24, 1999, Ms. Merner sent a letter to the respondent outlining her concerns, terminating the respondent's representation and requesting that he make her file available for new counsel.
27. The respondent never filed contempt proceedings against Ms. Merner's former spouse as she requested and he never withdrew from representation of Ms. Merner in the domestic relations matter.
28. The respondent did not communicate with Ms. Merner in any form after July 1999.
29. Ms. Merner entrusted to the respondent legal matters regarding her domestic relations case and the Transmedia collection litigation.
30. Through his conduct as described above, the respondent neglected these legal matters entrusted to him.
31. The respondent violated Colo. RPC 1.3 (a lawyer shall not neglect a legal matter entrusted to the lawyer).
WHEREFORE, the complainant prays at the conclusion hereof.
CLAIM II
[Failure to keep a client reasonably informed of the status of a matter and to comply with reasonable requests for informationColo. RPC 1.4(a)]
32. Paragraphs 2 through 31 are incorporated herein.
33. In representing Ms. Merner as alleged above, the respondent had a duty to keep Ms. Merner reasonably informed about the status of her legal matters and to comply with reasonable requests for information.
34. The respondent failed to comply with these duties through his conduct as described above, when Ms. Merner had a reasonable expectation that the respondent would communicate with her concerning the status of her legal matters.
35. Through his conduct as described above, the respondent violated Colo. RPC 1.4(a) (a lawyer shall keep a client reasonably informed about the status of a matter and promptly comply with reasonable requests for information from a client).
WHEREFORE, the complainant prays at the conclusion hereof.
CLAIM III
[Failure, upon termination of representation, to take steps to the extent reasonably practicable to protect the client's interestColo. RPC 1.16(d)]
36. Paragraphs 2 through 35 are incorporated herein.
37. Through her letter dated August 24, 1999, Ms. Merner terminated the respondent's representation of her.
38. Upon termination of his representation, the respondent had a duty to take steps to the extent reasonably practicable to protect Ms. Merner's interests, such as surrendering papers and property to which Ms. Merner was entitled.
39. In terminating the respondent's representation, Ms. Merner requested that the respondent return her file and make it available for new counsel.
40. The respondent has failed or refused to return Ms. Merner's file to her.
41. Through his conduct as described above, the respondent violated Colo. RPC 1.16(d) (upon termination of representation, a lawyer shall take steps to the extent reasonably practicable to protect the client's interests, such as surrendering papers and property to which the client is entitled).
WHEREFORE, the complainant prays at the conclusion hereof.
6. Montoya Matter
CLAIM IV
[Neglect of a legal matter Colo. RPC 1.3]
42. On or about August 25, 1998, Lorraine Montoya, a complaining witness in this matter, paid the respondent $500.00 in advance *633 to represent her daughter, Claudette Rachel Gray, in an uncontested divorce.
43. The advance fee was to cover the entire representation unless there was a dispute concerning custody.
44. Shortly after the respondent was retained, Ms. Gray and her husband considered reconciliation, and Ms. Gray instructed the respondent to put the matter on hold temporarily.
45. In July 1999, Ms. Gray communicated to the respondent her desire to proceed with the dissolution.
46. The respondent provided paperwork to Ms. Gray's husband to complete concerning financial matters. Ms. Gray's husband filled out the paperwork and returned it to the respondent in September 1999.
47. Since September 1999, the respondent has failed to take any further action on Ms. Gray's dissolution matter and he has never filed a Petition for Dissolution of Marriage.
48. Through his conduct as described above, the respondent neglected Ms. Gray's dissolution case.
49. The respondent violated Colo. RPC 1.3 (a lawyer shall not neglect a legal matter entrusted to the lawyer).
WHEREFORE, the complainant prays at the conclusion hereof.
CLAIM V
[Failure, upon termination of representation to refund unearned fee Colo. RPC 1.16(d)]
50. Paragraphs 42 through 49 are incorporated herein.
51. On or about August 9, 2000, Ms. Gray sent a letter to the respondent terminating his representation and demanding a refund of the advance payment made to the respondent on her behalf.
52. Upon termination of his representation, the respondent had a duty to refund any advance payment of fee that had not been earned.
53. The respondent did not earn the $500.00 fee paid to him in advance to represent Ms. Gray.
54. The respondent has failed to refund any of the money paid to him in advance to represent Ms. Gray.
55. Through his conduct as described above, the respondent violated Colo. RPC 1.16(d) (upon termination of representation, a lawyer shall take steps to the extent reasonably practicable to protect the client's interests, such as refunding any advance payment of fee that has not been earned).
WHEREFORE, the complainant prays at the conclusion hereof.
CLAIM VI
[Conversion Colo. RPC 8.4(c)]
56. Paragraphs 42 through 55 are incorporated herein.
57. The respondent has continued to exercise dominion and control over funds belonging to Ms. Montoya or Ms. Gray since Ms. Gray terminated his representation, despite Ms. Gray's request for the refund.
58. The respondent has neither authority nor justification for continuing to exercise dominion or control over these funds.
59. Through his conduct as described above, the respondent has converted funds belonging to a client or third person.
60. Through his conversion of funds, the respondent violated Colo. RPC 8.4(c) (conduct involving dishonesty, fraud, deceit or misrepresentation).
WHEREFORE, the complainant prays at the conclusion hereof.
7. St. Peter Matter
CLAIM VII
[Neglect of a legal matter Colo. RPC 1.3]
61. In approximately September 1999, Renee St. Peter, a complaining witness in this matter, paid the respondent $550.00 in advance for attorney fees and costs necessary to file a personal bankruptcy.
*634 62. Ms. St. Peter provided the respondent with the information necessary to file her bankruptcy.
63. At the respondent's suggestion, Ms. St. Peter agreed to wait to file the bankruptcy while she made sure that any of her husband's money was removed from their joint checking account.
64. Ms. St. Peter also agreed, based upon the respondent's advice, to wait until after she received her federal income tax refund for 1999 to file her bankruptcy.
65. By April 2000, all of Ms. St. Peter's husband's funds were out of the checking account and she had received her tax refund.
66. By April 2000, there was no reason for further delay in filing Ms. St. Peter's bankruptcy.
67. In June 2000, the respondent had still not filed Ms. St. Peter's bankruptcy.
68. On June 6, 2000, Ms. St. Peter sent a letter to the respondent complaining about his lack of action and demanding that he file her bankruptcy within 10 working days or she would contact "the bar association."
69. The respondent never filed Ms. St. Peter's bankruptcy and failed to communicate with her further concerning her bankruptcy matter.
70. The respondent also moved to a new office location without providing any notice to Ms. St. Peter.
71. Through his conduct as described above, the respondent neglected Ms. St. Peter's bankruptcy matter.
72. The respondent violated Colo. RPC 1.3 (a lawyer shall not neglect a legal matter entrusted to the lawyer).
WHEREFORE, the complainant prays at the conclusion hereof.
CLAIM VIII
[Failure upon termination of representation to refund unearned fees Colo. RPC 1.16(d)]
73. Paragraphs 61 through 72 are incorporated herein.
74. On or about September 8, 2000, Ms. St. Peter hand-delivered a letter to the respondent's new office advising the respondent that his representation was terminated and demanding a refund.
75. Upon termination of his representation, the respondent had a duty to take steps to the extent reasonably practicable to protect Ms. St. Peter's interests, including refunding any advance payment of fee that had not been earned.
76. As of the date his representation was terminated, the respondent had not earned any of the fee paid to him by Ms. St. Peter.
77. The respondent has failed or refused to refund to Ms. St. Peter any of the money she paid to him in advance for filing her bankruptcy, including payment made to him for the cost of filing the bankruptcy petition.
78. Through his conduct as described above, the respondent violated Colo. RPC 1.16(d) (upon termination of representation, a lawyer shall take steps to the extent reasonably practicable to protect the client's interests such as refunding any advance payment of fee that has not been earned).
WHEREFORE, the complainant prays at the conclusion hereof.
CLAIM IX
[Conversion Colo. RPC 8.4(c)]
79. Paragraphs 61 through 78 are incorporated herein.
80. The respondent has continued to exercise dominion and control over funds belonging to Ms. St. Peter since she terminated the respondent's representation, despite Ms. St. Peter's request for the refund.
81. The respondent has neither authority nor justification for continuing to exercise dominion or control over these funds.
82. Through his conduct as described above, the respondent has converted funds belonging to a client.
83. Through his conversion of funds, the respondent violated Colo. RPC 8.4(c) (conduct involving dishonesty, fraud, deceit or misrepresentation).
*635 WHEREFORE, it is prayed that the respondent be found guilty of violations of various rules of conduct which establish grounds for discipline as provided in C.R.C.P. 251.5, and the Colorado Rules of Professional Conduct, rules 1.3, 1.4(a), 1.16(d) and 8.4(c), and that he be appropriately disciplined and assessed the costs of these proceedings.
NOTES
[1] In both the Gray matter and the St. Peter matter, Tidwell did eventually refund the full amount of the advance fees. He did so, however, only after the Complaint in this case had been filed.
[2] ABA Standards 9.32(i) (Supp.1992) requires "medical" evidence to establish the mental disability. Construing, without deciding, that Tidwell's testimony concerning his health qualifies as "medical" evidence, his testimony is insufficient to support this mitigating factor. | 01-03-2023 | 11-01-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623316/ | 15 So. 3d 583 (2009)
JACKSON
v.
STATE.
No. 1D08-5672.
District Court of Appeal of Florida, First District.
August 17, 2009.
Decision without published opinion Certiorari denied. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623302/ | 569 So. 2d 1357 (1990)
Lester G. KATES, Petitioner,
v.
Peter J. MILLHEISER, M.D., Respondent.
No. 90-1740.
District Court of Appeal of Florida, Third District.
November 13, 1990.
Marcelo M. Agudo, Miami, for petitioner.
Joseph T. Robinson, Miami, for respondent.
Before BARKDULL, BASKIN and LEVY, JJ.
LEVY, Judge.
Peter J. Millheiser, M.D., filed a cause of action in the county court against attorney Lester G. Kates claiming the attorney had failed to pay the doctor an expert witness fee. The county court entered a final judgment which held that the attorney was not responsible for the fee because the evidence showed that there was no express agreement by the attorney to pay the doctor's fee, and that the attorney was acting on behalf of a disclosed principal. The doctor then appealed to the Circuit Court, Appellate Division, which "Per Curiam Reversed", without a written opinion, the County Court decision. The attorney now petitions for a writ of certiorari to quash the decision of the Circuit Court.
As stated by this court in Andrew H. Boros, P.A., v. Arnold P. Carter, M.D., P.A., 537 So. 2d 1134, 1135 (Fla. 3d DCA 1989) (citations and footnotes omitted): "Generally, an attorney serves as an agent for his client; the attorney's acts are the acts of the principal, the client. Absent an express agreement, an agent acting for a disclosed principal is not personally liable for the debts of the principal." Here, the evidence at trial showed that the attorney did not agree to pay the doctor's fee. It also showed that the attorney was acting on behalf of a disclosed principal. Thus, the attorney was clearly not responsible to pay the doctor's bill, and the County Court judge correctly entered a final judgment in favor of the attorney. See Andrew H. Boros, P.A., v. Arnold P. Carter, M.D., P.A., 537 So.2d at 1135. See also Blount v. Tomlinson, 57 Fla. 35, 48 So. 751, 753 (1909) (absent express agreement, agent acting for disclosed principal not liable for debts of principal); International Bulk Shipping, Inc. v. Manatee County Port Authority, 472 So. 2d 1321, 1322 (Fla. 2d DCA 1985) (same); Johnson v. Estate of Fraedrich, 472 So. 2d 1266, 1268 (Fla. 1st DCA 1985) (same); In Re Brugh's Estate, 306 So. 2d 599, 600 (Fla. 2d DCA 1975) (same); Epperson v. Rupp, 157 So. 2d 537, 538 (Fla. 3d DCA 1963) (same). For this reason, we quash the per curiam reversal of the circuit court sitting in its appellate capacity.
*1358 We find the per curiam reversal inappropriate for other reasons as well. First, it is the responsibility of the appellate courts to guide the trial courts as to questionable procedures or rulings. A per curiam reversal opinion does not give the trial judge any guidance as to how to correct the supposed error which was the basis of the reversal.
Second, to the extent that the reversal relates to evidentiary matters, it fails to place the trial lawyers on notice as to what issues are open for retrial.
Finally, the need for an appellate court to announce the reason for a reversal is essential to the integrity of the judicial process. It is important for litigants and the public to recognize that determinations develop as the result of a fair and just reasoning process as opposed to perceiving judicial decisions as unjustified and arbitrary. Ultimately, it is the responsibility of the judiciary to maintain the integrity of the legal system by ensuring that the judgment processes in the appellate system involve scholarly and fair deliberations which are open for the public to view.[1] When a case is appealed, the judgment under review is clothed with a presumption of correctness. Applegate v. Barnett Bank of Tallahassee, 377 So. 2d 1150 (Fla. 1979); Department of Transportation v. Morehouse, 350 So. 2d 529 (Fla. 3d DCA 1977), cert. denied, 358 So. 2d 129 (Fla. 1978). If the appellate court per curiam affirms the trial court decision, this means that the appellant failed to rebut the presumption of correctness, but still leaves the parties with the knowledge as to why the final judgment was reached.
However, in the situation where an appellate court per curiam reverses a final order or judgment, without an opinion, neither party is apprised of why that particular legal result was reached. Specifically, the parties are entitled to know exactly why the result reached at the trial level, which was presumed to be correct, was set aside by the appellate court.
It is for this reason that we find paramount among the responsibilities of an appellate court, the responsibility of writing opinions in all reversals and remands. See Whipple v. State, 431 So. 2d 1011, 1015 (Fla. 2d DCA 1983) ("We write opinions in all reversals and remands"). In the interests of propriety and fairness, litigants cannot be left to wallow in a sea of confusion as to the rationale supporting a legal result.
Accordingly, we grant certiorari, quash the order under review, and reinstate the judgment of the County Court judge.
NOTES
[1] As stated by one commentator:
In the broader view, appellate justice can be the last best effort of our government and our law to gain the respect and acceptance of the people. Appellate justice should be a model for the government's dealings with citizens. Appellate courts are the most dignified and receptive authorities to which individuals can turn to express their legal dissatisfactions in a pointed way, with assurance of a direct response. If these courts do not deal justly with litigants, we cannot expect agencies or bureaucracies of lesser sensitivity to legal rights to do so. It is therefore important that justice on appeal be visible to all.
Carrington, Meador & Rosenberg, Preface to Justice on Appeal at v (1976). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623368/ | 569 So. 2d 1203 (1990)
Darrell E. SMITH
v.
STATE of Mississippi.
No. 89-KA-0416.
Supreme Court of Mississippi.
October 24, 1990.
*1204 Thomas H. Comer, Jr., Comer & Jenkins, Booneville, for appellant.
Mike C. Moore, Atty. Gen. and Charles W. Maris, Jr., Sp. Asst. Atty. Gen., Jackson, for appellee.
Before ROY NOBLE LEE, C.J., and ROBERTSON and SULLIVAN, JJ.
ROY NOBLE LEE, Chief Justice, for the Court:
Darrell E. Smith was convicted in the Prentiss County Circuit Court for sexual battery on a five year old male child. He has appealed to this Court and presents three issues for decision:
I. DID APPELLANT MAKE A KNOWING AND INTELLIGENT WAIVER OF HIS RIGHT TO COUNSEL AND HIS PRIVILEGE AGAINST SELF-INCRIMINATION?
II. DID THE LENGTH OF JURY DELIBERATION INDICATE THAT THE VERDICT WAS SUPPORTED BY BIAS AND PREJUDICE RATHER THAN CAREFUL THOUGHT AND DELIBERATION?
III. WAS APPELLANT'S SENTENCE DISPROPORTIONATE TO THE CRIME OF SEXUAL BATTERY?
FACTS
The sordid facts of this case will not be detailed. Suffice it to say, the appellant, from the overwhelming evidence, sodomized the child by forcing anal intercourse upon him. The testimony of the child, his mother, the police, the physician, and the physical facts prove beyond reasonable doubt that the appellant committed the offense.
DISCUSSION
I. DID APPELLANT MAKE A KNOWING AND INTELLIGENT WAIVER OF HIS RIGHT TO COUNSEL AND HIS PRIVILEGE AGAINST SELF-INCRIMINATION?
Appellant contends that statements he made to Mrs. Kim Shackleford, Prentiss County Welfare Department, and Chief of Police Hubert Kitchens, City of Booneville, were not free and voluntary. He had waived his right to an attorney but he claimed that his drinking of intoxicating liquor and drunkenness the night before rendered his statement the next morning to those individuals involuntary. On cross-examination, the appellant testified that he remembered waiving his rights to an attorney and making a statement. On redirect examination, appellant testified to the following:
A: ... I was drunk but I was able to drive a car, able to run from the law, able to come back up there, able to talk with the law, and able to go to jail without a fight. I wasn't that drunk.
In Johnson v. State, 511 So. 2d 1360 (Miss. 1987), the Court considered the degree of intoxication in determining whether a confession is voluntary:
We have repeatedly held that the voluntariness of a waiver, or of a confession, must be determined by the trial judge from the totality of the circumstances; it is a factual inquiry. (citations omitted) Moreover, where there is conflicting evidence on the admissibility of a confession, this Court will not disturb the court's findings "unless it appears clearly contrary to the overwhelming weight of the evidence." Wiley v. State, 465 So. 2d 318, 320 (Miss. 1985)[.] (citations omitted)
No one factor is dispositive in the totality of circumstances test. Intoxication or sickness does not automatically render a confession involuntary. The admissibility of a confession depends upon the degree of intoxication. See Hemingway v. State, 483 So. 2d 1335, *1205 1336 (Miss. 1986). In Kemp v. State, 352 So. 2d 446, 448 (Miss. 1977) law officers testified that the appellant had been drinking heavily but that he was in control of his faculties, justifying the admission of the confession. In another case, although the defendant was intoxicated, the court decided there was ample evidence to justify the finding that he was in full command of his faculties, that his intoxication was less than mania, that he fully understood and appreciated what he way [sic] saying, and that his statements were free and voluntary. Moore v. State, 237 So. 2d 844, 849 (Miss. 1970).
511 So.2d at 1365 (emphasis added).
Appellant was arrested late in the evening on October 19, 1987. His interview took place the next morning. He testified that he was still partially drunk during the interview. No blood alcohol test was done, but the lapse between his arrest and the interview could not have been more than 11 or 12 hours.
In Stevens v. State, 458 So. 2d 726 (Miss. 1984), the Court held that a period of 13 hours was sufficient to allow the defendant to sober up. The statements given to Mrs. Shackleford and Chief Kitchens were used for impeachment by the state. The voluntariness of the statement was not an issue during the trial. The issue on this appeal is resolved against the appellant.
II. DID THE LENGTH OF JURY DELIBERATION INDICATE THAT THE VERDICT WAS SUPPORTED BY BIAS AND PREJUDICE RATHER THAN CAREFUL THOUGHT AND DELIBERATION?
The jury retired to consider its verdict at 2:37 p.m. and informed the Court at 2:40 p.m. that it had arrived at a verdict, a period of three minutes having expired. Appellant complains that three minutes is not enough time for the jury to have considered his case. This Court has held that there is no formula to determine how long a jury should deliberate. Johnson v. State, 252 So. 2d 221 (Miss. 1971), cert. denied, 405 U.S. 991, 92 S. Ct. 1262, 31 L. Ed. 2d 459 (1972). In Johnson, the Court said:
Because the jury's time of considering their verdict did not exceed seven minutes, it does not follow that the jurors did not carefully consider the testimony and the exhibits. It is not only possible but probable that when the state and the defendant had rested and the summations had been made each juror had decided in his mind the issue of innocence or guilt. After the brief deliberation with each other, the jurors found that they were of a single mind as to the guilt or innocence of the appellant and found him to be guilty.
Under the facts of this case this Court is unwilling to lend its authority to the establishment of any formula or guideline relating to the time a jury must deliberate before delivering its verdict. This Court is cognizant of the fact that in the past in occasional cases, as in the case at bar, rather brief deliberations have taken place in the jury room and verdicts have been returned with unusual rapidity. There is no yardstick of time which a jury should use before reaching a verdict. No two cases are similar as to facts and therefore the law varies in its application thereto. Therefore, we cannot hold that in the time utilized by the jury it could not reach a proper verdict of guilty.
252 So.2d at 224 (emphasis added).
The jury issue in this case was simple and concise. The jury heard the evidence, heard the instructions of the court on the law and found a verdict of guilty as charged. We cannot say that the length of the jury's deliberation indicated bias or prejudice toward the appellant on its part. Issue number two is resolved against the appellant.
III. WAS APPELLANT'S SENTENCE DISPROPORTIONATE TO THE CRIME OF SEXUAL BATTERY?
The appellant contends that his sentence of thirty years in the State Penitentiary is disproportionate to the crime of sexual battery. Section 97-3-101 Miss. *1206 Code Ann. 97-3-101 (Supp. 1980) provides that every person who shall be convicted of sexual battery shall be imprisoned in the state penitentiary for a period of not more than thirty (30) years. The maximum sentence under that statute was imposed upon the appellant. He cites no authority to support his position, nor was any objection made upon the imposition of the sentence. In Contreras v. State, 445 So. 2d 543, 546 (Miss. 1984), this Court said, as it has said many times:
This Court has held many times that the trial judge will not be put in error nor will he be held to have abused his discretion in the sentence, if it is within the limits fixed by statute.
The issue is resolved against the appellant. There being no reversible errors in the record, the judgment of the lower court is affirmed.
CONVICTION OF SEXUAL BATTERY AND SENTENCE OF THIRTY (30) YEARS IN THE CUSTODY OF THE MISSISSIPPI DEPARTMENT OF CORRECTIONS AFFIRMED.
HAWKINS and DAN M. LEE, P.JJ., and PRATHER, ROBERTSON, SULLIVAN, ANDERSON, PITTMAN and BLASS, JJ., concur. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623383/ | 360 S.W.2d 893 (1962)
F. M. McGEE, Appellant,
v.
W. H. GRISSOM, Appellee.
No. 16410.
Court of Civil Appeals of Texas, Fort Worth.
September 21, 1962.
*894 Shirley W. Peters, Denton, for appellant.
Joe H. Cleveland and Jack Lovette, Bowie, for appellee.
PER CURIAM.
This is an election contest. F. M. McGee and W. H. Grissom were run-off candidates for county commissioner in the second primary held on June 2, 1962. The election officers certified that Grissom received 397 votes and McGee 393. McGee filed this contest, and the district court found that 59 illegal votes were cast and ordered that 33 votes be subtracted from McGee's total and 26 from Grissom's total, leaving Grissom a majority of 11. McGee has appealed.
Appellant challenges the court's ruling in holding void 21 absentee votes because the medical certificate which was attached to each application for a ballot was obtained and completed and delivered fraudulently, based upon the following findings of fact and conclusions of law: the applications with the blank medical certificates attached thereto were brought to the certifying physician by appellant and his wife; the physician at the request and in the presence of appellant or his wife executed these certificates and delivered all of them to appellant or his wife; the physician is 77 years of age and has been retired for about 3 years; she has not made any calls or received any patients for more than 3 years; she was not the family physician of any of said voters, and had never at any time been the doctor for some of them; she had treated some of them "years ago" but was not able while testifying to remember the persons she had treated; she had not seen any of said voters in over 3 years, and did not see or examine any of them when she executed these certificates and did not know of the disability or the specific reason why the medical certificates were executed; she did not have personal knowledge of the physical condition of any of said voters.
Until the amendment of Article 5.05 of the Election Code by House Bill No. 134, Acts of 1959, 56th Leg., p. 1055, ch. 483, V.A.T.S., it was held that the provisions of the absentee voting law were directory unless the Legislature had otherwise declared. Fugate v. Johnston, Tex.Civ.App., 251 S.W.2d 792; Paredes v. Martinez, Tex.Civ.App., 264 S.W.2d 958. The caption of the amendment states that its purpose, among other things, is to define and prescribe additional requirements with respect to absentee ballots and the applications therefor; and the emergency clause recites that "The fact that the changes made by this Act will eliminate many of the abuses now prevailing in absentee voting creates an emergency and an imperative public necessity that the Constitutional Rule requiring bill to be read on three several days in each House be suspended, and this Rule is hereby suspended, and that this Act take effect and be in force from and after its passage."
The amendment provides that if the ground of the application for an absentee ballot be sickness or physical disability by reason of which the elector cannot appear at the polling place on election day, a certificate of a duly licensed physician or accredited Christian Science practitioner shall accompany the application. The certificate must be in substantially the following form: "This is to certify that I have personal knowledge of the physical condition of ____, and that because of sickness or physical disabilityhe will be unable to appear at the polling place for an election to be held on the ____ day of ____, 19." The amendment further provides: "Any person who requests a physician to execute a certificate for another *895 person without having been directed by such other person to do so, and any physician who knowingly executes a certificate except upon the request of the voter named therein or upon the request of someone at the voter's direction, and any physician who knowingly delivers a certificate except by delivering it to the voter in person or by mailing it to the voter at his permanent residence address or the address at which he is temporarily living, shall be guilty of a misdemeanor and upon conviction shall be fined not more than Five Hundred Dollars ($500) or imprisoned in the county jail for not more than thirty (30) days, or both so fined and imprisoned."
It was not shown that any of the challenged voters directed appellant or his wife to request a medical certificate. None of them testified, and neither did appellant nor his wife.
We have seen only two cases which have construed the absentee voting law, as amended. The first one of these is Farrell v. Jordan, Tex.Civ.App., 338 S.W.2d 269. In that case the court said: "Without reviewing the authorities, it is sufficient to say that they were all decided prior to the 1959 amendment of the statute and did hold the statute as to the manner of casting the vote, in the absence of fraud, was directory. If the statute were the same now as it was when the various cited cases were decided, we would hold the statute directory and require that the votes be counted. However, we are of the view that by the amendment in 1959 the Legislature made the manner of casting absentee votes mandatory and intended that if the statutory requirements were not complied with the votes were void and should not be counted."
The other case is Guerra v. Ramirez, Tex.Civ.App., 351 S.W.2d 272. There the requirements set out in the 1959 amendment as to opening, casting and counting absentee ballots were under consideration. The court said: "We feel that the provisions of Art. 5.05, Subd. 6, as amended in 1959, are mandatory, and to hold otherwise would open the door to fraud and destroy the secrecy of the ballot."
We do not believe that the ruling of the court in voiding the ballots, as challenged by appellant's first contention, was error.
Appellant also challenges the action of the court in holding void the votes cast by six persons because the application for each of them was not accompanied by a poll tax receipt or an exemption certificate, or an affidavit that such had been lost or mislaid, or that an exemption certificate was not required. In view of our holding on appellant's first contention, we think it is unnecessary to resolve the question presented by the second. If all six of these votes were cast for appellant and were counted, appellee would still have a majority of five.
The judgment is affirmed. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623371/ | 303 F. Supp. 1282 (1969)
Petition of the UNITED STATES of America and Marine Transport Lines, Inc., as owners of the USNS POTOMAC, for exoneration from or limitation of liability.
Mary Esther Ford LEONARD, Administratrix of the Estate of Clyde Virgesto Leonard, deceased, Libelant,
v.
UNITED STATES of America, Marine Transport Lines, Inc., and Aviation Fuel Terminals, Inc., Respondents.
Eugene ALVES et al., Libelants,
v.
UNITED STATES of America, and Marine Transport Lines, Inc., Respondents,
and
Aviation Fuel Terminals, Inc., Respondent-Impleaded.
Nos. 278, 272 and 273.
United States District Court E. D. North Carolina, New Bern Division.
July 14, 1969.
As Amended August 14, 1969.
*1283 *1284 *1285 *1286 *1287 William E. Gwatkin, III, Admiralty and Shipping Section, Dept. of Justice, Washington, D. C., and Robert H. Cowen, U. S. Atty., Raleigh, N. C., for the United States and Marine Transport Lines, Inc.
