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https://www.courtlistener.com/api/rest/v3/opinions/815297/	DLD-084 NOT PRECEDENTIAL UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT ____________ No. 12-3475 ____________ ZEFFIE NETIA SURGICK; CORDELIA JOHNSON v. ACQUANETTA CIRELLA; ROSE SURGICK; K. HOVNANIAN ENTERPRISES, INC., C/O ACQUANETTA CIRELLA [IN THE MATTER OF JAMES LESLIE SURGICK (DECEASED)]; INTERNAL REVENUE SERVICE Zeffie Surgick, Appellant __________________________________ On Appeal from the United States District Court for the District of New Jersey (D.C. Civ. No. 09-cv-03807) District Judge: Noel L. Hillman __________________________________ Submitted for Possible Dismissal Pursuant to 28 U.S.C. § 1915(e)(2)(B) or Summary Action Pursuant to Third Circuit LAR 27.4 and I.O.P. 10.6 January 10, 2013 Before: AMBRO, SMITH and CHAGARES, Circuit Judges (Opinion filed: January 14, 2013) _________________ OPINION _________________ PER CURIAM Appellant Zeffie Surgick and Cordelia Johnson, now deceased, brought suit pro se against Acquanetta Cirella, Rose Surgick, K. Hovnanian Enterprises, Inc., and the Internal Revenue Service (“the Service”) in the United States District Court for the District of New Jersey after Surgick unsuccessfully sought information directly from the Service, see 26 U.S.C. § 6103(e). Surgick and Johnson claimed that the defendants denied them access to tax records and other information relating to the estate of their father, James Leslie Surgick, and thereby violated their First Amendment and statutory rights to freedom of information. In addition, they alleged that Cirella and Rose Surgick, in exercising power of attorney over the estate, conspired to defraud them by concealing the value of the estate, in violation of New Jersey law. 1 In an order filed on June 15, 2010, the District Court granted K. Hovnanian’s motion to dismiss and advised Surgick and Johnson to amend their complaint with respect to the Service. K. Hovnanian had argued, and the District Court agreed, that, as a private corporation, it was not subject to the Freedom of Information or Privacy Acts, and it had no legal obligation to the plaintiffs to disclose its tax records. In August, 2010, Surgick and Johnson filed an amended complaint, alleging that the Service violated the Freedom of Information Act (“FOIA”) by withholding information pertaining to James Leslie Surgick and his estate, and his investment interests. In a June 19, 2011 Opinion, the District Court recognized that dismissal of the amended complaint should probably be granted to the extent that the plaintiffs sought disclosure from the Service of K. Hovnanian’s tax information, but the court was concerned about FOIA’s segregation requirement. Additionally, the District Court recognized that representations made by the Service that its officials had conducted a reasonable investigation for the documents requested; discovered that most of those 1 Zeffie Surgick, Cordelia Johnson, Rose Surgick and Acquanetta Cirella are four of James Leslie Surgick’s 12 children. 2 documents were either destroyed or did not exist; and had provided the documents it did have, should be presented in a motion for summary judgment. In August, 2011, the Service moved for summary judgment, Fed. R. Civ. Pro. 56(a), arguing that the plaintiffs did not have a valid FOIA claim regarding the tax documents of James Leslie Surgick and his estate, and that it was entitled to summary judgment regarding the request for the tax return information for K. Hovnanian because K. Hovnanian had not consented to disclosure and because its tax records were exempt from disclosure. Cirella and Rose Surgick filed a motion to dismiss the amended complaint for lack of federal subject matter jurisdiction. In an order entered on March 29, 2012, the District Court granted summary judgment to the Service. After a careful review of the specific information requested and the Service’s declarations and exhibits regarding its investigation and actions, and the response in opposition to the motion for summary judgment, the District Court determined that there was no triable issue with respect to whether the Service was improperly withholding information from the plaintiffs. In a thorough opinion, the District Court concluded that the Service provided reasonable and sufficiently detailed declarations of two Disclosure Specialists, and that those declarations established that all files likely to contain responsive materials were searched. Officials had followed up on the results of the searches by working with the Federal Records Center to locate any responsive documents, and the Service had provided the plaintiffs with the only responsive documents that were located. The Service had also properly advised the plaintiffs that the majority of the requests sought records which were destroyed in accordance with the Service’s record retention schedule, were nonexistent, or were never 3 filed with the Service. In addition, the District Court determined that summary judgment was proper on the plaintiffs’ requests regarding K. Hovnanian's tax information. The plaintiffs had not obtained K. Hovnanian’s consent to disclosure, and FOIA’s segregation requirement did not apply because the documents sought were fully exempt from disclosure and did not contain any non-exempt information that the Service could segregate and disclose. In the margin, the court concluded that there was no need for a “Vaughn index.” See Surgick v. Cirella, 2012 WL 1067923 (D.N.J. March 29, 2012). Because the FOIA claim was dismissed, and there thus was no longer a federal question, the District Court, in addition, sua sponte declined to exercise supplemental jurisdiction over the plaintiffs’ state law claims and dismissed them without prejudice, 28 U.S.C. § 1367(c)(3). However, because the plaintiffs were proceeding pro se, the District Court gave them one final opportunity to amend the complaint to allege a basis for diversity jurisdiction over defendants Cirella and Rose Zurgick. Surgick and Cordelia Johnson’s daughter Charlotte Surgick responded by filing an amended complaint, again claiming that Cirella and Rose Surgick denied them their rightful inheritance. 2 In an order entered on April 27, 2012, the District Court noted that ninety days had passed since the court was notified of Cordelia’s death, and the issue whether Charlotte could be substituted under Fed. R. Civ. Pro. 25(a)(1) had not been properly addressed in a substitution motion. Accordingly, the court dismissed Cordelia’s claims. 3 The District Court then signaled its intention to dismiss Surgick’s amended 2 Cordelia Surgick died in November, 2011. 3 Rule 25(a)(1) provides: “If a party dies and the claim is not extinguished, the court may order substitution of the proper party. A motion for substitution may be made by any party or by the decedent’s successor or representative. If the motion is not made within 4 complaint against Cirella and Rose Surgick on the basis of the probate exception to federal court jurisdiction, see generally Three Keys Ltd. v. SR Utility Holding Co., 540 F.3d 220 (3d Cir. 2008). Surgick was given one more extension of twenty days in which to properly plead a basis for federal court jurisdiction. Surgick, in response, moved to withdraw her amended complaint against Cirella and Rose Surgick; she also filed a notice of appeal on May 14, 2012, seeking review of the District Court’s March 29, 2012 order granting summary judgment to the Service. We dismissed the appeal on July 12, 2012 as premature, see C.A. No. 12-2409, because Cirella and Rose Surgick remained parties to the action and because the order appealed had not been certified by the District Court pursuant to Fed. R. Civ. Pro. 54(b). In an order entered on July 19, 2012, the District Court granted the motion to withdraw the amended complaint and finally dismissed the claims against Cirella and Rose Surgick, thereby bringing the case to a close. Surgick had sixty days from the date of this order in which to file a timely notice of appeal, see Fed. R. App. Pro. 4(a)(1)(B) (authorizing 60- day appeal period when United States is party). No notice of appeal was filed by September 17, 2012. Instead, she filed a notice of appeal on October 16, 2012. Meanwhile, on August 28, 2012, Surgick filed a petition for panel rehearing in our court in her jurisdictionally defective appeal, see C.A. No. 12-2409, which we denied. But she also mailed a copy of her rehearing petition to the District Court, where it was treated as a notice of appeal and filed on August 30, 2012. It was forwarded to this Court, resulting in the instant appeal. Our Clerk granted Surgick leave to appeal in forma pauperis and advised her that the appeal was subject to summary dismissal under 28 90 days after service of a statement noting the death, the action by or against the decedent must be dismissed.” 5 U.S.C. § 1915(e)(2)(B) or summary affirmance under Third Cir. LAR 27.4 and I.O.P. 10.6. The Service has moved to dismiss the appeal for lack of jurisdiction, and K. Hovnanian Enterprises has submitted a letter joining in that motion. The Service argues that the notice of appeal filed on October 16, 2012 was not timely filed under appellate Rule 4, and the petition for rehearing which the Clerk of the District Court treated as a notice of appeal, although timely filed under Rule 4, should not be treated as a notice of appeal. In support, the Service argues that Surgick, although appearing pro se, is not an unsophisticated litigant. When the jurisdictional defect in the appeal docketed at C.A. No. 12-2409 was called to her attention, for example, she moved to withdraw the amended complaint against Cirella and Rose Surgick. Moreover, Surgick knows the proper format for a notice of appeal, having previously filed one. Surgick has filed a motion to strike, in which she argues, in effect, that we should exercise jurisdiction in the instant appeal. Federal Rule of Appellate Procedure 3(c) provides that a notice of appeal specify the party taking the appeal, designate the order being appealed, and name the court to which the appeal is taken. Fed. R. App. Pro. 3(c)(1)(A)-(C). “Form 1 in the Appendix of Forms is a suggested notice of appeal.” See id. at Rule 3(c)(5). Without a doubt, Surgick’s petition for panel rehearing does not conform to Form 1, but if a document filed within the time specified by Rule 4 gives the notice required by Rule 3, it is effective as a notice of appeal. Smith v. Barry, 502 U.S. 244, 248 (1992). The requirements of Rule 3 are to be construed liberally, but “Rule 3’s dictates are jurisdictional in nature, and their satisfaction is a prerequisite to appellate review.” Id. In 6 Smith, the Supreme Court held that an inmate’s informal brief, submitted in response to a briefing order, could qualify as a notice of appeal; the case was remanded to the appeals court. Not surprisingly, Surgick’s petition for panel rehearing which was filed on the District Court docket on August 30, 2012 as a notice of appeal references on page 1 Surgick’s existing appeal to our Court (without identifying the specific court of appeals docket number), and indicates an intent to have review of the District Court’s order of March 29, 2012. On the second page of the petition, Surgick notes that her case became appealable upon entry of the District Court’s July 19, 2012 order dismissing the remaining claims against Cirella and Rose Surgick, and she notes that she “now” appeals the order of the District Court denying her claim against the Service for disclosure of records. Under these circumstances, we conclude that Rule 3(c)(1) is satisfied, and that we have jurisdiction, 28 U.S.C. § 1291. We will summarily affirm the District Court’s order granting summary judgment in favor of the Service and against Zeffie Surgick. Under Third Circuit LAR 27.4 and I.O.P. 10.6, we may summarily dispose of an appeal when it clearly appears that no substantial question is presented by the appeal. Summary judgment is appropriate where the moving party shows that there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). Although the initial burden is on the moving party to show the absence of a genuine issue of material fact, the burden on the moving party may be discharged by showing that there is an absence of evidence to support the nonmoving party’s case. See id. at 325. Thus, to withstand a properly supported motion for summary judgment, the 7 nonmoving party must identify specific facts and affirmative evidence that contradict that which is offered by the moving party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 257 (1986). A party opposing summary judgment must do more than just rest upon mere allegations. See Saldana v. Kmart Corp., 260 F.3d 228, 232 (3d Cir. 2001). A District Court may order the production of documents pursuant to FOIA, 5 U.S.C. § 552(a)(4)(B), where (1) the requested documents are agency records; (2) the records have been withheld by the agency; and (3) the withholding was improper. See Coastal States Gas Corp. v. Dep’t of Energy, 644 F.2d 969, 974 (3d Cir. 1981). The agency has a duty to conduct a reasonable search for responsive records. See Abdelfattah v. U.S. Dep’t of Homeland Sec., 488 F.3d 178, 182 (3d Cir. 2007). To establish for summary judgment purposes the adequacy of its search, the agency should provide a “reasonably detailed affidavit, setting forth the search terms and the type of search performed, and averring that all files likely to contain responsive materials . . . were searched.” Oglesby v. U.S. Dep’t of Army, 920 F.2d 57, 68 (D.C. Cir. 1990). With respect to James Leslie Surgick and his estate, the plaintiffs sought tax returns and records for numerous years. Based on the record in this case, the Service established that it complied with its duty to conduct an adequate search of its Integrated Data Retrieval System and to turn over all responsive documents in its possession. Surgick failed to identify specific facts and affirmative evidence to contradict the evidence offered by the Service in support of its argument that its search was adequate and it was not improperly withholding documents. Thus, summary judgment was proper. With respect to K. Hovnanian, the plaintiffs sought corporate tax returns and information concerning James Leslie Surgick’s interests in the corporation. Pursuant to 8 FOIA exemption 3, 5 U.S.C. § 552(b)(3), and the tax code, 26 U.S.C § 6103(e)(1), the Service is prohibited from releasing K. Hovnanian’s tax information to the plaintiffs without K. Hovnanian’s consent, which the plaintiffs did not obtain. Section 6103(e)(1)(A)-(F) prohibits the disclosure of third-party tax return information, and subparagraph (b)(2) broadly defines “return information” to include a “taxpayer's identity, the nature, source, or amount of his income, payments, receipts, deductions, exemptions, credits, assets, liabilities, net worth, tax liability, tax withheld, deficiencies, over assessments, or tax payments …,” id. at 6103(b)(2). Accordingly, summary judgment was proper here as well. FOIA’s segregation requirement, 5 U.S.C. § 552(b) (unnumbered paragraph) (any “reasonably segregable portion of a record shall be provided to any person requesting such record after deletion of the portions which are exempt under this subsection”), is not applicable because the Service established that the information requested is exempt from disclosure, and established that there was no form of non-exempt information in the documents requested which the Service could segregate and legally disclose to the plaintiffs. See Church of Scientology v. Internal Revenue Serv., 484 U.S. 9, 16 (1987) (“Congress did not intend [section 6103] to allow the disclosure of otherwise confidential return information merely by the redaction of identifying details.”). A “Vaughn index,” see Vaughn v. Rosen, 484 F.2d 820 (D.C. Cir. 1973), was unnecessary because the information sought plainly was confidential taxpayer information. For the foregoing reasons, the order of the District Court granting summary judgment to the Internal Revenue Service and against Zeffie Surgick on her FOIA claim is summarily affirmed. The Service’s and K. Hovnanian’s motions to dismiss for lack of 9 appellate jurisdiction are denied. Surgick’s motion to strike is denied as stated but has been considered as a jurisdictional response. 10	01-03-2023	01-14-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527142/	131 Pa. Commonwealth Ct. 317 (1990) 570 A.2d 132 John C. ZERR and Ruth M. Zerr, his wife, and Geigertown Water Co., Petitioner, v. COMMONWEALTH of Pennsylvania, DEPARTMENT OF ENVIRONMENTAL RESOURCES, BUREAU OF STATE PARKS, Respondent. Commonwealth Court of Pennsylvania. Submitted December 15, 1989. Decided February 12, 1990. 318 Frederick R. Mogel, with him, Robert D. Katzenmoyer, Mogel, Speidel, Bobb & Kershner, Reading, for petitioner. Martha R. Smith, Harrisburg, for respondent. Before DOYLE and PALLADINO, JJ., and BARBIERI, Senior Judge. PALLADINO, Judge. John Zerr, Ruth Zerr and Geigertown Water Company (Petitioners) appeal from an order of the Board of Property (Board) which sustained the preliminary objections of the Department of Environmental Resources (DER). We affirm. Petitioners filed a complaint to quiet title to property that is part of the French Creek State Park in Berks County (Park). The Park, which is under DER's control, was 319 acquired by the Commonwealth of Pennsylvania from the National Park Service of the United States (U.S.) The deed granting the Park to the Commonwealth reserves for the U.S. certain mineral rights and requires that the Park revert to the U.S. if it is used for any purpose other than park land. Petitioners seek to quiet title to strips of land along the southern and eastern boundaries of Petitioners' land and the Park. DER filed preliminary objections alleging, in pertinent part, that the Board did not have jurisdiction because Petitioners failed to join the U.S. as an indispensable party. The Board, relying upon Pocono Pines Corporation v. Pennsylvania Game Commission, 464 Pa. 17, 345 A.2d 709 (1975), held that it lacked jurisdiction because Petitioners failed to join an indispensable party and because the U.S. had not consented to be sued before the Board. In Pocono Pines, the plaintiff sued the Game Commission to quiet title to land which the U.S. had deeded to the Commission, reserving mineral rights and providing that whenever the President or other government official declared that the land was necessary for defense purposes the U.S. could take the land. The supreme court held that the U.S. had an interest to protect in the property and had a right to protect that interest. Therefore, the court held that the U.S. was an indispensable party and the Board did not have jurisdiction without joining the U.S. Moreover, the supreme court, noting 28 U.S.C. § 1346(f)[1] and 28 U.S.C. § 2409a[2], held that the U.S. has only consented to be sued in quiet title actions in district court and therefore the Board lacked subject matter jurisdiction. *320 Petitioners assert that Pocono Pines is distinguishable because in Pocono Pines the U.S. held an "active" interest in the land: it could take the land at any time. Here, Petitioner argues that the U.S. interest is "passive": it can only take the land upon the happening of a condition. Petitioners argue that the U.S. mineral rights and mere passive interest are insufficient for the U.S. to be an indispensable party. To be an indispensable party, one must have rights so directly connected with and affected by the litigation that he must be a party to protect such rights; his absence renders any order or decree of the court null and void for want of jurisdiction. Columbia Gas Transmission Corporation v. Diamond Fuel Company, 464 Pa. 377, 346 A.2d 788 (1975). The distinction Petitioners draw between this case and Pocono Pines is based upon the type of interest that the U.S. has in the property in question. Despite this distinction, the U.S. holds a significant interest in the property which could be lost forever should Petitioners prevail on the merits. The U.S. must be given the opportunity to protect its rights in the property. We hold that the U.S. is an indispensable party. Finally, Petitioners argue that the Board erred as a matter of law in relying upon 28 U.S.C. § 1346(f) and 28 U.S.C. § 2409a. Petitioners assert that these sections do not apply because the U.S. is not an indispensable party. Petitioners rely upon the same argument as set for above. Above we held that the U.S. is an indispensable party. Accordingly, we affirm. ORDER AND NOW, February 12, 1990, the order of the Board of Property in the above-captioned matter is affirmed. NOTES [1] 28 U.S.C. § 1346(f) provides as follows: (f) The district courts shall have exclusive original jurisdiction of civil actions under section 2409a to quiet title to an estate or interest in real property in which an interest is claimed by the United States. [2] 28 U.S.C. § 2409a provides, in part, as follows: (a) The United States may be named as a party defendant in a civil action under this section to adjudicate a disputed title to real property in which the United States claims an interest, other than a security interest or water rights. . . .	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1526832/	131 Pa. Commw. 488 (1990) 570 A.2d 1360 COMMONWEALTH of Pennsylvania, Appellant, v. Robert A. BENDAS and Martin T. Bendas, Township of White Deer, Merrill C. Perry and Marilyn B. Perry, Appellees. COMMONWEALTH of Pennsylvania v. Merrill C. PERRY and Marilyn B. Perry, husband and wife, Robert A. Bendas, Township of White Deer, Appellees. Commonwealth Court of Pennsylvania. Argued September 12, 1989. Decided February 6, 1990. Reargument Denied March 28, 1990. 489 Thomas M. Devlin, Deputy Atty. Gen., Torts, Litigation Section, for appellant. Brad M. Jackman, with him, Charles H. Saylor and Thomas E. Boop, Sunbury, Jackman and Dixon, Doylestown, for appellees. Before CRUMLISH, Jr., President Judge, and COLINS and McGINLEY, JJ. OPINION CRUMLISH, Jr., President Judge. The Commonwealth, Department of Transportation (DOT), appeals a Union County Common Pleas Court order which, in pertinent part, denied its motion for summary judgment.