Vandeventer, Black, Meredith & Martin, Hugh S. Meredith, Norfolk, Va., Rountree & Clark, Wilmington, N. C., Claud R. Wheatly, Jr., Beaufort, N. C., for Aviation Fuel Terminals, Inc.
Kelsey & Owens, Sidney H. Kelsey, Norfolk, Va., for Mary Esther Ford Leonard, Admx., etc.
George H. McNeill, Morehead City, N. C., for William F. Craig and Therence G. Cloud.
Joseph H. Levinson, Smithfield, N. C., for William H. Massengill, Wade H. Stanley, and William Gerald Massengill.
Schwartz & O'Connell, Donald E. Klein, New York City, and William K. Rhodes, Jr., Wilmington, N. C., for estate of *1288 Peter Salopek and estate of John C. Smith.
Breit, Rutter, Cohen, Ermlich & Friedman, C. Arthur Rutter, Jr., Norfolk, Va., and Lee Pressman, New York City, for Eugene Alves, and others, including all crew members other than Leonard, Salopek, Smith, Craig and Cloud.
Lake, Boyce & Lake, Raleigh, N. C., for A. T. Leary, lessee of Beaufort & Morehead R. R. Co., and Home Insurance Co., as subrogee of A. T. Leary, etc.
Block, Meyland & Lloyd, Greensboro, N. C., for Coastal Realty Co.
MEMORANDUM
WALTER E. HOFFMAN, District Judge (under designation).
On September 26, 1961, the United States Naval Ship POTOMAC, a Navy tanker and a public vessel of the United States, was moored in the harbor of Morehead City, North Carolina, alongside a fuel pier belonging to Aviation Fuel Terminals, Inc., which had contracted with the United States for the handling and storage of Government-owned petroleum products. While the POTOMAC was discharging a Government-owned cargo of aviation gasoline and jet fuel, a fire broke out on the surface of the water near or underneath a railroad trestle crossing the Newport River, nearly half a mile away.
The fire spread toward Aviation Fuel's pier, and after it reached the pier and burned alongside the POTOMAC for awhile, there were a series of severe explosions on board, setting her afire and ultimately causing her to sink at the pier in 30 feet of water. The fire and explosions destroyed Aviation Fuel's pier, caused the total loss of the POTOMAC and her cargo, and allegedly have resulted in the death and injuries of various members of her crew, as well as certain other damage to persons and property in the vicinity.
These proceedings commenced with a petition for exoneration from or limitation of liability,[1] brought pursuant to the Shipowners' Limitation of Liability Act, 46 U.S.C., sections 183-189, by the United States as owner of the USNS POTOMAC and by Marine Transport Lines, Inc., as the POTOMAC's operating agent, with standing as such to petition under 46 U.S.C., section 186.[2]*1289 In response to the petition, 38 claims aggregating $2,111,413.17, including a claim by Aviation Fuel, were filed against the United States, which in turn filed an impleading petition for recovery over against Aviation Fuel, and thereby tendered Aviation Fuel to the claimants as an additional defendant. The United States also filed a crossclaim against Aviation Fuel for the loss of the POTOMAC and her cargo.
The proceedings went to trial on the merits, and on damages with respect to the death and personal injury claims.[3] The case is before the Court for determination as to: (1) whether the United States is entitled to exoneration as to all claims; (2) if not, which claimants, including Aviation Fuel, are entitled to recovery against the United States; (3) whether and which claimants are entitled to recovery against Aviation Fuel; (4) as to those death and personal injury claimants entitled to recovery, the amount thereof; (5) whether the United States is entitled to limitation of liability, both as to property damage as well as death and personal injury claims;[4] (6) whether the United States is entitled to recovery over against Aviation Fuel by way of reimbursement, contribution, indemnity or otherwise; and (7) whether the United States is entitled to recovery in whole or in part against Aviation Fuel for the loss of the POTOMAC and her cargo.
THE USNS POTOMAC
The United States Naval Ship POTOMAC was a Navy tanker and a public vessel of the United States, used exclusively for the carriage of Government-owned petroleum products for the military services. At all times material to this action, she was operated on behalf of the United States by Marine Transport Lines, as the Navy's public vessel operating agent.
She was a rather new tanker, of a new T-5 class.[5] Built in 1957 in accordance with the Rules of the American Bureau of Shipping for Building and Classing Steel Vessels, she had a length of 593 feet, a breadth of 83.9 feet, and a depth of 42.6 feet. She measured 15,626 gross tons, 9,380 net tons, and had a cargo carrying capacity of 203,215 barrels.
The POTOMAC had nine main cargo tanks, running across the ship, each of which was divided by fore and aft bulkheads into three sections. The sections on the port and starboard sides were known as wing tanks, and those on the center line between them were known as the center tanks. In addition, there were two sets of deep tanks forward of the No. 1 cargo tank, the after one of which, known as the No. 2 deep tank, was also *1290 used for carrying liquid cargo. It was divided into two sections, known as the port and starboard deep tanks.
Immediately aft of the No. 9 cargo tank was the main pump room, where the ship's four main cargo pumps were located. Aft of the pump room were the machinery spaces, the boiler room, and the engine room in the stern of the ship. The crew's living quarters were in the after superstructure, aft of the cargo tanks and above the machinery spaces, one or more decks above the main deck. The officers were housed in the amidships superstructure, located above the No. 3 and No. 4 tanks, which also contained the ship's radio room, the bridge and the pilot house. A catwalk above the main deck led aft along the center line from the amidships superstructure to the after house and led forward to the forecastle deck, which commenced immediately forward of the No. 2 deep tank, one deck above the main deck.
The POTOMAC was designed so that her cargo tanks could be divided into four isolated systems for carrying four separate types of cargo. Each of these systems utilized its own set of lines and valves, and its own cargo pump, which pumped cargo up into a manifold line running across the main deck just aft of the amidships superstructure above the No. 5 tank, with four hose connections on both the port and starboard sides.
The four systems ran in the following manner. The No. 1 and No. 2 tanks, and the deep tanks, were connected through the starboard outboard suction line to the starboard outboard cargo pump. The No. 3 and No. 4 tanks were connected through the starboard inboard suction line to the starboard inboard cargo pump. The No. 5 and No. 6 tanks were connected through the port inboard suction line to the port inboard cargo pump. And finally, the No. 7, No. 8, and No. 9 cargo tanks were connected to the port outboard suction line through the port outboard cargo pump. Each of the four cargo pumps had a 4,200 gallon per minute capacity, and a relief valve set at 125 pounds per square inch.
In the main pump room, there were certain crossover lines which permitted transfer of cargo between the four systems. The upper crossover was on the discharge side of the pumps, and connected the discharge lines leading from the cargo pumps up to the main deck. The lower crossover was on the suction side of the pumps, and connected the suction lines leading to the pumps from the cargo tanks. There was a third cross-over at the bottom of the pump room, known as the sea suction crossover line, or simply the sea line, which was isolated from the cargo piping systems and used for taking on or discharging sea water ballast, connecting through drop valves with the suction lines from the cargo tanks, and thus with the cargo pumps.
At either end of the sea line were the sea suction valves, one on the port and one on the starboard side, through which sea water ballast is taken on or discharged. There was a third sea suction valve in the pump room known as the "eductor valve" or "master eductor valve" located on the starboard side of the pump room, and the sea chest or sea spool with which it was connected to the upper and lower crossover lines was also on the starboard side of the bottom of the vessel. This valve was closed and is not involved in this proceeding.
It is of prime importance that the sea suction valves are closed during cargo handling operations, so as to avoid contamination of petroleum cargo with sea water, and to avoid losing cargo overboard. For this reason, the POTOMAC's operating manual stated that the first step in discharging cargo was to "secure master sea suction valves" and to "close the pump discharge valve connected to the sea crossover line." The Navy required a certification that the sea suctions were closed and sealed, emphasizing on the form that "sea suctions and overboard discharges should be carefully checked before commencement of loading to make sure that they are closed, and then sealed." And Marine Transport Lines as operating agent had issued an oil pollution manual which contained *1291 strict instructions that in preparing to discharge cargo:
"Sea valves and stern loading connections should be inspected to insure that they are tightly closed and that seals, if used, from the loading port remain intact."
The piping arrangement in the pump room demonstrates that the closing of these discharge valves, which were connected with the sea crossover line, would completely isolate the sea crossover line from the piping system during a cargo discharge operation. Section 36, paragraph 26(b) of the American Bureau of Shipping requirements provides:
"Where sea suctions are provided for ballasting purposes, two valves are to be fitted between the sea chest and the cargo piping, one of which is to be capable of being locked in the closed position."
There is very little dispute as to the fact that an attempt to discharge cargo through the sea line is generally frowned upon and is considered an unsafe practice. Yet cargo was being discharged through the sea line just prior to the outbreak of the fire.
THE LOADING AT HOUSTON, TEXAS
The POTOMAC's voyage which terminated with the disaster at Morehead City had commenced at Houston, Texas, in mid-September of 1961. She had arrived in the Houston area in ballast on September 15, 1961, having first discharged some ballast at sea, and discharging the balance into ballast pits at various loading facilities in Houston.
When in port, the sea suction valves are not used in the discharge of ballast as ballast is pumped up into the deck lines and discharged into a pit ashore. However, while at sea the sea suction valves are used to discharge ballast. The quantity of ballast required to be discharged at sea controls whether one or both of the sea suction valves will be opened. If there are only one or two tanks to be deballasted, generally only one sea suction valve is opened; if there are more tanks to be deballasted, the usual procedure is to open both sea suction valves. On the voyage from Greenland to Houston in ballast, the record does not affirmatively demonstrate whether one or two valves were opened. It is true that the recommended practice is to use only the starboard sea suction but, in this case, the chief pumpman who opened whatever sea suction valves were opened did not testify.[6] Bert Forman, the chief mate at the time of any deballasting, testified that the matter of opening either or both of the sea suction valves was left to the chief pumpman and that, in pumping out the usual amount of ballast, both sea suction valves would normally be used in order to more expeditiously accomplish the job.
It is conceded that most of the POTOMAC's sea water ballast was pumped out prior to the arrival of the vessel in Galveston Bay. There is affirmative evidence that the chief mate gave an order to the chief pumpman "To close off the sea suction and stand by and wait and see what happens." Neither the chief mate nor any other officer checked the chief pumpman to determine whether the order was fulfilled. Deballasting was discontinued when the vessel arrived at Galveston Roads, and it was approximately 36 hours later before the POTOMAC headed for the Sinclair docks at the Houston Ship Channel. Upon arrival at the Sinclair docks the major portion of the remaining water was pumped ashore.
When ballast is discharged using both the port and starboard sea suction valves it is necessary to use the sea crossover line. Unlike a T-2 tanker, the POTOMAC did not have a block valve inboard of the sea suction valves, which block *1292 valve operates as a safety factor in the event the sea suction valve becomes faulty, encumbered with debris, or through oversight or neglect is not closed.
As a result of the fire and explosions the vessel sank and, on a later date, was towed to another location in the Morehead City harbor where she rested undisturbed for more than a year. Apparently no one entered the pump room from the time of the fire until the POTOMAC was raised and put in dry dock, other than a diver employed by Merritt-Chapman & Scott who stated that he had instructions not to, and did not, touch any valve in the pump room. After the ship was in dry dock it was discovered that the port sea suction valve was open. The pertinent inquiry is whether this port sea suction valve was sealed in an open position. Concededly the open port sea suction valve could account for the spillage of the cargo. Petitioner argues that, assuming arguendo the open port sea suction valve at the time of the fire, all evidence points to the opening of this valve by Matamala, the pumpman on watch at the time of the fire, and, therefore, the petitioner would be entitled to limit its liability. The claimants, especially Aviation Fuel, contend that this valve was sealed in an open position, thereby rendering the POTOMAC unseaworthy prior to the commencement of the voyage, thus barring any right to limit liability. For reasons hereinafter stated, we agree with the claimants.
Reverting to the activities of the POTOMAC in the Houston area, we find that she first proceeded from Galveston Bay to the Sinclair Refining Company, arriving at its dock at 7:12 p. m., on September 17, 1961, where she took on a Government-owned cargo of JP-4 jet fuel in her No. 7, No. 8 and No. 9 tanks. She departed from the Sinclair docks at 5:45 p. m. on September 18, 1961, and proceeded to the facilities of the Crown Central Petroleum Company, arriving there at 8:54 p. m. on the same day, where she took on a Government-owned cargo of JP-5 jet fuel in her No. 3 and No. 4 tanks. Departing Crown Central at 2:25 p. m. on September 19, 1961, she next proceeded to the Shell Oil Company dock, arriving there at 4:04 p. m. on the same date, where she took on her remaining cargo of aviation gasoline in her No. 1, No. 2, No. 5, No. 6 tanks and the No. 2 deep tanks. She finished loading at 1:15 a. m. on September 21, 1961, and was ready for sea at 4:00 a. m. on that same date.
While the POTOMAC was in Houston, she was attended by port engineer and marine surveyor Walter Ritter, who was sent down from New York by James C. Clarke, the vice-president and marine superintendent of Marine Transport Lines, the Government's operating agent, to determine whether the ship had any problems and to prepare a repair list for her next shipyard period, which was to be scheduled in the following two or three weeks. The port engineer was under instructions to contact Marine Transport's marine superintendent's office immediately if he discovered any condition that affected the ship's seaworthiness, but Marine Transport received no report of any deficiencies affecting her fitness for her prospective voyage, since Ritter, after having gone over the vessel and made up a list of routine repairs, found nothing that would affect the seaworthiness of the ship.[7]
During the POTOMAC's stay in Houston, several personnel changes were made.[8] The POTOMAC's former master *1293 had died at sea on her last voyage, and all her officers had moved up one grade. Her former chief mate, Arthur Hunter, an experienced tanker officer who had been going to sea for 25 years, with a master's license since 1947, and who had previously sailed on a sister ship of the POTOMAC, remained on the ship as master after receiving detailed instructions as to his duties and responsibilities. Second mate Forman did not wish to continue as chief mate, in which capacity he had been acting, and it was necessary to obtain another chief mate. Marine Transport had none of their own personnel available, and their personnel department selected William P. Maholland, the most qualified officer whose application they had on file, after having first received a very favorable report from Sinclair, his former employer, and from his union. Maholland had been going to sea for about 23 years, had been a licensed officer since 1948, had been sailing on tankers since 1950, had held a master's license since 1959, and had been on Sinclair tankers as master or chief since that time. Maholland had never served aboard a T-5 tanker and he admitted that the piping arrangement on the POTOMAC was quite different from that to which he had become accustomed. When he reported aboard the POTOMAC to relieve Forman, the then chief mate, he made no effort to examine the pump room; nor did he request, nor was ever shown, any diagram of the piping arrangement in the pump room. He did not ever see the chief pumpman who left the vessel at Houston, and concedes that he never studied the operating manual or, in fact, knew that there was such a manual aboard ship. On one occasion Captain Hunter went into the pump room with Maholland for the purpose of explaining to Maholland the water eductor system which had nothing to do with the sea suction valves.
There was also a change of pumpmen, who were obtained through the local union hiring hall. The new first pumpman was Howard Mixon, a duly certificated pumpman, who had been a seaman for 19 years and a pumpman since 1949, and whose last ship had been a tanker with nine cargo systems, as contrasted with the four cargo systems on the POTOMAC.
Mixon, while familiar with T-2 tankers, had never served aboard a T-5 tanker. When Mixon went aboard he met the former chief pumpman who advised that he would complete the job of pumping the ballast. Mixon left the vessel to return to his home without entering the pump room at that time, and he never thereafter saw the former chief pumpman. In fact, during the continuous loading operations at the various terminals in the Houston area, Mixon went home for supper each night and left after breakfast each morning.
The new second pumpman was Avelino Matamala, who was also a certificated pumpman, and had been going to sea as such since 1936 or 1937. He joined the vessel on September 20, 1961, just prior to her departure from Houston. Like the others, he had never previously served aboard a T-5 tanker. He asked Mixon for a pumping diagram but was told that the chief mate had said that none was available.
Because the POTOMAC was carrying a military cargo of Government-owned petroleum product, she was regularly attended by a quality control representative, sometimes known as a petroleum inspector, from the Military Petroleum Supply Agency of the Department of Defense, one of whose functions included the sealing of sea suction and other valves essential to cargo isolation, to avoid the possibility of contamination or loss of cargo during shipment. One of the Defense representatives at Houston was Marvin D. Brasfield, who attended the POTOMAC at both the Sinclair and the Shell docks. While he was at Sinclair, he testified that the sea suction *1294 valves were checked in his presence, when he had one of the mates open each valve and close it down again, but he did not seal the sea suctions at this time because other types of cargo were to be loaded at other docks.
When he attended the ship at the Shell facilities, where her final cargo was to be loaded, Brasfield said that he went into the pump room with one of the mates, had the valves checked in his presence to determine that they were closed, and then chained and sealed both the port and starboard sea suction valves and the overboard eductor. He recorded the seal numbers on the final cargo loading documents, and also executed an MSTS valve sealing certificate that the sea suctions had been sealed.[9] While Brasfield's recollection was to the effect that he was "pretty sure it was the chief mate [Maholland]" who tightened the valves before the seals were affixed thereto, Maholland testified that he did not recall being present when the valves were sealed, although he noted that they were sealed when he went into the pump room the next morning. Maholland affirmatively stated that he did not know how or by whom the chains and seals were put on the valves. Assuming arguendo that a loading mate (or night mate) was the individual with Brasfield at the time, the record is devoid as to the identity of such person who may have accompanied Brasfield at the time in question. In fact, Brasfield was not contacted as to the events at Houston until approximately 17 months after the fire, and his testimony appears to be predicated largely on the entries contained in the log book which he was required to keep in substantiation of the performance of his duties.
Maholland, the chief mate, testified that he first examined the sea suction valves while the ship was at Sinclair, and stated that they were closed but not yet sealed as the vessel was still loading cargo. At Shell, after the ship had started loading aviation gasoline, Maholland said that he checked the sea suction valves and found them closed, chained and sealed, and contends that he tested same by putting a wrench on the wheel of the valve handle. Later, after loading and making ready for sea, he again used a wheel wrench and, according to his statement, the sea suction valves were closed, chained and sealed.
The seals were made of small strips of iron coated with tin, similar to the tin used in a tin can. After the vessel was placed in dry dock, following its year's rest on the bottom of the harbor, the seals were missing. Whether this was due to rust, exposure to sea water, the weight of the chains which the seals held together, or the explosions at the time of the fire, is unknown. Manifestly, there were adequate reasons why the seals would break and fall into the debris in the bottom of the pump room.
THE VOYAGE TO MOREHEAD CITY AND DOCKING AT AVIATION FUEL
The POTOMAC departed from the dock at Houston at 5:25 a. m. on September 21, 1961, and proceeded for Savannah, Georgia, holding a fire and boat drill on her first day out of port, at 3:20 p. m., September 22, 1961. She arrived at the Southland Oil Corporation Terminal in Savannah at about 7:33 p. m. on September 24, 1961, where, according to Maholland, her sea suction valves were examined and the seals thereon found intact. While at Savannah, the POTOMAC discharged all her JP-4 jet fuel from the No. 7, No. 8 and No. 9 tanks, and discharged a partial cargo of aviation gasoline, emptying the deep tanks, all of the No. 1 tanks and the No. 2 center tank.
Departing from the dock at Savannah at 8:10 p. m. on September 25, 1961, the vessel proceeded for Morehead City, North Carolina, arriving off the Morehead *1295 City bar at 1:54 p. m. on September 26, 1961. She was met at the sea buoy by pilot A. T. Piner of the Morehead City Pilots Association, who with the assistance of the Tugs MANIE and A. T. PINER brought her into Morehead City harbor, where she was tied up starboard side to the fuel dock of Aviation Fuel Terminals, Inc., at 3:10 p. m.
The harbor of Morehead City consists of a dredged turning basin where the Newport River meets Bogue Sound, before emptying through Beaufort Inlet into the Atlantic Ocean. The harbor is bounded on the east by Radio Island, on which the facilities of Aviation Fuel Terminals are located, with its upstream limits defined roughly by a causeway-type highway bridge and an adjacent railroad trestle nearly one-half mile long, crossing the Newport River between Morehead City and Radio Island, about 700 yards north of and inland from Aviation Fuel's dock.[10]
Both the highway bridge and the railroad trestle have drawspans near the Morehead City side of the river, to permit passage of traffic along the Intracoastal Waterway, which follows the Newport River and then turns at a right angle in the harbor so as to follow Bogue Sound to the west and down the coast. The Aviation Fuel dock is roughly opposite the entrance to Bogue Sound and the town of Morehead City, where the North Carolina Port Authority has wharves extending along the north side of the Sound and along the Newport River across from Radio Island.
Aviation Fuel Terminals, Inc., at whose facilities the POTOMAC had moored, had contracted with the United States to provide certain services for the storage and handling of Government-owned petroleum products, promising to perform "in accordance with the best commercial practices." Its petroleum storage facilities consisted of a tank farm of 10 large floating roof storage tanks, divided into three isolated systems to handle three grades of light fuel; grade 115/145 aviation gasoline, JP-4 jet fuel, and JP-5 jet fuel.
As part of its contract, Aviation Fuel was required to unload fuel from tankers, and to provide a berth at which such tankers could "always be safely moored and afloat with the necessary access thereto," for which the United States had paid Aviation Fuel dockage and wharfage charges.[11] Its docking facilities consisted of a pier about 300 feet offshore, and essentially parallel to the shoreline, to which it was connected by a trestle over which ran three large pipelines terminating at valves and hose connections on the dock.
There was one pipeline for each grade of fuel, the one to the south (or seaward) being the JP-5 line, the center line being used for aviation gasoline, and the line to the north (or inland) being used for JP-4. The POTOMAC's cargo was to go through the south and center lines into shore tank No. 1, used to store aviation gasoline, and into shore tank No. 2, used for JP-5 jet fuel.[12] These two tanks each had an 80,000 barrel storage capacity, and were the storage tanks closest to the dock, being located about 150 feet from the shoreline.
The dock proper was about 80 feet in length, and was connected by catwalks to a set of two breasting dolphins on either *1296 side, so that the entire structure was about 190 feet long. At a distance of 130 feet and 230 feet to both the north and south of the outermost breasting dolphins were two mooring dolphins, sitting out in the water 60 feet behind the line of the pierhead, with no means of access except by boat, which Aviation Fuel did not provide. The original plan for the dock's construction and the Army Corps of Engineers' permit therefor both called for a catwalk or other means of ready access, but the dock was not built in conformity with those plans or with the permit. However, there was apparently no complaint ever registered as to the construction design.
For fire protection, there was a fire main leading out to the dock, with a pump and hydrant on the trestle about 35 feet away, but the facility had failed to install an emergency diesel generator on its premises or provide for any other source of emergency power, so that their fire equipment could not be operated in the event of a power failure.[13] On the dock were four 50-foot lengths of 2½inch fire hose, which require two men to handle, and five 5-gallon cans of foam with a foam applicator whose range was 100 feet already attached. There were axes available to cut mooring lines, and there was sufficient hose that with the foam applicator, a blanket of foam could have been placed on the water around the bow of a ship moored to its dock.
THE DISCHARGE OPERATIONS
On arrival at Morehead City, the POTOMAC was carrying JP-5 jet fuel in her No. 3 and No. 4 cargo tanks, and aviation gasoline in No. 5 and No. 6 across and her No. 2 wing tanks.[14] Her draft on arrival was about 20 feet, 9 inches forward and 20 feet, 1 inch aft.
The vessel was tied up to the dock, starboard side to, with 10 mooring lines. There were two bow lines to the northernmost mooring dolphin, and a breast line leading to the mooring dolphin nearer the dock, all of which had been led by boat, since there was no other access. There were two stern lines and a breast line aft which led to the inaccesible dolphins to the south, and the remaining spring lines were made up to the breasting dolphins connected to the pier. As she was made fast, her bow was positioned opposite a point roughly midway between the mooring dolphins to the north, a distance of about 275 feet from the manifolds on the dock.
The POTOMAC gave notice of readiness to discharge cargo at 3:10 p. m., and was thereupon boarded by Aviation Fuel personnel, who took cargo samples and gauged the ship's cargo tanks. The local Department of Defense petroleum quality control representative, William M. Maull, came aboard and went into the pump room to examine the sea suctions. There is no contention that any wrench was applied to the valves at this time. As reflected in the cargo receiving documents, he found the seals intact with numbers corresponding to those appearing on the cargo documents forwarded from Houston.
In the meanwhile, preparations were being made to connect up the cargo hoses, which belonged to and were furnished by Aviation Fuel. The cargo hoses consisted of three 25-foot lengths, connected by bolt flanges into one hose, 75 feet in length. The cargo hoses were supported by two booms with straps, one on the dock and one on the ship, to keep the sag out of them where they were suspended in the air.
*1297 Under Coast Guard regulations, 46 C.F.R., section 35.35-30, the terminal superintendent has the right to satisfy himself by personal inspection that "sea valves connected to the cargo system [are] closed" before commencement of cargo discharge operations. Aviation Fuel's superintendent, G. L. Bennett, chose not to make any such inspection. The regulation is obviously not mandatory. As soon as the cargo samples had been tested, Bennett gave the signal to start discharging the cargo. Discharge of aviation gasoline started at 5:20 p. m., and 20 minutes later, at 5:40 p. m., discharge of JP-5 commenced.
After the ship had docked, the customary in-port watch was maintained on board, consisting of an oiler, a fireman, and a relief engineer in the engine room, and three deckhands (two able-bodied and one ordinary seaman), a pumpman and a relief officer on deck. Those not on watch were free to go ashore or remain on board, and many of the officers and crew had gone off the vessel on shore leave. The night relief mate was Richard W. Cantwell, Jr., a graduate of the Kings Point Merchant Marine Academy, and a licensed second mate who had previously sailed on tankers and had acted as a tanker night mate on 50 or 60 occasions. He reported on board at about 5:30 p. m., just after the discharge of aviation gasoline had started and prior to discharge of the JP-5 jet fuel. After he advised both the chief mate and the master that this was the first T-5 tanker he had been aboard, the master told the chief mate to remain around and neither he nor the chief mate went ashore.
When the cargo discharge operation commenced, the POTOMAC was discharging aviation gasoline from her No. 5 and No. 6 cargo tanks through the port inboard suction line with the port inboard cargo pump. The JP-5 jet fuel was being discharged from the No. 3 and No. 4 cargo tanks through the starboard inboard suction line by the starboard inboard cargo pump. This left the chief mate with the problem of how to discharge the aviation gasoline remaining in his No. 2 wing tanks.
He could not use his starboard outboard system, of which the No. 2 tank was a part, because there was only one hose and one dock connection for handling aviation gasoline, and that was being used on the port inboard system from the No. 5 and No. 6 tanks. Nor could he use the upper or lower crossover lines in the pump room to interconnect the starboard outboard and port inboard systems, because the JP-5 jet fuel was being discharged through the starboard inboard system between them, and such an interconnection would contaminate both cargoes. The only alternative open to him, short of waiting until No. 5 and No. 6 were empty and then shifting cargo hoses, was to use the sea suction crossover as a transfer line, and this was the method he decided to follow.[15]
Maholland was aware that this was a risk, but he apparently thought that the procedure would be reasonably safe provided the sea suction valves were closed. He testified that when he made his final check of the pumproom, he applied the wrench to the sea suction valves.[16]
About 10 minutes after commencing discharge of JP-5, or at about 5:50 p. m., Maholland testified that he sent the night mate up forward to open the valves which connect the No. 2 wing tanks with the starboard outboard suction line, and also sent chief pumpman Mixon back into the pumproom to open up the necessary valves there. Mixon then went down and opened the drop valve between the starboard outboard suction line and the sea *1298 suction crossover, and then the drop valve between the port inboard suction line and the sea suction crossover, thereby placing the suction of the port inboard cargo pump on the sea suction crossover line, and finally, the crossover valve in the sea suction line. Mixon then came up on deck, went forward to make certain that the night mate was opening the correct valves, and watched the night mate and two seamen open up the valves to the No. 2 wing tanks.
It was at just about 6:00 p. m. that the No. 2 wing tanks were open and commenced discharging. Shortly thereafter, Maholland went ashore to make a telephone call from the tank farm office, and then came back to the ship. While he was gone, Mixon asked to be relieved by second pumpman Matamala, who did so between 6:16 and 6:20. Chief mate Maholland prepared to turn in, but before he did, he made one final check of the pumproom, at around 6:20 or 6:25 p. m., at which time he was alone. He testified that he again put a wrench on both sea suction valves, and again found both of them closed, chained and sealed.
Aviation Fuel's superintendent Bennett and plant manager Murphy left the tank farm at 6:20 p. m., leaving only two employees on the premises, one of whom was night watchman Sewell, whose functions were essentially janitorial. The other person was L. B. Willis, one of Aviation Fuel's foremen, who had been on duty since 7:00 a. m., and was expected to carry out all the functions of a petroleum storage terminal unloading a tanker at its facilities. One of his duties was supposed to be that of a dock watch.
Willis had other duties to perform. One of these required him to go up into the tank farm once an hour to obtain gauge readings from the terminal's storage tanks into which product was being pumped, and to calculate the pumping rate and ascertain the quantity of fuel that had been discharged. His routine was to take cargo samples from each line, and then go take readings from his shore tanks, timing it so as to arrive at the base of the tank on the hour. He accordingly left the dock about 2 or 3 minutes before 6:20 p. m., an hour after discharge of the aviation gasoline had commenced, and took gauge readings from both the shore tanks which were receiving the product.
Returning to the dock, he made his calculations, called Sewell on the plant intercom to have the figures recorded in the office, and then went up to give them to the ship. On his way, he noticed that his hoses were sagging a bit, and got a member of the ship's crew to raise them with the ship's boom for him. Instead of leaving the pumping figures with the deckhand on watch and returning promptly to his post, however, Willis went on up to the second deck of the amidships superstructure to the officers' lounge, where he ran into night mate Cantwell entering to make his log entries and put on a pot of coffee. While the coffee finished perking, Willis waited and had a cigarette, leaving the dock unattended.
Assuming that the port sea suction valve was open,[17] the evidence is without contradiction that, when Mixon opened the valves in the pumproom thus permitting the aviation gasoline from the No. 2 wing tanks to flow into the sea line, some of the gasoline commenced to gravitate out into the harbor through the port sea chest which was located on the flat bottom of the ship about halfway between the turn of the bilge and the keel on the port side. The movement of the flood tide could reasonably cause this gasoline to rise to the surface of the water near the forward portion of the vessel. The elevation of the gasoline in the tank was approximately 23 feet higher than the sea water and it is logical to assume that the flow of gasoline would continue until the level of the tank product was reduced to the level of the sea water.
*1299 THE FIRE AND EXPLOSIONS
Up to the time that Willis boarded the POTOMAC, there was no obvious indication of anything out of the ordinary. It was a warm September evening, with the air temperature recorded at 81 degrees, the water temperature logged at 80 degrees, and the wind from the south at about five knots. The tide was at maximum flood current, the speed of which according to Morehead City pilot A. T. Piner was from 2½ to 3½ knots. Under the tidal conditions then existing, according to pilot Piner, it would take about ten minutes for something to float on the flood current from the place where the POTOMAC was moored past the bridges to the north. However, what must not be overlooked is the fact that there was apparently nothing to ignite the fuel until the fishing boat containing the open flame lantern entered the danger area as hereinafter indicated. Thus, the approximation of ten minutes floating time is not of great value.
Underneath those bridges, which were about 700 yards from Aviation Fuel's dock, two groups of sport fishermen were preparing to fish from small outboard motorboats which they had rented. In one of them, carrying the Stone party, Donald Stone began smelling gas fumes of some kind as they reached the end of Bunch's pier, while they were proceeding from Radio Island toward the drawspan. They passed out of the area, but after they had gone through the drawbridge, and headed back toward Radio Island, he happened to raise up a gas lantern, and it was suddenly surrounded by fire. It went out when he brought it back down, but he then began smelling gas fumes again and saw another ball of fire underneath and between the railroad trestle and the highway bridge. At this point everything caught fire, with flames spreading upstream about 100 yards, between him and Radio Island.
A similar phenomenon was experienced by the boat carrying the Massengills and Wade Stanley, who found the fumes so unpleasant that they were heading back to shore. They had an open-flame Coleman gas lantern in the bottom of their boat, and as they were going underneath the highway bridge from the railroad trestle, they were suddenly surrounded by a flash of fire, from which they all sustained varying degrees of injury.
At about this time, the POTOMAC's chief engineer Norris Nations and second assistant engineer Craig were walking through Aviation Fuel's tank farm going ashore. As they were roughly opposite shore tank No. 1 about 150 yards from the water's edge, they began smelling a strong odor of gas and then observed a small blue flame under the causeway, about one-third of the way out. As they watched, the blue flame grew in size and moved rapidly toward the Radio Island shore, and then began following the general direction of the shoreline. Nations and Craig ran back to the ship, and proceeded into the engine room. The last time they observed the fire was when they were running down the trestle toward the ship, at which time it was in a bay about 400 yards away.
In the meanwhile, the fire had been observed from the ship, and the alarm shouted. Night mate Cantwell first saw the fire off his starboard bow by one or two points of the compass when it was on the causeway, and when he observed it beginning to work towards him he called the chief mate and gave orders to stop the pumps and close down the deck manifolds. At about the same time, both Chief Mate Maholland and Captain Hunter looked out, and saw a blue flame off their starboard bow about a quarter of a mile away coming right along the beach toward them. Maholland ran down to the deck to help the night mate secure the manifolds, ascertained that the cargo pumps were off, and then ran up to the bridge to sound the general alarm.
Captain Hunter had meanwhile gone directly to the bridge, planning to get the ship underway, had called down to the engine room ordering them to get ready to get underway immediately and give him all available steam, and then ordered the engines full speed astern. At about this point, chief engineer Nations arrived *1300 in the engine room to find the fire pumps started and the necessary preparations being made for an emergency departure, and Nations set his throttles for 60 revolutions, full astern, in response to the Captain's order.[18]
It was at this juncture that Maholland arrived, and Captain Hunter ordered him to get all the lines off. Maholland ran back to the manifold where the night mate was trying to disconnect the cargo hoses, and ordered him to throw off the after lines. Maholland then proceeded forward, threw off the spring lines, and then went up on the forecastle deck forward of the deep tanks. He began working on the breast line, and had it about halfway off, when he testified that flames higher than his head leaped over the starboard bow where he was working, driving him back.
The approach of the fire was observed by the crew of the tugboats MANIE and A. T. PINER, who were in the turning basin of Morehead City harbor at the time. Four crew members of these tugs testified that they observed the fire when it was about halfway between the highway bridge and the POTOMAC, and watched it until it seemed to disappear behind the POTOMAC's bow on her starboard side, between the ship and the dock. As they continued to watch, they saw the fire reappear in a matter of seconds when it flared up from her starboard side, just forward of her amidships superstructure, and begin to flame over her decks.[19]
Similar observations were made by others. Leon Clifton from the railroad trestle watched the fire go down the ship's starboard side near the point of the bow, as did the witness Wayne Sowers.[20] The ship's purser Newton saw the fire coming down the starboard side of the ship towards the midship section, and seaman Nelson saw a ball of orange flame proceeding toward the dock area underneath the pipe lines. Seaman Lee, pumpman Mixon, and Captain Hunter all observed the fire come between the ship and the dock as far aft as the gangway and the manifolds. On these facts, according to Aviation Fuel's expert Prussing, there would have then been a large quantity of petroleum product present on the water between the ship and the dock, although he also said that the condition of the steel on the port side showed evidence that the fire had been more intense on the port side than on the starboard side.
In the event of an oil spill during discharge, it is the duty of a fuel terminal's dock watch to warn the ship and then either to drive it away with water or blanket it with foam. The instructions given by terminal superintendent Bennett to dockman Willis were that in the event of a spill, he was supposed to shut down the ship, find out where the spill was coming from and, if possible, stop it.
It is agreed that, if Willis had been on the dock, he would have been in the best position to detect a spill on the water between the ship and the dock or, if not Willis, then another dock watcher should have been on duty to the end that the dock would not be left unattended at any time. The port sea suction block valve *1301 was opened by Mixon at approximately 6:20 p. m., according to Maholland. The fire broke out at approximately 6:45 p. m.
While better commercial practice would seem to require the services of two men one of whom would have the duty of a yard gauger with the attendant duty of boarding the ship to advise the proper ship's officer as to the rate the cargo was being pumped ashore; the other remaining on the dock at all times there is certainly nothing that could have been done by either dock watcher which would have prevented the spill or, in fact, prevented the fire. As soon as the fire was discovered, Willis heard the order to close down the pumps on the ship. He ran to the dock, called the watchman in the office, stood by the valves on the pier with his foot on the hose until he could feel that the pumping had stopped, and then started to close the valve in his line. Before he could get this valve closed, the fire was too close and had almost reached the ship. He then ran to the next set of valves at the pump block, approximately 50 feet from the inshore end of the pier, and closed the valves in two lines. About that time the fire struck the bow of the vessel.
To spray the water, dock and ship with foam at this final moment would have been a fruitless effort, to say nothing as to the risk of life involved in such a procedure. We cannot attribute negligence to what Willis did or failed to do under the existing circumstances.
The foregoing does not, of course, answer the argument that Willis, or an additional dock watcher, might have detected the spill on the water in time to have taken some action which may have prevented the disaster or otherwise lessened the damage.
While there is evidence that the fire headed generally in the direction of the starboard bow, we must remember that any dock watcher would have been several hundred feet from the vessel's bow. It is far more likely that a member of the ship's crew would have first observed any spillage of gasoline. There is no evidence as to how close the product approached the pier and no testimony that there were any leaks in the hoses and lines adjacent to the pier. Since the gasoline was being discharged from an opening in the flat bottom of the vessel on the port side, and since there was no vertical keel which would have retained the product on this side of the ship, it is logical to assume that the flood tide may have carried some of the fuel toward the starboard bow as it gradually rose to the surface, but this does not necessarily mean that it would have flowed to the immediate area of the pier.[21] From the evidence we must conclude that there was gasoline on the surface of the water off both the port and starboard bow of the vessel.
We feel that it would be sheer speculation to find that the presence of an additional dock watcher or Willis' presence on the dock would have in any manner prevented or lessened the disaster. We decline to accept the invitation to find Aviation Fuel negligent to the extent of determining that such negligence was a proximate cause of the fire and resulting damage. Indeed, Creed, the Supervising Inspector of Naval Material, testified that, at none of the commercial terminals with which he was familiar, did they maintain a dock watch of more than one man after the gauging had been completed and the pumping commenced. Since the pumping started at 5:20 p. m. at least 40 minutes before the No. 2 wing tanks were opened the presence of an additional dock watcher, according to Creed, was not customary.
After Willis closed the valves in both the aviation gasoline and JP-5 lines at the pump block, and at about the time the fire reached the ship, Willis moved his automobile towards the office, stopping *1302 at the fire side of the No. 1 storage tank and entering the tank farm. At this moment he heard a tremendous explosion, after which he ran and closed the valves at the base of the No. 1 and No. 2 storage tanks, and then removed his car to a point outside the gate and off the terminal premises.
At about the same time, Captain Hunter left the POTOMAC's bridge, after first telling the radio operator Salopek to get moving back to the stern, and went forward to get Maholland off the bow. When he got there, he ordered Maholland back, telling him they could not save the ship, but that they should try and save the crew. The master and chief mate then went aft, going down to the main deck on the port side from the midships house because flames were coming over the starboard side and licking up over the catwalk. They then went through the crew's quarters in the after superstructure getting the crew out, and when they got to the fantail they found about 12 men assembled there. At this time, there was a large explosion forward of the amidships superstructure, probably in the deep tanks.
Captain Hunter then ran to the engine room hatch and ordered his engineering watch to stop the engines and come out on deck. As soon as he saw that the screws had stopped dead in the water, Hunter gave the order to abandon ship and his crew began jumping or sliding down lines into the water, until only the chief mate and Hunter remained, and then they went over the stern.
Most of the crew made their way to the mooring dolphins and some of them swam ashore to the beach. Others were picked up by a Coast Guard boat or by a small fishing boat which came in and retrieved them. As the fishing boat was about halfway across the harbor, there was a severe explosion on the POTOMAC, apparently in her No. 7, No. 8 and No. 9 tanks, which opened up the ship and caused her to settle to the bottom. The POTOMAC and her cargo burned thereafter for about ten days and became a total loss.
WAS THE PORT SEA SUCTION VALVE SEALED IN AN OPEN CONDITION?
By inference, at least, the United States contends that the second pumpman, Matamala, who was in the pump room after Maholland had departed, opened the port sea suction valve. Matamala testified by way of deposition and emphatically denied having opened this valve.[22] Despite the discrepancy shown in the footnote, it is clear that Matamala had no motive or reason to tamper with the valve. Obviously, however, the valve had been opened at some time as evidenced by the discovered position of the port sea suction valve when the vessel was raised and placed in dry dock.
We believe that a fair review of the evidence will demonstrate that it is just as likely that the port sea suction valve was sealed in an open position at the time the POTOMAC departed from Houston, Texas. The last known opening of the port and starboard sea suction valves was when the vessel pumped out most of the sea water ballast prior to her arrival in Galveston Bay en route to Houston. The party who allegedly closed these valves was the former chief pumpman who was not called as a witness. In any event, his work was not checked by the then chief officer, Forman.
This pertinent issue, essentially controlling on the right to limit liability, is governed by the burden of proof in such matters. The parties are in agreement that the initial burden of proving negligence or unseaworthiness rests upon the claimant or claimants in a limitation *1303 proceeding. The 84-H, 296 F. 427 (2 Cir., 1923), cert. den. 264 U.S. 596, 44 S. Ct. 454, 68 L. Ed. 867 (1924); Walston v. Lambertsen, 349 F.2d 660 (9 Cir., 1965), cert. den. 382 U.S. 980, 86 S. Ct. 553, 15 L. Ed. 2d 470 (1966); Coleman v. Jahncke Service, Inc., 341 F.2d 956 (5 Cir., 1965), cert. den., Jahncke Service, Inc. v. Greater New Orleans Expressway Commission, 382 U.S. 974, 86 S. Ct. 538, 15 L. Ed. 2d 465 (1966); Petition of Cherokee Trawler Corp., 157 F. Supp. 414 (E.D.Va., 1957); The Titanic, 225 F. 747, 141 C.C.A. 19 (2 Cir., 1915). However, once negligence is established, the burden rests upon the party seeking to limit liability to prove seaworthiness and lack of privity. The 84-H, supra.
The evidence abundantly establishes negligence on the part of the ship-owner. While we believe that negligence has been established by reason of a crew untrained in the operation of a rather unique piping arrangement in the pump room, we prefer to rest this finding on the open port sea suction valve. If, as the United States strongly intimates, the port sea suction valve was opened by Matamala about 10 minutes prior to the outbreak of the fire, then this was negligence on the part of Matamala which is attributable to the United States, but which would apparently not disturb the right of the shipowner to limit its liability.[23] If, as suggested by Aviation Fuel and other claimants, the port sea suction valve was sealed in an open position by the former chief pumpman, this was likewise negligence attributable to the shipowner and, in addition, created a condition of unseaworthiness which existed at the outset of the voyage from Houston, all of which would bar any right to limit liability. There is no merit to the argument that, again assuming Matamala's act in opening the port sea suction valve, the act was not in the furtherance of the business of the shipowner in the absence of a showing that Matamala intentionally committed a criminal act. A mere act of negligence on the part of the servant, which results in a loss or liability vested upon the master, does not exonerate the master.
While it is perhaps true that the quantity of the testimony reflects that several individuals applied a wrench to the sea suction valves for the purpose of determining whether the valves were closed, the quality of such evidence must likewise be considered in ascertaining whether the shipowner has met the burden of proof required by law. We hold that this burden has not been met. In light of this holding, it is unnecessary to make a specific finding with respect to who opened *1304 the port sea suction valve and for what purpose as related to the claims of the POTOMAC's crew.
It is true, of course, that the United States is not liable under concepts of unseaworthiness to the Massengill fishing party, the owner of the damaged railroad trestle, or Aviation Fuel as the dockowner. Those who are not a member of the ship's company, nor of that broadened class of workmen to whom the admiralty law has extended the absolute right to a seaworthy ship, are not entitled to recover on any basis of unseaworthiness but must rely upon negligence. Kermarec v. Compagnie Generale Transatlantique, 358 U.S. 625, 79 S. Ct. 406, 3 L. Ed. 2d 550 (1959). However, even if the United States is entitled to limit its liability, the injured parties on the Massengill fishing boat have a fund created for their benefit under 46 U.S.C., sec. 183(b) which is more than adequate.
Since the Court has found that the shipowner has failed to meet the burden of proof required to demonstrate that Matamala was the party guilty of opening the port sea suction valve, and since it is obvious that this valve was open with the resultant spillage of product, the only other logical alternative is that the port sea suction valve was sealed in an open position. While such an act undoubtedly created an unseaworthy condition of the vessel, it was equally a negligent act attributable to the United States. For these reasons, and since the shipowner is precluded from limiting liability, the owners of the railroad trestle and Aviation Fuel may recover on the theory of negligence.
We could go further and state that, even if Matamala or some other crew member opened the port sea suction valve after the vessel left Houston, this act of negligence may properly relate back to the commencement of the voyage in that the POTOMAC was equipped with a unique piping arrangement and no effort was made to acquaint the pumpmen with the inherent dangers attendant to its operation. It was clearly the duty of the shipowner to not only provide a crew sufficient in numbers, but also a crew competent for the duties it may be called upon to perform, including provision for any exigency which is likely to happen. In re Pacific Mail S. S. Co., 130 F. 76, 82, 69 L.R.A. 71 (9 Cir., 1904); Admiral Towing Company v. Woolen, 290 F.2d 641 (9 Cir., 1961). Such a failure may constitute both negligence and unseaworthiness. Waldron v. Moore-McCormack Lines, Inc., 386 U.S. 724, 87 S. Ct. 1410, 18 L. Ed. 2d 482 (1967). We do not hold that the pumpmen were per se incompetent, nor that they were not qualified in the performance of duties on a T-2 or other similar class tanker. However, with only four T-5 tankers in existence and with these T-5 tankers being equipped with a unique piping arrangement which did not have the customary safety block valve, appearing on other vessels, it seems logical to assume that the shipowner, or its operating agent, Marine Transport Lines, had the duty of warning otherwise experienced pumpmen with respect to the potential danger existing by reason of the use of the sea suction crossover as a transfer line. Acknowledging that shipowners and their operating agents must obtain their crews from a Union and, for this reason, their opportunity for selection is essentially limited which, standing alone, would not bar the right to limit liability, Coryell v. Phipps, 317 U.S. 406, 63 S. Ct. 291, 87 L. Ed. 363 (1943), Admiral Towing Co. v. Woolen, supra this affords no answer to this case. Until such time as the T-5 tanker with its piping arrangement, had become universally accepted by pumpmen, we think that there existed some duty on the part of the shipowner or its operating agent to familiarize pumpmen, unacquainted with the operative effects of the piping arrangement, with the potential danger always existing under the circumstances. Negligence or knowledge of the operating agent is, of course, binding upon the United States for purposes of the Limitation Act. Admiral Towing Co. v. Woolen, supra.
We turn, then, to the issue of damages.
*1305 DEATH CLAIM PETER SALOPEK
This decedent was the radio operator aboard the POTOMAC. At the time of his death[24] on September 26, 1961, he was 47 years of age, having been born on February 9, 1914. He had no wife or children, and his sole surviving eligible beneficiary was his mother, Agnes Salopek, who was born on July 25, 1891, and was 70 years old when the decedent met his death.
Salopek's tax returns reflect that he claimed his mother as a dependent with average annual contributions of $1,333.75 for the four calendar years prior to his death, with the largest annual contribution being $1,400 in 1960, and the lowest being $1,290 in 1958. His average annual earnings for the same four-year period were $7,055.88, with a high of $9,800.98 in 1957, and a low of $4,976.84 in 1958. The calendar year prior to his death resulted in earnings of $6,053.49.
On the voyage prior to the one in question from July 21, 1961, to September 15, 1961 Salopek's gross earnings were $1,988.30, from which an allotment in the sum of $600 was deducted in favor of his mother.
We are not too much concerned with Salopek's life expectancy which, at the time of his death, was in excess of 25 years. It is certainly reasonable to assume that, under ordinary circumstances, Salopek would outlive his mother. Her life expectancy at the time of the fire was 10.12 years according to the Commissioners 1958 Standard Ordinary Mortality Tables.[25] We may assume that the mother would be entitled to the full pecuniary loss for at least the period of her life expectancy.
The mother testified that she was the recipient of $1,800 to $2,000 by way of annual contributions, plus a $500 per year vacation gift. No precise records, other than the claim for dependency in the tax returns and the allotment of $600 for the voyage prior to the disaster, are available. It is contended that the decedent, together with his brother, provided the housing accomodations for the mother, same being valued at $660 per year for the decedent's share of same. Claimant agrees, however, that the rental value of housing accomodations should be disregarded if the contributions by the decedent to a joint savings account in the name of the decedent and his mother are to be considered.
The joint savings account reveals the following:
YEAR DEPOSITS WITHDRAWALS INCREASE
1957 $1,864.06 $900.00 $ 964.06
1958 1,496.00 500.00 996.00
1959 1,031.00 - 1,031.00
1960 1,730.00 200.00 1,530.00
_________
Total increase $4,521.06
Average annual increase $1,130.24
*1306 In 1961, there were no withdrawals but an additional $550 had been deposited. The closing balance in the account was $7,936.32; there having been an opening balance of $2,041.39 in 1956. The average annual increase over a five-year period (to the date of death) was $1,178.98.
There is no indication that the mother ever exercised her option to withdraw funds from the joint savings account; nor is there any claim of gift from son to mother of the deposited funds. By operation of law, the balance in the account became the property of the mother upon the death of Peter Salopek. The essence of the claim of the mother in regard to the savings account is that she has been deprived of the benefit of the power of withdrawal as to the potential increase in this account for the years of her life expectancy, including the reasonable expectancy that the son's annual contributions to the mother would be increased to some extent during the remaining years of her expectancy.
We are inclined to the belief that the documentary evidence as to the son's income tax returns is somewhat more persuasive than the mother's testimony indicating the average annual contribution with no records being maintained. In fixing the amount of the pecuniary loss to the mother, however, we believe that there is a reasonable expectation of pecuniary assistance or support which would have modestly increased over the period of the mother's life expectancy. Michigan Central R. R. Co. v. Vreeland, 227 U.S. 59, 70, 33 S. Ct. 192, 57 L. Ed. 417 (1913). While the law recognizes the propriety of considering, as an element of damages, the reasonable increase in the decedent's estate had he survived, such principles have generally been applied to the right of a beneficiary who is likely to outlive the victim, thus enabling the beneficiary to inherit from the victim had he lived a normal life span. Such is the case where widows and dependent minor children are involved. Just as courts frequently cut off the dependency of children upon attaining the age of majority, we do not believe that there is any reasonable expectancy that Mrs. Salopek would have inherited from her son had he continued to live; not because of any lack of affection on the part of the son, but due to her age and the normal expectancy of her life. There is, of course, always the question as to whether a widow would have outlived her husband had it not been for his death by accident but, as stated in O'Toole v. United States, 242 F.2d 308 (3 Cir., 1957), "But that is no harder to figure than the expectation of life for the decedent himself had he been permitted to live out his time." We hold, therefore, that as applied to the facts of this case, there is no reasonable expectancy that the mother would have survived the son and thereby inherited any potential increase in the son's estate.[26] See: Anno. 91 A.L.R.2d 477-489.
Nevertheless, the fact that the son demonstrated a steady pattern of deposits in the joint savings account, with an average annual increase of $1,130.24, is indicative of some reasonable expectancy of increased annual contributions from the son to the mother. Speaking from experience common to all, it is a recognized fact that as a person accumulates a larger estate, the objects of his affection to whom he has previously rendered financial assistance with a marked degree of regularity are likely to benefit therefrom.
Weighing all of the foregoing factors, we conclude that the mother's average annual pecuniary loss should be fixed at $1,600.00.
Prejudgment interest is expressly prohibited by the terms of the *1307 Public Vessels Act, 46 U.S.C., section 782. The United States, therefore, concedes in its brief that the loss of contributions from the date of death to the date of judgment should not be subject to discount. While the case was heard in 1963, there were many delays including a delay of more than two years before the transcript was prepared by the official reporter who left this position several months after the trial.[27] Thus, it is likely that a final judgment will not be entered until approximately 7½ years after the tragic event which gave rise to this litigation. Unlike Gardner v. National Bulk Carriers, Inc., 221 F. Supp. 243 (E.D.Va., 1963), aff'd per curiam 333 F.2d 676 (4 Cir., 1964), where prejudgment interest was allowed and the pecuniary loss was discounted from the date of death, such a computation cannot be used in this case due to the prohibition of the statute. We will, therefore, accept the invitation of the United States to adopt the reasoning in LeRoy v. Sabena Belgian World Airlines, 344 F.2d 266 (2 Cir., 1965) cert. den. 382 U.S. 878, 86 S. Ct. 161, 15 L. Ed. 2d 119 (1965), and allow in full the pecuniary loss from the date of death for a period of 7½ years, without discounting the value thereof.
On this basis, we conclude that Agnes Salopek, Administratrix of the Estate of Peter Salopek, is entitled to a judgment against the United States of America in the sum of $28,303.89, with legal interest thereon from the date of said judgment. This is computed, in part, on the basis of $12,000 pecuniary loss for eight years without discount. As of March 26, 1969, the beneficiary will be nearly 78 years of age with a life expectancy of 6.59 years (Commissioners 1958 Standard Mortality Table). Fixing Mrs. Salopek's life expectancy at 7 years and computing the discount value at 4%, the pecuniary loss is $9,603.20, which is rounded out at $9,600. We also feel that the evidence is sufficient to sustain the claim for conscious pain and suffering in light of the finding that Salopek was burned to death, and we fix this item of damages at $5,000. Furumizo v. United States, 245 F. Supp. 981, 1015 (D.Haw., 1965). The United States takes no issue with a claim for unpaid wages ($398.81), loss of moneys ($805.08), and loss of personal effects ($500.00), same aggregating $1,703.89.
DEATH CLAIM-CLYDE V. LEONARD
Clyde V. Leonard was a crew member aboard the POTOMAC at the time of the fire and explosions heretofore mentioned. He was born on October 5, 1904, and, at the time of his death, was within a few days of being 57 years of age. He was survived by his widow, Mary Esther Ford Leonard, to whom he was married on May 20, 1934.
Leonard's body was recovered. No one apparently saw him after the fire started. The death certificate reflects that the cause of death was probable pulmonary edema, secondary to inhalation of poisonous gas. An examination of the body did not indicate any burning with the possible exception of a place on the forehead. While death from burning sounds more gruesome than death from inhalation of poisonous gas, we cannot distinguish between the two primary causes of death from the standpoint of conscious pain and suffering. The just and reasonable inferences are that Leonard would have had some conscious pain and suffering prior to death as he was attempting to get air during his last moments. Consistent with the Salopek claim, we find that an award of $5,000 for this item of damages is fair and reasonable. Story Parchment Co. v. Paterson Parchment Paper Co., 282 U.S. 555, 563, 51 S. Ct. 248, 75 L. Ed. 544 (1931); Civil v. Waterman Steamship Corp., 217 *1308 F.2d 94, 99 (2 Cir., 1954). Unlike Gardner v. National Bulk Carriers, Inc., 221 F. Supp. 243, 246 (E.D.Va., 1963), aff'd per curiam 333 F.2d 676 (4 Cir., 1964), and Whitaker v. Blidberg-Rothchild Co., 195 F. Supp. 420, 424 (E.D.Va., 1961), aff'd per curiam 296 F.2d 554 (4 Cir., 1961), where the seamen jumped off the vessels in obvious attempts to commit suicide, with no showing of their state of mind immediately before leaving the ship and no indication as to whether they were living or dead when they hit the water, the reasonable inference in the present case is that Leonard, a man in good health, would have undergone conscious pain and suffering for an undetermined period of time prior to death.