[1] We affirm. This controversy arises out of an accident in which an automobile driven by Robert Bendas collided with Merrill Perry's vehicle at the intersection of Legislative Route (L.R.) 475, a Commonwealth highway and Township Road 490 533 in White Deer Township (Township). Bendas and Perry instituted separate suits, alleging that both the Township and DOT negligently failed to erect traffic control devices at the intersection or, in the alternative, failed to correct a dangerous condition. The court denied DOT's motions for summary judgment,[2] holding it owed a duty to erect traffic signals at the intersection and thus Bendas and Perry had stated a cause of action against it. DOT contends that it is not liable for failing to perform the discretionary act of erecting traffic control devices. Section 6122(a)(2) of the Vehicle Code (Code), 75 Pa.C.S. § 6122(a)(2), gives to the Department the authority merely to approve the erection of traffic signals by local authorities. Section 6124 of the Code, 75 Pa.C.S. § 6124, further provides that the Department "may erect and maintain . . . traffic control devices." (Emphasis added.) In Sippos v. Richards, 116 Pa.Commonwealth Ct. 124, 541 A.2d 413 (1988), we held that these sections impose no duty on the Department either to approve the erection of traffic signals by local authorities or to erect traffic control devices. Here, the common pleas court distinguished Sippos, reasoning that Section 103 of the State Highway Act of 1961 (Act), Act of September 18, 1961, P.L. 1389, as amended, 36 P.S. § 1758-103, relieving the Commonwealth of any duty to regulate traffic or police highways, pertained only to local roads adopted as state highways pursuant to Section 101 of the Act, 36 P.S. § 1758-101. Rather, we found that ownership of the highway was immaterial, inasmuch as neither the Act nor the Code imposed the asserted duty. Sippos was not, however, decided with reference to the exceptions to sovereign immunity defined in the Judicial 491 Code, 42 Pa.C.S. § 8522(b). It is this interplay and apparent conflict between DOT's authority under the Vehicle Code and its potential liability under the exceptions to sovereign immunity which we must now address. In Snyder v. Harmon, 522 Pa. 424, 562 A.2d 307 (1989), our Supreme Court said that in order to ascertain the duty owed by the Commonwealth in a specific situation, we must first examine the exception to sovereign immunity within which the appellant contends his claim falls. In this case, as in Snyder, the fourth exception, governing dangerous conditions of state highways, applies. 42 Pa.C.S. § 8522(b)(4).[3] To state an actionable claim within this exception, one must allege that an artificial condition or defect of the highway itself caused the injury to occur. Snyder; see Mascaro v. Youth Study Center, 514 Pa. 351, 523 A.2d 1118 (1987). The corresponding duty owed by the Commonwealth agency requires, in general terms, that it provide reasonably safe highways, Wyke v. Ward, 81 Pa.Commonwealth Ct. 392, 474 A.2d 375 (1984), safe for the activities for which they are regularly used, intended to be used or reasonably foreseen to be used. Snyder. More specifically, the court must analyze the relationship between the parties and balance the various competing interests and costs involved in providing the requested protection. Mindala v. American Motors Corp., 518 Pa. 350, 543 A.2d 520 (1988); Huber v. Department of Transportation, 122 Pa.Commonwealth Ct. 82, 551 A.2d 1130 (1988). Thus, the determination of the 492 nature of the duty owed is a question of law, necessarily dependent on the facts of the incident in question. Statutes pertaining to the same subject matter should be construed in pari materia, if possible. 1 Pa.C.S. § 1932. Moreover, the Court must presume that the General Assembly did not intend an absurd or unreasonable result. 1 Pa.C.S. § 1922; Unionville-Chadds Ford School District v. Rotteveel, 87 Pa.Commonwealth Ct. 334, 487 A.2d 109 (1985). We cannot interpret Sections 6122(a)(2) and 6124 of the Vehicle Code to reach the conclusion that DOT could act to design, build, adopt, improve and/or maintain a roadway, yet ignore obvious potential hazards created by inadequate traffic control signals thereon because its authority to erect such signals and devices ab initio is purely discretionary. Such an interpretation is absurd and contrary to the intent of the legislature in enacting the highway exception to immunity. 42 Pa.C.S. § 8522(b)(4). Rather, it is reasonable and consistent to construe Vehicle Code Sections 6122(a)(2) and 6124 as giving DOT the authority to erect traffic signals, which authority can be abused if not exercised where a dangerous condition has arisen. Such an abuse of the authority under the Vehicle Code is tantamount to a breach of duty under the Judicial Code's highway exception to sovereign immunity. In addressing the factors addressed in Mindala, we note that DOT, as the Commonwealth agency empowered to establish statewide highway designations and regulations, 75 Pa.C.S. § 6109, must act in the interests of the Commonwealth's travelling public. Thus, the relationship between DOT and the travelling public is sufficient, in the context of the highway exception, to impose some affirmative duty. Further, while there is no doubt of the magnitude of DOT's responsibility to monitor the Commonwealth's highways and facilitate appropriate safety measures, we hasten to point out that liability under the highway exception to governmental immunity is limited to situations where DOT 493 has palpably failed to provide reasonably safe conditions. Not every intersection, either as designed or in and of itself, constitutes a dangerous condition. Wyke v. Ward. Therefore, the imposition of a duty to erect appropriate traffic control devices in some circumstances is consistent with the highway exception to governmental immunity and does not outweigh the interests and rights of the travelling public to safely traverse Commonwealth highways. Given our limited scope of review of a common pleas court's denial of summary judgment and the well-settled principle that summary judgment may be granted only in cases where the right is clear and free from doubt, DiMino v. Borough of Pottstown, 129 Pa.Commonwealth Ct. 154, 564 A.2d 1329 (1989), we affirm the order of the common pleas court.[4] ORDER The orders of the Union County Court of Common Pleas, Nos. 67, 1984, and 378, 1985 dated February 14, 1989 and March 23, 1989, are affirmed. McGINLEY, Judge, dissenting. I respectfully dissent to the majority opinion. The majority concludes that Sections 6122(a) and 6124 of the Vehicle Code[1] give DOT the authority to erect traffic 494 signals, which authority can be abused if not exercised where a dangerous condition has arisen. Thus, the majority holds that an abuse of this authority is tantamount to a breach of duty under the Judicial Code's highway exception to sovereign immunity. Sections 8522(b)(4) and (5) of the Judicial Code, 42 Pa.C.S. § 8522(b)(4) and (5) provide: (b) Acts which may impose liability. The following acts by a Commonwealth party may result in the imposition of liability on the Commonwealth and the defense of sovereign immunity shall not be raised to claims for damages caused by: . . . . (4) Commonwealth real estate, highways and sidewalks. A dangerous condition of Commonwealth agency real estate and sidewalks, including Commonwealth-owned real property, leaseholds in the possession of a Commonwealth agency and Commonwealth-owned real property leased by a Commonwealth agency to private persons, and highways under the jurisdiction of a Commonwealth agency, except conditions described in paragraph (5). (5) Potholes and other dangerous conditions. A dangerous condition of highways under the jurisdiction of a *495 Commonwealth agency created by potholes or sinkholes or other similar conditions created by natural elements, except that the claimant to recover must establish that the dangerous condition created a reasonably foreseeable risk of the kind of injury which was incurred and that the Commonwealth agency had actual written notice of the dangerous condition of the highway a sufficient time prior to the event to have taken measures to protect against the dangerous condition. Property damages shall not be recoverable under this paragraph. I would interpret a dangerous condition of the highway under Sections 8522(b)(4) and (5) to be limited in scope to defects in the highway itself. Also, the majority in note 4 on page 5 of its opinion states that Bendas was precluded from proceeding on a defective design theory because the common pleas court would not allow Bendas to amend his complaint after the statute of limitations had expired. As is noted, Bendas has not appealed and thus has not preserved this issue. Consequently, only Bendas' allegation that DOT was negligent in failing to erect traffic control devices at the intersection was properly before the common pleas court. Without an allegation of defective design or dangerous condition of the highway itself, I would find that liability cannot be imposed on DOT under Sections 6122(a) and 6124 of the Vehicle Code for a failure to erect traffic control devices at the intersection in question. I would reverse the order of the common pleas court and direct that DOT's motion for summary judgment be granted. NOTES [1] By Order dated May 3, 1989, this Court granted DOT's petition for permission to appeal an interlocutory order. [2] The common pleas court granted the Township's motions for summary judgment, concluding that it had no duty to erect traffic control devices. Bendas appealed that order which matter appears at Bendas v. Township of White Deer, 131 Pa.Commonwealth Ct. 138, 569 A.2d 1000 (1990). Although Perry likewise appealed the order dismissing the Township and was a named respondent here, those suits were settled during the pendency of this appeal. [3] That section reads as follows: (b) Acts which may impose liability.The following acts by a Commonwealth party may result in the imposition of liability on the Commonwealth and the defense of sovereign immunity shall not be raised to claims for damages caused by: . . . . (4) Commonwealth real estate, highways and sidewalks.A dangerous condition of Commonwealth agency real estate and sidewalks, including Commonwealth-owned real property, leaseholds in the possession of a Commonwealth agency and Commonwealth-owned real property leased by a Commonwealth agency to private persons, and highways under the jurisdiction of a Commonwealth agency, except conditions described in paragraph (5). [4] In its opinion, the common pleas court also precluded Bendas from proceeding on a defective design theory because he had failed to specifically allege that basis for negligence in his complaint. The court further opined that he would be precluded from amending his complaint because the statute of limitations had long since expired. Although Bendas alleges that this conclusion constitutes reversible error, we note that Bendas has not appealed this order and has not preserved this issue by actually seeking to amend his complaint or otherwise petitioning for an appealable order. [1] Sections 6122(a) and 6124 of the Vehicle Code, 75 Pa.C.S. §§ 6122(a) and 6124 provide as follows: § 6122. (a) General rule. The department on State-designated highways and local authorities on any highway within their boundaries may erect official traffic-control devices, which shall be installed and maintained in conformance with the manual and regulations published by the department upon all highways as required to carry out the provisions of this title or to regulate, restrict, direct, warn, prohibit or guide traffic. (1) Local authorities shall obtain approval of the department prior to erecting an official traffic-control device on a State-designated highway except where department regulations provide otherwise. (2) Local authorities shall obtain approval of the department prior to erecting any traffic signal except in a municipality with a traffic engineer qualified in accordance with department regulations. § 6124. The department on State-designated highways, including intersections with local highways, and local authorities on intersections of highways under their jurisdiction may erect and maintain stop signs, yield signs or other official traffic-control devices to designate through highways or to designate intersections at which vehicular traffic on one or more of the roadways should yield or stop and yield before entering the intersection.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1526831/	119 B.R. 272 (1990) In re Clifford G. HALL, Debtor. Constance HALL, Plaintiff, v. Clifford G. HALL, Defendant. Bankruptcy No. 89-8771-9P7, Adv. No. 90-097. United States Bankruptcy Court, M.D. Florida, Fort Myers Division. September 14, 1990. 273 Dennis L. Avery, Fort Myers, Fla., for plaintiff. Jeffrey W. Leasure, Fort Myers, Fla., for defendant. FINDINGS OF FACT, CONCLUSIONS OF LAW AND MEMORANDUM OPINION ALEXANDER L. PASKAY, Chief Judge. THIS is a Chapter 7 case and the matter under consideration is a challenge of the 274 dischargeability of several obligations admittedly owed by Clifford Hall, the Debtor/Defendant (Debtor). The challenge is presented by a Complaint filed by the Debtor's former wife, Constance Hall (Plaintiff). In her Complaint, she contends that the debts due and owing by the Debtor to her should be declared to be nondischargeable pursuant to § 523(a)(5) of the Bankruptcy Code. In Count I of the Complaint, the Plaintiff seeks a determination that a debt in the amount of $205,153.14 due and owing from the Debtor to the Plaintiff, based on a dissolution of marriage judgment, is nondischargeable pursuant to § 523(a)(5) of the Bankruptcy Code. In Count II of the Complaint, the Plaintiff seeks a determination that a debt in the amount of $11,371.74, based on an award to the Plaintiff of attorneys fees and costs from the dissolution of marriage proceeding, is also nondischargeable pursuant to § 523(a)(5) of the Bankruptcy Code. In Count III, based on § 727(a)(2)(A), the Plaintiff contends that in any event the Debtor's discharge should be denied. It was agreed by the parties that this Court should defer the consideration of this claim until after the Plaintiff's claim of nondischargeability is determined. The facts relevant to the claims under consideration which were established at the final evidentiary hearing or were stipulated to by the parties are as follows: The Plaintiff and the Debtor, former wife and husband, are Canadian citizens and were married in Canada on November 30, 1963. There are no minor children of the parties. In 1983, the parties left their residence in Canada and moved to Lehigh Acres, Florida. The Plaintiff and the Debtor began experiencing marital difficulties in early 1985, and on April 2, 1985, they executed a Separation Agreement. Thereafter, the Plaintiff returned to Canada and filed an action against the Defendant in Canada, which is comparable to an action for separate maintenance under Florida law. During the pendency of the Canadian proceedings, the Debtor agreed to pay the Plaintiff interim support in the amount of $350 per week, and he made payments until 1986. In the Canadian proceedings, the Plaintiff claimed a one-half interest in a business known as "Gen-Rep, Ltd.", which was owned by the Debtor. The Debtor was informed by his counsel that under Canadian law, his wife could claim one half of his business. The Debtor, upon receiving that information, arranged to sell his business, and left Canada with approximately $150,000.00 in proceeds from the sale of his interest in Gen-Rep, Ltd., and moved to Florida. After the sale of his interest, the Debtor stopped all interim support payments. On March 23, 1987, the Supreme Court of Ontario entered a judgment on behalf of the Plaintiff against the Debtor. The judgment consists of four parts: 1) a lump sum support award of $13,856.00, 2) an equalization of net family property award of $185,000.00, 3) ongoing support of $1.00 per month, and 4) attorneys' fees and costs, which were later determined to be $17,857.00. In February 1987, the Plaintiff filed a dissolution of marriage action against the Defendant in Lee County, Florida. In June 1987, she filed another action in Lee County, Florida in order to domesticate the Canadian judgment. These two actions were subsequently consolidated and were tried together. On March 30, 1988, the Circuit Court entered a Final Judgment which dissolved the marriage, but did not accord comity to the Canadian Judgment. The Final Judgment entered by the Circuit Court was reversed by the Second District Court of Appeals, and the case was remanded back to the trial court. The trial court subsequently entered a Final Judgment in favor of the Plaintiff which awarded attorneys' fees and costs in the amount of $11,371.74 to the Plaintiff pursuant to Fla.Stat. § 61.16 for services rendered in connection with the appeal. The Final Judgment is the basis of the Plaintiff's claim set forth in Count II of the Complaint. On November 22, 1989, the Circuit Court in Lee County entered an Amended Final 275 Judgment and granted comity to the Canadian Judgment and awarded the Plaintiff additional attorneys' fees and costs pursuant to Fla.Stat. § 61.16. As noted earlier, the Canadian judgment awarded to the Plaintiff $13,856.00 based on past due interim support that the Debtor failed to pay; a net equalization of property award in the amount of $185,000.00; and an award of $1.00 per month in periodic support, attorney fees, and costs, for a total of $205,153.14 (U.S. dollars). The amount was based on the Canadian judgment, conversion rates, interest, amounts previously paid by the Debtor attorney fees and costs. Of the $205,153.54 awarded, $17,875.00 is for attorney fees and $551.56 is for court costs. It further appears that $13,008.88 is attributable to the unpaid periodic alimony award, while $173,715.19 is attributable to the net equalization of family assets award in the original Canadian judgment. The award granted by the Amended Final Judgment is the subject of the claim set forth in Count I of the Complaint. It is the contention of the Plaintiff that the entire $205,153.14 (U.S. dollars) is nondischargeable because the award is in the nature of alimony, maintenance or support of spouse or child. Section 523(a)(5) of the Bankruptcy Code addresses the dischargeability of a debt for alimony and provides as follows: § 523. Exceptions to Discharge (a) A discharge under section 727 ... of this title does not discharge an individual debtor from any debt (5) to a spouse, former spouse, or child of the debtor for alimony to, maintenance for, or support of such spouse or child in connection with a separation agreement, divorce decree, or other court of record, determination made in accordance with state or territorial law by a governmental unit or property settlement agreement, but not to the extent that (B) such debt includes a liability designated as alimony, maintenance, or support, unless such liability is actually in the nature of alimony, maintenance, or support. It is appropriate to note at the outset that the underlying purpose of the Bankruptcy Code is to give the debtor a new opportunity in life and a fresh start in life, Lines v. Frederick, 400 U.S. 18, 91 S. Ct. 113, 27 L. Ed. 2d 124 (1970). Debts owed by the debtor who seeks relief in the bankruptcy court are assumed to be dischargeable unless the party complaining that the debt is nondischargeable meets the burden of proving that nondischargeability. In the Matter of Bonanza Import and Export, Inc., 43 B.R. 577 (Bankr.S.Dist.Fla. 1988); In re Garner, 881 F.2d 579 (8th Cir.1989). A party seeking to have a debt declared nondischargeable under § 523(a)(5) of the Bankruptcy Code has the burden to establish with competent proof that the debtor's obligation is actually alimony, maintenance, or support. Tilley v. Jesse, 789 F.2d 1074 (4th Cir.1986). Obligations to pay attorney fees for a former spouse may be declared to be nondischargeable if the attorney fees are related to obtaining an award for alimony, maintenance, or support of the spouse of the debtor. In the Matter of Breen, 50 B.R. 454 (Bankr.Del.1985). What is or what is not within the exception to discharge within the provisions of § 523(a)(5) must be determined with reference to federal bankruptcy law, and not by the laws used or with reference to local law. In re Hall, 40 B.R. 204 (Bankr.M.D.Fla.1984); In the Matter of Vande Zande, 22 B.R. 328 (Bankr.W.D.Wisc.1982). There are several factors to be considered in determining whether an obligation stemming from a dissolution of marriage proceeding is in the nature of alimony, support or maintenance, or whether it is, in fact, a property settlement. These factors include whether the obligation is subject to contingencies such as remarriage or death, whether the payment appears to balance disparate incomes, whether the obligation is payable in installments or in a lump sum, whether there are minor children, whether there was an actual need for support at the time it was awarded, whether the award is modifiable, the manner of enforcement of the award, i.e., by 276 contempt or by execution and levy, and whether there was a division of property and allocation of debts between the parties. See In re Bell, 47 B.R. 284 (Bankr.E.D.N. Y.1985), In the Matter of Basile, 44 B.R. 221 (Bankr.M.D.Fla.1984), In the Matter of Rachimel, 19 B.R. 721 (Bankr.M.D.Fla. 1982), In the Matter of Newman, 15 B.R. 67 (Bankr.M.D.Fla.1981). Rather than simply accepting the label used by the parties or by the court characterizing a particular obligation imposed on the Debtor by the Final Judgment dissolving the marriage, the Court must look to the substance of the Final Decree which dissolves the marriage and the nature of the obligation. In re Usher, 442 F. Supp. 866 (M.D.Ga.1977). Essentially, the Court must go beyond the language of the decree and attempt to determine the intent of the parties and the substance of the obligation. Shaver v. Shaver, 736 F.2d 1314 (9th Cir.1984). Considering both the Order and Final Judgment of June 20, 1989, and the Amended Final Judgment of Dissolution of Marriage of November 22, 1989, this Court is satisfied that some of the debts due and owing to the Plaintiff by the Debtor can be fairly characterized as obligations in the nature of alimony and support and are therefore nondischargeable under § 