Leonard's average annual earnings as an able-bodied seaman varied considerably.[28] The average annual income for the six years prior to 1961 amounted to $3,087. However, during the year of his death he had earned $5,023.98, or an average of $558.22 per month.
The widow testified that she received, by way of allotment or otherwise, the approximate sum of $300 per month.[29] The only other apparent income received by Leonard was doing delivery work for Norfolk Ice Cooperating Company on one or two occasions when not at sea. We fix the decedent's average annual gross earnings at $5,000, taking into consideration his past record of earnings as well as his income while serving aboard the POTOMAC,[30] together with the knowledge that seamen's wages are generally on the upgrade.
The amount sent home while at sea does provide some guide for a determination of pecuniary loss, but it is not an absolute factor. We believe that a fair analysis of all of the evidence leads to the conclusion that Leonard's average contribution for the purpose of ascertainment of damages is $2,700 per annum, or $225 per month. This is calculated upon the assumption that his work record would fairly correspond with his 1961 activities, and would continue until reaching the age of 65. From this annual contribution we must deduct Leonard's "at home" personal expenses. O'Connor v. United States, 269 F.2d 578 (2 Cir., 1959). Bearing in mind that Leonard would be at home only during brief intervals and his personal "at home" expenses would be minimal, we find that the annual pecuniary loss sustained by Mrs. Leonard is $2,200.
Using the same 7½ year computation as with respect to the Salopek claim, we fix Mrs. Leonard's pecuniary loss to the date of Leonard's retirement age at $16,500.[31] At age 65 it is reasonable to assume that his working life expectancy as a seaman would be ended.[32] Certain benefits generally accrue to seamen by way of retirement and, in addition, a person may obtain some earnings doing *1309 odd jobs. Had Leonard reached the age of 65, his expectation of life would be 12.90 years, or roughly 13 years. Undoubtedly Leonard's annual contributions to Mrs. Leonard would be substantially reduced at that time. Perhaps arbitrarily, but with no other guide to follow, the Court fixes Mrs. Leonard's annual pecuniary loss at $1,200 following retirement. The discounted value for 13 years at 4% amounts to $11,983.20, which has been rounded out to $12,000.
We do not agree that the evidence justifies any consideration for an award for accumulations in Leonard's estate. Mrs. Leonard cannot recover for the economic value of decedent's life, in addition to her own pecuniary loss. Petition of United States, 367 F.2d 505, 511-512 (3 Cir., 1966), cert. den. Black v. United States, 386 U.S. 932, 87 S. Ct. 953, 17 L. Ed. 2d 805 (1967). There is not a shred of evidence which indicates any systematic saving as in Salopek; nor is there any evidence that Mr. and Mrs. Leonard did anything other than live to the full extent of their income. We believe that the same pattern would follow even though Leonard's employment had been regular and his income had increased.
A judgment may be entered in favor of Mary Esther Ford Leonard, Administratrix of the Estate of Clyde V. Leonard, deceased, against The United States of America, in the sum of $34,500, with legal interest thereon from the date of judgment.
DEATH OR INJURY CLAIM JOHN C. SMITH
In considering this claim the essential question is one of causation. Sarah Smith, Administratrix of the Estate of John C. Smith, argues that this is a death claim or, at least, an aggravation claim which, in whole or in part, contributed to Smith's death. We do not agree.
The deceased was third mate aboard the POTOMAC. He actually died approximately 9 weeks after the POTOMAC disaster. The cause of his death was lung cancer.
Smith was 65 years of age at the time of the fire. He had planned to retire in six or seven months. He was off duty when the fire broke out and, along with other crew members, assembled on the stern of the vessel when the order was given to abandon ship. He jumped about 50 feet into the water, swam to a mooring line, and was thereafter assisted behind a piling by the master and chief engineer. A small fishing boat threw the men a line and proceeded to tow them across the harbor. About that time the second and more severe explosion took place and the fishing boat increased its speed, thereby placing the three men under the water a portion of the time. It is estimated that Smith was in the water about 30 minutes.
Upon reaching shore, Smith was exhausted and remained flat in the truck which took him to the Public Health Relief Station at Morehead City. He was then removed to the Marine Corps Air Station at Cherry Point, a distance of 15 to 20 miles, where he was admitted at approximately 9:00 p. m. The hospital record reflects no burns, but he did have scratches on his lower legs from barnacles on the pilings, and he was suffering from a cold and soreness of the chest.[33] His heart and lungs were clear. Because of his weakened condition, Smith was retained in the hospital overnight, and discharged the following morning. He then went to his home in Largo, Florida.
On October 3, 1961, Smith reported to the Public Health Service Clinic at Tampa, complaining of a cough, nervousness and insomnia. He had appeared somewhat drawn, with a loss of appetite, when he returned to his home. He returned to the same clinic on October 9, 1961, when a notation was made that he was doing "fair." On October 11, 1961, he was given an x-ray examination of his chest *1310 at the Mease Hospital, Dunedin, Florida, which revealed pleurisy of the right lung.[34] Smith was advised of this fact and, on November 8, 1961, entered the Mease Hospital where the admitting diagnosis indicated carcinoma of the left lung. The history disclosed a 20-pound weight loss over the previous several weeks, an acute lumbosacral back sprain originating within ten days,[35] shortness of breath and difficulty in breathing. Dr. Norton, the examining physician, referred Smith to Dr. Williams, a thoracic surgeon, who noted the progressive consolidation and retraction of the left upper lobe, probably occasioned by the tumor compressing the bronchus "rather than being related to the accident two months previous." A bronchoscopy report indicates a tumor mass displacing the lower trachea, corona, and left main bronchial branch downward and to the right. Smith left the hospital on November 11, with a final diagnosis of bronchogenic carcinoma of the left lung, and it was recommended that he return in ten days for exploratory surgery.
Smith was admitted to the United States Public Health Service Hospital, Savannah, Georgia, on the late evening of November 14, 1961. The x-ray of the chest on admission showed a large soft tissue density obscuring the upper half of the left lung field, with some pleural fluid at the left base.[36] The pleural fluid was withdrawn through the process known as thoracentesis, and a number of large cells were discovered which appeared to be neoplastic. Successive x-rays showed rapid enlargement of the upper lung mass and a further accumulation, or re-accumulation, of increased amounts of pleural fluid and, on November 26, 1961, this fluid was again removed. The doctors considered Smith's condition as inoperable and, on December 2, 1961, he expired from "carcinoma of the lung with pleural metastatis."
All of the medical experts agree that Smith had a malignant cancer in his left lung prior to September 26, 1961, when the disaster occurred. The admission history at Savannah reflects that Smith consumed an average of from one to three packs of cigarettes per day. Therefore, the claimant predicates her argument for recovery on the ground that the POTOMAC disaster accelerated Smith's death.[37]
The claimant rests her case on acceleration of death on the basis of statements from Dr. Koonce, a general surgeon who had never performed an operation for lung cancer, and Dr. Norton, the general practitioner at Mease Hospital, who referred Smith to a thoracic surgeon. Dr. Koonce stated that Smith's experience on September 26 and his "exposure to cold" could have lowered his resistance and hastened his death, but even then he declined to testify as to Smith's life expectancy or as to any causal relationship in fact. Dr. Norton testified that the disaster probably "hastened the progress of this fatal disease" but, on cross-examination, conceded that Smith's "demise was imminent," irrespective of his exposure to water, and that he had no opinion as to the extent to which his death was hastened.
The testimony of Dr. Ridgeway, who was Smith's attending physician during the two weeks prior to death, was emphatic *1311 in stating that the experience of September 26, 1961, had nothing to do with his death, and that Smith would have died "just as early as if he had not been exposed in the water." To the same effect is the testimony of Dr. Hotchkiss, a specialist in the field of thoracic surgery, who, while he never saw Smith, had reviewed the records at length. Dr. Hotchkiss concluded that Smith's death was totally unrelated to the events of September 26, 1961; that there was no evidence of aggravation; and that no causal relationship existed and that Smith would "have died at approximately the same time, whether the accident occurred or not."
We conclude from this record that the evidence is insufficient to merit a finding of acceleration of death, in whole or in part. Indeed, the preponderance of the evidence supports the view that the events of September 26, 1961, had nothing to do with Smith's death on December 2, 1961.
The statutes of Florida, where the claimant qualified as administratrix, and North Carolina, where the fire and explosions occurred, provide for a survival of all causes of action. Thus we are confronted with a determination of damages, either tort or contract, which Smith would have had he lived.
We do not agree that the minor barnacle scratches and exposure in the water were so de minimis as to be disregarded. We likewise feel that emotional distress is a proper item for consideration. For his minor scratches, exposure, exhaustion, and emotional distress, we award the sum of $2,200.
We agree with the United States that a claim for funeral expenses is not appropriate in this case where there is no causal connection between accident and death, even though Smith died ashore at a time when he was entitled to medical care and maintenance.[38] The claim for funeral expenses might well present a different question if causal relationship existed.
Clearly the claim for maintenance and cure is valid even though the lung cancer may not have manifested itself while in the service of the ship. Obviously, Smith had the malignancy while aboard the POTOMAC. The claimant is entitled to hospital expenses incurred at Mease Hospital in the sum of $387.60, and maintenance at $8.00 per day for five days or $40.00.[39] Claimant is also entitled to recover the sum of $1,017.22 for moneys lost aboard the ship. Claims for pecuniary loss through Smith's anticipated retirement date in June 1962, and loss of earnings from September 28, 1961, to the date of his death on December 2, 1961, must be rejected for reasons heretofore stated, and for the further reason that the voyage was terminated by the fire and explosion and, thereafter, Smith received maintenance for his obvious disability.
A judgment may be entered in favor of Sarah Smith, Administratix of the Estate of John C. Smith, deceased, against the United States of America, in the sum of $3,644.82, with legal interest thereon from the date of judgment.
INJURY CLAIMS WILLIAM H. MASSENGILL, WADE H. STANLEY, AND WILLIAM GERALD MASSENGILL
These three men were preparing to go fishing in the small boat near the railroad trestle when the fire originated at that point. Since they were not members of the POTOMAC's crew, they have no claim for unseaworthiness but must rest their case upon negligence. Damages are to be determined according to the usual principles of maritime law.
The United States contends that, as to Stanley at least, any recovery should be diminished by the proportion *1312 of Stanley's contributory negligence on the theory that he had detected the fumes but permitted the open-flame lantern to remain in the bottom of the boat without extinguishing the flame. We do not agree that such failure to act constitutes contributory negligence. Nor are we of the opinion that the probable consequence of shipboard conduct was unforeseeable under the doctrine pronounced in Palsgraf v. Long Island R. R. Co., 248 N.Y. 339, 162 N.E. 99, 59 A.L.R. 1253 (1928). There was an unbroken connection between the wrongful act and the injury which constituted a continuous operation. Milwaukee & St. Paul Ry. Co. v. Kellogg, 94 U.S. 469, 24 L. Ed. 256 (1876).
(a) William H. Massengill
William H. Massengill, the father of William Gerald Massengill, was 55 years of age at the time of the fire. He had been a tenant farmer his entire adult life and was, at the time in question, responsible for tending a 2½ acre plot of tobacco land. He received first and second degree burns of both hands and forearms to a point above the elbow, with some third degree burns on the arm, hands, and fingers being confined to small areas, such areas being so small that skin grafting was not required. The left hand was more severely burned and has resulted in arthritis, with a 20% permanent loss of function of the lower portion of this arm. The only permanent scarring was some depigmentation of the arms and hands. For several years following the injury his skin would be more sensitive to sunlight.
This claimant was brought to the Johnson Memorial Hospital, Smithfield, North Carolina, on the evening of September 27, 1961, having been transferred there from Cherry Point Hospital.[40] He remained in the hospital under the care of Drs. Alderman and Barnes until his discharge on October 23, 1961. He was thereafter followed until June 2, 1962. As to the arthritis in the hand, Dr. Alderman is positive that this condition is associated with the injury but, with respect to the arthritis in the shoulder and elbow, he cannot say that it is "totally" related to the fire.
The doctors, hospitals and drug bills aggregated $974.30. The property damage claim was $50.00. We turn, then, to the loss of earnings.
The record is rather barren as to the elder Massengill's earnings. He testified that he was required to hire additional help at an expense of $300-$400 per annum because of his disability, but that otherwise he was performing his duties as a tenant farmer. Accepting the median figure of $350.00 for 7½ years, his maximum loss of earning capacity is $2,625[41] for this period of time. An additional three-year life expectancy discounted at 4% amounts to $971.25 (rounded out to $975.00). No further award can be made for impairment of earning capacity due to the lack of evidence as to what the earnings have been in the past and what they were during the year of the fire.
Turning to consideration of an award for pain, suffering, mental anguish, and all of the physical injuries, there can be little doubt but that the elder Massengill was severely burned and underwent appreciable pain. We think that an award of $20,000 is fair and reasonable compensation.
A judgment may be entered in favor of William H. Massengill against the United States of America in the sum of $24,624.30, with legal interest thereon from the date of judgment.
(b) Wade H. Stanley
Stanley was 51 years of age at the time of the fire. He supervises the operation *1313 of several farms and conducts a feed and fertilizer business. While the nature of his business activities requires that he remain outdoors a good portion of this time, he apparently does no personal active labor. Stanley received first and second degree burns on his face, neck, hands, arms, and forearms more extensively on the left hand, arm, and left side of his face. He sustained no third degree burns. The only positive evidence of permanency was depigmentation centered over the left dorsal aspect of the left hand and around his ear and nose. Depigmentation produces photosensitivity. Like William H. Massengill, Stanley was initially taken to Cherry Point Hospital on the night of September 26, 1961, and was transferred to Johnson Memorial Hospital, Smithfield, North Carolina, on the following day. He was discharged from the latter hospital on October 10, 1961, and was last seen on November 11, 1961.
Approximately six weeks prior to the trial in March 1963, Dr. Alderman examined Stanley for a lesion of the right lower eyelid. Stanley was referred to a specialist, Dr. Bizzell, in Goldsboro, for a possible malignancy. Dr. Alderman, a general practitioner, expressed the opinion that the condition was a "probable" malignancy, but he could not establish any causal relationship to the accident with any degree of medical certainty. Dr. Bizzell did not testify. As noted, Stanley had no third degree burns and this is the condition which generally gives rise to the development of cancer from a burn. Moreover, Stanley had a chronic condition of dermatitis and skin irritation for a period of approximately 15 years before the fire and, under all the circumstances heretofore mentioned, the evidence is insufficient to justify consideration of the eye lesion and possible or probable cancerous condition.
The medical, hospital, and drug expenses aggregated $567.30.[42] Property damage loss, consisting primarily of fishing gear and an outboard motor, was valued at $240. There is no provable loss of earnings and, in fact, no earnings shown by Stanley.[43]
We believe that a fair and reasonable award for the pain, suffering, mental anguish, and all of his physical injuries, is $12,000.
A judgment may be entered in favor of Wade H. Stanley against the United States of America in the sum of $12,807.30, with legal interest thereon from the date of judgment.
(c) William Gerald Massengill
This young man, the son of William H. Massengill, was 19 years of age on the day following the disaster. At the time in question he was in the United States Air Force, having entered this branch of service approximately three months earlier. He was on authorized leave incident to a transfer to a new duty station.[44]
First and second degree burns were sustained to the face, hands and forearms. Taken initially to the Cherry Point Marine Corps Air Station Hospital, he was transferred the next day to Seymour-Johnson Air Force Base, Goldsboro, North Carolina, where he remained *1314 until October 13, 1961, when he was given a week-end pass to permit him to visit his home, following which he was formally released from the hospital on October 17, 1961. The notation on discharge is to the effect that his injuries were healing and that there would be little or no residuals.
Upon reporting to his new duty station at Bolling Air Force Base, he shortly thereafter commenced his duties as an air policeman, and continued in that capacity to the date of trial. He has no loss by reason of medical or hospital expenses, and no actual loss of earnings.[45]
According to medical testimony, the only apparent permanent injury is confined to whitish spots over small areas of the forearm resulting from depigmentation. The young man likewise complained that his left arm burned rather easily when exposed to sunlight, and that his face was sensitive to sun. He sustained a loss of property valued at $37.00.
The initial burns were, of course, more severe than that indicated by the final result. His hair and eyebrows were burned and, according to claimant, his hair is now considerably thinner, although he appears still to have a good head of hair. He complains of constant itching of the left arm which has a tendency to break out.
A fair and reasonable award for the pain, suffering, mental anguish, and all the physical injuries sustained by William Gerald Massengill is $7,000. There is no showing of any diminution of earning capacity by reason of the accident.
A judgment may be entered in favor of William Gerald Massengill against the United States of America in the sum of $7,037.00, with legal interest thereon from the date of judgment. Since this plaintiff has now attained his majority, the judgment may be paid directly to him and his attorney.
CLAIMS OF VARIOUS CREW MEMBERS
Many crew members filed claims herein. Some had proceeded by way of independent actions against the United States of America and Marine Transport Lines, which actions were filed in the United States District Court for the Eastern District of Virginia and were subsequently transferred to this court for trial.[46] Claims in the limitation proceeding (Admiralty No. 278) were thereafter filed alleging claims for personal injuries, loss of moneys (in some instances), medical expense, and loss of earnings by the following crew members: Lydon, Romero, Thomas, Burton, Alves, Berntsen, Bradfield, Brown, Fogg, Lee, Malone, Matamala, Minter, Nayer, Page, Pickens, Sang, Spates, Rice, Taber, Crawford, Holley, and Nelson all represented by one firm of attorneys. Individual claims were likewise filed by seamen Sang, Fogg, and Taber, whose claims are included in the foregoing group. Crew members Craig and Cloud similarly filed claims represented by other attorneys.[47] None of the claims *1315 of the crew members assert in their pleadings any liability for maintenance. With respect to Crawford, any claim for damages by reason of the requirement of hiring an attorney is expressly disavowed.
At the outset we are confronted with the problem of handling the claims for maintenance which were supported by the evidence, at least in part, even though the pleadings failed to reveal any claim for same. To bar the claims on the technical ground of failure to allege same would invite a flood of requested amendments. Moreover, the seamen probably would not be barred by laches under the circumstances of this case and additional litigation would be forthcoming. It is also obvious that the Government, while not called upon to answer any claim for maintenance, did have some knowledge of maintenance as to several seamen as well as the amounts paid by way of maintenance. Questions involving maintenance have been fully briefed and argued. The Court concludes that it will consider the maintenance claims as shown by the evidence, reserving to the Government, following any appeal from the decision at this stage of the proceeding, the right to produce such further pertinent evidence as may be required touching upon the maintenance claims.
There are related matters touching the claims for maintenance. Ordinarily interest is allowable on such claims, but in this case interest is prohibited by virtue of the provisions of 46 U.S.C., sec. 782, as "[not] upon a contract expressly stipulating for the payment of interest." Thus, the United States of America is not liable for interest on maintenance claims.
In substantially all of the seamen's cases a claim for damages occasioned by the alleged failure to pay maintenance as and when due has been argued and briefed (although not alleged) by counsel. The right to collect such damages is predicated upon Vaughan v. Atkinson, 369 U.S. 527, 82 S. Ct. 997, 8 L. Ed. 2d 88 (1962). As stated by this Court in Roberson v. S/S American Builder, 265 F. Supp. 794 (E.D.Va., 1967), the ultimate test is whether the shipowner was acting in good faith, or whether such actions were "callous," "recalcitrant," or clearly unjustified. As far as this record establishes, claims for maintenance when presented were processed and obviously paid in some instances. However, after the crew dispersed, it is impracticable to expect the United States of America or its operating agent to run down every crew member to determine whether they were out-patients or otherwise unfit for duty and, if so, on what dates the disability existed. For these reasons, claims of all seamen for damages under Vaughan v. Atkinson, supra, are denied. In one case (Henry R. Crawford), the claim for such damages was expressly waived during the course of trial.
We shall discuss the claims of these seamen in three categories, to-wit: (1) the claims of those who did not testify either at the trial or by deposition, (2) the crew members who were aboard the vessel and required to abandon ship, and (3) the crew members who were ashore at the time of the disaster, but who claim loss of moneys, personal property, and wages.
CLAIMS OF SEAMEN WHO DID NOT TESTIFY AT TRIAL OR BY WAY OF DEPOSITION
Claims for loss of moneys and personal injuries were asserted by crew-men Theodore Brown, Edmundo Romero, Hom Yew Sang, Paul B. Spates, and Willie Thomas. Neither of these claimants testified in person or by deposition and their actions must be dismissed with prejudice. However, as to Hom Yew Sang, the United States points out that he filed an independent claim for loss of moneys in the sum of $680.10 "to which there is no objection." If this concession is tantamount to an admission that this sum is due and owing, a judgment may be entered in favor of Hom Yew Sang against the United States of America in *1316 the sum of $680.10 plus interest from the date of judgment.
THE CREW MEMBERS WHO WERE ABOARD THE VESSEL AND REQUIRED TO ABANDON SAME.
The threshold question is whether seamen who remained on board until the abandon ship order was given, and thereafter either slid down lines into the water or jumped off the stern and thereafter swam ashore or were retrieved by small boats, have actionable claims for exposure, an involuntary swim in water recording a temperature of 80 degrees and, in some instances, superficial rope burns or barnacle scratches. The United States relies upon Perez v. Suwanee S. S. Co., 239 F.2d 180 (2 Cir., 1956), relating to an inconsequential injury; Brown v. Potomac Electric Power Co., 236 F. Supp. 815, 819-820 (D.D.C., 1964), involving a sudden electrical explosion which caused a minor eye inflammation of brief duration; Healy v. United States, 192 F. Supp. 325 (S.D. N.Y., 1961), aff'd per curiam, 295 F.2d 958 (2 Cir., 1961); and Schmidt v. Merchants Despatch Transp. Co., 270 N.Y. 287, 200 N.E. 824, 104 A.L.R. 450 (1936), holding that no actionable wrong is committed if the danger is averted.
With the exception of Perez, supra, the authorities cited above do not discuss the de minimis rule. In the final analysis, it is probably a matter of degree. Under the facts and circumstances of this case, we do not believe that the doctrine of de minimis non curat lex should be invoked as to these seamen who were required to abandon ship. It is settled that a rule permitting recovery for fright does not require that the direct physical injuries be permanent or severe, and even though the sole physical injury may have resulted from an attempt to escape actual danger, damages are nevertheless recoverable for an impairment of health occasioned by the consequential fright. 25 C.J.S. Damages § 70a, p. 833. We conclude, therefore, that compensatory damages may be determined despite the minimal extent of any injury.
Eugene Alves
This 27-year-old fireman water tender was on watch in the fire room when the fire broke out and the alarm shouted. As he had duties with respect to the attempt to get the ship underway, he remained in the fire room until the order to abandon ship was given. He then immediately went to the stern of the vessel, jumped into the water, and after swimming a short distance was picked up by a private yacht. He testified that he injured his low back on the right side while grabbing a mooring line or otherwise pulling himself along this line to reach a mooring dolphin. Taken to the Cherry Point Marine Corps Air Station Hospital, he was released after one hour with no significant complaints. He apparently returned to Portland, Maine, where there is a Public Health Service Clinic, and Alves reported there on October 3, 1961. The examination reflected "mild to moderate lumbar strain with no limitation of motion," and "anxiety reaction." He was refused a "not fit for duty" slip, but was instructed to return in two weeks and, in the interim, physical therapy three times per week and phenobarbital were prescribed. Alves registered for work through his union hiring hall approximately one week after the disaster, or about October 4, 1961, but this fact is not necessarily controlling as seamen are generally employed according to priority of registration. He returned to the Clinic on October 17, 1961, and the notation is "patient continues about the same." On October 31, 1961, Alves again went to the Clinic complaining of rectal pain and hemorrhoids which preexisted the disaster and are wholly unrelated.
On November 3, 1961, Alves elected to see a private physician in Portland. Dr. Crane took no x-rays but made certain statements relative to his findings, all being essentially subjective except where *1317 negative.[48] Dr. Crane also advised counsel for claimant, by letter dated November 3, 1961, that it would not hurt Alves to return to work on board ship at that time.[49] Certainly as to any disability following a period of thirty (30) days from the disaster, such disability is not chargeable to what occurred on September 26, 1961.
The USNS POTOMAC was scheduled for overhaul about three (3) weeks following the disaster. The wages of all crewmen would have been terminated at that time. Of course, as to any crewman with a permanent disability, this could be of no consequence. Alves received a base pay of $373.84, plus overtime average approximating $263.10, per month. His daily earnings for the 12-day period prior to the disaster amounted to $24.33. We feel that his loss of earnings should be limited to approximately thirty (30) days and we fix his loss of earnings at $650. Maintenance, although never apparently claimed until trial time, is fixed at $8.00 per day for thirty (30) days, or $240, subject to the rights of the United States as heretofore stated.
Alves estimated that he lost $250 in cash as a result of the fire and explosion. We hold that he is entitled to this sum.
As to his claim for minimal injuries, fright, nervousness, etc., we find that a fair and reasonable award would be $1,000.
A judgment will be entered in favor of Eugene Alves against the United States of America in the sum of $1,900, plus interest from the date of entry of said judgment, and costs. A judgment may also be entered on the claim for maintenance in the sum of $240, plus interest from the date of judgment, subject to the right of the United States to insist upon a further hearing or to otherwise offer proof that same has been paid in whole or in part.
Robert L. Bradfield
This 53-year-old A/B seaman was off duty and asleep in his bunk. He was aroused by the general alarm and went aft. Upon orders to abandon ship, he slid down a line and remained in the water until a small Coast Guard boat retrieved him.[50] He was in the water for approximately 30 minutes. He was taken to Morehead City and transferred to Cherry Point Marine Corps Air Station Hospital with no significant complaints other than rope burns and consumption of a quantity of sea water. He was released before midnight and spent the night in a Morehead City hotel. Upon his return to Houston, Texas, he checked into the Public Health Service Clinic on October 4, 1961, with complaints diagnosed as generalized myalgia or neuralgia. On October 10 he returned to the Clinic and was apparently feeling much better. He was instructed *1318 to take the balance of his medicine. He was not declared fit for duty at that time, although there is no affirmative evidence that he was found to be unfit for duty. Bradfield again returned to the Clinic on November 24, 1961, at which time he was declared fit for duty, and he subsequently caught his next ship on December 16, 1961.
Bradfield, at the instance of his counsel,[51] was examined by Dr. Brown at Houston on October 31, 1961. Bradfield had suffered a stroke about 10 years prior thereto and the neurological abnormalities noted by Dr. Brown were related to his condition. There was some reddening of an eardrum which may have been a possible objective finding of a concussion. Other than the neurological test, which did not include any x-rays or audiogram, Dr. Brown's diagnosis was based upon Bradfield's complaints to him, including "unconsciousness" and "constant" headaches following the disaster.
Two days after the fire and explosion, Bradfield signed a statement saying:
"I suffered no injuries from fire but chafed my legs and testicles coming down line."
We find it difficult to believe that a man undergoing an experience of being blown into the cockpit of a boat following an explosion, and allegedly being rendered unconscious from a blow on the head, would fail to remember same two days later.
Dr. Brown's bill is not a proper item for consideration under Roberson v. S/S American Builder, supra. There is no suggestion that adequate medical facilities were not available at the Public Health Service Clinic.
Apparently maintenance to November 24, 1961, was paid to Bradfield. The record does not affirmatively disclose this fact, but the brief of the United States states this to be a fact and names the sum of $416. The reply brief does not take issue with the statement. Reserving to Bradfield the right to controvert the statement of payment of maintenance to November 24, 1961, the claim for maintenance is disallowed.
We think that, at best, a thirty (30) day period for loss of earnings would be adequate. While counsel for Bradfield compute his monthly earnings, including overtime, at $607, the Government appears willing to compute his earning capacity on the 12-day period prior to the disaster which amounts to $22.72 per day, or $681.60. Striking a fair average, we find that Bradfield sustained a loss of earnings in the sum of $650.
For his injuries, burns, accompanying fright, etc., we fix an award of $1,000. A judgment will be entered in favor of Robert L. Bradfield against the United States of America in the sum of $1,650, plus interest from the date of judgment, and costs.
Therence G. Cloud
This First Assistant Engineer was a member of the engine room group who attempted to get the POTOMAC underway as the fire approached the vessel. The only evidence as to his injuries appears from clinical records of Public Health Service clinics and hospitals located at Morehead City, Savannah and Jacksonville.[52]
On October 9, 1961, Cloud was found to be improved and marked not fit for duty for one week. He sailed from Houston, Texas, six days thereafter.
Clearly Cloud is entitled to 18 days loss of earnings. His base pay was *1319 $856.47 per month. The record indicates his gross earnings for the 12-day period prior to the disaster to be $704.79, or an average of $58.73 per day. Computed on a per diem basis, including overtime, we arrive at the approximate sum of $1,050 for his loss of earnings.
While Cloud did not testify at the trial or by deposition, the medical record substantiates the fact that he sustained an illness as a result of the forced exposure. We find that an award of $900 for his illness, fright, nervousness, etc., to be fair and reasonable.
No claim has been made for maintenance and we assume that the same was paid. Reserving to Cloud the right to assert the same was not paid for the 18-day period, the maintenance is disallowed.
A judgment will be entered in favor of Therence G. Cloud against the United States of America in the sum of $1,950, plus interest from date of judgment, and costs.
William F. Craig
This Second Assistant Engineer was on the property of Aviation Fuel, going ashore with the Chief Engineer, when the fire started. He rushed back to the ship in an effort to get the vessel underway. He was in the engine room when the first explosion occurred on the forward end of the POTOMAC. He then went further down into the engine space to cut on another pump. Craig next went on deck where he learned that the master had ordered the crew to abandon ship. He jumped off the stern and swam about 20 yards to a mooring dolphin where other crew members were located. A fishing boat, the BUNNY TOO, threw the men a line and towed them into the harbor during which time the severe explosion took place in the vessel's after tanks.
Craig sustained cuts and abrasions on his arms and feet, presumably from barnacles on the dolphin. He was full of salt water, nauseous and thirsty. His complaints at Cherry Point Marine Corps Air Station Hospital were confined to soreness and fatigue. He remained at Morehead City (not in the hospital) for several days and then returned to his home in Texas. About one week after the disaster, he had a cold and slight case of flu, lasting approximately one week. At no time after leaving Cherry Point station hospital on the night of the disaster did Craig ever consult a doctor, nor did he visit a Public Health Service facility. He was never declared unfit for duty.
Craig, admitting that his physical condition was perfect a short time after the fire, states that he was unable to work and did not work for four months. He finally signed aboard a grain ship on February 6, 1962. Apparently his primary complaint is confined to his uneasiness about sailing on tankers. While we think that this latter item is not a legally compensable claim as such an uneasy feeling does not render a person unfit for other employment, including service aboard vessels other than tankers, we think that Craig's claim along these lines lacks merit under the burden of proof rule.
This claimant's loss of earnings should be limited to two weeks. His base pay was $726 per month. His gross earnings, including overtime, for the 12-day period prior to the disaster aggregated $591.91, or $49.33 per day. Computed on a per diem basis, we arrive at the approximate sum of $700 for loss of earnings.
No mention is made with respect to maintenance. It will not be awarded although, as in Cloud, the right is reserved to substantiate this claim if any exists.
For his slight injuries, illness, fright, etc., an award of $1,000 is made.
A judgment will be entered in favor of William F. Craig against the United States of America in the sum of $1,700, plus interest from the date of judgment, and costs.
*1320 Henry R. Crawford
This claim presents the most complex medical questions. Crawford was a pantry utilityman on the POTOMAC. He was born on June 3, 1908. At the time of the fire he was off duty and preparing to take a shower. When the general alarm sounded, he went to the stern of the vessel and later jumped into the water. He had signed aboard the POTOMAC on or about July 7, 1961, approximately two and one-half months prior to the disaster.
Crawford drifted out into the Morehead City harbor where the current carried him clear of the fire. He was apparently the first, or one of the first, members of the crew to be picked up. He was taken ashore, sent to the station hospital at Cherry Point, remained overnight, and was discharged the next morning. He returned to his home in Boston and claims to have checked into the Public Health Service Hospital, although these records are not in evidence. According to Crawford, he was told that he was in satisfactory condition and that nothing could be done for him.
Crawford has been afflicted with a rare neurological disorder known as peroneal neuromuscular atrophy, also referred to as Charcot-Marie-Tooth disease (CMT), for approximately 30 years prior to the POTOMAC disaster.[53]
The real problem which arises in Crawford's matter is the fact that, without question, he would have reached his present condition within a relatively short period following the POTOMAC disaster. Thus it follows that his case does not fall within the familiar rule touching aggravation of a preexisting condition. Nevertheless, Crawford was capable of performing his usual duties aboard ship up to the moment of the fire and explosion. In short, it appears that the unfortunate incident of September 26, 1961, destroyed Crawford's desire and incentive to compensate for his physical disability.[54] This destruction of such motivating factors was not of Crawford's own making. We think that this claim should be treated as an acceleration of a preexisting condition and that it is compensable to the extent that it is believed Crawford would have been permitted to continue his services as a seaman, but not thereafter.
Crawford was 53 years of age at the time of the explosion. We cannot agree that he would have carried on his duties as a seaman until his retirement age of 65. We think that, as of September 26, 1961, Crawford's maximum working life expectancy was approximately five years with the ability to continue work being progressively lessened as the five-year period approached its end.
It is believed that the foregoing findings are substantially in accord with the majority view expressed in "Cause of Musculoskeletal Condition" set forth in 2 A.L.R.3d, pp. 294-353. True, the selection of a working life expectancy of five years involves a degree of speculation which is apparent in many cases, but we believe that such an approximation is fair and reasonable under all the circumstances relating to Crawford's claim.[55]
The claimant's earning capacity is also affected by his prior condition. During 1958 and 1959, he earned $7,700.80 and $9,173.27, respectively. His income for *1321 1960 was only $2,541.78, due largely to the fact that he was involved in a serious automobile accident which hospitalized him for about four months. His 1958, 1959 and pre-accident 1960 earnings were those of a cook and steward. Following his apparent recovery from the injuries sustained in the automobile accident, he attempted to return to work as a cook-steward but only worked for a short period of time in that capacity. In 1961, his earnings in the lower paid job as a pantryman were only $1658.28 for the first nine months. At that rate he would have earned, if regularly employed for the entire year, only roughly $2,200.00. We do not, of course, know to what degree, if any, the automobile accident may have played a part in his ability to compensate for his preexisting physical condition brought about by the CMT disease. We can fairly assume that his earning capacity would have diminished as the disease became progressively intense. We feel that a total loss of earnings in the sum of $9,000 would be a reasonable forecast.
The only medical expense items in evidence are the bills of Dr. Hormell in the sum of $130 and Dr. Lewenstein for $365. The latter includes an item of $200 for litigation expense and, as to this amount, it is clearly not allowable. Aside from this factor, the primary reason for disallowance of all medical bills is that there is no showing that treatment could not be accorded at the Public Health Service Hospital in the area where Crawford lived and, until this is established, the law does not permit a recovery by a seaman for outside medical and hospital expenses.[56]
We approach Crawford's claim for maintenance and loss of moneys. As to the latter, a search of the record does not reveal that there is any evidence as to the loss of $250. With respect to maintenance, while there was no claim for same in the pleadings, we think that Crawford, who is now incurable and can never again work, should be treated as having reached a maximum possible cure stage in approximately 90 days at which time he was apparently seen by Dr. Horenstein and was diagnosed as having the CMT disease. We allow $720 by way of maintenance.[57]
For the minor injuries, fright, mental suffering during the accelerated period, and the actual acceleration of the preexisting condition for the same period, Crawford is allowed the sum of $15,000.
A judgment will be entered in favor of Henry R. Crawford against the United States of America in the sum of $24,720, plus interest from the date of judgment, and costs.
Robert D. Fogg
This deck maintenance man was at a doctor's office in Morehead City when the fire broke out. He claims damages occasioned by a nervous condition. The claim is totally without merit and is not worthy of discussion.
His claim for moneys lost is equally suspect. While he testified that he had approximately $463 in his locker aboard the vessel, he had answered the issued monition by indicating this amount to be $25. We find that his loss of moneys amounted to $25.
While no claim for maintenance was alleged, it is immaterial as Fogg would not be entitled to same in any event. One is not entitled to maintenance merely because he becomes nervous thinking about an event which he did not even experience. Of course, it goes without saying that Fogg never saw a physician and was never declared unfit for duty. The entire claim, except for $25, is simply an effort on the part of a seaman to collect money to which he is not entitled. Even as to any claim for loss of earnings, *1322 since Fogg was not aboard the vessel at the time of the disaster, he is barred from claiming the right to wages subsequent to the loss of the POTOMAC under 46 U.S.C., section 593.
A judgment will be entered in favor of Robert D. Fogg against the United States of America in the sum of $25, plus interest from the date of judgment, and costs.
George Thomas Holley
Holley, a second cook and baker aboard the POTOMAC, was 42 years of age as of the date of the disaster. As with respect to many other seamen, he abandoned ship pursuant to order. He dropped 40 or 50 feet to the water. He was successful in swimming to the railroad trestle about one-fourth to three-eighths of a mile upstream, with the current running fairly strong in that direction. He climbed up on the trestle and thereafter managed to get to the highway bridge where he remained for an undetermined period of time[58] until a Coast Guard boat approached. He then dropped into the water and was pulled into the boat, following which he was taken to the Cherry Point Station Hospital where he remained for about two hours. He returned to Morehead City and remained there until September 30, 1961, when he went to Norfolk and checked in at the Public Health Service Hospital where, after examining him for a cough, he was told to report back on October 2, 1961, for chest x-rays.[59]
The x-rays revealed that Holley had active pulmonary tuberculosis on October 2, 1961 six days after the POTOMAC disaster. The sputum test was positive. He was admitted as a patient and remained until he was transferred to Piedmont Sanatorium where he was received on October 18, 1961. While in the Public Health Service Hospital, and prior thereto as far as this record reveals, there was no evidence of fever or coughing of blood.
On some date after June 17, 1962, the sputum test became negative. Holley was discharged from Piedmont Sanatorium on November 16, 1962, to report for outpatient care at the Public Health Service Hospital in Norfolk. He was finally declared fit for duty on July 1, 1963, and shipped out on a vessel on July 6, 1963.[60]
On August 12, 1943, Holley had been admitted to Grandy Sanatorium,[61] a tuberculosis hospital in Princess Anne County, for what appears to have been active pulmonary tuberculosis. He remained at this institution until May 11, 1944, when he left against the advice of attending physicians.
While at Piedmont Sanatorium he gave a history of smoking from one and one-half to two packs of cigarettes per day. While Holley admits smoking prior to the date of the disaster, he disclaims using the quantity of cigarettes referred to in the Piedmont history.
As previously noted, the air and water temperatures on the evening of September 26, 1961, were approximately 80 degrees Fahrenheit.
*1323 The medical evidence is in conflict as to the extent of aggravation, if any, occasioned by the incident of September 26, 1961. There are suggestions that the events of that evening might have or could have contributed to reactivation of the tubercular condition. There is also evidence that it could not have aggravated the condition in any manner. Clearly, there is no credible testimony to support the claim that the incident caused the tuberculosis. Perhaps the most plausible explanation is submitted by Dr. Wray[62] when he said:
"I think if there was aggravation or exacerbation or progession, it was of a minimal nature and that his need for sanatorium care and the length of his sanatorium care that was required was related to his chronic active pulmonary tuberculosis and that what minor changes may have resulted from his experience would not have influenced either the need for sanatorium care or for the period that he required sanatorium care."
In sum, the events of September 26, 1961, may have triggered Holley's condition to the point that the necessity for his sanatorium care became more immediate, but clearly Holley did not have a truly arrested case of tuberculosis and we find that he had active pulmonary tuberculosis on September 26, 1961.
Holley's brief alleges the loss of moneys to the extent of $240. A review of the record does not disclose any testimony to support this claim.
Holley had been aboard the POTOMAC for approximately 14 months prior to the disaster. Prior to his employment he executed a pre-sign-on medical form which, among others, contained a question relating to tuberculosis. The written answer, not in Holley's handwriting as to that particular question, was in the negative. Holley testified as to the questions asked of him at the time of the physical examination and denies that anything was said relating to tuberculosis, although he admits his signature to the form. While we believe that Holley's tubercular condition was active on September 26, 1961, we entertain no doubt that it became active during the period of his employment aboard the POTOMAC.
The United States argues that Holley has forfeited his right to maintenance by reason of a material misrepresentation as to his physical condition relying upon Milton v. Pure Oil Company, 165 F. Supp. 635 (E.D.Va., 1958), aff'd per curiam 264 F.2d 892 (4 Cir., 1959), and Tawada v. United States, 162 F.2d 615 (9 Cir., 1947). These authorities are inapposite. Milton was a case of willful concealment of recent medical history. Tawada, a tuberculosis case, demonstrated that the seaman knew that he was afflicted with a disabling disease, but nevertheless held himself out as fit. Holley, the present claimant, had no knowledge that his condition relating back 16 years had any adverse effect upon his health. We find that Holley is entitled to maintenance at the rate of $8.00 per day from September 26, 1961, to October 2, 1961, and from November 16, 1962, the date of his hospital discharge, until July 1, 1963, when he was declared fit for duty, or a total sum of $1,856. We reject any contention that Holley is entitled to damages by way of attorneys fees for the reasons previously stated with respect to all claimants, and, for the further reason, that the shipowner had a valid defense to the claim which could not readily have been resolved without litigation.
Holley has worked regularly as a member of the crew of various vessels since July 1, 1963. We reject Holley's contentention that he strained his back in departing from the vessel and that he has recurrences of this condition. Nor can we justify any appreciable earning loss by reason of the events taking place on September 26, 1961. Such earning loss is fixed at four weeks (the probable date the POTOMAC's activity would have terminated) and we allow $650 for this item. *1324 For his physical and emotional stress, fright, minimal acceleration of his tubercular condition, etc., we award the sum of $3,000. It is assumed that Holley's cure at Piedmont Sanatorium was not at Holley's expense or was otherwise paid by the shipowner.
A judgment will be entered in favor of George Thomas Holley against the United States of America in the sum of $5,506.00, plus interest from the date of judgment, and costs.
Thomas Lee
This ordinary seaman was on deck watch when the fire started. He gave the alarm into the after crew's quarters and pump room, following which he assisted the mate in shutting down the manifold valves and attempting to disconnect the cargo hose. As the fire progressed, he left the vessel by the gangway and went ashore without incident. He sustained minor injuries to his foot and back when someone ran into him in the gangway area, but concedes that, after being seen by a doctor in Morehead City, he received no further medical treatment but did apply liniment and took aspirin for several days.
The United States concedes that Lee has a valid claim for loss of moneys in the sum of $3,750, occasioned by his cashing a cashier's check for $2,750 just prior to leaving Houston, plus payoffs while aboard the POTOMAC.
For his minor injuries we allow $300. It is contended by Lee's counsel that Lee is entitled to his earning loss from the date of the disaster until the date of reshipment. We know of no such legal principle. As noted, the POTOMAC would have been overhauled approximately three weeks after September 26, 1961, and, allowing for some delay, the earning loss for crewmen not sustaining permanent or otherwise disabling injuries must be so limited. Since Lee's minor injuries cleared up in about one week, we find that he should be limited to $131.74 as he is otherwise barred by 46 U.S.C., section 593.
A judgment will be entered in favor of Thomas Lee against the United States of America in the sum of $4,181.74, plus interest from the date of the judgment, and costs.
Abel Malone
This seaman was the chief cook aboard the POTOMAC. He was in his quarters, preparing to go ashore, when the fire broke out. He proceeded to the gangway and, as he was descending same, the fire reached the ship. Malone was ashore by the time of the first explosion.
It is admitted that Malone sustained no burns nor any immediate physical injury from either the fire or explosions. It is also obvious that he became extremely nervous for some period of time following the fire. The question arises as to whether this seaman, sustaining no immediate physical injury, can be compensated for fright and nervousness under federal law.
We have no hesitancy in finding that Malone would ordinarily be entitled to maintenance and cure under the circumstances. This is a matter of implied contract under admiralty law. His cure was rendered by the Public Health Service Hospital, outpatient clinic at Houston, and, while the record may be incomplete, it sufficiently supports a finding that Malone was still under treatment for nervousness as of November 13, 1961, and was not declared fit for duty until January 17, 1962. Since he was at all times an outpatient, we find that he is entitled to maintenance for 112 days at $8.00 per day, or $896.
The bill of Dr. Markewich in the sum of $20 is disallowed. There is no showing that Malone was not receiving adequate medical attention at the Public Health Service Hospital. It is solely an expense of litigation.
Malone's claim for compensatory damage, including any loss of earnings, presents a much disputed controversy among legal scholars. It is well settled that an action cannot be maintained for mental suffering alone. Southern *1325 Express Co. v. Byers, 240 U.S. 612, 36 S. Ct. 410, 60 L. Ed. 825 (1916); Western Union Telegraph Co. v. Speight, 254 U.S. 17, 41 S. Ct. 11, 65 L. Ed. 104 (1920). Furthermore, as to a claim such as was advanced by a fellow crew member, Robert D. Fogg, while it was disallowed on the basis of being completely unfounded, we think that the law requires some immediate physical connection with the incident giving rise to any emotional or nervous condition which may have allegedly contributed or caused the condition.
As indicated, we believe that Malone's nervous condition was proximately related to the fire in question. He had a narrow escape and, under the modern trend of authorities, is entitled to be compensated.
Judge Rives, speaking for the Fifth Circuit in Kaufman v. Western Union Telegraph Company, 224 F.2d 723 (5 Cir., 1955), attempts to distinguish the two Supreme Court cases cited above, and arrives at the conclusion that, where physical injuries result from emotional distress wrongfully or negligently caused, an action may be maintained. To the same effect are Belt v. St. Louis-San Francisco Ry. Co., 195 F.2d 241 (10 Cir., 1952), and Baltimore & Ohio R. Co. v. McBride, 36 F.2d 841 (6 Cir., 1930). The words "physical injury" do not require that there be a "visible" injury and, as stated in Crews v. Provident Finance Company, 271 N.C. 684, 157 S.E.2d 381 (1967), while damages for mere fright are not recoverable, if there is a contemporaneous physical injury resulting from the conduct of another, there may be a recovery. Stated otherwise, the mental anguish or disturbance must be a part of the physical suffering and inseparable therefrom before there can be a recovery. We believe that Malone's claim falls within the rule permitting a recovery for nervousness unaccompanied by any actual contact injury.
However monumental the legal issue may be, we cannot accept the assertion that Malone's nervous state brought about his marital separation and divorce. This allegation has a familiar ring. For the nervous condition occasioned as stated above, Malone will be awarded $2,000. He registered for work on or before October 5, 1961, and, while not specifically declared unfit for duty, was apparently treated as an outpatient at least until November 13, 1961, when he was then stated to be unfit for duty. Bearing in mind that his services aboard the POTOMAC would have been terminated approximately 30 days after the disaster, and mindful of the fact that reshipment is seldom immediate, his earning loss will be fixed at 60 days, or $1,422.
A judgment will be entered in favor of Abel Malone against the United States of America in the sum of $4,318, plus interest from the date of judgment, and costs.
Avelino Matamala
As heretofore stated, Matamala was the vessel's second pumpman but, when the fire broke out, was serving as pumpman on duty. He was 57 years old as of September 26, 1961. He abandoned ship by jumping off the stern. He held on to the ship's propeller until a Coast Guard boat picked him up. He was taken to the station hospital at Cherry Point where he remained overnight and was discharged the following morning. He returned to his home in Houston, Texas, where he went to the Public Health Service Clinic and was found to be fit for duty.[63] This was his only visit to this facility and was, according to counsel, on October 4, 1961. Matamala testified that he was told that there was nothing that could be done for him. Matamala registered for work the day following his return to Houston, but did not ship out until December.
*1326 On October 20, 1961, Matamala visited a private physician, Dr. Markewich,[64] and complained as to loss of hearing and ringing in his ears. This witness stated that Matamala's symptoms indicated "Cephalgia, which means pain in the head, buzzing about the left ear. I made the conclusion that it was secondary to the explosion and fire aboard the U. S. Navy Ship POTOMAC."
The medical evidence is far from satisfactory. Despite Matamala's assertion to the contrary, Dr. Markewich found no evidence of any ruptured ear drum, the drums and ossicles were normal, with no symptoms of trauma or concussion. There was, however, an infection in both ears which the doctor could not attribute to the explosion but which he suggested could have been caused by a sudden pulling of the drums.
According to Matamala's brief, he makes claim for bills to Dr. Donald M. Levy, known to be a prominent Norfolk neurologist, and Dr. George H. Williams, who apparently examined Matamala and ran an audiogram. The names of these two doctors do not appear in the record and their bills are not in evidence. Assuming that Matamala was examined by these doctors, it is a reasonable assumption that they would not have supported his claim with respect to the alleged condition of his ears (as related to the explosion) and that all neurological findings were negative. If Matamala never visited these doctors, the bills could not be considered. Moreover, once again we are met with the problem of not returning to the public facility available to all seamen without cost. Without the record from the Public Health Service Clinic, it is impossible to determine the diagnosis, findings, etc. We agree that his claim is largely suspect.
For his trivial personal injuries he is allowed $1,500. Matamala will be awarded $250 for loss of earnings and maintenance for eight days, or $48.
A judgment will be entered in favor of Avelino Matamala against the United States of America in the sum of $1,798, plus interest from the date of judgment, and costs.
James Henry Minter
Having finished taking a shower and while in the process of dressing, Minter, a galleyman, heard the general alarm and immediately went aft. Following the first explosion he jumped off the stern on the port side. Swimming with the current, he reached the causeway bridge where he held onto a piling until picked up by a Coast Guard boat.
Superficial cuts and scratches on his arms were treated by first aid. He was then taken to the station hospital at Cherry Point, remaining there overnight and being discharged the next morning. On September 30, 1961 four days after the disaster Minter reported for outpatient treatment at the Public Health Service Hospital in Norfolk with symptoms being noted as a mild lumbosacral strain.
When he next returned on October 5, 1961, he was declared not fit for duty for two weeks and given an x-ray examination. The report on the latter reflected some slight postural change of the lumbar spine, then believed to be congenital. Later, on October 19, 1961, the diagnosis was changed to seminal vesiculitis. He was continued in a not-fit-for-duty status until November 21, 1961, when he was declared fit for duty.
At his counsel's request, Minter went to see Dr. W. Clarke Pole on October 27 and again on November 16. No x-rays were taken and all objective symptoms were negative. Dr. Pole expressed the view that Minter' complaints of pain on the extremes of motion in the lower back probably represented residual sprain symptoms in that portion of the back, and that Minter was improving nicely. Unfortunately Dr. Pole, an able orthopedic surgeon, did not have the records of the *1327 Public Health Service Hospital and was not advised that Minter's condition had been diagnosed as seminal vesiculitis. He was merely asked, on cross-examination, whether seminal vesiculitis would produce pain in the area of the lower back and he replied in the affirmative.
Once again we have the problem of causation. There is no medical evidence indicating that seminal vesiculitis was in any way related to the POTOMAC disaster and, as Dr. Pole testified, the low back complaint could have been caused by seminal vesiculitis. On the other hand, the initial impression was a mild lumbosacral strain and the seminal vesiculitis may have existed or had its origin at the time of the accident and that this was the sole cause of Minter's complaints.
Admonished as we are in Vaughan v. Atkinson, 369 U.S. 527, 532, 82 S. Ct. 997, 8 L. Ed. 2d 88 (1962), to give the benefit of the doubt to a seaman in a claim for maintenance, we find that Minter is entitled to same until November 21, 1961, when he was released as fit for duty. This amounts to $448. Minter lost $83 in cash in the fire and is entitled to recover this amount. Dr. Pole's bill is not allowable as an item of cure as there is no suggestion that the Public Health Service Hospital could not adequately care for Minter. Since maintenance was never claimed, there is no basis for allowing damages by way of attorney's fees.
Irrespective of the allowance of maintenance for 56 days, we do not think it follows, as a matter of course, that loss of earnings should be governed by the same yardstick. We believe that the preponderance of credible evidence supports the view that, on and after October 19, Minter's disability was occasioned by seminal vesiculitis which, on this record, is not causally related to the incident of September 26, 1961. The allowance of maintenance subsequent to October 19 was due to the fact that the urinary infection may have had its onset while Minter was aboard the POTOMAC and, under applicable law, the doubt as to the right to maintenance must be resolved in Minter's favor. The loss of earnings for 23 days aggregates $447.81.
For Minter's minimal injury, his back strain, fright, etc., we award $1,600.
A judgment will be entered in favor of James Henry Minter against the United States of America in the sum of $2,578.81, plus interest from the date of judgment, and costs.
Clarence B. Nelson
As of the date of the disaster this ordinary seaman was 40 years of age, somewhat overweight, and with minor preexisting ailments. His principal and probably sole complaint worthy of discussion is a hearing loss. Nelson was in his room when the general alarm sounded. He proceeded to the stern and, together with other crew members, aided in casting off the after lines and breaking out fire hoses. The first explosion took place while he was still aboard the vessel, following which he left the ship by sliding down one of the stern lines. When about halfway down the rope, Nelson dropped the rest of the way into the water[65] and started to swim for shore. The second major explosion occurred while he was headed for shore and, upon arriving ashore, Nelson ran through the tank farm encountering some prickly pears or other sharp objects which caused burrs on his feet. A truck picked him up and took him to a local hospital in Morehead City, following which Nelson was transferred to the station hospital at Cherry Point the same evening. He was discharged two hours later following treatment for rope burns, burrs, and the removal of some material from his right ear.
Following Nelson's return to his home in Houston, he reported to the Public Health Service Clinic on September 29, 1961. The clinical record reveals rope burns on hand and feeling very nervous. *1328 That same day he made application for a duplicate set of seaman's papers and registered with the hiring hall. He subsequently visited the Clinic on October 2, 5 and 9, with an improved condition of the hand but still feeling nervous. However, on October 9, he was given a fit-for-duty slip. It was not until November 6 when Nelson again appeared at the Clinic and submitted a report from a private doctor indicating that he had retracted ear drums and a loss of hearing. Nelson was given another fit-for-duty slip on November 13, and caught a ship on November 20. He has been sailing regularly since that date.
On October 27, 1961, Nelson visited Dr. Brown, a neurosurgeon. Other than pre-existing ailments, Dr. Brown diagnosed an anxiety state neurosis. Because of complaints as to hearing loss, Dr. Brown referred Nelson to Dr. Wolfe, an eye, ear nose and throat specialist, whom he saw on the following day, October 28, 1961.
Four months following the conclusion of the trial at New Bern, a further hearing was conducted at Norfolk. At the trial in New Bern permission had been granted to have Nelson examined by an ear specialist upon his return from sea. The principal reason for granting this request was because the depositions of Drs. Brown and Wolfe had been taken only a few days prior to the commencement of the trial. Prior to the hearing at Norfolk on July 29, 1963, Nelson had been examined by an ear specialist, Dr. J. Charles Dickson, at the request of the United States. Dr. Dickson's testimony was later taken and, while differing from Dr. Wolfe as to the likely cause of the hearing loss, does substantiate that Nelson definitely had such a loss.[66]
While Nelson has sustained a fairly substantial percentage of hearing loss, it is with respect to high tones. There is no apparent loss at lower tones. We find that Nelson sustained a concussion-type shock from the explosions which, in turn, contributed appreciably to a perceptive-type hearing loss. The claimant's specialist concedes that a portion of the hearing loss was probably due to advancing age and this tends to minimize the importance of the excluded evidence relating to the 1952 hospitalization.