523(a)(5) of the Bankruptcy Code. On the other hand, other obligations imposed on the Debtor are more in the nature of a property settlement and therefore cannot be excepted from the general protective provisions of the discharge. Specifically, the award of $13,008.88 granted to the Plaintiff based on past due interim support that the Debtor failed to pay does, in fact, clearly represent payments in the nature of alimony and support. This award of support was payable in weekly installments, was based on the Plaintiff's needs, and was modifiable based upon showing of material change in circumstances. Accordingly, this debt due and owing by the Debtor to the Plaintiff in the amount of $13,088.88 is excepted from the provisions of the general discharge pursuant to § 523(a)(5) of the Bankruptcy Code. The award of support in the amount of $1.00 per month was characterized by the Canadian Court as support payment. It takes no great imagination to concur that no one can be supported on an award of $1.00 a month. This award may be explained by drawing two opposite inferences, neither of which is supported by the record. The first is that in light of the large property settlement award, the Canadian Court concluded that the wife is not in need of alimony, but because the Canadian law requires an award, they made this token award in order to comply with the requirements of Canadian law. On the other hand, it also may be inferred that the property settlement award was actually intended to be support but because of tax reasons, or some other reason, was labelled as "net equalization of property" and not alimony or support. As noted, however, neither of these inferences are really supported by the record, and in the absence of any proof this Court is constrained to accept the label placed on the $1.00 a month award and concludes that this award also is excepted from the overall protection of the general bankruptcy discharge based on § 523(a)(5) of the Bankruptcy Code. The portion of the Canadian judgment that was incorporated into the Amended Final Judgment and which granted an award to the Plaintiff to equalize family property appears to be a property settlement, rather than an award of alimony, maintenance or support. Both the Plaintiff and the Debtor stipulated that the laws of Canada, specifically the Statutes of the Province of Ontario, are the applicable laws to the they are relevant to the matter under consideration. The Ontario Statutes provide for an equalization of net family properties and state in pertinent part that When a divorce is granted or a marriage is declared a nullity, or when the spouses are separated and there is no reasonable prospect that they will resume cohabitation, the spouse whose net family property is the lesser of the two net family properties is entitled to one-half the difference between them. *277 Family Law Act, Chapter 4, Sect. 5(1), Ont.Stat.1986, as amended by Chapter 5, Ont.Stat.1986. Based on the Statute, it is evident that the award of the sum of $173,715.19 was, in fact, a monetary compensation of the Plaintiff's interest in the family property. This leaves for consideration the award of attorney fees as awarded by the Canadian judgment in the amount of $17,875.00, as well as the award of attorney fees in the Final Judgment of Dissolution of Marriage in the amount of $11,371.74 awarded in Florida. This Court follows the line of cases that holds that an obligation to pay attorney fees is so entwined with the obligation of support that it can be considered in the nature of support and alimony and excepted from the provisions of the discharge. See In re Spong, 661 F.2d 6 (2d Cir.1981); In re Morris, 14 B.R. 217 (Bankr.D.Colo.1981); In re Midnet, 84 B.R. 776 (Bankr.N.D.Fla.1988). This proposition is also supported by Fla.Stat. 61.16, which provides in part that a state court may, after considering the financial resources of both parties, award reasonable attorney's fees and the cost of maintaining or defending a proceeding under Chapter 61 of the Florida Statutes (Dissolution of Marriage). Clearly then, the award of attorney fees in both the Final Judgment and Amended Final Judgment can be characterized as in the nature of support or alimony and excepted from the general provisions of the discharge pursuant to § 523(a)(5) of the Bankruptcy Code. In summary, this Court is satisfied that the debts owed by the Debtor to the Plaintiff in the amounts of $17,875.00 and $11,371.74 for attorney fees, $551.56 for court costs, and $13,008.88 for alimony are nondischargeable pursuant to § 523(a)(5) of the Bankruptcy Code. Additionally, any debts attributable to the $1.00 monthly support award is also nondischargeable. However, the debt owed by the Debtor to the Plaintiff in the amount of $173,715.19 which is attributable to net equalization of property is dischargeable. A separate Final Judgment will be entered in accordance with the foregoing. DONE AND ORDERED.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1526835/	119 B.R. 285 (1990) In re Philip David KNAPP, Debtor. Philip David KNAPP, Plaintiff, v. Thomas N. APPLEWHITE, Defendant. Bankruptcy No. 87-2069-BKC-3P1, Adv. No. 89-203. United States Bankruptcy Court, M.D. Florida, Jacksonville Division. August 28, 1990. 286 Albert H. Mickler, Jacksonville, Fla., for plaintiff. Granville C. Burgess, Fernandina Beach, Fla., for defendant. FINDINGS OF FACT AND CONCLUSIONS OF LAW GEORGE L. PROCTOR, Bankruptcy Judge. This adversary proceeding is before the Court upon complaint predicated upon 11 U.S.C. § 547 seeking to avoid the transfer of $275,000. Trial was held on August 29, 1989, and May 2, 1990, and upon the evidence presented, the Court enters the following Findings of Fact and Conclusions of Law: FINDINGS OF FACT Plaintiff is a certified public accountant licensed to practice in the State of Florida. Defendant is a retired merchant seaman who loaned a significant portion of his lump sum retirement benefit to plaintiff. The parties originally met in 1981 when defendant became a client of the plaintiff and maintained an accountant/client relationship at all times relevant to this proceeding. Plaintiff began soliciting loans in 1985 from defendant. Initially the sum of $50,000 was loaned to finance the purchase of investment real estate. Subsequently plaintiff began negotiations with third parties to purchase liquor stores, and licenses as well as other properties. In order to finance the acquisitions plaintiff and defendant (and defendant's wife) entered into an Agreement of Intent dated April 7, 1986. The terms provided for the defendant to receive a 30 percent interest in the corporation of Appkapp, Inc., Nassau Lounges, Inc., and Kapple, Inc., in return for rolling over the previous $50,000 loan and committing an additional advancement of $150,000. The minutes of Nassau Lounges, Inc., dated September 10, 1986, records the $150,000 as a loan to that corporation. During the entire period plaintiff and defendant were associated, plaintiff was the majority stockholder and controlled all business operations, funds, and corporate books and records of Nassau Lounges, Inc., Appkapp, Inc., and Kapple, Inc. The corporate books and records do not characterize defendant's interest in these corporations other than as a stockholder. There are no promissory notes or interest payments to substantiate any loans to the corporations by defendant. By May of 1987, plaintiff and defendant began to disagree over the management of the corporations. In order to settle their differences they agreed to sell the "5-Points Liquor Store and license" to 5-Points Liquor Store, Inc., in exchange for stock and cash. The terms were contained in Stock Buy-Back and Note Pay-Off Agreement ("Agreement") dated June 25, 1987, containing this provision: Both parties agree to a complete pay-off and satisfaction of all notes due to Thomas N. Applewhite from Philip D. Knapp. The total amount of the stock purchase and satisfaction of notes is $275,000.00. A closing occurred on June 25, 1987, and the terms of the Stock Buy-Back and Note Pay-Off were incorporated into a Settlement Agreement and defendant personally received a $275,000.00 credit, with $30,000.00 of that amount allocated to the purchase of his 30 percent stock interest and $245,000.00 credit to the purchase of the liquor store. On January 18, 1988, plaintiff filed a Chapter 11 petition. At filing, plaintiff listed defendant as a creditor in the amount of $245,000.00. The exact amount of the loans to plaintiff is indeterminable as neither 287 plaintiff nor defendant produced evidence as to amount or disposition. Plaintiff filed this adversary proceeding seeking to avoid the $275,000.00 credit as a preferential transfer pursuant to 11 U.S.C. § 547. At trial defendant asserted: (i) property transferred was not that of the plaintiff, but corporate assets; (ii) he is not a creditor of the plaintiff but rather an investor in the corporations; (iii) financial statements made to banks just weeks prior to filing showed the plaintiff to be solvent; (iv) the transfer did not deplete the estate, and (v) he was not an insider due to the de minimis nature of his involvement and shareholdings. CONCLUSIONS OF LAW Preferential Transfer 11 U.S.C. § 547 provides in relevant part: (b) ... the trustee may avoid any transfer of an interest of the debtor in property (1) to or for the benefit of a creditor; (2) for or on account of an antecedent debt owed by the debtor before such transfer was made; (3) made while the debtor was insolvent; (4) made (A) on or within 90 days before the date of the filing of the petition; or (B) between ninety days and one year before the date of the filing of the petition, if such creditor at the time of such transfer was an insider; and (5) that enables such creditor to receive more than such creditor would receive if (A) the case were a case under chapter 7 of this title; (B) the transfer had not been made; and (C) such creditor received payment of such debt to the extent provided by the provisions of this title. Transfer of an Interest of the Debtor When a creditor is paid from the funds of a third party, the Court must look to the source of control over distribution of the funds to determine whether the payment is an avoidable preference. If the debtor determines the disposition of the funds from the third party and designates the creditor to be paid, the funds are available for payment to creditors in general and the funds are assets of the estate. In re Jaggers, 48 B.R. 33, 36 (Bankr.W.D.Texas 1985); Matter of Howdeshell of Ft. Myers, 55 B.R. 470, 474 (Bankr.M.D.Fla.1985). Corporate Resolution No. 3 of Nassau Lounges, Inc., and Appkapp, Inc., demonstrates that plaintiff was the owner of 70 percent of the outstanding stock of both corporations. Plaintiff was also the sole director and president. In order to close the Agreement, plaintiff was required to obtain a release of the 5-Points Liquor Store from the mortgage and substitute another parcel of realty. These facts support that plaintiff controlled the disposition and distribution of the funds scheduled in the Agreement and that the transfer was that of "an interest of the debtor in property." Antecedent Debt 11 U.S.C. § 101(11) defines "debt" as a liability on a claim. 11 U.S.C. § 101(4) defines "claim" broadly to include any "right to payment, whether or not such right is ... legal, equitable...." Defendant characterized his transactions with plaintiff as a "business venture" or "investment." However, the evidence at trial shows instead that the transactions were loans. If the monies that were given to plaintiff had been an investment, the defendant would not have been entitled to recover his full claim since the value of a true investment rises or falls upon success or failure of the venture. Notwithstanding this basic approach to investment theory, defendant sought repayment of all funds given to plaintiff over the course of their dealings. Defendant initially advanced the funds to plaintiff individually, and the corporations were formed at a later date. Defendant *288 was then granted an interest in the corporation. Insolvency At trial plaintiff introduced a balance sheet showing his assets at $637,000 and liabilities at $1,106,000 as of the date of the closing agreement. Defendant countered with the introduction of various financial statements claiming solvency submitted by plaintiff for loan applications during the applicable time period. In determining the issue of "insolvency" in preference actions, the Court may ignore pre- or even post-petition valuations of assets that are overly optimistic or unrealistic. Accordingly, courts have refused to adopt "solvent" figures from the debtors' schedules, when those schedules were determined to be an "overly optimistic" appraisal of the debtor's assets in an effort to secure financing. In re American Insulator Co., 60 B.R. 752, 755 (Bankr.E.D.Penn. 1986). Within the context of a preference action, courts have refused to accept the proof of solvency contained in the debtor's schedules when a post-petition sale of the debtor's real property reflected a much lower market value. The schedules were deemed not controlling in In re Ressler, 61 B.R. 403, 407 (Bankr.E.D.Tenn.1986); and Matter of Howdeshell of Ft. Myers, supra. Errors discovered subsequent to a debtor's balance sheet have been used to retroactively determine the debtor to be insolvent. Matter of Howdeshell of Ft. Myers, supra. In that case, although the debtor's balance sheet occurred at a date later than the preferential transfer, the court found insolvency where the debtor's financial condition did not change during the interim period between the transfer and the statement. In this proceeding, subsequent events have proven that the pre-petition asset valuations of plaintiff, in efforts to gain additional financing, were excessive.[1] The evidence presented clearly establishes that plaintiff was insolvent on the date of the transfers. Preference Period The Bankruptcy Code provides for the avoidance of preferential transfers to insiders that occur within one year prior to the filing of the petition. 11 U.S.C. § 547(b)(5). The Code's definition "insider" includes any "[a]ffiliate, or insider of an affiliate...." 11 U.S.C. § 101(30). The Court then looks to the Code's definition of "affiliate", which includes a "[c]orporation twenty (20%) percent or more of whose outstanding voting securities are directly ... owned, controlled ... by the debtor...." 11 U.S.C. § 101(2). As a matter of law the Court finds defendant to be an insider of the affiliate corporations Nassau Lounges, Inc., and Appkapp, Inc. The transaction in dispute occurred on June 25, 1987. Plaintiff filed his petition on January 18, 1988. Therefore, the transfer in question falls within the time frame provided in 11 U.S.C. § 547(b)(5). More Than Liquidation The Chapter 11 plan filed by the plaintiff provides for unsecured creditors to receive at least 10 percent of their claims and as much as 40 percent based upon pending litigation. Certainly, defendant received more through the Agreement than he would have under the Chapter 11 plan, liquidation in a Chapter 7 proceeding, or had the transfer not been made. CONCLUSION The plaintiff has proven the elements of 11 U.S.C. § 547(b) and is permitted to avoid the transfer of $275,000 to defendant under the Agreement. The Court will, by separate order, enter a Final Judgment in favor of plaintiff. NOTES [1] One example of such excess in the Asset and Corresponding Liability Sheet given to various banks is the valuation of two properties at $4,200,000. These properties were eventually sold at a foreclosure sale for $400,000.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1526856/	549 S.W.2d 886 (1977) Albert J. BOLIN et al., Appellants, v. FARMERS ALLIANCE MUTUAL INSURANCE CO., a corporation, Respondent. No. 59647. Supreme Court of Missouri, En Banc. May 10, 1977. 887 Paul McGhee, McGhee & McGhee, Dexter, for appellants. Robert A. Wulff, St. Louis, for respondent. FINCH, Judge. This is a suit on a trip accidental death insurance policy issued on the life of Alma Mae Bolin on May 31, 1974. Following the accidental death of the insured on June 1, 1974, suit was brought by the heirs at law and the personal representative of Alma Mae Bolin (hereinafter plaintiffs) against Farmers Alliance Mutual Insurance Co., the company which issued the policy, and Marilyn Abernathy, a friend of the insured who is designated in the policy as beneficiary. The trial court rendered summary judgment in favor of Farmers on March 21, 1975. On March 25, 1975, the court sustained without prejudice Marilyn Abernathy's motion to dismiss as to her. Subsequently, on April 21, 1975, plaintiffs filed their notice of appeal from the summary judgment entered on March 21, 1975. The court of appeals, Springfield district, dismissed that appeal on the basis that said judgment, not having made any finding or disposition of the case against defendant Abernathy, did not finally dispose of all the parties and issues and was not a final judgment from which an appeal would lie. On application, we ordered the case transferred and we now decide it as though here on direct appeal. Mo.Const. art. V, § 10. 888 Plaintiffs first sought suit against only Farmers. It alleged (1) issuance by Farmers of a policy of insurance whereby it insured the life of Alma Mae Bolin for $50,000 if through accidental means she received injuries which resulted in her death, (2) the death of Alma Mae Bolin from such causes during the term of the policy, (3) that plaintiffs were entitled as next of kin and personal representative to the proceeds of the policy and (4) that payment had not been made although proof of loss had been furnished. In answers to requests for admissions, plaintiffs admitted that the policy sued upon listed Marilyn Abernathy as beneficiary.[1] Farmers then filed a motion for summary judgment, alleging that the beneficiary listed in the policy was Marilyn Abernathy, the effect of which is that under the policy provision relating to the payment of claims, plaintiffs are not entitled to the proceeds of the policy and are precluded from maintaining this cause of action.[2] Before the motion for summary judgment was acted upon, plaintiffs obtained leave to and actually filed an amended petition wherein Marilyn Abernathy was added as an additional defendant. The amended petition, in addition to allegations substantially the same as those in the original petition, alleged that Marilyn Abernathy had no insurable interest in the life of Alma Mae Bolin, that her designation as beneficiary was not effective and that she was not entitled to the proceeds of the policy. It stated further that Farmers knew when it issued the policy that Marilyn Abernathy had no insurable interest, that it negligently issued the policy, and that it was estopped from refusing to pay the benefits provided by the policy. Finally, the amended petition alleged that Marilyn Abernathy obtained the policy at the instance and request of Alma Mae Bolin and that she had directions from Alma Mae Bolin to name plaintiffs as beneficiaries in said policy. It asked for judgment against Farmers for the amount of the policy, plus interest, and sought a declaration that Marilyn Abernathy had no interest in the proceeds of the policy. After the amended petition was filed, defendant Abernathy, on December 17, 1974, filed a special entry of appearance and moved to dismiss plaintiffs' petition as to her for failure to state a claim against her on which relief could be granted and also for the reason that the petition improperly united several claims. Meanwhile, Farmers refiled its motion for summary judgment and on March 21, 1975, the court sustained that motion and entered judgment against plaintiffs and in favor of defendant Farmers. The judgment stated that "This judgment shall not affect the rights, if any, of defendant Marilyn Abernathy". Four days later, on March 25, 1975, the court entered this order: "Motion of Defendant Marilyn Abernathy to dismiss is hereby sustained and said cause is hereby dismissed as to Defendant Abernathy and said dismissal is without prejudice as to any rights between plaintiffs and Defendant Abernathy." In deciding sua sponte to dismiss the appeal herein as premature, the court of appeals relied primarily on its decisions in Wile v. Donovan, 514 S.W.2d 177 (Mo.App.1974) and Wile v. Donovan, 532 S.W.2d 891 (Mo.App.1976). In Wile I plaintiffs sued Marie Donovan and Jack Donovan in an action wherein they sought to have a warranty deed declared to be a mortgage and 889 then to have the property reconveyed to them upon tender of the amount due. The trial court entered a decree which resolved the issues in favor of plaintiffs and against Marie Donovan but did not grant plaintiffs any relief as against Jack Donovan nor did it discharge him from liability to plaintiffs. On appeal the court of appeals held that the judgment did not dispose of all parties and all issues and was not a final judgment in the case. The appeal was dismissed as premature. On remand to the circuit court, the plaintiffs filed a motion to dismiss their cause of action against Jack Donovan. The motion was sustained and the case against Jack Donovan was dismissed without prejudice. No new judgment was entered and there was no order or judgment which made reference to the prior judgment entered against Marie Donovan. A new notice of appeal was filed which recited that it was from the findings and judgment entered September 24, 1973, (the judgment against Marie Donovan) and January 30, 1975, (the date of the order of dismissal as to Jack Donovan). The court in Wile II again dismissed the appeal as premature. It held that the dismissal order was not a final judgment and that the judgment of September 23, 1973, still did not constitute a final appealable order. It is obvious that the court of appeals concluded that a judgment or order fully disposing of issues in the case as to only one of the two defendants in a case, followed subsequently by an order of dismissal without prejudice as to the other defendant, did not result in a final judgment in the case. The opinion did not indicate what else would have been necessary for there to have been a final judgment.[3] After the court of appeals rendered its opinion herein, both plaintiffs and Farmers sought a rehearing in which they would have an opportunity to brief the question of whether there was a final appealable judgment. Both requests were denied. Plaintiffs then sought a transfer and we concluded that the question merited further consideration. In this court supplemental briefs have been filed. Both sides argue strenuously that the circuit court disposed of this case as to all parties and issues and that there was a final judgment. However, after considering the briefs filed and the cases therein cited, we have concluded, for reasons which follow, that there was not a final judgment and that the case must be dismissed as premature. The right of appeal is purely statutory. Dudeck v. Ellis, 376 S.W.2d 197, 204 (Mo.1964). Sec. 512.020 RSMo 1969 governs who may appeal a case from the trial court and when. Insofar as pertinent here, it provides that any aggrieved party may appeal "from any final judgment in the case". In deciding what constitutes a final judgment, our courts have stated repeatedly "that, since an appeal must be from a final judgment (with specified exceptions), the trial court must have disposed of all issues and all parties". Spires v. Edgar, 513 S.W.2d 372, 373 (Mo. banc 1974). This requirement that all issues and all parties have been disposed of is for the purpose of avoiding piecemeal presentation of cases on appeal, except where specifically so authorized. Weir v. Brune, 364 Mo. 415, 262 S.W.2d 597, 599 (1953). The amended petition in this case listed as plaintiffs the personal representative and the heirs at law of Alma Mae Bolin. Defendants were Farmers and Marilyn Abernathy. The issue as between plaintiffs and Farmers was whether plaintiffs should recover $50,000, the policy amount, plus interest. As to Marilyn Abernathy, the suit sought a declaration that, although named in the policy as beneficiary, Abernathy had no right, title or interest in the proceeds of the policy sued upon. Various grounds for such a result, such as a lack of an insurable 890 interest and a violation by Abernathy of instructions from the insured to have plaintiffs named as beneficiaries, were alleged. The trial court made two entries of record whereby these issues and these parties were disposed of in this case. The first was the order of March 21, 1975, which provided as follows: "Motion for summary judgment filed on behalf of defendant Farmers Alliance Mutual Insurance Company as against plaintiffs is hereby sustained and judgment in favor of defendant Farmers Alliance Mutual Insurance Company is entered as against said plaintiffs and the cost of this action is taxed against plaintiffs. This judgment shall not affect the rights, if any, of defendant Marilyn Abernathy." Whether denominated an order or a judgment, this action by the trial court undertook to resolve the issue between plaintiffs and Farmers as to whether plaintiffs were entitled to judgment against Farmers on the policy. It settled that issue by sustaining Farmers' motion for summary judgment on plaintiffs' petition and by taxing costs of the action against plaintiffs. It did not undertake to resolve issues as between plaintiffs and Abernathy and specifically recited that it was not to affect the rights, if any, of Marilyn Abernathy. Hence, this entry did not dispose of all issues and all parties in the case and was not a final judgment. The fact that it was not treated as a final judgment at the time is shown by the fact that the court on March 25, 1975, acted to dispose of the case as against Marilyn Abernathy. Hence, the summary judgment directed by the court necessarily was an interlocutory judgment or order. Barlow v. Scott, 85 S.W.2d 504, 519 (Mo.1935). This meant that the court continued to have the right at any time, so long as the order remained interlocutory, to add to, amend or set aside that order. State ex rel. Schweitzer v. Greene, 438 S.W.2d 229, 232 (Mo. banc 1969). The second entry made by the court with reference to disposing of issues or parties in the case was the order of dismissal dated March 25, 1975, whereby the case was dismissed without prejudice as to Marilyn Abernathy. That order did not undertake to adjudicate the rights as between plaintiffs and Abernathy as to the accidental death policy or the proceeds thereof. (It recited that it was "without prejudice as to any rights between plaintiffs and defendant Abernathy".) However, it did eliminate from that suit the controversy between plaintiffs and Abernathy and dismissed her as a party in the case. It did not purport to do anything else. After the order of dismissal as to Abernathy was made on March 25, 1975, the court had made disposition of all issues and all parties in the case. Both plaintiffs and Farmers would have us hold that this meant there was a final judgment and that we should go on to resolve the case on the merits. The problem we face is that the trial court, in resolving the issues between plaintiffs and Farmers, did so by an order which, as we have noted, was interlocutory at the time it was entered. Thereafter, the court made no order and entered no judgment which indicated an intention to or which had the effect of converting what had been an interlocutory judgment or order into a final judgment in the case. Until that was done, the March 21, 1975, order remained subject to change by the trial court at any time. It is arguable, as plaintiffs contend, that when the trial court entered summary judgment for Farmers in plaintiffs' suit to recover on the policy, thereby determining that plaintiffs could not recover on the policy at all, the issues as between plaintiffs and Abernathy became moot and plaintiffs' cause of action against Abernathy was moot. If that argument is accepted, the summary judgment could be said to be a final appealable judgment. Likewise, it is arguable, as all parties to this appeal contend, that when the trial court, after entering the interlocutory order covering issues between plaintiffs and Farmers, then disposed of the remaining issues and parties by dismissing the case without prejudice as to Marilyn Abernathy, the interlocutory 891 order or judgment was transformed as a matter of law into a final appealable judgment. There are cases which seem to support such a result. We perhaps could adopt one of these positions but to do that means that when an appellate court gets a transcript which contains nothing which purports to be a final judgment it must then search the record to determine, if possible, whether what the court did on various occasions amounts collectively to a final judgment. Such approach presents, for the appellate court, the kinds of problems and difficulties which have been encountered in those cases wherein the court, in order to establish jurisdiction, has had to search the record and then grapple with whether the case involved construction of constitutional provisions or mere application of established constitutional principles. That, we conclude, is not desirable. The transcript on appeal should contain a final judgment, plainly constituting such. We should not approve an approach which makes it necessary for the appellate court to decide whether a resolution of the case as to one defendant makes the case moot as to the other, or which makes it necessary for the appellate court to piece and tack together various parts of the record, none of which purport to be a final judgment, and conclude therefrom that collectively they amount to a final judgment. This is not to say that a final judgment must have physically incorporated therein everything necessary to a conclusion that the court by this judgment has disposed of all issues and all parties. For example, if, in the order made March 25, 1975, whereby the case was dismissed without prejudice as to Marilyn Abernathy, the entry had gone on to recite that with this dismissal as to Abernathy, the court had now by its orders disposed of all issues and all parties and the interlocutory order granting summary judgment in favor of Farmers, entered March 21, 1975, was now made final and incorporated by reference, there clearly would have been a final appealable judgment. See 49 C.J.S. Judgments § 65 (1947), wherein it is stated: "The entry of an interlocutory decree followed by the entry of a decree rendering the former final does not violate the rule [that requires a single final judgment]."[4] In oral argument of this case, counsel stated that there are two other cases pending involving this same policy of insurance. One was described as a suit by Abernathy against Farmers in which plaintiffs have intervened. The nature of the other suit was not disclosed. We do not know the status of those cases but perhaps on remand of this case, the parties can avoid multiple suits by choosing one vehicle in which this entire three-sided controversy can be resolved in one case. Appeal dismissed. SEILER, C. J., and MORGAN, BARDGETT, HENLEY, and DONNELLY, JJ., concur. RENDLEN, J., not participating because not a member of Court when cause submitted. NOTES [1] Plaintiffs' answers also recited that Marilyn Abernathy, the beneficiary named in the policy, did not have an insurable interest in the life of Alma Mae Bolin and that said policy erroneously named Marilyn Abernathy as beneficiary instead of naming plaintiffs as beneficiaries. [2] The policy provision referred to is captioned "Payment of Claims" and provides as follows: "Indemnity for loss of life will be payable in accordance with the beneficiary designation and the provisions respecting such payment which may be prescribed herein and effective at the time of payment. If no such designation or provision is then effective, such indemnity shall be payable to the estate of the Insured. * *" [3] It is of interest to note that on a third appeal in that case from a judgment which the court considered to be a final appealable judgment, the court disposed of the case on the merits. The opinion does not set out what form that judgment took. Wile v. Donovan, 538 S.W.2d 906 (Mo.App.1976). [4] Of course, there would have been no problem if the court on the same day had entered in a single judgment the summary judgment as entered March 21, 1975, and the order of dismissal as entered on March 25, 1975. Newdiger v. Kansas City, 342 Mo. 252, 114 S.W.2d 1047, 1048, 1054 (1937).	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1526833/	549 S.W.2d 198 (1977) Ex parte Sheldon QUINN. No. 54125. Court of Criminal Appeals of Texas. April 13, 1977. Mario J. Martinez and H. Davidson Smith, III, El Paso, for appellant. Steve W. Simmons, Dist. Atty., and Douglas Gelo, Asst. Dist. Atty., El Paso, Jim D. Vollers, State's Atty., and David S. McAngus, Asst. State's Atty., Austin, for the State. 199 OPINION ONION, Presiding Judge. This is an appeal from an order entered in the 205th District Court of El Paso County in a habeas corpus proceeding remanding the appellant to custody for extradition to the State of Indiana on the charge of theft of a 1969 Cadillac automobile of the value of $2,300.00 in violation of Burns Indiana Statutes, § 10-3030. At the habeas corpus hearing the State introduced the Executive Warrant of the Governor of Texas and the supporting papers from Indiana. The appellant offered no evidence. First, we shall consider appellant's contention that he was denied bail pending appeal after the habeas corpus hearing. It might be argued that if this appeal is affirmed, which it is, the question of bail is moot. Whatever may be the validity of such argument, it is observed that to raise such question it would be necessary for any appellant in an appeal from a habeas corpus proceeding ordering extradition where bail had been denied pending appeal to bring still another habeas corpus proceeding and bring an appeal from the continued denial of bail and hope that the second appeal would reach this court and be passed upon before the first appeal. Further, since the trial bench has been relying upon an Attorney General's opinion with which this court does not agree for the denial of bail pending appeal in extradition cases, the matter should be considered. It is further observed that the appellant has fifteen days in which to file his motion for leave to file his motion for rehearing, and this appeal is not final until the mandate of this court is issued. We observe that it was held in early cases of Ex parte Erwin, 7 White & W. 288 (1879), and Hobbs v. State, 32 Tex. Crim. 312, 22 S.W. 1035 (1893), that where an individual is held under and by virtue of an extradition warrant from the Governor, he is not entitled to bail. In 1927 the Legislature enacted Article 857a, Vernon's Ann.C.C.P., which provided: "In any habeas corpus proceeding in any court or before any judge in this State where the defendant is remanded to the custody of an officer and an appeal is taken to an Appellate Court, the defendant shall be allowed bail by the court or judge so remanding the defendant, except in capital cases where the proof is evident. The fact that such defendant is released on bail shall not be ground for a dismissal of the appeal except in capital cases where the proof is evident." (Acts 1927, 40th Leg., p. 66, ch. 43, Sec. 1.) (Emphasis supplied.) In Ex parte Anderson, 133 Tex. Crim. 589, 113 S.W.2d 551 (1938), it was noted that the Erwin and Hobbs cases were decided when no statute such as Article 857a, supra, was in effect. The court then wrote: "In those states having no statute permitting bail upon appeal in habeas corpus cases it has been quite uniformly held that bail should not be allowed where the party complaining was held upon extradition demand. In other states by statute bail is allowed upon appeal in habeas corpus cases except where the party has been remanded in extradition proceedings. But in those states having a statute similar to that passed by the 40th Legislature bail is allowed upon appeal even in extradition cases . . . "Our own Legislature not having excepted extradition cases from the operation of the statute passed in 1927 permitting bail upon appeal where one has been remanded upon habeas corpus hearing, we feel compelled to give it application in the present instance." See and cf. Ex parte Hawthorne, 151 Tex. Crim. 283, 207 S.W.2d 408 (1948). Cf. Ex parte Gallogly, 138 Tex. Crim. 115, 134 S.W.2d 666 (1939), holding Article 857a, supra, inapplicable to habeas corpus proceedings involving extradition for escaped felon from Georgia whose convictions were there final. In 1951 Texas adopted the Uniform Criminal Extradition Act which became Article 1008a, Vernon's Ann.C.C.P. § 16 thereof provided: 200 "Unless the offense with which the prisoner is charged is shown to be an offense punishable by death or life imprisonment under the laws of the State in which it was committed, a judge or magistrate in this State may admit the person arrested to bail by bond, with sufficient sureties and in such sum as he deems proper, conditioned for his appearance before him at a time specified in such bond; and for his surrender, to be arrested upon the warrant of the Governor of this State." The statute made no provision regarding bail after the Governor's Warrant is issued. The act was silent as to such matter, and there was no express repeal of Article 857a, supra, which remained on the statute books. One statute expressly provided for bail pending appeal in any habeas corpus case except as otherwise provided, and the other statute was silent as to bail after the issuance of the Governor's Warrant. We observe no conflict between such statutes and know of no decision construing the statutes to be in conflict. In the 1965 Code of Criminal Procedure, Article 1008a, supra, was brought forward as Article 51.13, Vernon's Ann.C.C.P., with § 16 unchanged and with the act remaining silent as to bail after the issuance of the Governor's Warrant. Article 857a, supra, was brought forward unchanged as Article 44.35, Vernon's Ann.C.C.P., indicating a legislative intent that in any habeas corpus proceedings, except as limited in the statute, the petitioner was entitled to bail pending appeal. It is true that in some states which have adopted the Uniform Criminal Extradition Act the courts have construed it to prohibit bail in extradition cases after the issuance of the Governor's Warrant, including the situation where the prisoner has applied for habeas corpus or has appealed from a remand to custody following denial of habeas corpus relief. See Allen v. Wild, 249 Iowa 225, 86 N.W.2d 839 (1957); Buchanan v. State ex rel. Weiss, 166 So. 2d 596, 597 (Fla. App.1964); State v. Second Judicial Dist. Ct., County of Washoe, 86 Nev. 531, 471 P.2d 224 (1970); Wayans v. Wolfe, 30 Conn. Super. Ct. 60, 300 A.2d 44 (1972); State ex rel. Howard v. St. Joseph Superior Court, 262 Ind. 367, 316 N.E.2d 356 (1974); Deas v. Weinshienk, 533 P.2d 496 (Colo.1975). These cases seem to rely upon the omission in the act of any reference to bail after the issuance of the Governor's Warrant. See Allen v. Wild, supra; State v. Second Judicial Dist. Ct., County of Washoe, supra. However, in none of these jurisdictions did there exist a statutory provision permitting bail on appeal in habeas corpus such as Article 44.35, supra. In states where there is an express statute outside the Uniform Criminal Extradition Act providing for bail pending appeal, it has been held that such statute controls. See Ruther v. Sweeney, Ohio App., 75 Ohio L.Abst. 385, 137 N.E.2d 292 (1956). See also Application of Haney, 77 Idaho 166, 289 P.2d 945 (1955). In Ruther v. Sweeney, supra, the Court of Appeals of Ohio wrote: "We are not unmindful of the authority to the contrary to be found in the annotation in 63 A.L.R. 1460 and also in 143 A.L.R. 1354. These cases, however, for the most part, are decided against the right to bail because of the absence of statutory authority, and where it was claimed the right to release on bail was to be found in the inherent power of the court in the administration of justice. These cases are not in point. In every case where the right to release the relator on bail in an appeal from a denial of release in a habeas corpus case was based on statutory authority the holdings are in complete accord with our conclusions in this case." We conclude that the Legislature having enacted Article 44.35, supra, as part of the same Code of Criminal Procedure as Article 51.13, supra, and not having excepted extradition cases therefrom, the provisions of Article 44.35, supra, control except in capital cases where the proof is evident. We hold the court erred in not setting bail pending appeal. The court obviously relied upon Attorney General's Opinion H-803 (1976), 201 which was cited to the court and which held that a person held for extradition may not be admitted to bail after issuance of the Governor's Warrant pending determination of an appeal from a remand to custody. For reasons stated, we do not agree with such opinion. As stated in Ex parte Anderson, supra, "Whether it would have been more expedient if the Legislature had exempted from the operation of the statute those held under extradition warrant is a matter for the legislative branch of the government and not the courts." Appellant also complains that the Indiana information found in the supporting papers is defective because it was executed before a notary public and does not comply with the laws of Texas, to-wit, Article 21.21(9), which requires that an information "must be signed by the District or County Attorney, officially." He argues that in absence of proof to the contrary it is presumed that the laws of Indiana are the same as Texas. Ex parte Posey, 453 S.W.2d 833, 834 (Tex.Cr.App.1970); Ex parte Krarup, 422 S.W.2d 173, 174 (Tex.Cr.App.1967). While the information was signed by the complaining witness and sworn to by the complaining witness before a notary public, it is also signed by the deputy prosecuting attorney. While the signature and oath of the complaining witness are not required in Texas on an information, it can be disregarded as surplusage since it is signed by the prosecuting official. Appellant's contention is without merit.[1] Next, appellant complains that the affidavit used by the State of Indiana was defective as it was sworn to before a notary public and not a magistrate as required by law. It is true that the Indiana affidavit was sworn to by the complaining witness before a notary public. In Ex parte Rosenthal, 515 S.W.2d 114 (Tex.Cr.App.1974), this court in interpreting Article 51.13(3), Vernon's Ann.C. C.P., held that a demand for extradition is sufficient where accompanied by either: (1) copy of indictment, or (2) information supported by affidavit, or (3) copy of an affidavit made before a magistrate, together with a copy of a warrant which was issued thereupon, or (4) copy of a judgment of conviction. See Ex parte Peairs, 162 Tex. Crim. 243, 283 S.W.2d 755 (1955). The instant case falls under method # 2 above. The Indiana information is supported by affidavit. Under such method, there is no requirement that the affidavit be made before a magistrate as in method # 3. Appellant's contention is without merit. Another of appellant's grounds of error is somewhat confusing as to the real thrust of his contention. He urges the "Warrant used as a part of the State's Exhibit number one does not comply with the requirements of Article 51.13, Sect. 7 of the Texas Code of Crim.Proc., the Uniform Fugitives from Justice Act, which states: "`If the Governor decides that the demand should be complied with, he shall sign a warrant of arrest . . . The warrant must substantially cite the facts necessary to the validity of the issuance.'" He then argues that the warrant fails to comply with Article 15.02(3), Vernon's Ann. C.C.P., that a warrant "must be signed by a magistrate, and his office be named in the body of the warrant or in connection with his signature." Under authorities and argument relative to this ground of error appellant argues, however, that the Indiana information found in the supporting papers was executed before a notary public and not before a magistrate and that the warrant issued thereon is invalid since in absence of any showing to the contrary it is presumed the law of Indiana is the same as Texas. Ex 202 parte Krarup, supra; Ex parte Posey, supra. Needless to say it is difficult to ascertain just what appellant contends. First, we observe that the provisions of Article 51.13, supra, relative to the Governor signing a warrant of arrest for the purpose of extradition is a special statute and controls over the requirements of Article 15.02(3), supra, that a warrant of arrest must be signed by a magistrate which is defined by Article 2.09, Vernon's Ann.C. C.P., and which does not include the Governor. As to appellant's other assertion, it is observed, as noted earlier, that while the information is signed and sworn to by the complaining witness before a notary public it is also signed by the prosecuting attorney and meets the requirements of a Texas information. The oath of the complaining witness is surplusage as far as the validity of the information is concerned. Any warrant issued thereon would not be invalid for the reason urged by appellant. As earlier noted, the court erred in refusing to set bail for the appellant, but such failure does not call for the reversal of this judgment. The judgment is affirmed. ROBERTS, J., concurs in the result. NOTES [1] It is observed that an "Information Relative to Statutes of the State of Indiana" is also found in the record signed by the Prosecuting Attorney, 60th Judicial Circuit of Indiana.