Once again we have the problem with respect to medical bills rendered by private physicians. It must be remembered that, although apparently some substance was removed from Nelson's right ear at Cherry Point, he made no complaint to the Public Health Service Clinic at Houston as to any hearing loss until after he had seen Drs. Brown and Wolfe. Once having given the Clinic the report from Dr. Wolfe, the hospital was then on notice of the hearing loss but, as to this defect, Dr. Wolfe only saw Nelson on one subsequent occasion and, as to Dr. Brown, there is no showing that Nelson was refused or otherwise could not have been successfully treated for his anxiety state and minor preexisting ailments at the Public Health Service Clinic. Under the principles enunciated in Roberson v. S/S American Builder, 265 F. Supp. 794 (E.D.Va., 1967), and authorities therein cited, these bills cannot be allowed.
Nelson testified that he lost $75 in the fire, which item is allowed.
There is a dispute as to whether Nelson will be required to undergo the expense of a hearing aid and the maintenance of same. Dr. Wolfe indicated that a hearing aid would entirely correct the *1329 defect, but that it would take a period of months to handle the necessary adjustments and such would be impossible if Nelson remained at sea. Dr. Dickson expressed the view that a hearing aid would so magnify the nearly normal lower tones that they would be uncomfortably loud. In any event, Nelson has not incurred such an expenditure and apparently does not plan to do so. We are inclined to the opinion that a hearing aid would not prove to be a satisfactory solution of the overall hearing problem. The estimated possible future expense as testified to by Dr. Wolfe must be disregarded and the damages will be fixed under the assumption that the loss cannot be successfully adjusted by a hearing aid.
Nelson makes no claim for maintenance and he apparently has been paid for this item. He is entitled to loss of earnings from September 27, 1961, to November 13, 1961, computed at $500 per month. He is allowed $750 for this item. While he has been regularly employed since November 20, 1961, and can establish no definite impairment of earning capacity as of the time of trial, we think it appropriate to give some consideration to the hearing loss as related to impairment of earning capacity in the overall allowance for his injuries.[67]
For the minor and permanent injuries sustained, including consideration of future impairment of earning capacity, an award in the sum of $10,000 is made.
A judgment will be entered in favor of Clarence B. Nelson against the United States of America in the sum of $10,825, plus interest from the date of judgment, and costs.
Vadis Page
This 38-year-old able-bodied seaman was on watch near the No. 5 tanks on the catwalk when the fire broke out. At the direction of the Chief Mate, Page ran to the pump room to have the pumps cut off, and then began shutting down the deck manifolds and breaking out fire hoses while working his way aft. Together with the other members of the crew he was on the fantail when the first explosion occurred. On orders to abandon ship, Page slid down a line, dropped the last five or six feet to the water, and swam over to a mooring dolphin where other members of the crew were gathered. A fishing boat threw the men a line and Page, with others, was towed out into the harbor before being taken aboard. He was in the water about thirty minutes.
Page was taken to the local hospital where his right hand was treated and bandaged for a rope burn. He was transferred to the station hospital at Cherry Point and again the rope burn was treated and bandaged. He remained overnight and was discharged the next day.
On October 5, 1961, Page visited the Public Health Service Clinic at his home in Houston, with the records indicating nervousness and further treatment for the burn. He never returned thereafter and his fit-for-duty status is not indicated. In any event, he immediately registered for work and caught his next ship on October 20, 1961. He lost his wallet which contained $104.
Subject to what has heretofore been said with respect to maintenance, he is allowed maintenance and loss of earnings for a period of fifteen days. Maintenance amounts of $120. Loss of earnings aggregate $300. For his minor injury, fright, etc., he is allowed the sum of $1,200.
A judgment will be entered in favor of Vadis Page against the United States of America in the sum of $1,724, plus interest from the date of judgment, and costs.
Henry Pickens
This fireman water tender has died from natural causes unrelated to the disaster since the trial of this case. His *1330 claim has been revived by Florence Pickens, the administratrix of his estate.
When the alarm was sounded, Pickens was in his quarters. He immediately went to the fire room and assisted the engineering personnel in operating the plant. Upon receiving orders to abandon ship, he went up on deck, slid down a line, and dropped the last few feet into the water. He swam out into the middle of the harbor and then, aided by the current, continued under the causeway and railroad trestle into the Newport River. He was found by a Coast Guard boat some distance upstream and is believed to be the last survivor rescued.
Taken initially to the Morehead City hospital, Pickens was transferred to Cherry Point where he remained overnight and was discharged the next morning. He returned to his home in Alabama and then proceeded to New Orleans where he reported to the Public Health Service Hospital on October 2, 1961, and also registered for work with his union. The hospital record reflects small burns, apparently from the rope, on his left hand and forearm, myalgia of the neck and lower back muscles, hypertension, and lumbo-sacral sprain. He was declared not fit for duty and was subsequently given outpatient treatment at the Public Health Service Clinic in Mobile and by a doctor in his hometown. He was declared fit for duty on October 31, 1961, and caught his next ship on December 1, 1961. Pickens lost $33 in the fire.
Counsel for Pickens now claims maintenance, although it is not mentioned in the record. The petitioner's brief states that Pickens was paid $240 through October 31, 1961, the date that he was declared fit for duty. While the Court would allow maintenance for 34 days, or $272, it is apparent that maintenance was paid and, subject to the right of counsel for Pickens to be heard, the claim for maintenance is disallowed.
Allowing 30 days for loss of earnings, we award $530 for this item.
Pickens had a rather harrowing experience as he was in the water better than two hours. For his minor injuries, fright, etc., he is allowed the sum of $1,800.
A judgment will be entered in favor of Florence Pickens, Administratrix of the Estate of Henry Pickens, against the United States of America, in the sum of $2,363, plus interest from the date of judgment, and costs.
Elmer E. Taber
Taber, the fourth mate on the POTOMAC, was not aboard the vessel when the fire broke out. He contends that he fell and injured his leg and back when he started to run back to the ship from a restaurant near the causeway. Originally, Taber filed a claim for personal injuries but his brief seeks loss of cash, maintenance and loss of earnings during disability. Indeed, Taber testified that he had no claim for personal injuries and we agree with his ultimate conclusion.
Any claim for loss of earnings is prohibited by the Wreck Statute, 46 U.S.C., section 593, since he sustained no personal injury and the vessel was a total loss.
Taber's claim for maintenance is not rejected because he was purportedly injured in an accident ashore. Taber apparently returned to his home and elected to rest until November 6, 1961, before registering for work. Conceding that he may have received treatment at a Public Health Service Hospital, there is no medical evidence reflecting that he was ever declared or otherwise not fit for duty.
Taber's claim for loss of money in the sum of $400 is allowed. Taber also claimed $1,180.75 for loss of personal effects, but he failed to testify anything with respect to same. Counsel assert that this was an oversight. While the latter statement may be correct, there is no law justifying an allowance of $1,180.75, or any part thereof, where there is not a shred of evidence to support same.
*1331 A judgment will be entered in favor of Elmer E. Taber against the United States of America in the sum of $400, plus interest from the date of judgment, and costs.
CLAIMS OF UNINJURED SEAMEN ASHORE FOR WAGES AND LOSS OF MONEY
Five seamen, Hans Berntsen, Willie Burton, Francis J. Lydon, Woodrow P. Nayer and Charles Rice, have filed claims for lost moneys and loss of wages from the date of the disaster until they were successful in catching their next ship. The last mentioned claim is precluded by the Wreck Statute, 46 U.S.C., section 593, and these seamen cannot recover for any loss of wages. They were apparently paid in full through the date of the disaster.
The claim of Willie Burton for loss of money is disallowed as he did not testify, either in person or by deposition. In fact, there is no evidence to support same.
While there is room for argument as to the Berntsen claim, we think that it should be allowed in the sum of $600. The claims of Lydon in the sum of $650, Nayer in the sum of $295, and Rice in the sum of $200, are not seriously controverted.
Judgments will be entered against the United States of America, plus interest from the date of judgment, and costs, in behalf of the following:
Hans Berntsen $600
Francis J. Lydon $650
Woodrow P. Nayer $295
Charles Rice $200
Appropriate judgment orders will be entered upon presentation.
MEMORANDUM AND ORDER ON SUPPLEMENTAL FINDINGS
At the hearing on August 14, 1969, it was suggested that the First Assistant Engineer, Therence G. Cloud, had received no maintenance during his alleged disability, and had made no claim for same. Consistent with the memorandum opinion dated July 11, 1969, and counsel having waived their right to an evidentiary hearing, Therence G. Cloud is allowed maintenance at the rate of $8.00 per day for 18 days, or the sum of $144.00, thereby increasing the total judgment in favor of Therence G. Cloud from $1950.00 to $2094.00. It is so ordered. The United States excepts to the allowance of any claim for maintenance on the ground that it was never requested nor asserted in any claim or pleading.
At the hearing on August 14, 1969, the attorney for the United States stated that the Second Assistant Engineer, William F. Craig, had received no maintenance and had made no claim for same. Counsel waived any right to a further evidentiary hearing. Craig did not testify. Whether he was ever declared unfit for duty is not known. While Craig was allowed loss of earnings for two weeks, it does not necessarily follow that he is entitled to maintenance for this or any other period. It is ordered that no allowance be made to William F. Craig by way of maintenance. The United States, while not objecting to the disallowance, reserves its exception to consideration of any award for maintenance on the ground that it was never requested nor asserted in any claim or pleading.
At the hearing on August 14, 1969, a release executed by Hom Yew Sang in the sum of $680.10 was exhibited. Counsel agreed that this claim had been previously satisfied and it is ordered that the findings be so amended.
The United States seeks a reduction in the award to Agnes Salopek, Administratrix of the Estate of Peter Salopek. The theory advanced by the Government is that the Court allowed the mother of the deceased seaman an award for her pecuniary loss without discount for 7½ years[1] but then picked up Mrs. *1332 Salopek's life expectancy at that particular date, to-wit, March 26, 1969, and the Court should have adhered to Mrs. Salopek's life expectancy at the time of her son's death. We disagree with the Government's contention on this point. Strictly speaking, a pecuniary loss payable to one who does not have as long an expectancy as the deceased, should be paid annually during the life of the dependent beneficiary. We see no harm in computing Mrs. Salopek's pecuniary loss based upon her expectancy at the end of the 7½ year period. It is reasonable to assume that the decedent, had he lived, would have continued his support until her death. The language in Gardner v. National Bulk Carriers, Inc., 221 F. Supp. 243, 247 (E.D.Va.1963), aff'd per curiam, 333 F.2d 676 (4 Cir. 1964), was stated in a situation where the decedent's wife was younger than the deceased. Moreover, the Court stated in Gardner that "the basis for the proper determination of damages is essentially fixed upon death." Nor do we believe that Van Beeck v. Sabine Towing Co., 300 U.S. 342, 347-349, 57 S. Ct. 452, 81 L. Ed. 685 (1937), is contrary to this ruling. The latter involved a widow who had remarried. We think that the policy of the law intends to award the beneficiary no more and no less than the best possible estimate of the Court as to what the dependent would have received but for the death of the seaman. The same question was before this Court in Whitaker v. Blidberg-Rothchild Company, 195 F. Supp. 420, 424 (E.D.Va.1961), aff'd. per curiam, 296 F.2d 554 (4 Cir. 1961), in which the mother's age was 50 at the time of her son's death and 52 at the time the decision was handed down. The Court computed the life expectancy of the mother as of the date of the decision. We adhere to this view in cases where the expectancy of the dependent is less than the expectancy of the decedent at the time of death. It is so ordered.
The United States has moved to reduce the award to Clarence B. Nelson. By order of Court entered on August 14, 1969, this award was increased from $10,075.00 to $10,825.00 due to the inadvertent failure to include an item of $750.00 for loss of earnings; a failure commendably called to the attention of the Court and opposing counsel by the Government attorney at the hearing on August 14, 1969. There is no merit to the motion to otherwise amend the findings as to Clarence B. Nelson, and it is so ordered.
This leaves for consideration the award to Mary Esther Ford Leonard, Administratrix of the Estate of Clyde V. Leonard, which is likewise subject to the motion to amend as filed by the United States. In part, at least, we think that there is merit to this motion. At the time of decedent's death, he was 57 years of age. As the dependent beneficiary, Mrs. Leonard testified that she was 58 at the time she testified on March 21, 1963 (Vol. X), it follows that she was slightly younger than her husband. The Court erred in making an allowance to Mrs. Leonard based upon the decedent's life expectancy had he reached the age of 65. The decedent's life expectancy at the time of death was 18.23 years.[2] By recomputing his life expectancy had he lived until the age of 65 (12.90 years life expectancy at age 65) the Court accorded the decedent's life expectancy a new status which, in the opinion of the Court, was erroneous. The Court allowed a full annual pecuniary loss of $2200.00 for 7½ years, or $16,500.00. The Court should have then allowed a pecuniary loss following the normal age of retirement (age 65) for 10.73 years, rather than 13 years as computed in the memorandum of July 11, 1969. The closest convenient factor for computing the discounted value is for 11 years, or 8.760. This would amount to $10,512.00, rather than the rounded out figure of $12,000.00 as specified in the memorandum opinion. Rounding out this figure we find that the original award of $34,500.00 should be reduced to $33,000.00, the same representing the approximate difference of $1500.00.
*1333 Other than the aforesaid error, we find that the basis for the award was well within the discretion of the Court in ascertaining proper damages. We do not believe that potential Social Security benefits should be considered in diminution of the pecuniary loss of the beneficiary. It is so ordered.
NOTES
[1] Two earlier suits were brought on seaman's death and injury claims against the United States and Marine Transport Lines in the Eastern District of Virginia, which were thereafter transferred to this Court and consolidated for trial with this proceeding. Mary Esther Ford Leonard, Admx. v. United States and Marine Transport Lines, Inc. v. Aviation Fuel Terminals, Inc. (EDNC Adm. No. 272). Eugene Alves, et al v. United States and Marine Transport Lines, Inc. v. Aviation Fuel Terminals, Inc. (EDNC, Adm. No. 273).
Two related actions, not consolidated with the present cases, are likewise pending in this Court, Sarah Smith, Administratrix of the Estate of John C. Smith v. Aviation Fuel Terminals, Inc. (EDNC, Civil No. 566), and Agnes Salopek, Administratrix of the Estate of Peter Salopek v. Aviation Fuel Terminals, Inc. (EDNC, Civil No. 567), and as the present decision may affect these cases, copies of the memorandum will be filed therein.
[2] It has been decided on interlocutory appeal earlier in these proceedings that there can be no recovery against Marine Transport Lines because of the exclusivity provisions of the Public Vessels and Suits in Admiralty Acts, 46 U.S.C., sections 741-752, 781-790. Smith v. United States, 346 F.2d 449 (4th Cir., 1965), cert. denied 382 U.S. 878, 86 S. Ct. 163, 15 L. Ed. 2d 119 (1965); see also Petition of United States, 367 F.2d 505, 509-511 (Third Cir., 1966) cert. denied Black v. United States, 386 U.S. 932, 87 S. Ct. 953, 17 L. Ed. 2d 805, rehearing denied, 386 U.S. 1000, 87 S. Ct. 1303, 18 L. Ed. 2d 354. In Smith, the Fourth Circuit held (346 F.2d at 454):
"Our conclusion is that Marine [Transport Lines] should now be declared exonerated, by reason of the statute, of any liability to the appellant-claimants."
As the law of this case, the Smith decision requires that the petition of Marine Transport Lines for exoneration herein must be granted. The Smith case was heard on its merits in the present controversy following the denial of certiorari by the Supreme Court.
[3] Trial of damages on claims for property damage was reserved until after entry of an interlocutory decree on the merits.
[4] The petition was supported by affidavits showing that the value of the POTOMAC as she lay after the disaster was $577,000, and that her estimated costs of salvage were $800,000, so that her value for limitation purposes is zero. The POTOMAC measured 15,626 gross tons, and at $60 per gross ton there would be a limitation fund of $937,560 available for death and personal injury claimants in some cases under 46 U.S.C., section 183(b). The United States contends that under 46 U.S.C., section 183 (f), the $60 per gross ton exception to the limitation statute is inapplicable to tank vessels, but the case law on the subject is apparently contrary to this contention. In re Petition of The Dodge, Inc., 282 F.2d 86, 89-90 (2 Cir., 1960); Petition of Panama Transport Co., 73 F. Supp. 716 (S.D.N.Y., 1947); Oliver J. Olson & Co. v. American Steamship MARINE LEOPARD, 356 F.2d 728, 737, ftnote 4 (9 Cir., 1966); 3 Benedict, Admiralty, sec. 475, p. 321, sec. 494, p. 405 (6th Ed., 1940). Contra: Gilmore & Black, Admiralty, sec. 10-35, p. 720. There is much to be said in argument, it being urged that the legislative history demonstrates that the language of section 183(f) refers only to tankers of the river and harbor type, but in view of the conclusions herein reached the point is immaterial.
[5] At the time of the Morehead City disaster, there were only four T-5 tankers in existence.
[6] One of the grounds assigned by the petitioners in an effort to secure a continuance of the trial was the contended inability to secure the presence of the chief pumpman. However, during the prolonged trial and thereafter, apparently all other witnesses mentioned in the motion for continuance were located.
[7] After returning to New York, Ritter prepared from his notes formal specifications for the next repair contract, the typed specifications being dated September 25, 1961.
[8] The POTOMAC was manned by a crew of civilian merchant seamen, who were hired by Marine Transport Lines as the Government's public vessel operating agent, and whose employment could be terminated by the United States at any time. The officers were required to become members of the United States Naval Reserve; the master was directed and authorized to carry out direct Navy orders concerning the ship, which was at all times under the Navy's operational control.
[9] The valve sealing certificate was retained on board the vessel until completion of discharge and was apparently executed in Morehead City, but was thereafter lost in the fire.
[10] Directions at Morehead City are quite confusing, because the Atlantic coast at this point is running almost exactly in an east-west direction. Ships enter Morehead City harbor from the south, with Radio Island to their right, Bogue Sound to their left, and the highway bridge dead ahead to the north.
[11] The contract provided that dockage and wharfage charges would be eliminated after 10,000,000 barrels of fuel had passed over Aviation Fuel's dock, which under the guarantee provisions of the dockage clause, would necessarily occur within five years of the contract date. The barrelage ceiling seems to have been met in the summer of 1960, by which time Aviation Fuel had been paid $350,000 in dockage and wharfage charges.
[12] The JP-4 system was not used in discharging the POTOMAC's cargo, but the pipeline leading over the water to the dock was filled with JP-4 jet fuel up to the dockside connection at all times.
[13] There was no way that the Fire Department could be called from the dock, because there is no telephone there. There is an intercommunication system connecting the dock and the office, and messages can be relayed outside the premises so long as someone is present in the office.
[14] The quantity of cargo remaining on board the POTOMAC on her arrival at Morehead City was 57,177.50 gross barrels (or roughly 2,400,000 gallons) of aviation gasoline, and 45,013.60 gross barrels (or roughly 1,890,000 gallons) of JP-5 jet fuel.
[15] Maholland did not advise the master and the master did not know that Maholland was going to use the sea line. Neither the master nor Marine Transport Lines' marine superintendent consider use of the sea line for this purpose a good practice.
[16] Apparently it was Mixon's idea to use the sea line as Maholland asked Mixon how the No. 2 wing tank could be discharged and Mixon responded. Mixon incorrectly assumed that block valves were just inside the sea suction valves.
[17] This factual finding is essentially conceded in the brief of the United States as there is no dispute that the port sea suction valve was found to be open when the vessel was inspected months after the fire.
[18] The steam smothering system, which was in good operating condition and had been activated and tested only two days earlier, was not turned on, because the master had not ordered it. Captain Hunter did not want the steam smothering system turned on, because under normal in-port steaming conditions, there is not enough steam to permit both an emergency departure and activation of the steam smothering system. Captain Hunter chose to attempt to get the ship underway, which Aviation Fuel's expert Prussing agrees should be the first concern of the ship's officers in these circumstances.
[19] Morehead City pilot Piner had just finished docking the Tanker PALLIUM, and was still on board her when he saw the fire. He did not see it after it got closer than 600 or 700 feet from the POTOMAC's bow, but observed that the fire extended 150 to 200 feet north of the causeway. He fixes the time of the fire's outbreak at about 6:45 p.m.
[20] Sowers testified that he ran out to the Radio Island edge of the railroad trestle and observed a "blue streak" take off from the body of fire under the bridge, headed for the vessel, and hitting it directly on the bow.
[21] Guthrie, the bridge tender operator, who was called as a witness by the United States, was in an excellent position to observe the path of the fire. He stated that the fire went directly to the port bow, about midway between the midship house and the bow.
[22] At his deposition Matamala said that he did not look at the sea suction valves and could not say whether they were open or closed. Apparently prior to the deposition he had told counsel for the United States, in the presence of his own attorney, that he had looked at the sea suction valves and they were closed. He also testified that these valves were closed at the time of the Coast Guard hearing shortly after the disaster.
[23] We need not venture into any realm of speculation with reference to the effect of instantaneous unseaworthiness or operating negligence being tantamount to unseaworthiness as the same applies to the right to limit liability. Under 46 U.S.C., sec. 183(e), in matters touching loss of life or bodily injury, the privity or knowledge of the master or of the superintendent or managing agent of the owner, at or prior to the commencement of each voyage, is deemed conclusively the privity or knowledge of the vessel's owner. While the foregoing applies to a "seagoing vessel," and the United States contends that the POTOMAC was a "tank vessel" and, therefore, not within the category of a "seagoing vessel," this subject is discussed in footnote (4), infra. Under 46 U.S.C., sec. 183(a), the owner, if without privity or knowledge, may limit his liability, except as provided in sec. 183(b), to the value of the owner's interest, as the interest is shown after the catastrophe, plus her pending freight. Thus, "privity or knowledge" as prescribed by 46 U.S.C., sec. 183(a) need not necessarily be in existence at the commencement of the voyage. We must assume, arguendo, that authorities such as Mitchell v. Trawler Racer, Inc., 362 U.S. 539, 80 S. Ct. 926, 4 L. Ed. 2d 941 (1960), and Venable v. A/S Det Forenede Dampskibsselskab, 399 F.2d 347 (4 Cir., 1968), do not change the long-existing law on "privity or knowledge" as the same applies to the right to limit liability. Indeed, the brief per curiam en banc opinion on the petition for rehearing in Venable considerably weakens the force of the majority opinion and, in effect, holds that operational negligence does not constitute unseaworthiness in all cases, but that the same remains a question of fact.
[24] Salopek's body was never found. He was apparently last seen by the master who instructed him "to get moving, get a life jacket, and go to the stern." We think that the evidence justifies a finding that Salopek was burned to death. This inescapable conclusion is derived from all of the physical facts, including the extent of the fire at the moment Salopek was last seen. While the United States urges that any award should be reduced by reason of Salopek's failure to go to the stern of the ship as directed by the master, we do not believe that this point merits discussion when we consider that there is a presumption, in the absence of evidence sufficient to dispel or rebut it, that the decedent, acting in the instinct of self-preservation, was in the exercise of ordinary care. 25A C.J.S. Death § 80(2), p. 819.
[25] The brief of the claimant suggests her life expectancy at age 74 to be 9.90 years. The brief of the United States states her life expectancy to be 4.12 years at age 76. The statutory mortuary tables of North Carolina, N.C.Gen.Stat., sec. 8-46, reflects that the life expectancy of a person 70 years of age is 9.96 years.
[26] We draw an analogy to the present situation in Bagley v. City of St. Louis, 268 Mo. 259, 186 S.W. 966 (1916), wherein the death action was brought on behalf of the decedent's mother and four half brothers and sisters. The mother died prior to trial. On appeal, it was held that the mother's action for loss of heritable rights abated upon her death.
[27] Even after the transcript had been completed, there were so many errors that it was a year later before the transcript was corrected. Other delays were occasioned by the interlocutory appeal (footnote 2, infra); the necessity of hearing the Smith and Holley claims in 1967; and the lack of judicial manpower until September 1967.
[28] The gross earnings were as follows:
1955 $2,026.44
1956 3,687.27
1957 4,284.07
1958 1,827.70
1959 4,564.66
1960 2,131.87
[29] It is not clear from the record whether the monthly contribution of $300 is confined to 1961 or constitutes an average for prior years as well. Counsel's question to Mrs. Leonard refers to a "recent average." Obviously Leonard could not have contributed $300 per month during 1960, as such a contribution would exceed the gross annual earnings by nearly $1,500.
[30] On a seven-month voyage aboard the POTOMAC ending in July 1961, Leonard's gross earnings were $4,654.81, and his allotments to his wife aggregated $975. He obtained advances aggregating $363.50. Even if the advances were transmitted to his wife, the sum total of the allotments and advances amounts to $1,338.50, or slightly less than $200 per month.
[31] Leonard's retirement age is approximately six months beyond the anticipated date of entry of final judgment.
[32] The allowance of full pecuniary loss for 7½ years, plus an allowance of six months life expectancy computed at $1,058.20 (rounded out at $1,000), would be the equivalent of reaching the retirement age.
[33] Smith apparently caught cold some two or three days prior to the disaster, and it had not been cured.
[34] The notation refers to the right lung, but all symptoms were in the left chest and it may be assumed that the notation or transcript is in error.
[35] Dr. Norton, the examining physician at Mease Hospital, does not attribute the lumbosacral back sprain to the POTOMAC disaster. He suggests that it was possibly caused by the metastatic spread from the lung malignancy.
[36] There was no evidence of pleural fluid found at Mease Hospital, all of which would indicate a rapid progression of the lung cancer during the interim period.
[37] Even if this theory should be accepted, the life expectancy tables would be meaningless. Such tables are of assistance in determining the average expectancy of life for one in otherwise normal health, but should not be applied with respect to one who is known to have a malignancy which is acknowledged to be incurable.
[38] Cf. Trexler v. Tug Raven, 290 F. Supp. 429, 450, N. 36 (E.D.Va., 1968).
[39] Smith was paid his maintenance from September 26, 1961, through November 9, 1961. Since he entered the Public Health Service Hospital at Savannah at 7:00 p. m., on November 14, 1961, we have computed his maintenance for five days.
[40] The record is not clear as to whether this claimant was transferred from the hospital at Cherry Point of Camp Lejeune. The point is immaterial. The claimant testified that it was the Cherry Point Hospital.
[41] Claimant testified that, prior to 1962, he handled the bulk of his farming work without much assistance.
[42] No evidence was introduced with respect to the expense of Dr. Bizzell's examination or treatment.
[43] Answers to interrogatories propounded by the United States to Stanley do reveal his income according to his Federal Income Tax returns. The answers to the interrogatories were not admitted in evidence by stipulation, and Stanley was not questioned as to his earnings. The answers to interrogatories disclose that Stanley's income during the year of the disaster far exceeded his income for five years prior thereto. While we know of no rule of law which would permit consideration of such answers, we pause to say that there is no information as to whether the income, or part thereof, came from capital gains, etc.
[44] Since he was on authorized leave and was not performing any duties connected with the United States, Massengill has a right to bring an action against the United States. Brooks v. United States, 337 U.S. 49, 69 S. Ct. 918, 93 L. Ed. 1200 (1949).
[45] The collateral source rule does not apply as the United States paid his salary and furnished all medical attention.
[46] The independent action referred to herein is Admiralty No. 273, which was consolidated for trial with Admiralty No. 278 (the limitation proceeding) and Admiralty No. 272 (the Leonard death claim). The libel in No. 273 asserts claims for personal injuries, loss of moneys, medical expense, and loss of earnings, but makes no mention of any claims for maintenance. The crew members filing the independent action were Alves, Berntsen, Bradfield, Brown, Crawford, Fogg, Holley, Lee, Malone Matamala, Minter, Nayer, Nelson, Page, Pickens, Sang, Spates, Smith, Rice and Taber. The claim of John C. Smith was later treated as a death claim, with other counsel appearing, and is the subject of separate discussion, infra.
[47] Other claims were filed with respect to property damages and, as to these claims, the issue of damages has been reserved. They are: Aviation Fuel Terminals, Inc.; A. T. Leary, lessee of Beaufort & Morehead Railroad Co.; Home Insurance Co. as subrogee of A. T. Leary, etc.; and Coastal Realty Co. The United States of America has filed a cross-libel against Aviation Fuel Terminals, Inc., but this issue is terminated by the decision herein.