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1526879/	549 S.W.2d 59 (1977) Nora Gail SUTTON, Appellant, v. STATE HIGHWAY DEPARTMENT of Texas, Appellee. No. 5598. Court of Civil Appeals of Texas, Waco. March 24, 1977. Rehearing Denied April 14, 1977. James K. Peden, III, Strasburger, Price, Kelton, Martin & Unis, Dallas, DeVore, Bagby, McGahey, Ross & Burnett, Arlington, for appellant. Sam L. Jones, Jr., Austin, for appellee. HALL, Justice. On May 4, 1970, Michael Dwayne Sutton was driving his automobile on Highway 67 in Ellis County at a point approximately five miles south of the City of Midlothian when a heavy pipe loader fell from a truck and either struck his car or caused him to 60 veer into a bridge abutment. He died five days later of injuries received in the accident. Nora Gail Sutton, the decedent's widow, brought this suit originally against Curtis Nolan Julian (the driver of the truck), Wales Transportation, Inc., and Gifford-Hill & Company, Inc., as a wrongful death and survival action under the provisions of Article 4671 et seq., Vernon's Tex. Civ.St., alleging that at the time of the accident Julian was operating the truck in a joint enterprise with Wales Transportation; that Wales was a wholly-owned subsidiary of and alter ego of Gifford-Hill; and that the accident and the decedent's death were caused by their negligence in certain particulars we need not mention. Later, Mrs. Sutton joined the State Highway Department of Texas (State) as a defendant on the theory that the pipe loader was caused to fall onto the roadway when the wheels of the truck struck a severe depression in the highway where the asphalt part of it had sunk below the surface of the abutting concrete bridge. The suit was originally brought by Mrs. Sutton individually, as the surviving widow of the decedent, in a representative capacity on behalf of the estate of the decedent and for the use and benefit of all persons entitled to recover under the wrongful death and survival statutes, and as next friend and guardian of the estate of her minor son, Michael Shane Sutton, who was born two months after the decedent's death. While the suit was awaiting trial, a settlement was made and an agreed judgment was rendered in the case which effected a release of all parties but the State. The judgment recites that Mrs. Sutton, individually, and in her various representative capacities, and the defendants, Gifford-Hill, Wales, and Julian had settled their controversies, but that the cause between the minor plaintiff and the State had not been settled. It recites among other things the release of Gifford-Hill, Wales, and Julian in consideration for their payment of $150,000.00; that the minor plaintiff was not accepting his portion of the settlement sum as payment in full for his damages; that he was specifically reserving his right to proceed against the State to recover his remaining damages, while releasing and discharging Gifford-Hill, Wales, and Julian; and it severs the minor's cause of action against the State from the remainder of the case. Thereafter, Mrs. Sutton filed her fourth amended original petition, suing only as next friend and guardian of the person and estate of the minor plaintiff, and complaining only against the State. In it, she alleged that the accident happened in the afternoon of the day in question when the deceased was driving his automobile from Dallas to his place of business in Cleburne; that it was "a clear and dry day"; that a severe depression existed in the highway at the point of the accident "where the asphalt roadway had negligently been allowed to sink below the surface of a small abutting concrete bridge"; that the pipe loader was caused to fall from the truck, causing the accident and resulting death of the deceased, when the wheels of the truck struck the depression in the roadway; that the State "had knowledge of the defect," that it negligently failed to properly maintain and repair the surface of the roadway at this place, and that it negligently failed to post signs warning of the defect; and that the suit was brought under the provisions of the Texas Tort Claims Act (Article 6252-19, Vernon's Tex.Civ.St.). The State moved for dismissal of the suit asserting among other grounds that plaintiff's petition does not state a cause of action upon any theory of governmental liability coming within the waiver of sovereign immunity set forth in the Tort Claims Act, and that for this reason the court did not have jurisdiction in the case. The record shows without question that the pleas to the jurisdiction were directed at plaintiff's fourth amended original petition. The motion was granted and the suit was dismissed for want of jurisdiction without the court specifying the basis of its order. Plaintiff appeals. We reverse. In its pertinent parts, the Texas Tort Claims Act provides as follows: 61 Sec. 3. Each unit of government in the state shall be liable for money damages for . . . personal injuries or death when proximately caused by the negligence or wrongful act or omission of any officer or employee acting within the scope of his employment or office . . or death or personal injuries so caused from some condition or some use of tangible property, real or personal, under circumstances where such unit of government, if a private person, would be liable to the claimant in accordance with the law of this state. Such liability is subject to the exceptions contained herein, and it shall not extend to punitive or exemplary damages. . . . . . Sec. 14. The provisions of this Act shall not apply to: . . . (7) Any claim based upon the failure of a unit of government to perform any act which said unit of government is not required by law to perform. If the law leaves the performance or nonperformance of an act to the discretion of the unit of government, its decision not to do the act, or its failure to make a decision thereon, shall not form the basis for a claim under this Act. Sec. 18. . . . (b) As to premise defects, the unit of government shall owe to any claimant only the duty owed by private persons to a licensee on private property, unless payment has been made by the claimant for the use of the premises. Provided, however, that the limitation of duty contained in this subsection shall not apply to the duty to warn of special defects such as excavations or obstructions on highways, roads or streets. . . We agree with the State that the depression in the highway was a "premises defect" within the meaning of Section 18(b) of the Act. In this respect we fail to see a material distinction between our State highway system and a network of canals operated by a unit of government which was held to be "premises" within the meaning of the Act in Lower Neches Valley Authority v. Murphy, 536 S.W.2d 561 (Tex. Sup.1976). Plaintiff says the depression was a "special defect" within the exception to the limitation of duty contained in Section 18(b), citing Harris County v. Dowlearn, 489 S.W.2d 140 (Tex.Civ.App.Houston [14th] 1973, writ ref'd n. r. e.). We disagree. In Dowlearn, an unattached wall partition fell on the claimant while she was seated, waiting to pay taxes, in the Harris County Courthouse. It was held that the defect was special and that the premises defect did not apply. Unlike the condition before us, the defect in Dowlearn was specially created, and was not a routine maintenance defect. It is distinguishable on those grounds. Under the express terms of Section 18(b), a unit of government's duty to claimants as to premise defects under the circumstances before us is "only the duty owed by private persons to a licensee on private property." In Lower Neches Valley Authority v. Murphy, supra, and State v. Tennison, 509 S.W.2d 560 (Tex.Sup.1974), our Supreme Court defined that duty as follows: It is well settled in this State that if the person injured was on the premises as a licensee, the duty that the proprietor or licensor owed him was not to injure him by willful, wanton or gross negligence. . . An exception to the general rule is that when the licensor has knowledge of a dangerous condition, and the licensee does not, a duty is owed on the part of the licensor to either warn the licensee or to make the condition reasonably safe . . . Plaintiff did not plead that the State caused the deceased's death willfully, wantonly, or through gross negligence, and does not state a cause of action on those grounds. However, she did allege that the State knew of the premises defect and failed to warn of it. She therefore brings her case within the exception to the general rule. The State says the case does not fall within the exception because plaintiff did not plead that the deceased did not know of the defect, and because she did not expressly allege that the depression was a "dangerous *62 condition." We disagree. The question of the deceased's knowledge of the premises condition relates to an issue of contributory negligence. Farley v. M M Cattle Company, 529 S.W.2d 751, 758 (Tex.Sup.1975). Plaintiff was not required to negate it in her pleadings. And, the extent of the danger posed by the defect alleged is a matter for proof on the trial. The State asserts the maintenance or not of the highway by the Highway Department is a discretionary activity falling within the exclusion set forth in Section 14(7) of the Act, and that for this reason the case was properly dismissed for want of jurisdiction. This contention is overruled. Article 6674q-4, Vernon's Tex.Civ.St., directly places the responsibility for the construction and "the efficient maintenance of all highways comprising the State System" upon the State Highway Commission and the State Highway Department. None of the remaining grounds asserted by the State to support the order of dismissal deal with the question of jurisdiction. Most deal with questions of abatement which will likely be corrected by new pleadings. Two of the grounds, charging (1) that this suit is a "second suit" prohibited by the wrongful death statute, and (2) that the agreed judgment and a resulting subrogation agreement violate Article 6636, Vernon's Tex.Civ.St. (which pertains only to recordation and notice of transfers of judgments and causes of action) are wholly without merit. The case needs to be repleaded, with all beneficiaries under the wrongful death statutes again brought before the court, grounds for recovery fully alleged, defenses and exceptions to pleadings restated, and the suit heard anew in keeping with the rulings in this opinion. The judgment is reversed and the cause is remanded for trial.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527013/	119 B.R. 388 (1990) In re NARRAGANSETT CLOTHING CO., Debtor. Bankruptcy No. 90-10149. United States Bankruptcy Court, D. Rhode Island. October 4, 1990. 389 Allan M. Shine, Cary J. Coen, Winograd, Shine & Zacks, P.C., Providence, R.I., for trustee. David L. Pollack, Rosenwald and Pollack, Philadelphia, Pa., for Rouse Co. Robert S. Parker, Temkin & Miller, Providence, R.I., for White Flint Mall. DECISION AND ORDER ARTHUR N. VOTOLATO, Jr., Bankruptcy Judge. Heard on July 17, 1990 on the Motion of the Rouse Company[1], ("Rouse"), for an order directing the debtor to perform certain obligations pursuant to 11 U.S.C. § 365(d)(3), to wit: payment of postpetition rent, late charges, attorneys' fees and costs. The debtor operates a chain of women's high quality retail clothing stores located throughout the Eastern states, and concentrated in New England. Each store has its own leasehold arrangement, and of the 40 locations, there are approximately 35 individual lessors. From the outset the Trustee has acknowledged his obligation to pay postpetition rent, but has consistently failed to comply with orders specifically directing him to do so. See Orders dated April 19 and May 22, 1990. In the present dispute, he again acknowledges the rent obligation, but strongly opposes the lessors' demands for attorneys' fees, late charges and costs. The charges and fees in question have accumulated during prolonged negotiations and contested proceedings between these parties, illustrated by the partial chronology of events since February 5, 1990, the date the Chapter 11 petition was filed. On March 7, 1990, the Trustee filed the first of several motions to extend time to assume or reject non-residential real estate leases. Numerous objections were filed, as well as a motion by White Flint to compel the debtor to assume or reject its lease. (See docket entries 28, 29, 32, and 40). After hearing on these matters on March 22, 1990, we granted the debtor's request to extend time until April 11, 1990, and also scheduled a continued hearing on that date. (See Order dated April 5, 1990, docket entry 55). Prior to the April 11 hearing, additional objections were made by various lessors, (see docket entries 42, 43, 58, 60, and 62), as well as the instant motion by Rouse to compel the debtor to perform its obligations pursuant to § 365(d) (docket entry 61). Clearly, throughout these proceedings, Rouse and White Flint have aggressively pursued their contractual and statutory rights to either possession or compensation, and they have not waived any rights against the Trustee. At the conclusion of the April 11, 1990 hearing we issued a bench decision ordering that: (1) the time to assume or reject leases was extended again, to May 14, 1990; (2) In addition, the Trustee was ordered to pay, by April 21, 1990, all rent which became due after April 6, 1990; and (3) if the Trustee failed to pay 390 the rent referred to in item 2 above, then said lease would be deemed rejected, without further order. (See Stipulation and Order dated April 19, 1990, docket entry 72). On May 11, 1990, the Trustee filed a second request to extend time, which motion was heard on (the continued date of) May 14, 1990. After hearing, we ruled that: (1) the time to assume or reject said leases was extended for yet a third time, this one to July 17, 1990; (2) the Trustee was ordered to continue to pay all postpetition rent which became due after April 6, 1990, pursuant to the individual leases; (3) by June 14, 1990, the Trustee was to cure all unpaid rent which accrued during the period February 5 through March 5, 1990; (4) by July 14, 1990, the Trustee was to cure all unpaid rent which accrued during the period March 5 through April 5, 1990; and (5) if the Trustee failed to meet any rental obligation set forth in paragraphs 2, 3 or 4 above, then any such lease would be deemed rejected, without further order of this Court. (See Stipulation and Order dated May 22, 1990, docket entry 98 and 99). On June 21, 1990, White Flint, by its general partner, Mark D. Lerner, filed an affidavit declaring that the Trustee's failure to comply with the May 22, 1990 Order triggered the automatic rejection of its lease (because rent had not been paid by the specified dates), and entitled White Flint to immediate possession. (See docket entry 105). A subsequent hearing was held on July 17, 1990 on: (1) the continued motion of the Trustee to extend the time to assume or reject leases; and (2) Rouse's motion to compel the Trustee to perform his obligations pursuant to § 365(d). After hearing, we continued the Trustee's motion to extend time to August 16, 1990, and took under advisement Rouse's motion to compel. With respect to the motion to compel, Rouse and White Flint demand the immediate payment of past due rent, as well as late charges, expenses and attorneys' fees. The parties were able to agree on the amount of rent due, but the Trustee disputes any claim by the lessors for attorneys' fees, expenses and late charges. After argument, the Court requested memoranda addressing the lessors' claims for these additional items, and the parties have complied. In support of their contention that they are entitled to attorneys' fees, late charges and expenses, Rouse and White Flint ("the lessors") rely on § 365(d)(3), which provides in pertinent part that: The trustee shall timely perform all the obligations of the debtor, except those specified in section 365(b)(2), arising from and after the order for relief under any unexpired lease of nonresidential real property, until such lease is assumed or rejected, notwithstanding section 503(b)(1) of this title. The lessors argue that since the leases in question specifically provide for the payment of attorneys' fees, expenses and late charges in the event of default by the tenant, § 365(d)(3) entitles them to such payment, and that the only issue is the reasonableness of such charges. The Trustee argues that once the leases are deemed rejected, then § 365(d)(3) no longer applies, and instead, the lessors' claims are limited to the provisions of § 503(b)(1)(A), the administrative expense statute. In making this argument, the Trustee relies primarily on two recent decisions, Great Western Savings Bank v. Orvco, Inc. (In re Orvco, Inc.), 95 B.R. 724 (9th Cir. BAP, 1989) and In re Patella, 102 B.R. 223 (Bankr.D.N.M.1989). These decisions hold that "when a lease is deemed rejected, a lessor must establish its claim for administrative status under section 503(b)(1)(A), the specific section governing such status." In re Orvco, supra at 728; In re Patella, supra at 225 (adopting the holding and rationale of In re Orvco, supra). However, the Patella Court makes an interesting observation: "[i]f a lessor is not paid by the trustee and then petitions the Court, during the 60 day period and prior to rejection, for payment of rent, then the Court must order that rent be paid in the amount stated in the lease. . . . If the lease is rejected without any payment to the lessor, then § 365(d)(3) does not do away with the 391 necessity of proving an administrative expense under § 503(b)(1)(A)." In re Patella, supra at 225-226. Because the lessor in Patella made no demand for the payment of rent prior to the time the trustee rejected the lease, the Court held that "section 365(d)(3) will not, under these facts, automatically give CBS administrative expense treatment at the amount stated in the lease." Id. at 226 (emphasis added). In the instant case, the leases in question were deemed rejected on June 15, 1990[2]. However, unlike the more passive lessor in In re Patella, supra, Rouse made demand for the payment of rent as early as April 9, 1990, when it filed its motion to compel the debtor to perform its obligations pursuant to § 365(d). Thereafter, Rouse kept the pressure on as numerous hearings were held and orders entered directing the Trustee to pay ongoing rent and to cure the other unpaid obligations which accrued during the 60 day period after the filing of the petition. For reasons which he considered to be in the best interest of the estate, the Trustee chose not to comply with these orders, and eventually his failure to pay resulted in rejection of the leases. In these circumstances, the Trustee loses the argument that while he is deciding whether to assume or reject a lease, he is excused from compliance with specific court orders, as well as his statutory obligations under the Code, and that after rejection, § 365(d) no longer applies and the lessor is left only with its rights under § 503. Such a convenient and obvious circumvention of § 365(d) during the initial 60 day period (and any extensions thereof) could not have been intended by the drafters of the Code. "No other creditor is put in this position . . . The bill would lessen these problems by requiring the trustee to perform all the obligations of the debtor under a lease of nonresidential real property at the time required in the lease. This timely performance requirement will insure that debtor-tenants pay their rent, common area, and other charges on time pending the trustee's assumption or rejection of the lease." In re Wingspread Corp., 116 B.R. 915 (Bankr.S.D.N.Y.1990) (emphasis added), (citing 130 Cong.Rec. S8894, S8895 (daily ed. June 29, 1984) (statement of Sen. Hatch)); see also, In re Galvan, 57 B.R. 732 (Bankr.S.D.Ca.1986) (Section 365(d)(3) entitles lessor to immediate payment of rent from date case filed to date lease is actually rejected). To the extent that In re Orvco, Inc., supra, holds to the contrary, we decline to follow it. Judge Brozman, in In re Wingspread Corp., supra, also rejected the Ninth Circuit Bankruptcy Appellate Panel's holding in In re Orvco, and ruled that "in agreement with pre-Orvco decisions, . . . during the 60 days after an order for relief is entered or within such extensions as are granted by the court prior to assumption or rejection, the debtor must pay the rent reserved under the lease." Id. at 926. We agree with the conclusion in Wingspread, and with that Court's reasoning underlying its rejection of the Orvco decision. Our concurrence with In re Wingspread Corp., however, does not entirely dispose of the issue before us. Although the leases in question provide for the payment of interest, expenses and attorneys' fees upon default by the tenant, we are not convinced that such charges were intended to be included under § 365(d)(3), in the usual circumstance where the lessor seeks to enforce that provision pending assumption/rejection, and, where the trustee complies. In fact, we agree with the Trustee that the cases cited by the lessors in support of their request for such charges all involve leases that were eventually assumed by the Trustee. Based upon the entire record of these proceedings, however, including: the actions of the Trustee; the frustrated efforts of two diligent lessors to collect postpetition 392 rent; and the ultimate rejection of their leases, with no rent having been paid as of July 17, 1990; this clearly is an appropriate case for the award of interest, expenses and attorneys' fees. Accordingly, we make the following rulings pursuant to our authority under 11 U.S.C. § 105: 1. The Trustee shall pay interest to Rouse and White Flint on the unpaid rent, at the prevailing legal rate, from the date payment was due (per our Orders dated April 19, and May 22, 1990), until the date the Trustee tenders such payment; 2. Both Rouse and White Flint are entitled to reasonable attorneys' fees and expenses incurred in attempting to obtain compliance with Court orders requiring the Trustee to pay postpetition rent. Counsel for said lessors are requested to submit revised fee applications specifically addressing this time period, and subject matter; 3. Claims for additional rent and/or charges[3] sought after the June 15, 1990 rejection date are governed by § 502(g)[4]. "Rejection of any executory contract constitutes breach of that contract, which breach relates back to the date immediately before the filing of the bankruptcy petition; accordingly, claims may be filed against the estate for all losses attributable to nonperformance of the contract." International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America v. IML Freight, Inc., 789 F.2d 1460 (10th Cir.1986). Enter Judgment consistent with this opinion. NOTES [1] At the hearing, another lessor, White Flint Mall ("White Flint"), also pressing for the payment of postpetition rent and attorneys' fees, joined in the subject motion. [2] At the July 17, 1990 hearing, the Rouse Company, without objection by the Trustee, sought payment of postpetition rent through June 15, 1990. Likewise, White Flint stated that it was seeking rent through June 15, 1990, when possession of the premises was surrendered to the lessor. In addition, in their memoranda, the Rouse Company and White Flint both refer to June 15, 1990 as the date the leases were deemed rejected. We see nothing in the record of this case to contradict June 15, 1990 as the date the subject leases were rejected. [3] With the exception of those allowed in connection with items 1 and 2 above. [4] Section 502(g) provides: "A claim arising from the rejection, under section 365 of this title . . . of an executory contract or unexpired lease of the debtor that has not been assumed shall be determined, and shall be allowed under subsection (a), (b), or (c) of this section or disallowed under subsection (d) or (e) of this section, the same as if such claim had arisen before the date of the filing of the petition."	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527044/	680 F. Supp. 1545 (1988) Charles H. MATHIS, Plaintiff, v. ALLIED WHOLESALE DISTRIBUTORS, INC., et al., Defendants. Civ. A. No. 87-269-2-MAC (WDO). United States District Court, M.D. Georgia, Macon Division. March 4, 1988. John A. Draughon, Macon, Ga., for plaintiff. R. Napier Murphy, Macon, Ga., Raymond G. Chadwick, Jr., Augusta, Ga., for defendants. ORDER OWENS, Chief Judge. Before the court is a motion to dismiss count two of plaintiff's complaint filed by defendants Allied Wholesale Distributors, Inc. (Allied) and Louis M. Ferrando. These defendants assert in their motion that, pursuant to Rule 12(B)(1) of the Federal Rules of Civil Procedure, count two of plaintiff's complaint should be dismissed on the ground that this court lacks subject matter jurisdiction over these state law claims. Plaintiff asserts, however, that this court has jurisdiction to hear his state law claims because of the federal age discrimination claim alleged in count one of his complaint. Following a thorough review of the law relevant to deciding defendants' motion, the court makes the following ruling. Undisputed Facts and Conclusions of Law Plaintiff Charles H. Mathis has asserted in count one of his complaint a claim based upon the Age Discrimination in Employment Act (ADEA), 29 U.S.C. § 621-634. More specifically, Mr. Mathis asserts in count one of his complaint that defendant Allied fired him in order to replace him with a younger person. Based upon 29 1546 U.S.C. § 626, this court clearly has jurisdiction to entertain such a claim.[1] Count two of plaintiff's complaint alleges a claim against Louis M. Ferrando that is based upon state law. It appears from the pleadings that Mr. Ferrando and Mr. Mathis are both residents of the State of Georgia. Since this claim is not based upon diversity jurisdiction or a federal cause of action, the court must decide whether the federal cause of action alleged in count one confers upon this court jurisdiction to entertain the claim found in count two. Mr. Mathis asserts in his briefs that the doctrine of pendent jurisdiction allows this court to decide the pendent state law claims found in count two. Defendants Allied and Ferrando contend, however, that the proof required to demonstrate an ADEA violation is significantly different from the proof required to demonstrate the state law cause of action. Because of these distinctions, defendants contend that this court is without jurisdiction to entertain the state law claims, or in the alternative, the court should decline to exercise its discretion in hearing these claims. The parties have cited to a number of cases standing for the proposition that where a valid ADEA claim has been alleged against a defendant, the court may or may not entertain the pendent state law claims. In deciding when to hear the state law claims, these same courts have focused upon the issue of whether the proof required to demonstrate the pendent state law claims would be significantly different from that required to prove an ADEA claim. The parties have overlooked, however, a significant fact common to all of these cases, but not present in the pending action before this court. In all of the cases cited by the parties, the defendant in the pendent state law claim was the same defendant named in the federal ADEA claim. In this case, however, Mr. Mathis has filed a claim based upon state law against a defendant that has not been sued under ADEA. Since Mr. Mathis and Mr. Ferrando appear to be residents of the same state the court must decide whether pendent party jurisdiction can be utilized to bring him into this action. The doctrine of pendent party jurisdiction entails bringing extra parties into a federal suit who could not otherwise be subjected to federal jurisdiction. The major Supreme Court pronouncement on pendent party jurisdiction is found in Aldinger v. Howard, 427 U.S. 1, 96 S. Ct. 2413, 49 L. Ed. 2d 276 (1976). In Aldinger, the plaintiffs sought to couple their civil rights claim under 42 U.S.C. § 1983 against county officials with a state law claim against the county itself. Jurisdiction over the federal claim was based upon 28 U.S.C. § 1343(3) and pendent jurisdiction was asserted to be the basis for the state law claims over the county. The Supreme Court refused to assert jurisdiction over the county, finding that the facts of the case did not warrant the exercise of pendent party jurisdiction. While the Supreme Court in Aldinger did not completely overrule the possibility of recognizing pendent party jurisdiction in certain fact situations, the court indicated that before pendent party jurisdiction could be used in a case, there should be compelling facts to support the utilization of that type of jurisdiction. Included in the factors to be considered were not only judicial economy and convenience, but also whether the federal claim is exclusive to the federal court system. The Supreme Court in Aldinger stated, When the grant of jurisdiction to a federal court is exclusive, i.e., as in the prosecution of tort claims against the United States under 28 U.S.C. § 1346, the argument of judicial economy and convenience can be coupled with the additional argument that only in a federal court may all the claims be tried together. As we indicated at the outset of this opinion, the question of pendent party jurisdiction is "subtle and complex," and we believe that it would be as unwise as it would be unnecessary to lay down any sweeping pronouncement upon the existence or exercise of such jurisdiction. Two observations 1547 suffice for the disposition of the type of case before us. If the new party sought to be joined is not otherwise subject to federal jurisdiction, there is a more serious obstacle to the exercise of pendent jurisdiction than if parties already before the court are required to litigate a state law claim. Before it can be concluded that such jurisdiction exists, a federal court must satisfy itself not only that Art. III permits it, but that Congress in the statutes conferring jurisdiction has not expressly or by implication negated its existence. Id. at 18, 96 S.Ct. at 2422. This court, therefore, must look to these factors to determine whether or not it should exercise pendent party jurisdiction over defendant Ferrando. Plaintiff's ADEA claim is not one exclusive to the federal court system. 29 U.S.C. § 626(c)(1) provides that: "Any person aggrieved may bring a civil action in any court of competent jurisdiction for such legal or equitable relief as will effectuate the purposes of this chapter." Under this section then, plaintiff could have originally instituted his age discrimination action in either the state or federal court system. See Jacobi v. Highpoint Label, Inc., 442 F. Supp. 518, 520 (D.C.N.C.1977). Because the state court has concurrent jurisdiction over plaintiff's ADEA claim, considerations of judicial economy and convenience for the plaintiff should not normally be considered since he could have filed both his federal cause of action and his state cause of action in the state court system, thus achieving the desire to have one trial to resolve the entire controversy. See Comment, Unravelling the "Pendent Party" Controversy; A Revisionist Approach to Pendent and Ancilliary Jurisdiction, 64 B.U.L.Rev. 895, 917 N. 119 (commentator arguing that the Fifth Circuit has limited "pendent party" jurisdiction to cases involving exclusive federal jurisdiction); but see Boudreaux v. Puckett, 611 F.2d 1028, 1031 (5th Cir.1980). Furthermore, the fact that Congress in promulgating a remedy for age discrimination limited the Act solely to employers leads this court to believe that Congress has expressly and impliedly negated the existence of jurisdiction over a pendent party where that party is not an employer. See Hensman v. Adams County Department of Social Services, 623 F. Supp. 96 (D.C.Colo.1985). The court, therefore, finds that the doctrine of pendent party jurisdiction may not be used in this case to bring Mr. Ferrando into this action. Even if this court were to decide that it had jurisdiction to entertain plaintiff's pendent party claim, the exercise of pendent jurisdiction is a discretionary decision reserved to the district court. See Jackson v. Stinchomb, 635 F.2d 462, 472-73 (5th Cir.1981). Unlike the typical pendent jurisdiction case where the plaintiff's claims have been brought against the same defendant, pendent party cases involve "subtle and complex" issues which should not be trampled over in a court's haste to exercise its power. See Wicker v. First Financial of Louisiana Savings & Loan Association, 665 F. Supp. 1210, 1214 (M.D. La.1987). Pendent party cases involve more serious obstacles to the exercise of pendent jurisdiction and should be examined carefully before the court exercises jurisdiction in such a case. Id. Looking at the differences between the required proof in an ADEA claim and the instant state law claim, the court believes that it is appropriate for a state court to decide the state law questions in this case. See Arnell v. Pan American World Airways, Inc., 611 F. Supp. 908 (D.C.N.Y.1985). In addition, the court notes that should plaintiff continue to desire to have all of his claims tried in one forum, he may ask for a voluntary dismissal of the federal claims pending before this court. Once dismissed, plaintiff would be entitled to refile its action in the state court system. See O.C.G.A. § 9-2-61 (Michie 1982 & Supp.). In the alternative, plaintiff may continue to pursue his federal claims in this court, and, thereafter, he may wish to pursue his state law cause of action in the state forum. In conclusion, the court has found that: one, the court does not have pendent party jurisdiction over plaintiff's state law claims; and two, that even if it did have *1548 such jurisdiction, considerations of comity and fairness to the litigants require this court to not exercise its discretion in hearing the state law claims. Accordingly, the court DISMISSES without prejudice Mr. Mathis' state law claims alleged against Mr. Ferrando in count two. The motion to dismiss filed by Allied and Mr. Ferrando, therefore, is GRANTED. NOTES [1] 29 U.S.C. § 626(c)(1) provides: Any person agrieved may bring a civil action in any court of competent jurisdiction for such legal or equitable relief as will effectuate the purposes of this chapter.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1526873/	680 F. Supp. 387 (1988) SOUTHERN INSURANCE COMPANY, Plaintiff, v. Anthony Dewayne BENNETT, et al., Defendants. Civ. A. No. 87-215-2-MAC (WDO). United States District Court, M.D. Georgia, Macon Division. March 4, 1988. 388 John C. Edwards, Macon, Ga., for plaintiff. J.A. Powell, Jr., Georgia Fed. Bldg., Macon, Ga., Lanny B. Bridgers, Atlanta, Ga., Stewart R. Brown, Manley F. Brown, Macon, Ga., Robert H. Harris, Montgomery, Ala., for defendants. ORDER OWENS, Chief Judge. Presently before the court is a motion to dismiss by Economy Insurance Agency of Macon, Inc. (Economy Insurance), third-party defendant in the above-captioned case. Third-party plaintiff Anthony Dewayne Bennett, objects to this motion filed by Economy Insurance. In order to decide whether the motion should be granted or denied, the court deems it appropriate to first discuss generally the factual and procedural background that led up to the filing of the present motion. Procedural and Factual Background Apparently on March 27, 1987, Mr. Bennett was in an automobile incident involving Stephen Roane Adams, Sr. in Macon, Georgia. As a result of this incident, Mr. Bennett has been sued in a personal injury action brought by Mr. Adams and the passengers of Mr. Adams' car. The personal injury lawsuit was subsequently removed to this court from the State Court of Bibb County on the basis of diversity jurisdiction. The instant dispute relates to the question of whether Mr. Bennett maintained insurance coverage on his car on March 27, 1987. Mr. Bennett contends that prior to the incident with Mr. Adams, he had secured a policy of insurance with Southern Insurance Company (Southern). Southern has denied any coverage on the vehicle being driven by Mr. Bennett on March 27, 1987. In order to confirm its position, Southern thereafter filed a declaratory judgment action in this court against Mr. Bennett in order to find out whether it was obligated to insure him in the pending personal injury action. After being named in this declaratory judgment action, Mr. Bennett proceeded to file his own third-party complaint against Economy Insurance contending that if Southern was not liable on any policy of insurance, then the negligent or intentional acts of Economy Insurance proximately caused this lack of coverage on his vehicle. He, thus, asserts that Economy Insurance would be liable for any 389 damages Mr. Bennett sustains as a result of no coverage on his automobile. Following the filing of this declaratory judgment action, the personal injury action lodged against Mr. Bennett was remanded back to the state court system by agreement of the parties once it was found that diversity jurisdiction did not exist. Conclusions of Law Southern has filed the instant declaratory judgment action, pursuant to 28 U.S.C. § 2201, in order to determine whether it must insure Mr. Bennett in the on-going personal injury action now pending before the State Court of Bibb County. Southern's action is based upon diversity jurisdiction.[1] Because Southern's rights may be prejudiced by a judgment in the pending personal injury action, and further, because diversity does exist in this case, the court finds that the declaratory judgment action filed by Southern against Mr. Bennett is properly before the court. Now with regard to the appropriateness of Mr. Bennett's attempt to include Economy Insurance in the declaratory judgment action by way of a third-party complaint, the court perceives two fatal problems with this court exercising jurisdiction over such a claim. The first problem relates to whether the court has jurisdiction to entertain the third-party complaint. Mr. Bennett has alleged in his third party complaint that if Southern is not liable on any policy of insurance to him, then the negligent or intentional acts of Economy Insurance proximately caused this lack of coverage. By making such an allegation, Mr. Bennett essentially asserts that if one party is not liable to him, then the other party is liable. In effect, Mr. Bennett has alleged a separate and distinct cause of action against Economy Insurance, as opposed to the typical third-party complaint whereby it is alleged that if one party is held liable, another party may be required to indemnify the party held liable. When indemnity is not involved, Mr. Bennett must allege an independent basis of jurisdiction for this court to hear the complaint. It is clear that Mr. Bennett and Economy Insurance are not diverse, and, therefore, there is not an independent basis of jurisdiction to hear the claim. Ancillary jurisdiction will not work in this case because Mr. Bennett's third-party complaint is not an action for indemnity, rather, it is just an attempt to name another defendant who may be ultimately liable to Mr. Bennett. See Owen Equipment and Erection Co. v. Kroger, 437 U.S. 365, 376, 98 S. Ct. 2396, 2403-04, 57 L. Ed. 2d 274 (1978). This action, thus, cannot be allowed because of the federal court's long-standing requirement of complete diversity among all defendants. The second problem the court perceives with entertaining Mr. Bennett's third-party complaint against Economy Insurance is the fact that a claim based upon negligent or intentional acts is not one appropriate for a decision in a declaratory judgment action. See Wright & Miller, Federal Practice & Procedure § 2765 at 729-731. Unlike the situation with Southern which seeks a declaration of whether a policy of insurance exists with Mr. Bennett, Mr. Bennett's claim upon Economy Insurance is simply not ripe for decision since Mr. Bennett has not been held liable to anyone at the present time in the pending state action. What damages Mr. Bennett will suffer as a result of Economy Insurance's alleged acts, cannot be determined until the conclusion of the pending personal injury action. In addition, even if this court were to find Economy Insurance liable to Mr. Bennett, that would not obligate it to defend Mr. Bennett in the underlying personal injury action, whereas with Southern, a finding of coverage would require *390 Southern to defend Mr. Bennett in the personal injury action. These substantial distinctions warrant a finding by this court that any claims against Economy Insurance are not appropriate for decision by way of a declaratory judgment action at this time. In conclusion, the court has found that it lacks both subject matter jurisdiction over the "third-party complaint" alleged by Mr. Bennett against Economy Insurance, and further, that even if this court did have jurisdiction to entertain the claim, it is one not appropriate for decision under 28 U.S. C. § 2201. The court, therefore, will GRANT the motion to dismiss defendant Bennett's third-party complaint against Economy Insurance. Finally, Southern has requested that this court stay the personal injury action previously pending in this court. Now that this action has been remanded back to the state court system, the court does not believe it proper to issue a stay of that action. Of course, the parties may wish to move for an appropriate order in the state court to have that action stayed. See Lumbermens Mutual Casualty Company v. Sutch, 197 F.2d 79, 82 (3d Cir.1952). NOTES [1] Southern is a resident of the State of Texas where it is incorporated and where it maintains its principal place of business. Mr. Bennett is a resident of Macon, Georgia. While Southern's complaint also names as defendants the plaintiffs to the personal injury action pending in the state court system against Mr. Bennett, and that diversity appears to be present with these defendants, the court notes that these latter parties are probably not proper parties to Southern's complaint for declaratory judgment since Georgia does not provide for a direct action against an insurer. This issue, however, is not relevant to the court's decision today, and will not be decided at this time.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1526870/	680 F. Supp. 2d 201 (2010) Yvonne STANTON, parent and next friend of K.T., a minor, Plaintiff, v. DISTRICT OF COLUMBIA, Defendant. Civil Action No. 09-988 (ESH). United States District Court, District of Columbia. January 27, 2010. 