[48] Dr. Crane's testimony is as follows:
"I illicited no muscle spasm in evaluating his back and palpating it in the prone position. He did, however, have one spot that he said was tender on the right side of the low back in the vicinity of the fifth lumbar spinus process. Neurological examination, reflexes, sensation, motor power, and so forth, were all negative. I felt from this examination and from the history that he gave me, that he may well have strained his back during this or as a result of this explosion which took place on the tanker.
"I made an estimate of disability time at that time to be somewhere perhaps in the vicinity of eight to ten weeks" [from date of accident].
[49] Dr. Crane's small bill for this examination cannot be considered. Roberson v. S/S American Builder, 265 F. Supp. 794 (E.D.Va., 1967), and authorities therein cited.
[50] Bradfield testified that, as he was being hauled into the Coast Guard boat, an explosion from the POTOMAC knocked him into the cockpit, causing a cerebral concussion and rendering him momentarily unconscious. While we think it of no consequence to make a finding on this point, we doubt the testimony due to the estimated period of time that Bradfield was in the water. If required to make a finding, we would not conclude that he received such a blow on his head in the manner described by him.
[51] Bradfield at first denied that he visited Dr. Brown at the instance of counsel.
[52] Morehead City notation on September 27, 1961: "Not fit for duty to return September 28, 1961 for further examination." Savannah notation on September 30, 1961: "Not fit for duty, to report to Jacksonville, Florida, outpatient clinic." Jacksonville notation on October 2, 1961: "acute upper respiratory infection, extreme nervousness probably due to accident, improved," but without evidence of pneumonia, pleurisy, any active pulmonary disease, and with a normal heart.
[53] The disease in question is a slowly developing degenerative condition which affects the nerves and muscles below the knee, resulting finally in the disappearance of muscle tissue through atrophy thus leaving only skin and bones. By the time of the trial, approximately 90% of the muscles in both legs were absent in Crawford's case.
[54] We do not agree that Crawford sustained any injury by reason of being struck by the ship's propeller. Objective evidence of any such event is absent. If the propeller had been moving, it assuredly would have caused some bodily injury.
[55] There is minimal support for the five-year estimate in that the musculature was wasting away at the rate of 3% per annum.
[56] Roberson v. S/S American Builder, 265 F. Supp. 794 (E.D.Va., 1967). Other claims made in Crawford's belief as to certain medical and hospital expenses are not supported by the record.
[57] Because the medical records are incomplete, it is impossible to ascertain exactly when Crawford reached maximum possible cure.
[58] Holley testified that he was in the water for five hours. The fire and explosions took place about 6:45 p. m. Apparently Holley arrived at Cherry Point, distant appoximately 35 miles from the point of disaster, before midnight on September 26, 1961. The hospital record reflects that Holley referred to 45 minutes in the water. This is approximately correct, although it is possible that Holley remained in wet clothes for an hour or two while on the trestle and highway bridge.
[59] Holley stated that he remained at Morehead City for seven or eight days. Later he indicated this period to be five to seven days. Since he obviously visited the Public Health Service Hospital on September 30, we must assume that his stay at Morehead City was limited to approximately three days.
[60] Initially Holley stated that he waited two months for a ship and this time is referred to in Holley's brief. On cross-examination Holley admitted that he caught a vessel on July 6, 1963.
[61] Incorrectly referred to in the record as Granby Sanatorium.
[62] As stated in the record. The correct name of this witness appears to be Dr. Edward S. Ray.
[63] The records of the Public Health Service Clinic were not introduced. Matamala's counsel refers to a diagnosis of "post-explosive tinnitus."
[64] The deposition taken of this doctor as to the Malone claim indicates that Dr. Markewich is a general practitioner.
[65] Nelson sustained minor rope burns which he assigns as the reason he decided to drop into the water.
[66] Several years later, after the transcript had finally been completed, the Government requested leave to reopen the Nelson claim to introduce a 1952 hospital record bearing a notation with respect to scars on both drums with some minimal deafness, and a diagnosis of infectious hepatitis. Nelson had testified about this hospitalization long prior to his examination by Dr. Dickson. The short answer is that the Government, although having ready access to hospital records in a Government hospital, had never requested the production of the record. To permit the introduction of the 1952 hospital record would have required the retaking of depositions and possible additional testimony from the 1952 treating physicians. The evidence was rejected.
[67] Nelson's counsel contends that the earning loss should be computed in accordance with the percentage of hearing loss. Such a misconception of damages is not worthy of discussion.
[1] The lengthy memorandum refers to "eight years" without discount, but the computation of $1600.00 per annum for 7½ years results in $12,000.00 which was the pecuniary loss for this latter period.
[2] Commissioners 1958 Standard Ordinary Table. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623423/ | 360 S.W.2d 44 (1962)
Harold Russell ANDERSON
v.
James Sherill OUTLAND
Supreme Court of Tennessee.
September 7, 1962.
*45 Aaron Brown, Paris, for plaintiff in error.
Van Dyke & Dunlap, Paris, for defendant in error.
FELTS, Justice.
This was an action brought by a resident against a non-resident motorist for damages for personal injuries caused by defendant's negligence in operating his automobile on a highway in this State. Process to him was accepted by the Secretary of State as his agent, under our statute (T.C.A. §§ 20-224 to 20-226) providing for substituted service in such cases.
The accident occurred October 8, 1960, the summons was issued and the declaration filed October 5, 1961, forwarded to the Secretary of State, received by him October 16, 1961, and on the same day he accepted service of the process and mailed a copy of it and of the declaration to defendant at his home address in Kentucky, and on October 20, 1961, the Secretary received the return receipt showing delivery had been made.
Defendant pleaded in abatement to the service, that the Secretary of State's agency to accept service for him continued only for one year from the date of the accident (Oct. 8, 1960), and that the Secretary's attempted *46 acceptance of service October 16, 1961, 8 days after the year expired, and after the agency had ended, was invalid and ineffective to give the Court jurisdiction of him.
The Trial Judge sustained the plea and dismissed the action. Plaintiff appealed in error and insists this ruling was error. So, the question is one of construction of our statute as to the period or duration of the Secretary of State's agency to accept service for defendant; whether in this case the agency expired with the year, or continued until the Secretary could complete the service.
Our statute, like those of the other States of the Union, extends to a nonresident motorist the privilege of operating a motor vehicle on the highways of the State, and provides that by using such privilege he appoints the Secretary of State his agent to accept service of process for him in any civil action for injury or damage caused in this State by his operation of such vehicle (T.C.A. § 20-224).
The statute also provides that such service of process shall be by lodging the summons and a copy with the Secretary of State; and that he shall promptly mail the copy to the defendant, with written notice that service was so made; and that if it appears that such nonresident is dead, then either original or alias process may issue directed to the personal representative of such nonresident (T.C.A. § 20-226).
Up to 1955 the provision of the statute (T.C.A. § 20-224) as to the period or the duration of the Secretary of State's agency to accept service for a nonresident motorist was as follows:
"The agency of the secretary of state to accept service of process shall continue for a period of one (1) year from the date of any accident or injury and shall not be revoked by the death of such nonresident within such period of one (1) year. (Code 1932, sec. 8671; Acts 1947, ch. 235, sec. 1; 1949, ch. 47, secs. 1, 2; C.Supp.1950, sec. 8671.)"
This provision was construed in Tabor v. Mason Dixon Lines, Inc. (1953) 196 Tenn. 198, 264 S.W.2d 821. There, the accident occurred November 18, 1951, summons issued November 13, 1952, and was received by the Secretary of State November 25, 1952, a year and 7 days after the accident. It was held that the Secretary's agency to accept service continued only "one year from the accident" and had expired when he undertook to accept service.
It was there urged that the suing out of the summons within the year stopped the running of the period, because this statute was to be considered as a statute of limitation, in pari materia with Code Section 8571, which provides that the suing out of a summons is the commencement of an action, stopping the running of the limitation, whether summons be executed or not, if the action is duly prosecuted by alias process, etc.
The Court rejected this contention and held that this is "not a limitation statute but an appointing statute appointing this official as agent for the nonresident." The Court also said that there was "no ambiguity" in the statute, and that from "its very plain language it is rather obvious that the agency of the Secretary of State of Tennessee for the nonresident only extends one year from the date of the accident."
Thus the construction of the statute, established by the Tabor case, was that the Secretary's agency to accept service ended with the year so that he could not later accept service even though the process had been sued out within the year. A like ruling was made upon the same state of facts in Oliver v. Altsheler, 198 Tenn. 155, 278 S.W.2d 675.
A different result, however, was reached in Noseworthy v. Robinson, 203 Tenn. 683, 315 S.W.2d 259. Summons was sued out, received by the Secretary and mailed by him to nonresident, all within the year; but was returned unclaimed, owing to mistake in the address. It was held that an alias summons could properly issue after the *47 year was out so as to bring the defendant nonresident before the Court.
As stated, Tabor v. Mason Dixon Lines, Inc., supra, held that, under the above quoted provision, the Secretary of State's agency to accept service extended for only one year from the accident and he could not after the year accept service of process sued out within the year. Apparently to meet that holding, the Legislature in 1955 amended this provision by adding at the end of it another paragraph as follows:
"Such agency shall continue so long after the expiration of such year as may be necessary to enable the secretary of state to complete the service of process, sued out prior to the expiration of said year and forwarded to him with reasonable dispatch * * *"
(Ch. 265, Acts 1955; 1961 Supp. T.C.A. § 20-224).
Thus while the statute originally said "the agency of the Secretary of State to accept service of process shall continue for a period of one year" from the accident, this amendment says: "Such agency shall continue so long after the expiration of such year as may be necessary to enable" him "to complete the service of process, sued out prior to the expiration of said year and forwarded to him with reasonable dispatch." (Italics ours.)
The clear and plain meaning of this language is that if the process is sued out within one year from the accident (even on the last day "prior to the expiration of said year") and forwarded to the Secretary "with reasonable dispatch" (though it reaches him after the end of the year), his "agency shall continue so long after the expiration of such year as may be necessary to enable" him "to complete the service of process."
It is said that statutes for substituted service on nonresident motorists, being in derogation of common rights, are to be strictly construed. But such a rule of construction applies only where the statute is ambiguous or open to more than one meaning. Tabor v. Mason Dixon Lines, Inc., supra; 5A Am.Jur., Automobiles and Highway Traffic, Sec. 862.
The whole purpose of statutory interpretation is to ascertain and give effect to the legislative intent; and all rules of construction are but aids to this end. Woodroof v. City of Nashville, 183 Tenn. 483, 489, 192 S.W.2d 1013. Where the words of a statute are clear and plain and fully express the legislative intent, there is no room to resort to auxiliary rules of construction. State ex rel. Weldon v. Thomason, 142 Tenn. 527, 539, 221 S.W. 491; Gilmore v. Continental Casualty Co., 188 Tenn. 588, 591, 221 S.W.2d 814. In Hickman v. Wright, 141 Tenn. 412, 418, 210 S.W. 447, 448, it was said:
"The universal rule seems to be that if the actual language and provisions of the statute are plain and clear, and are devoid of contradiction or any affirmative ambiguity, so that the statute, as the result of the express provisions, is not reasonably susceptible of a twofold meaning, then there is no room for applying any other rules or canon of construction to the act." (Citing numerous authorities.)
Our statute is like that of most of the other States. It does not discriminate against nonresident motorists, but puts them on an equality with residents by making them suable in the State Courts in the same way as residents. Bertrand v. Wilds, 198 Tenn. 543, 553, 281 S.W.2d 390; Wuchter v. Pizzutti, 276 U.S. 13, 48 S. Ct. 259, 72 L. Ed. 446; Kane v. State of New Jersey, 242 U.S. 160, 37 S. Ct. 30, 32, 61 L. Ed. 222.
This statute is enacted for the benefit of the persons injured within the State rather than for the benefit of nonresident motorists causing such injuries. Bertrand v. Wilds, supra, 553, 281 S.W.2d 390; 5A Am.Jur., Automobiles and Highway Traffic, Sec. 862. Its intent is "to better enable enforcement in the Tennessee Courts" of *48 the remedies for such injuries. Leggett v. Crossnoe, 206 Tenn. 700, 706, 336 S.W.2d 1.
Such intent is furthered by this 1955 amendment, which provides that when process is sued out within one year from the injury, "[or] prior to the expiration of said year", and "forwarded to him (the Secretary) with reasonable dispatch", his "agency shall continue so long after the expiration of such year" as to enable him to complete the service, which he must promptly do, under other provisions of the statute not here involved.
Defendant, however, insists that the Legislature, by enacting this 1955 amendment, "did not attempt to extend the time of the agency of the Secretary of State to accept service of process which is one year from the date of any accident or injury but only clarified the point that his agency could continue after that time for the purpose of completing the service of process which the Secretary of State does by complying with provisions of Sections 20-226 and 20-227."
To sustain the contention, that this amendment did not extend the Secretary of State's agency beyond one year to accept service of process sued out within the year and forwarded to him with reasonable dispatch, would disregard the plain words of the amendment. If its purpose was not to extend the time of the agency in such case, what was its purpose? To uphold such contention would nullify this amendment.
As stated, this amendment provides that if the process was sued out within the year and forwarded to the Secretary "with reasonable dispatch," his agency shall continue so long after the expiration of such year as may be necessary to enable him to complete the service of process. We think the legislative intent, by use of the words "forwarded with reasonable dispatch," was to give some leeway, having regard to the usual course of doing things reasonable time for the clerk to prepare copy of summons and a reasonable time to forward same to the Secretary of State.
In the case before us, the summons was sued out within the year (3 days before the end of the year), forwarded to the Secretary of State, and reached him 8 days after the end of the year, which would seem "with reasonable dispatch" according to the usual course of affairs; and that in such circumstances, the Secretary's agency continued "so long after the expiration of the year" as was necessary to enable him to complete the service.
The judgment of the Circuit Court, sustaining the plea in abatement and dismissing the suit, is reversed and the case is remanded for further proceedings not inconsistent with this opinion. The costs of the cause are adjudged against defendant. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623594/ | 211 Wis. 2d 179 (1997)
564 N.W.2d 735
Phyllis A. TANNLER, Petitioner-Respondent-Petitioner,
v.
WISCONSIN DEPARTMENT OF HEALTH AND SOCIAL SERVICES, Respondent-Appellant.
No. 96-0118.
Supreme Court of Wisconsin.
Decided June 24, 1997.
Oral argument May 30, 1997.
*180 For the petitioner-respondent-petitioner, there was a brief by Scott Thompson and Kittelsen, Barry, Ross, Wellington and Thompson, Monroe and oral argument by Scott Thompson.
For the respondent-appellant the cause was argued by Maryann Sumi, assistant attorney general, with whom on the brief was Steven E. Tinker, assistant attorney general and James E. Doyle, attorney general.
¶ 1. DONALD W. STEINMETZ, J.
The issue in this case is whether an institutionalized person's failure *181 to assert a claim against his or her deceased "community spouse's"[1] estate constitutes a divestment under the Medical Assistance (MA) program. We conclude that the failure to make a spousal election is an "action" for purposes of determining MA eligibility under Wis. Stat. § 49.453[2] as defined by 42 USC § 1396p(e)(1).[3] We therefore hold that the failure of an institutionalized spouse to assert a claim against the estate of his or her deceased spouse constitutes a divestment for purposes of determining MA eligibility.[4]
*182 ¶ 2. The relevant facts are not in dispute. The petitioner, Phyllis Tannler (Tannler), lives in a nursing home.[5] She has received MA since early in 1993. Tannler's husband, Adolph Tannler, died in 1994 leaving a will that bequeathed all of his assets, both real and personal property, to his grandson and his grandson's wife. Adolph left nothing to his wife. Tannler, represented by a guardian ad litem in the estate of her deceased husband, did not contest the will, nor did she file any elections or select any property passing under her husband's will.[6]
¶ 3. Tannler continued to receive MA benefits until 1995 when the respondent, Department of Health and Social Services (DHSS), informed Tannler that it was terminating her eligibility. DHSS asserted that Tannler's failure to contest, select, or elect against the will constituted a divestment of assets which rendered her ineligible for MA. A hearing on the matter was held April 12, 1995, and the hearing examiner issued a proposed decision that Tannler remain eligible for MA. *183 DHSS rejected this proposal and modified the decision. It concluded as follows:
1. The petitioner's acceptance of her husband's will transferring to a third person assets to which she was entitled under law was a disposal or a transfer of an asset.
2. The petitioner divested herself of an asset.
The Matter of Phyllis A. Tannler, DHSS Decision, August 17, 1995.
¶ 4. Tannler appealed. The Green County Circuit Court, Judge David G. Deininger, ordered that DHSS's action terminating Tannler's MA be set aside. The circuit court found that DHSS erroneously interpreted 42 USC § 1396p(e)(1).
¶ 5. DHSS appealed from the circuit court order. The court of appeals reversed. According due weight to DHSS's interpretation, the court held that the failure to make a spousal election was an "action" constituting divestment that resulted in MA ineligibility. Tannler v. Department of Health and Social Servs., 206 Wis. 2d 385, 557 N.W.2d 434 (Ct. App. 1996).
[1, 2]
¶ 6. This case involves the interpretation of Wis. Stat. § 49.453 and 42 USC § 1396p(e)(1). Interpretation of a statute and its application to undisputed facts are questions of law which this court reviews de novo. Local No. 695 v. LIRC, 154 Wis. 2d 75, 82, 452 N.W.2d 368 (1990). This court is not bound by an agency's conclusions of law. See Kelley Co., Inc. v. Marquardt, 172 Wis. 2d 234, 244, 493 N.W.2d 68 (1992). However, this court defers to agency decisions in certain instances. See MCI Telecommunications Corp. v. State, No. 95-0915, op. at 7 (S. Ct. May 13, 1997).
*184 [3, 4]
¶ 7. In reviewing agency interpretations, this court has applied three distinct levels of deference: great weight, due weight, and de novo review. Id., citing Harnischfeger Corp. v. LIRC, 196 Wis. 2d 650, 659-60, 539 N.W.2d 98 (1995). In order to accord great weight deference, a court must conclude that: 1) the agency was charged by the legislature with the duty of administering the statute; 2) the interpretation of the agency is one of long-standing; 3) the agency employed its specialized knowledge or expertise in forming the interpretation; and 4) the agency's interpretation will provide consistency and uniformity in the application of the statute. Id., citing Jicha v. DILHR, 169 Wis. 2d 284, 290, 485 N.W.2d 256 (1992).
¶ 8. If an agency conclusion does not meet all of the criteria necessary to accord it great weight deference, this court may give "due weight" deference to the agency conclusions. Jicha, 169 Wis. 2d at 290-91. Due weight deference, the middle level of review, is appropriate "if the agency decision is `very nearly' one of first impression." Id. at 291. However, if the case is one of first impression for the agency and the agency lacks any special expertise, then the court must review the agency's conclusion de novo. Id.
¶ 9. As the court of appeals noted, the Medical Assistance Handbook produced by DHSS provides guidance on the issue presented by this case. The court stated that "[b]ecause the MA Handbook is designed to assist state and local agencies to implement the federal-state MA program, we conclude that its provisions are persuasive in resolving disputes such as the one before the court." Tannler, 206 Wis. 2d at 391. Tannler claims that this case presents an issue of first impression that should be subject to de novo review by this *185 court. While it appears from the lack of agency precedent that this case is one of first impression, the language found in the handbook indicates that the agency possesses a specialized knowledge on the issue of whether the failure to contest a will constitutes divestment for purposes of determining MA eligibility. Consequently, like the court of appeals, we also conclude that the findings of DHSS should be accorded due weight. Due weight deference means that this court will give some deference to the agency, but if a more reasonable interpretation exists, this court will adopt that interpretation.
¶ 10. Wisconsin Statutes § 49.45(10) authorizes DHSS to "promulgate such rules as are consistent with its duties in administering medical assistance." Pursuant to this provision, DHSS instituted Wis. Admin. Code §§ HSS 101-108.[7] Section HSS 103.065(4) states that an applicant who disposes of a "resource" at less than fair market value within 30 months of his or her application for MA is deemed to have "divested." According to the code provisions and the statutes, divestment renders a party ineligible for MA. Wis. Admin. Code § HSS 103.065(4); Wis. Stat. § 49.453(2).
¶ 11. In rendering its decision in this case, DHSS considered the language, purposes, and policies of the federal and state legislation regarding the MA program. It also looked to language found in the MA Handbook for guidance. Specifically, DHSS relied on an example found in the section of the Handbook covering divestment. The example provides as follows:
*186 It is also divestment if a person takes an action to avoid receiving income or assets s/he is entitled to. Actions which would cause income or assets not to be received include:
....
6) Refusing to take action to claim the statutorily required portion of a deceased spouse's or parent's estate. Count the action as a divestment only if:
a. The value of the abandoned portion is clearly identified, and
b. There is certainty that a legal claim action will be successful.
This includes situations in which the will of the institutionalized person's spouse precludes any inheritance for the institutionalized person. Under Wisconsin law, a person is entitled to a portion of his/her spouse's estate. If the institutionalized person does not contest his/her spouse's will in this instance, the inaction may be divestment.
MA Handbook, Section 14.2.1 (emphasis added).
¶ 12. DHSS explains in its decision that even though the statutes speak in terms of "action" while the Handbook refers to "refusal to take action," the distinction is one without a difference. DHSS concludes that the statutes and the Handbook are consistent because both seek to terminate MA eligibility where a recipient or spouse somehow dispose of or avoid acceptance of an available asset. In accepting the will, DHSS concludes, Tannler acted in concert with her deceased husband in completing the divestment, and, therefore, she is ineligible for further MA benefits according to Wis. Stat. § 49.453(2).
¶ 13. Tannler asserts that reliance on the MA Handbook is misplaced. Tannler claims that the relevant *187 provisions of this handbook should not be applied in this case because it is in conflict with the provisions of the controlling federal and state legislation. Specifically, Tannler objects to the Handbook's use of the phrase "refusal to take action" in light of the fact that the statutes use the term "action." Because "action" is an unambiguous term, Tannler argues, this court must enforce the plain meaning of the term.
¶ 14. We reject Tannler's arguments. This court concludes that the MA Handbook used by DHSS is consistent with the federal and state legislation regarding medical assistance. We further conclude that the term "action" as it is used in 42 U.S.C. § 1396p(e)(1) is an ambiguous term because there is more than one reasonable interpretation of the term.[8]
¶ 15. The Department may use policies and guidelines to assist in the implementation of administrative rules provided they are consistent with state and federal legislation governing MA. As long as the document simply recites policies and guidelines, without attempting to establish rules or regulations, use of the document is permissible. DHSS's MA Handbook is a policy manual that is consistent with controlling legislation, *188 both state and federal. Wis. Stat. § 49.45(34).[9] In fact, the portion of the MA Handbook that is relied on here is based on the federal model as it appears in the federal handbook.[10] This is evident when one examines the United States Department of Health and Human Services' (DHHS) State Medicaid Manual. Like the state's handbook, the federal manual also lists several "actions" that would cause income not to be received and may result in MA ineligibility. Many of these "actions" are technically an inaction or refusal to act. The following excerpt is taken directly from the federal manual:
The following are examples of actions which could cause income or resources not to be received:
Irrevocably waiving pension income;
Waiving the right to receive an inheritance;
Not accepting or accessing injury settlements;
Tort settlements which are diverted by the defendant into a trust or similar device to be held for the benefit of an individual who is a plaintiff; and
*189 Refusal to take legal action to obtain a court ordered payment that is not being paid, such as child support or alimony.
State Medicaid Manual, Section 3257(3) (emphasis added). Both the federal and state handbooks conclude that it is an "action" to refuse to take action to receive income to which one is entitled even if the refusal is merely a failure to act.
¶ 16. This court is satisfied that DHSS's reliance on the MA Handbook in this situation is authorized by the statutes and that the Handbook is consistent with both state and federal legislation regarding medical assistance. As demonstrated, the handbook used by the state is actually based on the federal model provided by the United States DHHS manual. As such, we conclude that the use of the MA Handbook for guidance on the issue involved in this case is appropriate.
¶ 17. Under Wisconsin law, a person is entitled by statute to a portion of his or her spouse's estate. See Wis. Stat. §§ 861.02, 861.03, 861.33. See generally Wis. Stat. Chs. 851 to 882. If the institutionalized person does not make a claim against his or her community spouse's estate, this failure to contest, or inaction, is a conscious act that constitutes divestment. See Wis. Stat. § 49.453; Wis. Admin. Code HSS § 103.065(4). See also MA Handbook, Section 14.2.1. Divestment results in MA ineligibility. Wis. Stat. § 49.453(2).
¶ 18. Phyllis Tannler is an institutionalized person. Her husband died in 1994 leaving her nothing in his will. Nonetheless, pursuant to Wisconsin law, Tannler is entitled to a portion of her husband's estate. Through her guardian, Tannler could have contested the will of her husband or affirmatively elected or selected certain property to which she is entitled. Through her guardian, Tannler made no claims *190 against the estate. She accepted the will and chose to elect or select nothing. For purposes of determining MA eligibility, this "refusal to take action" is a conscious act that results in MA ineligibility. To conclude otherwise would be contrary to the purposes of the divestment provisions of the MA legislation.
¶ 19. When interpreting a statute with an ambiguous term like "action" in this instance, this court looks to the purpose of the statute. Medical assistance is a joint federal and state program aimed at ensuring medical care for the poor and needy. See 42 U.S.C. § 1396, et seq. As the court of appeals in Tannler noted, the divestment portions of this legislation are designed to prevent those who, but for their divestment, are able to pay for their own medical needs. Tannler, 206 Wis. 2d at 392. DHSS's interpretation of the term "action" to include a "refusal to take action" to claim property to which one is entitled is consistent with the purposes of the divestment provisions of this legislation. If one renounces rights to his or her assets that may be used to pay for his or her own medical needs, then the taxpayers are unnecessarily made to bear the burden of supplying MA for that person. Consequently, this inaction is, in effect, no different from an affirmative action to disclaim. Both the state and federal manuals rely on this proposition in determining MA eligibility.
¶ 20. The practical effect of Tannler's inaction is that persons other than the community spouse or the institutionalized spouse will receive the financial benefits of the conscious act to reject her share of the estate. The result will be that the taxpayers of this state will bear the burden of supporting Tannler while she resides in the nursing home and receives medical assistance. If Tannler had not rejected her share of her spouse's estate, then those assets would have been *191 available to provide for her maintenance and health care without burdening the taxpayers.
[5]
¶ 21. Giving due weight to DHSS's final decision and order, we conclude that Tannler's failure to file a claim against her deceased husband's estate is an "action" within the meaning of Wis. Stat. § 49.453 and 42 USC § 1396p(e)(1). We uphold the decision of the Department finding Tannler ineligible for MA benefits because we hold that the failure of an institutionalized spouse to assert a claim against the estate of his or her deceased spouse constitutes a divestment for purposes of determining MA eligibility.
By the Court.The decision of the court of appeals is affirmed.
¶ 22. SHIRLEY S. ABRAHAMSON, CHIEF JUSTICE (concurring).
I join the majority opinion. I write to address the underlying policy of the statutes.
¶ 23. Anyone who works with medical assistance statutes begins by appreciating that the federal and state statutes are extremely complex and may fairly be described as incomprehensible.[1] The statutes are characterized by ambivalence and ambiguity, by a confusing mix of means-tested programs and entitlements, and by uneasy compromises among different and often conflicting policies. This case illustrates the difficulties posed by the legislative compromises made in this difficult field.
¶ 24. To be eligible for medical assistance an institutionalized person must have limited assets. *192 Thus persons may have to spend down, that is, divest themselves of assets, to qualify for medical assistance. Certain divestments are acceptable; others are not.