203 Roxanne Denise Neloms, Brown & Associates, PLLC, Washington, DC, for Plaintiff. Veronica A. Porter, Office of Attorney General for the District of Columbia, Washington, DC, for Defendant. MEMORANDUM OPINION ELLEN SEGAL HUVELLE, District Judge. Plaintiff Yvonne Stanton, as mother and guardian for K.T., seeks review of an administrative decision denying her request for a compensatory education award from the District of Columbia Public Schools ("DCPS"). Plaintiff alleges that DCPS violated the Individuals with Disabilities Education Improvement Act of 2004 ("IDEIA"), which requires states receiving federal financial assistance to identify, locate, and evaluate children with disabilities and to provide them with a free appropriate public education ("FAPE"). The parties agree that defendant denied K.T. a FAPE by failing to provide him with the services required by his Individualized Education Program ("IEP"). However, they disagree over whether the Hearing Officer appropriately rejected plaintiff's claim for compensatory education and whether plaintiff sufficiently supported her proposed award. For the reasons herein, the Court finds that the Hearing Officer erred by ignoring DCPS's failure to provide K.T. with counseling and tutoring services from October 2007 through February 2008 and improperly rejected plaintiff's claim for a compensatory award. However, because of the insufficiency of the record, the Court will remand the case for further proceedings. BACKGROUND K.T., a sixteen-year-old boy, has been diagnosed with a "mixed anxiety depressive disorder" and a learning disability. (Pl.'s Statement of Material Facts ["SMF"] ¶ 2; Def.'s SMF ¶ 1.) In November 2006, a multi-disciplinary team[1] created an IEP that placed K.T. in a "combination general education/special education setting," required that he receive twenty hours of specialized instruction and five hours of counseling per week, and set goals for him in language arts, math and mental health. (Id. ¶¶ 3-4; Administrative Record ["AR"] at 95-101.) In October 2007, K.T. began attending Ballou Senior High School ("Ballou"). (Pl.'s SMF ¶ 1; Def.'s SMF ¶ 5.) For reasons that remain unclear, Ballou placed K.T. in a general education curriculum and failed to provide him with any of the specialized instruction and counseling required by his IEP. (Def.'s SMF ¶ 6; Pl.'s Response to Def.'s SMF ¶ 2.) On February 13, 2008, a multi-disciplinary team met and, without plaintiff's involvement, amended K.T.'s IEP. (Pl.'s SMF ¶ 4.) The team held another meeting on February 15th, which plaintiff attended. (See id. ¶¶ 3-4.) At this meeting, K.T.'s teachers admitted that they had not implemented the November 2006 IEP and had been unaware of its existence. (Id. ¶ 4; 204 Def.'s Response to Pl.'s SMF ["Def.'s Response"] ¶ 4.) The Ballou staff, which apparently was confused because another student at the school had the same name as K.T., provided plaintiff with an inaccurate report on K.T.'s grades and attendance. (See Pl.'s SMF ¶¶ 7-8; Def.'s Response ¶¶ 7-8.) At the meeting, DCPS denied plaintiff's request for a compensatory education award. (Pl.'s SMF ¶ 6; Def.'s Response ¶ 6.) On February 19, 2008, plaintiff filed a due process complaint with the DCPS, alleging that it had failed to implement the IEP and that K.T. was entitled to a compensatory education award. (Id. ¶ 9.) On March 17, plaintiff filed a second complaint alleging that the February 13th meeting was not a "proper MDT meeting," and therefore, that DCPS had failed to "develop an appropriate IEP." (Id.) The two complaints were consolidated, and a due process hearing was set for April 7. At the hearing, DCPS conceded "all issues raised by the plaintiff, except that of compensatory education." (Def.'s SMF ¶ 13.) Plaintiff called Stephanie Denzel, an educational advocate with a masters in special education and a doctorate in psychology, to propose a compensatory education award. (AR, Hr'g Tr. ["Hr'g Tr."] at 17-18.) Denzel testified that she had reviewed K.T.'s records, attended the multi-disciplinary team meeting on February 15th, and met with both K.T. and his mother. (Id. at 19, 21-22.) In addition to introducing evaluations of K.T.'s reading, writing, and math skills (AR 102-24), Denzel testified that K.T. read at a level between third and fourth grade and could perform basic mathematical operations at a third grade level. (Hr'g Tr. at 20-21.) This placed K.T. five to six years behind the level of his peers. (Id. at 21.) Denzel argued for an award of 372 hours of one-on-one tutoring, including two hours a week for math, two hours for reading and two hours for writing for sixty-two weeks. (Id. at 24-31.) She pointed out that K.T. could not "demonstrate 8 out of the 11 objectives listed in his 2006 IEP" and argued that the compensatory award would allow him to "ma[k]e up that ground" and catch up "so that he can move forward successfully accumulating credits." (Id. at 25-28.) Defendant "offered no cross examination or evidence to rebut" Denzel's testimony. (Pl.'s SMF ¶ 16; Def.'s Response ¶ 16.) Indeed, defendant offered no assistance in calculating an appropriate compensatory education award, stating only that "we'll leave them to their proofs . . . ." (Hr'g Tr. at 15.) On April 17, the Hearing Officer denied plaintiff's request for compensatory education. (AR at 1-8.) In his decision, the Officer made no mention of Ballou's failure to implement K.T.'s IEP from October 2007 through February 2008. (See id.) Indeed, the Officer apparently believed K.T. was only denied a FAPE between the February 13th meeting and the filing of plaintiff's complaint "two weeks later." (Id. at 5-6 ("[Plaintiff] failed to prove a nexus between the violation proven, the failure to develop an appropriate IEP on February 13, 2008, and the proposed compensatory education plan . . . .").) The Officer concluded that this brief deprivation could not have resulted in K.T. being deprived of "460 hours of instruction," and that therefore plaintiff had not established the number of hours DCPS had failed to provide. (Id.) The Officer determined that plaintiff failed to meet its "burden of establishing the type and amount of compensatory services" needed to "compensate the student for the services that were denied." (Id. at 5-6.) Plaintiff submitted a motion for reconsideration on April 25, 2008, which, after thirty days, was deemed 205 to have been denied. (Id. ¶¶ 19-20.) Plaintiff filed this case on May 27, 2009. ANALYSIS I. REVIEW UNDER THE IDEIA Under the IDEIA, a party aggrieved by a hearing officer's decision may bring a civil action challenging it. 20 U.S.C. § 1415(i)(2)(A). A court "(i) shall receive the records of the administrative proceedings; (ii) shall hear additional evidence at the request of a party; and (iii) basing its decision on the preponderance of the evidence, shall grant such relief as [it] deems appropriate." Id. § 1415(i)(2)(C). If neither party introduces additional evidence, a motion for summary judgment acts as a motion for judgment based on the evidence in the record. Brown ex rel. E.M. v. District of Columbia, 568 F. Supp. 2d 44, 50 (D.D.C.2008). The party challenging the administrative decision carries the burden of "persuading the court that the hearing officer was wrong." Reid ex rel. Reid v. District of Columbia, 401 F.3d 516, 521 (D.C.Cir.2005) (quoting Kerkam v. McKenzie, 862 F.2d 884, 887 (D.C.Cir.1988)). A court must give "`due weight'" to the hearing officer's determinations and "may not substitute its own notions of sound educational policy for those of the school authorities." S.S. v. Howard Road Academy, 585 F. Supp. 2d 56, 63-64 (D.D.C.2008) (quoting Bd. of Educ. v. Rowley, 458 U.S. 176, 206, 102 S. Ct. 3034, 73 L. Ed. 2d 690 (1982)). However, less deference is to be accorded to the hearing officer's decision than would be the case at a conventional administrative proceeding. Reid, 401 F.3d at 521. The Court is "obligated by the IDE[I]A to ensure that relief set forth in the administrative award was `appropriate[.]'" Id. Thus, the Court may not simply "rely on the hearing officer's exercise of discretion"; a decision "`without reasoned and specific findings deserves little deference.'" Id. (quoting Kerkam v. Superintendent, D.C. Pub. Schs., 931 F.2d 84, 87 (D.C.Cir.1991)). Where the administrative record lacks "pertinent findings" and where neither party requested "consideration of additional evidence, the [Court] may determine that the `appropriate' relief is a remand to the hearing officer for further proceedings." Id. at 526 (quoting JH ex rel. JD v. Henrico County Sch. Bd., 395 F.3d 185, 198 (4th Cir.2005)). II. DENIAL OF COMPENSATORY EDUCATION AWARD A. Deference to the Hearing Officer A decision made by a hearing officer without "reasoned and specific findings deserves little deference." Id. at 521 (quoting Kerkam, 931 F.2d at 87). The Hearing Officer made his decision in this case without making any findings based on the tests, evaluations and testimony submitted by plaintiff. (AR at 5-6.) He concluded that K.T. had only been denied a FAPE for the two weeks between the meeting on February 13th and the filing of the initial complaint on February 27th.[2]206 (Id. ("Certainly there was insufficient time between the IEP meeting on February 13th and the filing of the first Complaint two weeks later for Petitioner to have missed 460 hours of instruction.").) Thus, the Officer ignored defendant's concession that, beginning in October 2007, it failed to provide K.T. with the services required by his IEP. Although defendant conceded the issue, the Officer "found nothing in the record" to support the claim that plaintiff had missed 460 hours of instruction and ignored much of plaintiff's evidence. (Id.) Because of this factual error, the Officer ignored the vast majority of the evidence submitted by plaintiff and totally failed to make reasoned or specific findings. His decision therefore deserves little deference from the Court. B. Compensatory Education Awards The IDEIA gives courts "broad discretion" to award compensatory education as an "equitable remedy" for students who have been denied a FAPE. Reid, 401 F.3d at 522-23 (quoting Florence County Sch. Dist. Four v. Carter, 510 U.S. 7, 15-16, 114 S. Ct. 361, 126 L. Ed. 2d 284 (1993)). The "ultimate award" must "provide the educational benefits that likely would have accrued from special education services" that the school district "should have supplied in the first place." Id. at 524. A compensatory award must "rely on individualized assessments" after a "fact-specific" inquiry. Id. "In formulating a new compensatory education award, the hearing officer must determine `what services [the student] needs to elevate him to the position he would have occupied absent the school district's failures.'" Anthony v. District of Columbia, 463 F. Supp. 2d 37, 44 (D.D.C.2006) (quoting Reid, 401 F.3d at 527). A "material failure" to implement an IEP denies the student his or her right to a FAPE. S.S., 585 F.Supp.2d at 71. Defendant therefore concedes that it denied K.T. a FAPE by admitting that it inappropriately created the February 2008 IEP (see Tr. at 15) and failed to implement the 2006 IEP, beginning in October 2007. (Def.'s Response to Pl.'s SMF ¶ 4.) Defendant argues, however, that plaintiff did not introduce sufficient evidence to be eligible for an award under Reid (Def.'s Mot. at 8-9), and that the compensatory education plan had "nothing to do with K.T.'s current educational needs." (Def.'s Reply to Pl.'s Opp'n at 3.) Even if plaintiff is eligible for an award, defendant argues that she did not introduce sufficient evidence to be awarded the hours she seeks as compensatory education. (Def.'s Mot. at 10-11; AR at 5.) 1. Plaintiff is eligible for a compensatory education award Defendant suggests that plaintiff is not eligible for a compensatory education award because she has not introduced sufficient evidence to satisfy Reid. (Def.'s Mot. at 8-9.) In Reid, the Court of Appeals rejected "mechanical hour-counting," and emphasized that an award must be "designed to meet [the student's] unique needs." Reid, 401 F.3d at 524 (quoting 20 U.S.C. § 1400(d)(1)(A)). Reid requires that any award "rely on individualized assessments" and be "reasonably calculated" to provide the educational benefits that "likely would have accrued" from the services the school should have provided. Id. (emphasis added). Thus, Reid overturned a decision that simply awarded one hour of compensatory instruction for "each hour without [a] FAPE." Id. at 523-24. However an award created with the "aid of a formula" is not "`per se invalid,'" as "psycho-educational evaluations" and "observations" of the student and of classes at the student's new high school, may be a sufficient basis for "an individually-tailored 207 assessment." See Brown, 568 F.Supp.2d at 53-54. See also Friendship Edison v. Nesbitt (Nesbitt I), 532 F. Supp. 2d 121, 123 (D.D.C.2008) (formula-based award may be acceptable if it "represents an individually-tailored approach to meet a student's unique prospective needs"). Defendant argues that the evaluations of K.T. were flawed because they addressed his progress since 2006 rather than October 2007, and that plaintiff did not submit sufficient evidence to satisfy Reid. (Def.'s Mot. at 8-10; Def.'s Reply at 2.) Defendant therefore suggests that any award would violate Reid. (Def.'s Opp'n at 10-11.) However, plaintiff presented a significant number of "individualized assessments" of K.T. and, through Denzel, sufficiently established that K.T. was entitled to an award. (Pl.'s Mot. at 7.) Although the 2006 evaluations do not "exactly" reveal K.T.'s level in November 2007, they "come[] very close and could . . . allow for an estimation of where [he] was functioning in 200[7]." Nesbitt II, 669 F.Supp.2d at 85. Plaintiff also submitted evaluations of K.T.'s skills from February 2008 that illustrated his failure to advance. (AR at 102-24.) Plaintiff based her proposal on Denzel's testimony, the evaluations of K.T.'s progress toward eight of the eleven objectives listed in his 2006 IEP (Hr'g Tr. at 25), his other school records, and interviews with plaintiff and K.T. (Id. at 19.) None of this evidence was contradicted or questioned by the defendant. Even if plaintiff failed to evaluate all of K.T.'s objectives and failed to show what hypothetical level K.T. might have reached had he received tutoring and counseling, its proposal still relied on "individualized assessments." Reid, 401 F.3d at 524. Moreover, despite its arguments now, defendant did not raise any objection to it at the hearing, but, rather, did no more than concede that it had deprived K.T. of a FAPE. Reid certainly does not require plaintiff to have a perfect case to be entitled to a compensatory education award. Once a plaintiff has established that she is entitled to an award, simply refusing to grant one clashes with Reid, which sought to eliminate "cookie-cutter" awards in favor of a "qualitative focus on individual needs" of disabled students. See Reid, 401 F.3d at 524, 527. A hearing officer may "provide the parties additional time to supplement the record" if she believes there is insufficient evidence to support a specific award. See Nesbitt I, 532 F.Supp.2d at 125. Choosing instead to award plaintiff nothing does not represent the "qualitative focus" on K.T.'s "individual needs" that Reid requires. Thus, the Court cannot simply "reject[] any award of compensatory education services[.]"[3]See Brown, 568 F.Supp.2d at 54. 2. The record is insufficient to evaluate plaintiff's proposed award Even if "the Court believes some measure of compensatory education 208 is warranted" (Def.'s Mot. at 10), defendant urges the Court not to grant plaintiff her proposed award because she has failed to provide sufficient support for it. (Id. at 8-11.) "Having found the Hearing Officer's reasoning unpersuasive, the Court has the authority to undertake its own review of the record, determine whether the plaintiff has met her burden of proof, and issue judgment in the case." Suggs v. District of Columbia, 679 F. Supp. 2d 43, 53, 2010 WL 165199, at *8 (D.D.C., 2010). However, because the Hearing Officer erred by finding that K.T. was only deprived of a FAPE for two weeks and failed to properly consider the evidence produced by plaintiff, the administrative record is "absen[t] of pertinent findings." Reid, 401 F.3d at 526. Additional evidence, such as evaluations of all of K.T.'s IEP goals, may also be useful. (Def.'s Mot. at 8-10.) "[T]he record in an IDEA case is supposed to be made not in the district court but primarily at the administrative level[.]" Reid, 401 F.3d at 527 (Henderson, J., concurring). Thus, although the Court is "troubled at the prospect of further delay," Nesbitt I, 532 F.Supp.2d at 125, it will remand this case to the Hearing Officer for further proceedings that should be conducted as expeditiously as possible. The Officer should supplement the record with the information needed to "best correct" K.T.'s educational "deficits," Reid, 401 F.3d at 526, and to "determine an appropriate award of compensatory education" based on the District's failure to provide K.T. with an FAPE. Brown, 568 F.Supp.2d at 54 (holding that plaintiff was entitled to an award, but remanding to the hearing officer to gather further evidence because plaintiff miscalculated the relevant time that the student had been denied a FAPE). CONCLUSION For the foregoing reasons, the Court finds that the hearing officer erred in failing to find that K.T. was deprived of a FAPE beginning in October 2007 and in denying plaintiff a compensatory education award. The Court will deny defendant's motion for summary judgment and will grant plaintiff's motion for summary judgment in part. The case will be remanded to the Hearing Officer to determine an appropriate compensatory education award. An Order consistent with this Memorandum Opinion is also being issued on this date. NOTES [1] Under the IDEIA, a multi-disciplinary team, also called an "IEP Team," see 20 U.S.C. § 1415(f)(1)(B)(i), develops the IEP for the disabled student. Jones ex rel. A.J. v. District of Columbia, 646 F. Supp. 2d 62, 64 (D.D.C. 2009). [2] The Officer also found that plaintiff's proposal was based on K.T.'s lack of progress since his 2006 evaluation, and that plaintiff had failed to offer "credible evidence that DCPS failed to provide services" since November 2006. (AR at 5.) Thus, the Officer found that the 2006 evaluation was not "relevant" in determining the effect of the FAPE denial in February 2008. (See id.) However, the Officer did not consider whether the 2006 evaluation was relevant in determining the effect of the FAPE denial that began in October 2007. See, e.g., Friendship Edison Pub. Charter Sch. Collegiate Campus v. Nesbitt (Nesbitt II), 669 F. Supp. 2d 80, 85 (D.D.C. 2009) (2002 psychological evaluation could "allow for an estimation" of student's cognitive and educational level in 2003). [3] Another judge on this Court affirmed a hearing officer's refusal to grant an award where plaintiff failed to "establish the type and amount of compensatory services owed to him by DCPS in order to compensate for the services he was denied." Gregory-Rivas v. District of Columbia, 577 F. Supp. 2d 4, 10 (D.D.C.2008). In that case, however, the hearing officer held that plaintiff was not entitled to any award because he failed to show that he was denied a FAPE or that he had suffered any educational harm. Id. Here, it is uncontested that K.T. was denied a FAPE and suffered some harm, although defendant argues that plaintiff has not been sufficiently precise in detailing the harm. Moreover, the Officer never found that plaintiff was ineligible for an award, merely that "any award . . . would be arbitrary." (AR at 5-6.) Thus, unlike Gregory-Rivas, plaintiff has shown that she was denied an award despite being entitled to one.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1526878/	239 N.J. Super. 81 (1989) 570 A.2d 1028 ANA FELIPE, PLAINTIFF, v. LINO VEGA ADMINISTRATOR OF THE ESTATE OF EDILBERTO VEGA, DEFENDANT. Superior Court of New Jersey, Chancery Division, Atlantic County. Decided November 15, 1989. 82 Teofilo Montanez for plaintiff (Montanez & Montanez, attorneys). J. Llewellyn Mathews for defendant (Apell & Mathews, attorneys). GIBSON, J.S.C. By this action plaintiff seeks permission to disinter the body of her now deceased companion and to move it to a cemetery within walking distance of her home. Her application is resisted by the decedent's father who was also the administrator of the estate. The matter was presented to the court in the form of an order to show cause seeking preliminary restraints but after taking testimony from the parties on the return day, it was agreed by counsel that the court should consider that hearing as "final" for purposes of making findings of fact and reaching conclusions of law. 83 Findings of Fact. In 1982, plaintiff, Ana Felipe, took up residence with Edilberto Vega and, although they never married, the two of them lived together as husband and wife until Edilberto was killed in an automobile accident on November 4, 1987. While together, the couple had a child, Sueheidi Alexis Vega who was five years old when her father died and who is now seven. Edilberto left no will and pursuant to intestate succession, his father, Lino Vega, was appointed as administrator of Vega's estate. Vega arranged for Edilberto's burial at St. Mary's Catholic Cemetery in Mt. Holly, New Jersey, that site being close to Vega's residence and also the cemetery where Edilberto's brother was buried. Plaintiff made no objection to the burial arrangements at the time, being grief stricken, disoriented and also unsure of her right to object. Vega also took responsibility for prosecuting a wrongful death claim in behalf of plaintiff's child and was ultimately successful in obtaining a significant recovery. Although the decedent had certain relatives in the Mt. Holly area, it would appear that their relationship with the decedent during his life was somewhat distant and their visits to the grave site, if any, have been infrequent. Plaintiff, on the other hand, visits the grave site regularly. She has placed a number of religious articles there and has treated it, more or less, as a shrine. Aside from her continuing affection for Edilberto and her desire to keep the memory of her "husband" alive, plaintiff believes that the visits to the grave are important to her daughter in that they provide reinforcement for her memory of her father and her identity with him. Unfortunately, the cemetery in Mt. Holly is over an hour from plaintiff's home and it has become increasingly difficult to obtain transportation there. Since there is no public transportation to the cemetery and plaintiff does not drive, she has had to rely on others to take her. Because of her fear of driving, she does not intend to obtain a license, and thus, the prospect of 84 a solution to her transportation problem is not likely. Because of these difficulties, plaintiff has sought to have the body removed to a cemetery in Egg Harbor City within walking distance of her home. As part of that effort she has made arrangements with the priest at St. Nicholas Roman Catholic Church to perform the appropriate religious rites, assuming the court permits the move. Finally, it should be noted that when the decedent was living with plaintiff and their child, they had a very close and loving relationship. In contrast, although Vega appears to be a loving and caring father, his contact with Edilberto during the last seven years of his life appears to have been minimal. It should also be noted that Vega's resistance to having the body moved is not based on any specific religious grounds or even because of his desire to have the grave site at a more convenient location. Rather, it is his belief that it would be unnatural to move the body and that his son should be permitted to "rest in peace." Legal Conclusions. Although it is widely recognized, both in this State and elsewhere, that once a body has been buried, there is a strong policy against disturbing it, the notions which support that concept are more spiritual than legal. The burial itself has historically been regarded as a religious rite and the ground where the body rests is generally regarded as consegrated. See Annotation, "Removal and Reinterment of Remains," 21 A.L.R.2d 472, 475 (1952). Despite the policy against disturbing the body of the deceased, under certain circumstances, removal will be warranted and the temporary disturbance of the remains will be justified. Glatzer v. Dinerman, 142 N.J. Eq. 88, 59 A.2d 242 (Ch. 1948). Those circumstances may be both private and public and although public concerns are not implicated here, they generally relate to criminal investigations and public health. See, e.g., N.J.S.A. 26:6-37; Petition of Sheffield Farms Company, 22 N.J. 548, 126 A.2d 886 (1956). 