¶ 25. Although Congress requires divestment, it has recognized that elderly persons should not be forced into impoverishment in order to qualify an institutionalized spouse for medical assistance. Thus Congress has determined that spouses of those who need long-term care should not be driven by the government into poverty. The Medicare Catastrophic Coverage Act of 1988 addressed the issue of spousal impoverishment by protecting some resources of the non-institutionalized spouse (referred to as the community spouse) from the debts of the institutionalized spouse.[2]
¶ 26. The case at bar involves the interplay of the divestment and spousal impoverishment provisions. Under the court's interpretation the community spouse retains the freedom to make testamentary gifts; yet at the community spouse's death the assets available by law to the institutionalized spouse are used for the care of that spouse. The court's interpretation of the statutes attempts to fit the congressional plan of enabling the community spouse to keep and dispose of his or her *193 own assets while requiring an institutionalized person to use his or her assets for self care. Thus the holding of the court attempts to comport with the spousal impoverishment provisions as well as the divestment goals.
¶ 27. I join the opinion of the court for the reasons stated.
NOTES
[1] A "community spouse" is a person who is married to an institutionalized person but is not himself or herself an institutionalized person. HSS § 103.065(3)(b); Medical Assistance Handbook, Section 23.2.1.
[2] Wis. Stat. § 49.453 provides as follows:
[I]f an institutionalized individual or his or her spouse, or another person acting on behalf of the institutionalized individual or his or her spouse, transfers assets for less than fair market value on or after the institutionalized individual's look-back date, the institutionalized individual is ineligible for medical assistance....
Wis. Stat. § 49.453(2).
The statute further provides in relevant part that "[i]n this section...'[a]ssets' has the meaning given in 42 USC 1396p(e) (1)." Wis. Stat. § 49.453(1)(a).
[3] 42 USC § 1396p(e)(1) provides as follows:
The term "assets", with respect to an individual, includes all income and resources of the individual and of the individual's spouse, including any income or resources which the individual or such individual's spouse is entitled to but does not receive because of action
(A) by the individual or the individual's spouse
(B) by a person, including a court or administrative body, with legal authority to act in place of or on behalf of the individual or such individual's spouse,....
[4] We stress that the ultimate determination of MA eligibility lies with the Department of Health and Social Services. This court is not in a position to determine what assets, if any, would be available to pay for Phyllis Tannler's medical care. The Department will have to examine the assets available in Mr. Tannler's estate to conclude what assets, if any, Phyllis Tannler could have selected or elected.
[5] Phyllis Tannler is an "institutionalized person" under the DHSS definition found in HSS 103.065(3)(d) and the Medical Assistance Handbook, Section 10.4.0, because she has resided in a medical institution for 30 or more consecutive days.
[6] Wisconsin law provides that a surviving spouse may elect up to one-half of his or her deceased spouse's deferred and augmented marital property. See Wis. Stat. §§ 861.02-.03. Additionally, the surviving spouse has the right to "select" other personal property of his or her deceased spouse, including items such as an automobile, jewelry, and furnishings. See Wis. Stat. § 861.33.
[7] Chapter HSS 101, et seq., have been renumbered Chapter HFS 101, et seq., effective January, 1997. However, the relevant events in this case occurred prior to January, 1997. Consequently, we use the "HSS" designation throughout this opinion.
[8] "Action" in this statute may be interpreted to mean an affirmative act, as suggested by Tannler. However, consistent with other areas of the law, "action" may also be interpreted to mean an inaction or a conscious failure to act. See, e.g., Rockweit v. Senecal, 187 Wis. 2d 189-90, 522 N.W.2d 575 (1994) (imposing liability for failure to extinguish hot embers in a fire pit); State v. Williquette, 125 Wis. 2d 86, 90, 370 N.W.2d 282 (Ct. App. 1985) (omission may constitute aiding and abetting in the abuse of a child). Both interpretations are reasonable because regardless of whether the party affirmatively or passively disclaims his or her share of property, the ultimate effect will be the same.
[9] Wis. Stat. § 49.45(34) provides in part that "[t]he department shall prepare a medical assistance manual that is clear, comprehensive and consistent with this subchapter and 42 USC 1396a to 1396u...."
[10] The attorney for DHSS made it clear at oral argument in this case that the state handbook is based on the federal manual. The following exchange demonstrates this:
Justice Crooks: What does the Department base that handbook on? Do they have a model from the federal government?
Attorney Sumi: There is a federal model. And perhaps this is a good time to inform the court that the federal manual does provide for this situation. It does say that waiver of an inheritance is an example of an action that could constitute divestment.
[1] See Jan Ellen Rein, Misinformation and Self-Deception in Recent Long Term Care Policy Trends, 12 J.L. & Pol. 195, 212 (1996).
[2] See Jeanette C. Schreiber, Medicaid Financial Planning After the Medicare Catastrophic Coverage Act of 1988: Essential Changes Governing Eligibility and Transfer of Assets, 63 Conn. B.J. 211 (1989). See also Harry R. Moody, The Return of the Repressed: The Ethics of Assets and Inheritance, in Institute for Health Services Research, U. Minn., Who Owes Whom What? Personal, Family, and Public Responsibility for Paying Long-Term Care 20 (1994) ("[W]hat Congress did in 1988 was to create a protection against spousal impoverishment, not a protection against" the impoverishment of testamentary beneficiaries.). | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/2749989/ | October 23, 2014
JUDGMENT
The Fourteenth Court of Appeals
ROLAND THOMAS SENN, INDIVIDUALLY AND AS REPRESENTATIVE
OF THE ESTATE OF TIFFANY ANN SENN AND AS NEXT FRIEND OF
SASHA RAEANN SENN AND KAIA LOUISE SENN, MINORS, Appellant
NO. 14-14-00678-CV V.
BRYAN BLONDER, D.O. AND OAKBEND MEDICAL GROUP, Appellees
________________________________
Today the Court heard its own motion to dismiss the appeal from the
judgment signed by the court below on May 19, 2014. Having considered the
motion and found it meritorious, we order the appeal DISMISSED.
We further order that all costs incurred by reason of this appeal be paid by
appellant, Roland Thomas Senn.
We further order this decision certified below for observance. | 01-03-2023 | 11-08-2014 |
https://www.courtlistener.com/api/rest/v3/opinions/1623306/ | 569 So. 2d 369 (1990)
Betty ROBERTS
v.
PUBLIC CEMETERY OF CULLMAN, INC., and Doyle Roberson.
No. 89-169.
Supreme Court of Alabama.
September 28, 1990.
*370 S. Shay Samples and Richard D. Stratton, Hogan, Smith, Alspaugh, Samples & Pratt, Birmingham, for appellant.
W.J. McDaniel and Robert G. Boliek, Jr. of McDaniel, Hall, Conerly & Lusk, Birmingham, for appellees.
HORNSBY, Chief Justice.
Plaintiff Betty Roberts appeals from a judgment for the defendants, Public Cemetery of Cullman, Inc., and Doyle Roberson, the cemetery's sexton. This suit arose out of the burial of Roberts's deceased husband. Roberts's complaint contained three counts, alleging: (1) that the defendants had acted negligently or wantonly (a) in failing to have the grave of her deceased husband acceptable for burial, by allowing it to contain water, (b) in burying her deceased husband in the wrong grave, and (c) in failing to maintain the grave site after burial; (2) that the defendants breached their contract to inter her deceased husband at the grave site owned by her; and (3) that the defendants' conduct involving the burial amounted to intentional infliction of emotional distress (the tort of outrageous conduct or "outrage"). At the close of the plaintiff's case, the trial court dismissed Roberson as a defendant.[1] The trial court directed verdicts for the cemetery on Roberts's contract claim and on her outrage claim; the jury then returned a verdict for the cemetery on her claims of negligence and wantonness.
On appeal, Roberts raises five issues: (1) whether the trial court erred in denying her motion for new trial; (2) whether the trial court erred in not submitting her contract claim to the jury; (3) whether the trial court erred by failing to direct a verdict in her favor on her negligence claim; (4) whether the trial court erred by directing a verdict for the cemetery on her outrage claim, and (5) whether the trial court erred in excluding testimony of statements made by Roberson to Roberts's son, Larry Roberts, who was not a party to the lawsuit. Because this lawsuit was filed after July 11, 1987, the "substantial evidence rule" applies. Ala.Code 1975, § 12-21-12.
The basic facts are as follows: The plaintiff and her husband, J.O. Roberts, purchased from the corporate defendant two grave sites at its cemetery, known as the Public Cemetery of Cullman; those grave sites were located in Lot # 134, Block # 802. J.O. Roberts died on July 2, 1987. Funeral services were held on July 5, with burial to occur at 2:00 P.M. The grave had been dug on the morning of July 5. It had rained the day before, but it did not rain the day of the funeral. Because of seepage into the grave, Roberson pumped water out of the grave two times on the morning of the funeral, but he did not check for additional seepage after the second pumping at 10:00 A.M. Winford Chamblee, not an employee of the cemetery, arrived to install the top ground vault at the grave at 11:30 A.M. After setting the vault on boards over the grave, Chamblee pumped water out of the grave.
The graveside service occurred without incident. One of the pallbearers said that he noticed water in the grave, and that when the casket and vault were lowered into the grave, he saw water come up around the sides of the vault. The plaintiff was not present at the grave while the casket and vault were being lowered; she had returned to her car and was waiting to return to the grave site after the vault and casket had been lowered. Larry Roberts said that he saw the water rise around the lid of the vault and that he told the workers to stop; he then went to the cemetery office to get Roberson. Roberson went to the grave site and began pumping water out of the grave. The burial was not completed until a half hour after the first attempt *371 to lower the vault. The plaintiff saw the pumping operation from her car, but at no time did she ever see water in the grave. As the plaintiff was returning to the grave, Roberson stopped his tractor near her and shouted something at her, but she did not recall anything that was said. At some time after the burial, Roberson said to Larry Roberts, "I had that grave ready, buddy. I am not God. I can't control the rain." The plaintiff did not hear Roberson make these comments.
The plaintiff visited her husband's grave during July, August, and September 1987 and noticed that the grave was sinking and that no sod had been placed on the grave. When she asked Roberson to fix these problems, he told her that the cemetery had buried her husband in the wrong grave. He had been buried in Lot # 133, a plot owned by another family, rather than Lot # 134, the plot owned by the plaintiff. The plaintiff refused to agree to have her husband reburied in the proper lot, and the cemetery made arrangements to have another body moved so that the plaintiff could be given title to Lot # 133. Prior to the plaintiff's filing suit, the cemetery had given her title to both Lot # 133 and Lot # 134.
I.
Roberts argues that the trial court erred in denying her motion for a new trial, claiming that the jury's verdict on the negligence and wantonness claims was contrary to uncontroverted evidence that the cemetery was negligent in burying her husband in the wrong grave.
The standard for the review of a denial of a new trial motion was set forth in Davis v. Ulin, 545 So. 2d 14, 15 (Ala.1989):
"Jury verdicts are presumed correct, and this presumption is strengthened by the trial court's denial of a motion for new trial. Therefore, a judgment based on a jury verdict will not be reversed unless it is `plainly and palpably' wrong. Ashbee v. Brock, 510 So. 2d 214 (Ala. 1987)."
While the cemetery admitted negligence in the burying of Roberts's husband in the wrong grave, it did not admit that the plaintiff was entitled to damages. There was no evidence presented of any monetary loss suffered by the plaintiff because her husband was buried in the wrong grave. Roberts argues that the cemetery's admission of negligence left nothing for the jury to resolve, but that argument does not take into consideration the fact that damages arising out of that negligence were disputed, and thus, that a jury question was presented. A claim alleging negligence involves more than proof of negligence (which is made up of proof of the elements of duty and breach of that duty); it also requires proof of the elements of proximate cause and injury. Rutley v. Country Skillet Poultry Co., 549 So. 2d 82, 85 (Ala.1989). The fact that the cemetery admitted negligence does not mean that it admitted proximate cause and damages as well; in this case, resolution of those two elements was properly left to the jury. We cannot say that the jury's verdict was plainly and palpably wrong.
II.
Roberts also argues that the trial court erred in not submitting her contract claim to the jury. She claimed that the cemetery breached the burial contract by burying her husband's body in the wrong grave. The trial court explained its reason for not sending the plaintiff's contract claim to the jury:
"[T]he contract itself does not provide expressly that the defendants will use due care in performing the contract. There is no express provision for that in the contract. And therefore, the plaintiff is not entitled to elect at this point whether to proceed in contract or in tort. I think, if she did the plaintiff would probably have to make an election as to whether to proceed on a contract or proceed on a tort count....
"....
"As I recall the law, when you have a contract that does not expressly provide for due care the law ... implies a duty to use due care, but does not imply that within the contract.... So I think that *372 the only remedy that you have available to you under these facts is to proceed in tort and that would be that the contract was performed, but was performed in a negligent or wanton manner and will be entitled to go to the jury with regard to damages on those particular claims."
This Court, however, has recognized that claims for tortious conduct and for breach of contract may be maintained in a single suit. See Eidson v. Johns-Ridout's Chapels, Inc., 508 So. 2d 697 (Ala.1987). There we stated:
"We can appreciate the dilemma faced by the learned trial judge, because this Court has had difficulty agreeing on cases involving the question of whether an action is ex delicto or ex contractu, but we hold that plaintiffs produced at least a scintilla of evidence that the defendants made specific promises to plaintiffs and then failed to perform as promised."
508 So.2d at 701. The Court has long recognized that, while a defendant's failure to exercise reasonable care or to perform the act promised in a contract may give rise to an action ex delicto, such failure also gives rise to an action ex contractu when there is a breach of promise. Vines v. Crescent Transit Co., 264 Ala. 114, 85 So. 2d 436 (1956). Eidson relied on Waters v. American Casualty Co., 261 Ala. 252, 73 So. 2d 524 (1954), wherein an insured had brought an action against its liability insurer. The Court stated:
"This Court has long since taken the position that under certain circumstances, for the breach of a contract there may be either an action of assumpsit or one in tort. That means that when there is a contract expressed to exercise reasonable diligence in the performance of an act, or when there is a specific contract to do an act, a failure to exercise reasonable diligence on the one hand or to do the act on the other gives rise to an action of assumpsit. But when the contract is to exercise reasonable care to perform the act, a failure to exercise such reasonable care may be redressed by either assumpsit or in tort. When the contract does not in terms require reasonable care in doing the act stipulated to be done, the law imposes a dutybut does not imply a contractto exercise due care in doing the act; and, therefore, when negligence exists in doing that act an action in tort only is available because there is no express or implied contract which is breached."
Id. at 258, 73 So.2d at 528-29 (citations omitted). See also Combined Services, Inc. v. Lynn Electronics Corp., 888 F.2d 106 (11th Cir.1989) (Alabama law permits plaintiff to recover judgment in actions for breach of contract and fraud).
Here, the trial court ruled that Roberts had to proceed under the tort claim and not under the contract claim, because there was no contract provision stating that the cemetery would use due care. However, there was clearly a breach of the agreement to bury the plaintiff's husband in the specific grave owned by the plaintiff; the defendant did not perform the act promised in the contract. Therefore, the plaintiff was entitled to present her contract claim to a jury, and the trial court's directed verdict on this claim was in error.
We note that the jury's findings against the plaintiff on the negligence claim could be read to indicate that the plaintiff was not entitled to damages. However, in light of the fact that damages under the breach of contract claim were never considered, we do not hold, as a matter of law, that ex contractu damages are not recoverable.
III.
Roberts argues that the trial court erred in not directing a verdict in her favor on her negligence count. As we determined in part I, there was a jury question on her negligence claim. Therefore, the failure to direct a verdict on this claim was not error.
IV.
Roberts contends that the trial court erred in directing a verdict for the cemetery on her outrage claim. This Court recently stated in Green Tree Acceptance, Inc. v. Standridge, 565 So. 2d 38, 44 (Ala. 1990):
*373 "This Court set out the elements of the tort of outrage in American Road Service Co. v. Inmon, 394 So. 2d 361 (Ala. 1981). For a plaintiff to recover under the tort, he must demonstrate that the defendant's conduct (1) was intentional or reckless; (2) was extreme and outrageous; and (3) caused emotional distress so severe that no reasonable person could be expected to endure it. Inmon, supra, at 365. In order to support a cause of action for the tort of outrage, the conduct complained of must be so extreme in degree as to go beyond all possible bounds of decency and be regarded as atrocious and utterly intolerable in a civilized society. McIsaac v. WZEW-FM Corp., 495 So. 2d 649, 651 (Ala.1986)."
The defendant's conduct in this case is clearly not so extreme in degree as to go beyond all possible bounds of decency. The evidence showed that seepage of water into graves after a rain is a common problem, and that the defendant took actions to remedy that problem. As to the allegations that the cemetery was not maintaining the grave properly, the evidence showed that there was a drought during that period and that all of the lots in the cemetery were suffering from the effects of that drought. Further, there was no evidence that the cemetery did, or did not, do anything in regard to this grave different from what it did in regard to all the other graves at the cemetery.
Therefore, the trial court did not err in directing a verdict for the cemetery on Roberts's outrage claim.
V.
Roberts's last argument is that the trial court erred in not allowing Larry Roberts to testify as to the statements made by Roberson to him. These statements were clearly hearsay, but Roberts argues that they were not offered to prove the truth of the matter but rather to prove Roberson's state of mind and intent in regard to her claims for outrage and wantonness. As held above in part IV, Roberts's claim for outrage was properly withheld from the jury. As for Roberts's claim that the cemetery was wanton in its preparation and maintenance of the grave, we cannot see how Roberson's statements"I had that grave ready, buddy. I am not God. I can't control the rain"have any relevance to that claim. Rulings as to the admissibility of evidence rest largely within the discretion of the trial judge and will not be disturbed on appeal in the absence of an abuse of discretion. Russellville Flower Craft, Inc. v. Searcy, 452 So. 2d 478, 480 (Ala.1984). We find no abuse of discretion here.
For the foregoing reasons, we affirm the trial court's judgment as to all of the claims, except the claim alleging breach of contract. As to that claim, the judgment is reversed and this cause is remanded for further proceedings consistent with this opinion.
AFFIRMED IN PART; REVERSED IN PART; AND REMANDED.
JONES, SHORES, ADAMS, STEAGALL and KENNEDY, JJ., concur.
MADDOX and HOUSTON, JJ., concur in part and dissent in part.
MADDOX, Justice (concurring in part, and dissenting in part).
I concur with that part of the majority opinion that affirms the trial court's judgment concerning Roberts's claims of negligence, wantonness, and outrage. However, I must dissent from that portion of the opinion that reverses the trial court's directed verdict for the defendant on Roberts's contract claim.
Cases of this kind pose a dilemma, and I would argue that ordinarily a contract claim should go to the jury,[2] but even assuming *374 that Roberts had presented evidence of actual damages due to a breach of the contract,[3] I am of the opinion that the trial court's failure to submit the contract claim to the jury was harmless error, if error at all. In instructing the jury, the trial judge arguably gave back some of what his prior decision took away; the trial judge's jury instruction included the following:
"To begin with, ladies and gentlemen, let me say that a contractyou have heard that term mentioned here on numerous occasions, a contract is an agreement between two or more persons or parties based upon a valid consideration to do or refrain from doing a particular lawful act. There was admittedly a contract between the plaintiff, Betty Roberts, and the defendant, Public Cemetery of Cullman, Inc. That contract is in evidence. The law implies that a contract with the nature that we have in this case would be carried out or performed by the use of ordinary care as may be required under the circumstances.
"Now, the plaintiff alleges that the defendant was negligent in the performance of its duties under this contract. And also that the defendant was guilty of wanton conduct in carrying out its obligations under this contract."
Although the jury was ultimately instructed to return verdicts on the counts of negligence or wantonness, the jury was also essentially instructed that a contract existed and that the contract contained an implied duty of due care. The jury was further instructed to award, if appropriate, the very damages claimed under the contract theory. The jury found that the defendant did not negligently or wantonly breach the duties imposed upon it by the contract and thereby damage the plaintiff; therefore, the failure to submit the breach of contract claim was not prejudicial error, and under Rule 45, Ala.R.App.P., the judgment of the trial court should not be reversed. Because the jury found that the defendant had not breached the duties imposed by the contract, I cannot see how the failure to instruct the jury on breach of that very same contract "injuriously affected the substantial rights" of the plaintiff. Under Rule 45, I would affirm the trial court's judgment as to this claim as well.
HOUSTON, Justice (concurring in part, and dissenting in part).
I would affirm the trial court's judgment as to all claims.
In Blumberg v. Touche Ross & Co., 514 So. 2d 922, 927 (Ala.1987), this Court held:
"In Alabama, one who contracts with another and expressly promises to use due care is undoubtedly liable in both tort and contract when his negligence results in injury to the other party. He is liable in contract for breaching an express promise to use care. He is liable in tort for violating the duty imposed by law on all people not to injure others by negligent conduct. The injured party has the choice of remedies when a contract contains an express promise to use due care. Eidson v. Johns-Ridout's Chapels, Inc., 508 So. 2d 697, 701 (Ala. *375 1987); Comment, Contractual Recovery for Negligent Injury, 29 Ala.L.Rev. 517, 524-25 (1978)."
I can find no express promise to use due care in any document in the record. The only express contract that I can find consisted of a "certificate of purchase," an "order for interment," a receipt for that interment, and rules and regulations of the Public Cemetery of Cullman. None of these documents contains an express undertaking to use due care. Such a duty will not be implied so as to give rise to a contractual remedy, in the absence of an express term. See Blumberg v. Touche Ross & Co., at 927, n. 4 (citing Garig v. East End Memorial Hosp., 279 Ala. 118, 182 So. 2d 852 (1966)).
NOTES
[1] Roberts does not contest on appeal the dismissal as to Roberson.
[2] This Court has recognized that claims for tortious conduct and for breach of contract may be maintained in a single suit. Eidson v. Johns-Ridout's Chapels, Inc., 508 So. 2d 697 (Ala.1987). In that case, involving the shipment of a body, this Court stated:
"We can appreciate the dilemma faced by the learned trial judge, because this Court has had difficulty agreeing on cases involving the question of whether an action is ex delicto or ex contractu, but we hold that plaintiffs produced at least a scintilla of evidence that the defendants made specific promises to plaintiffs and then failed to perform as promised."
508 So.2d at 701. This Court recognized that a defendant's failure to exercise reasonable care or to do the act promised in a contract may give rise to an action for breach of contract.
[3] Although Roberts provided substantial evidence that there was a contract to bury her husband's body in a specific grave and that that contract was breached, Roberts presented no evidence of any monetary damages. A plaintiff cannot recover for emotional distress and similar damages in a contract action. "Absent proof of actual damage or injury, there can be no recovery for breach of contract." Purcell Co. v. Spriggs Enterprises, Inc., 431 So. 2d 515, 523 (Ala.1983). Roberts offered no proof of any actual damages caused by this breach. Further, the damages awarded in a breach of contract action should return the injured party to the position he would have occupied had the breach not occurred. Boyett v. Oakes, 518 So. 2d 37, 40 (Ala.1987). Here, the cemetery gave Roberts the additional lot and had to remove another body in order to do so. Thus, Roberts's husband was buried, and she owned two lots rather than the one she had prior to the breach. There was no evidence that she was in a worse position after the breach. | 01-03-2023 | 10-30-2013 |
https://www.courtlistener.com/api/rest/v3/opinions/1623441/ | 303 F. Supp. 1339 (1969)
Sidney S. SACHS, Plaintiff,
v.
ST. PAUL FIRE & MARINE INSURANCE COMPANY, Defendant.
Civ. A. No. 3258-67.
United States District Court District of Columbia.
January 31, 1969.
*1340 James C. McKay, Washington, D. C., for plaintiff.
H. Mason Welch, Washington, D. C., for defendant.
MEMORANDUM OPINION
GASCH, District Judge.
This matter came on for hearing on cross motions for summary judgment of plaintiff's complaint for a declaratory judgment that defendant had breached its insurance contract with plaintiff and for damages for the breach of that contract. It appears that there are no material facts in dispute.
FINDINGS OF FACT
Plaintiff Sachs, an attorney, was named as defendant in a suit (Civil Action No. 2086-67) charging him with wrongful interference with an alleged contract of retainer between another attorney, Fitzgerald, and that attorney's client. One count of this complaint also charged Sachs with slander.
Plaintiff had purchased professional insurance from the defendant in the present action. The policy provided that defendant would pay all sums up to $100,000 which the insured would become obligated to pay as damages arising out of the performance of professional services as a lawyer by the plaintiff. "Dishonest, fraudulent, criminal or malicious act(s) or omission(s)" were excluded from the coverage. The policy further provided that "as respects such insurance as is afforded by the other terms of this policy the company shall * * * defend * * * in any suit against the insured alleging damages even if such suit is groundless, false or fraudulent * * *."
Defendant refused to defend plaintiff Sachs in Civil Action No. 2086-67 on the grounds that the suit was not based on conduct of the plaintiff in his professional capacity and that, in any event, it was excluded from coverage because the complaint alleged that it involved "dishonest, fraudulent, criminal or malicious act(s) * * *."
CONCLUSIONS OF LAW
It is apparent to the Court that the plaintiff was acting in his professional capacity as an attorney when the incidents complained of occurred. Indeed the plaintiff's undertaking to represent a client Fitzgerald claimed was his the crux of the interference with contract *1341 complaint could only be done by an attorney pursuing his profession.
The more difficult problem is the scope of the insurer's duty to defend. In this regard it has been frequently held that the duty to defend is broader than the obligation of coverage. (Employer's Mut. Liab. Ins. Co. of Wis. v. Hendrix, 199 F.2d 53, 41 A.L.R. 2d 424 (4th Cir. 1952). Defendant relies on the language of Judge Hand in Lee v. Aetna Cas. & Surety Co., 178 F.2d 750 (2d Cir. 1949), for the proposition that an insurance company need not defend a suit where it appears from the face of the complaint that the subject matter of the suit is not covered by the policy. This formulation of the rule is too general either to be denied or to be useful on the facts now before the Court.
It is true that a complaint wholly unrelated to the subject matter of a policy does not invoke the duty to defend and in this sense an insurance company need look no further than the complaint, "qua complaint." It is also the law that if any elements of the complaint might be within the ambit of the policy, the duty to defend attaches. (Employer's Mut. Liab. Ins. Co., supra). This duty then lasts until a stage of the proceedings is reached at which it is clear that no element of the subject matter of the suit is within the scope of the policy. (Id.) Thus, while an insurer arguably need look only to the complaint, it cannot refuse to defend an otherwise appropriate complaint because of some language in the complaint which may be merely "puffing" and which scrutiny reveals is not essential to the complaint. As the plaintiff skillfully points out, Lee v. Aetna Cas. & Surety Co., 178 F.2d 750 (2d Cir. 1949), supports this statement of the law.
When * * * the complaint comprehends an injury which may be within the policy, we hold that the promise to defend includes it. * * *
It follows that, if the plaintiff's complaint against the insured alleged facts which would have supposed a recovery covered by the policy, it was the duty of the defendant to undertake the defence, until it could confine the claim to a recovery that the policy did not cover.
Id., at 753.
Thus, the Court finds the complaint charged the plaintiff with conduct arising out of the professional services of a lawyer and that on its face the complaint is not excluded from the coverage of the policy merely because in addition to a claim covered by the policy there are allegations of maliciousness. The complaint could stand absent that language.
Accordingly, the Court declares that:
(1) Defendant is obligated under the policy to provide a legal defense to plaintiff in the Fitzgerald suit in accordance with this opinion and to pay all reasonable expenses incurred in the defense of such suit as specified in the policy;
(2) That as a result of defendant's denial of liability under the policy and refusal to defend, defendant breached its contractual obligations to plaintiff and is liable to plaintiff for all reasonable expenses incurred in defending the Fitzgerald suit, including reasonable attorney's fees and expenses incurred in defending the Fitzgerald suit, reasonable expenses incurred by plaintiff and others in his office in defending the suit; and reasonable expenses but not attorney's fees incurred in this action; and
(3) That this Court cannot on the pleadings before it make any determination as to the liability of the insurer on the merits of the Fitzgerald suit or any settlement thereof and accordingly retains jurisdiction to make such additional determinations and awards as may be shown to have resulted from defendant's breach of its contractual obligations and as may be appropriately related to this suit. | 01-03-2023 | 10-30-2013 |
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