85 In recognition of the fact that the right to have a body remain undisturbed is not absolute, it has long been held that disinterment after burial is subject to the control of the court of equity. Petition of Sheffield Farms Company, supra at 556, 126 A.2d 886; 22A Am.Jur.2d, Dead Bodies, § 70 (1988). The treatment given to this subject by our courts has varied, however, in part, depending on whether the rights invoked were private or public. Also, although the court rulings appear to be very "fact-sensitive," a presumption against the right of removal has generally prevailed. Ibid. The principle most cited is that, although the removal or other disturbance of a decedent's remains is within the jurisdiction of a court of equity, that power should not be exercised unless it has clearly been shown that good cause and urgent necessity for such action exists. Perth Amboy Gaslight Company v. Kilek, 102 N.J. Eq. 588, 590, 141 A. 745 (E. & A. 1928); Petition of Sheffield Farms Company, supra 22 N.J. at 556, 126 A.2d 886. A number of factors have been held to bear on a decision to disinter. They include the decedent's stated preference, if any, religious considerations, ownership rights in the plot, the closeness of the relationship between the petitioner and the decedent and the lapse of time from the original interment. See 22A Am.Jur.2d, supra at 54-57. Also included is the petitioner's desire to satisfy a longing that "those united during life shall not be divided after death." Friedman v. Gomel Chesed Hebrew Cemetery Ass'n of Elizabeth, 22 N.J. Super. 544, 549, 92 A.2d 117 (Ch.Div. 1952). Finally, there is a general agreement that if there is a surviving spouse, that person has the primary and paramount right to the possession of the body and the right to control its burial and other disposition. Id. at 56. Although it was held in at least one case that, once the duty of providing a proper grave site has been discharged, the control of the surviving spouse ceases, Smith v. Shepherd, 64 N.J. Eq. 401, 54 A. 806 (Ch. 1903), that view has been criticized as being unnecessarily harsh. See Annotation, supra, 21 A.L.R.2d at 503. 86 Applying these principles to the facts of this case, it would be easy to justify a conclusion that plaintiff's application should be denied. For one thing, she does not have the legal status of a spouse. In addition, she has waited almost two years to pursue this application. Finally, her reasons for the move, although quite reasonable, cannot fairly be classified as constituting "urgent necessity." On the other hand, one must question what legitimate policy reasons would be served by rejecting this otherwise reasonable request. For example, what logic supports the requirement for a showing of "urgent necessity" in this setting? Such a proposition may fit reasonably well when the grounds for the disinterment are based on public interest or economic concerns. Sheffield Farms Company, supra (involving a workmen's compensation investigation) and Perth Amboy Gaslight Company v. Kilek, supra (autopsy was requested). But where, as here, the considerations are purely equitable and the balance focuses on more spiritual considerations such as love and devotion, such a dispute will rarely if ever invoke urgency. Indeed, if urgency is the true test, it would appear that few of the cases where removal was authorized would have been justified. See generally, 22A Am.Jur.2d, supra; Annotation, supra, 21 A.L.R.2d at 472; Friant v. Dolbow, 41 N.J. Super. 84, 124 A.2d 12 (Ch. 1956). Accordingly, in the absence of public health concerns or investigative needs, the concept of urgent necessity seems to have little relevancy. If the test here is "good cause" and whether the presumption against the right of removal has been overcome, what is really involved is a weighing process which invokes the classic exercise of discretion which is the heart of equity. Such a balance includes consideration of the legitimate devotional needs of plaintiff and her child weighed against the father's desire not to disturb the "peace" of his son. Although plaintiff's position may arguably be labeled as no more than a matter of convenience, given this court's factual findings in that regard, what otherwise may be referred to as "convenience," should more 87 fairly be characterized as "necessity," or at least reasonable access. Balancing these various factors, the natural affection and devotional desires of plaintiff appear more compelling than the father's desire that the remains of his son be left to rest in peace. Although the spiritual considerations which attach to a burial site should never be taken lightly and although questions of removal will always involve a balance favoring non-removal, the natural desires and needs of the living should still be considered paramount absent some stated preference by the decedent. Annotation, supra, A.L.R.2d at 518; Neighbors v. Neighbors, 112 Ky. 161, 65 S.W. 607 (Ct.App. 1901). In this case, the decedent has expressed no preference. Cf. Guerin v. Cassidy, 38 N.J. Super. 454, 119 A.2d 780 (Ch. 1955). Since both of these grave sites will be sanctified by the church and neither side has invoked any religious considerations, the reasons advanced by plaintiff in behalf of herself and her child have considerable merit. In reaching this conclusion, I am persuaded that plaintiff's love for the decedent continues to be strong and that her desire to express her devotion to him is a substantial force in her life. I am also persuaded that, although change and new relationships are a natural part of everyone's life, given the lapse of time since decedent's death and plaintiff's continuing strong feelings on the subject, her sentiments do not appear to be transitory. Finally, I am persuaded that a change in the grave site will have no significant impact on the father's emotional needs or his ability to visit his son's grave. On balance, therefore, it is the conclusion of this court that the presumption against the right of removal has been overcome and that good cause has been proven. See Novelli v. Carroll, 278 Pa.Super. 141, 420 A.2d 469 (1980); Brake v. Mother of God's Cemetery, 251 Ky. 667, 65 S.W.2d 739 (Ct.App. 1933). There are two questions left open by the above conclusion: one relates to the impact of the delay; the second is whether 88 the result should be any different because plaintiff and the decedent were never married. With respect to the latter question, although the couple lived together as man and wife there is no question that New Jersey does not recognize common law marriages. N.J.S.A. 37:1-10. On the other hand, I see no reason why plaintiff's non-marital status alters any of the considerations already related. Plaintiff's love and her devotional needs seem no less strong because of it. Although this court can anticipate circumstances where the lack of a legal relationship between partners may make a significant difference in a balancing process like this, given the facts here, it is relatively insignificant. This is not a case where the court is testing the rights of the father against those of his son's unmarried partner. The considerations relied on by each side here were equitable, not legal. Even if legal considerations were invoked, the result being reached here is more likely to fulfill the presumed intentions of the decedent than the status quo. See generally, Annotation, "Disposition of Corpse-Decedent's Wishes," 54 A.L.R.3d 1037 (1973). Nor can the rights of the child be ignored. Although the value of this move to the child may seem debatable, given the absence of evidence to the contrary, the judgment of her mother and natural guardian is entitled to some deference. As for plaintiff's delay in bringing this action, I am prepared to accept her explanation that, given the sudden and violent nature of Edilberto's death, she was too grief stricken and confused regarding her rights to take a more aggressive position. Also, it has only been in recent months that her transportation problems have become so serious. Novelli v. Carroll, supra; Brake v. Mother of God's Cemetery, supra. The circumstances which might otherwise invoke estoppel are, therefore, not present. Cf. Smith v. Sheppard, supra. Conclusion. Plaintiff's request invokes fundamental and firmly-held concepts regarding the rights of both the dead and the living. 89 Although the court recognizes the strong policy against moving a decedent's remains, and although plaintiff has not demonstrated any urgent necessity, the factors she advances are substantial and clearly outweigh those of defendant. I have, therefore, concluded that the presumption against the right of removal has been overcome and good cause has been shown. The petition will be granted and the decedent's body may be removed. All expenses associated with this move will lie with plaintiff and the reinterment must be conducted with appropriate religious supervision and sensitivity. Plaintiff's attorney should submit an order consistent with the above.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1526920/	131 Pa. Commw. 267 (1990) 570 A.2d 108 ABINGTON TRANSPORTATION ASSOCIATION, PSSPA/PSEA, and Abington School District, v. COMMONWEALTH of Pennsylvania, PENNSYLVANIA LABOR RELATIONS BOARD. (Two Cases) Appeal of ABINGTON SCHOOL DISTRICT. Appeal of ABINGTON TRANSPORTATION ASSOCIATION, PSSPA/PSEA. Commonwealth Court of Pennsylvania. Argued December 12, 1989. Decided February 1, 1990. 268 Kenneth L. Oliver, Jr., with him, Marjorie H. Gordon, Obermayer, Rebmann, Maxwell & Hippel, Philadelphia, for appellant, Abington School Dist. Leonard V. Tenaglia, Richard, DiSanti, Hamilton & Gallagher, Media, for appellant, Abington Transp. Ass'n, PSSPA/PSEA. Peter Lassi, Camp Hill, with him, James L. Crawford, Harrisburg, for appellee, Pa. Labor Relations Bd. Before CRUMLISH, Jr., President Judge, and McGINLEY, J., and NARICK, Senior Judge. NARICK, Senior Judge. Abington School District (District) and Abington Transportation Association, PSSPA/PSEA (Association) have filed cross-appeals from an order of the Court of Common Pleas of Montgomery County that affirmed an order of the Pennsylvania Labor Relations Board (PLRB). We affirm. The controversy concerns the District's duty under the Public Employe Relations Act (PERA), Act of July 23, 1970, P.L. 563, as amended, 43 P.S. §§ 1101.101-1101.2301, to bargain with the Association concerning thirty-nine unilaterally promulgated written work rules and penalties which affected these school bus drivers.[1]269 270 The facts are summarized as follows. The Association and District were parties to a collective bargaining agreement (CBA) which was in effect by its terms from July 1, 1983 to June 30, 1986. On February 26, 1986, the representatives of the parties were engaged in the collective bargaining process when the director of personnel for the District presented the list of unilaterally promulgated work rules and their concomitant penalties (rules) to the Association which were to go into effect at 6:00 p.m. the following day. The Association responded that the rules would have to be negotiated, but it was the District's position that the rules represented the District's understanding of the current practice and were therefore, not subject to any bargaining obligation. On May 30, 1986, after the rules became effective, the Association filed a charge of unfair labor practice with the PLRB alleging the District violated Sections 1201(a)(1) and 1205(a)(5) of PERA, 43 P.S. § 1101.1201(a)(1) and 43 P.S. § 1101.1201(a)(5).[2] 271 On August 20, 1987, after failed negotiations and two days of hearings, the Board's hearing examiner issued a proposed decision and order in which he determined that some of the work rules were mandatory subjects of bargaining and others were matters of inherent managerial prerogative. Both parties filed objections to the proposed decision and order. The PLRB dismissed the objections and issued a final order. Thereafter, both the Association and the District filed petitions for review to the trial court which affirmed the PLRB's final order. These cross appeals then followed.[3] In essence, the parties' arguments are mirror images of each other. The District argues that the PLRB went too far in finding that some of the rules were mandatory subjects of bargaining while the Association argues that the PLRB did not go far enough because it found that some of the rules were matters of inherent managerial prerogative and thus, not subject to mandatory negotiation.[4] Our scope of review of a final order of the PLRB is limited. The PLRB's findings are conclusive if supported by substantial evidence and if the conclusions drawn from those facts are reasonable and not capricious, arbitrary or illegal. Delaware County Solid Waste Authority v. Pennsylvania Labor Relations Board, 125 Pa.Commonwealth Ct. 155, 557 A.2d 795 (1989). In Pennsylvania Labor Relations Board v. Butz, 411 Pa. 360, 377, 192 A.2d 707, 272 716 (1963), our Supreme Court stated that it "will not lightly substitute its judgment for that of a body selected from experts whose experience and expertise make it better qualified than a court of law to weigh facts within its field." In this case, neither the Association nor the District challenge the PLRB's findings of fact, therefore our review will focus upon the legal conclusions reached by the PLRB. Pennsylvania Labor Relations Board v. APSCUF/PAHE, 24 Pa.Commonwealth Ct. 337, 355 A.2d 853 (1976). The central issue before the Board was whether the District unilaterally changed mandatory subjects of bargaining under Section 701 of PERA, 43 P.S. § 1101-701,[5] or whether the rules were matters of inherent managerial prerogative under Section 702 of PERA, 43 P.S. § 1101.702.[6] The PLRB determined that the District had committed an unfair labor practice. Certain rules, which are summarized in shortened form, were determined to be mandatory subjects of bargaining or vague and overbroad: CLASS I 2. Ringing time card of another employe 3. Absence for three consecutive days 273 7. Possession, sale or use of drugs/alcohol (vague and overbroad) 9. Insubordination 10. Abusive language (vague and overbroad) 13. Immoral conduct (vague and overbroad) 14. Dangerous acts (vague and overbroad) 15. Violation of safety rules 16. Slowdowns 17. Failure to report 18. Disclosure of confidential information (vague and overbroad) 19. Outside employment CLASS II 1. Horseplay 4. Unsatisfactory work performance 5. Tardiness/absenteeism 6. Defacing walls, equipment 7. Leaving work station 8. Poor housekeeping 10. Abuse of start and break times 11. Sleeping/loafing 12. Interference with other employes (vague and overbroad) 14. Failure to punch time card 15. Violation of two or more Class II rules within twenty-four hours PLRB's decision of February 12, 1988 at 2. Rules determined to fall under inherent managerial prerogative were: CLASS I 1. Dishonesty, falsification or misrepresentation of District records 3. Stealing 4. Removal of District or other property without authorization 274 5. Willful damage of District or other property 8. Use, possession or storage of firearms/explosives 11. Fighting 12. Gambling CLASS II 2. Careless or reckless damage to District or other property/equipment 3. Smoking in restricted areas 9. Reckless driving/parking 13. Unauthorized personal work on District time Id. at 3. The PLRB's final order explained in detail how it balanced each rule weighing the District's interest in the rule against the Association's interest in job security. To determine whether an issue is a mandatory subject of bargaining, our Supreme Court held in Pennsylvania Labor Relations Board v. State College School District, 461 Pa. 494, 507, 337 A.2d 262, 268 (1975) (State College) that: Where an item of dispute is a matter of fundamental concern to the employes' interest in wages, hours and other terms and conditions of employment, it is not removed as a matter subject to good faith bargaining under Section 701 simply because it may touch upon the basic policy. It is the duty of the Board in the first instance and the courts thereafter to determine whether the impact of the issue on the interest of the employe in wages, hours and terms and conditions of employment outweighs its probable effect on the basic policy of the system as a whole. In Chambersburg Area School District v. Pennsylvania Labor Relations Board, 60 Pa.Commonwealth Ct. 29, 430 A.2d 740 (1988) appeal dismissed, 498 Pa. 366, 446 A.2d 603 (1982), (Chambersburg), this Court upheld the school's right to unilaterally prohibit smoking as an inherently managerial prerogative using the balancing test established in State College stating that: 275 Even if [the smoking ban] is a working condition, we are convinced that in striking a balance of educational motive behind the policy outweighs any impact on the employes' interests. We repeat that the paramount consideration in reaching this balance is the public interest in providing effective and efficient education for the School District's students. We, therefore, conclude that the smoking ban is an inherent managerial policy and not a mandatory subject of bargaining. Id. 60 Pa.Cmwlth. at 35, 430 A.2d at 744. By applying the test set forth in State College, and continued in Chambersburg, the PLRB here, determined that certain rules were subject to mandatory bargaining because they impacted the Association's interest in working conditions while others were inherent managerial prerogatives, related to the District's goal of maintaining effective and efficient education for students. Upon a careful review of the record, we find that the PLRB properly applied the balancing test set forth in State College and Chambersburg in reaching its conclusions. Because of this Court's narrow scope of review and the fine analysis of each rule made by the PLRB, in their expertise, we see no reason to reverse the trial court's affirmance of the PLRB's order. Accordingly, the order of the Court of Common Pleas of Montgomery County is hereby affirmed. ORDER AND NOW, this 1st day of February, 1990, the order of the Court of Common Pleas of Montgomery County in the above-captioned matter is hereby affirmed. NOTES [1] "CLASS I (Subject to Immediate Dismissal) The following is a partial list of the kind of improper conduct which, when engaged in, shall constitute grounds for disciplinary action, including immediate discharge: Note 1 Continued 1. Dishonesty, including any falsification or misrepresentation, providing incomplete, misleading or incorrect information in connection with the preparation of any District records, including an application for employment. 2. Ringing the time card of another employee or permitting another employee to ring your time card. 3. Stealing or sabotage of equipment, tools and/or other property belonging visitor [sic], employee or the District. 4. Removal from the District premises of any District property or property of others without proper authorization. 5. Willful damage, abuse or destruction of District property or the property of others. 6. Absence from the District for three (3) consecutive days without authorization or acceptable excuse. 7. Possession, sale or use of intoxicating beverages or drugs on District property or reporting for work under the influence of intoxicating beverages or drugs. 8. Unauthorized use, possession, conveyance or storage of any firearms, explosives or other dangerous weapons on District property. 9. Insubordination, including refusal to perform work required by a supervisor. 10. The use of profane, abusive or threatening language toward other employees, students, guests or supervisors. 11. Fighting, coercing, interfering with or threatening bodily injury to other employees, students, guests or supervisors. 12. Gambling of any kind, including but not limited to bookmaking or number writing. 13. Immoral conduct or indecency. 14. Any act which might endanger the safety or life of others. 15. Willful, deliberate or repeated violation of District safety rules. 16. Deliberate delaying or restricting services or work effort or inciting others to delay or restrict same. 17. Failure to report to work upon expiration of a vacation, holiday, or leave of absence or upon being called back, after a layoff, or when all leave time is exhausted. 18. Disclosure of confidential District information to unauthorized persons; and 19. Engaging in any outside employment which interferes with availability for work or ability to perform work. CLASS II (Warning before disciplinary action) The following is a partial list of improper conduct which, when engaged in, will constitute grounds for the issuance of a warning before more severe disciplinary action is taken up to and including discharge. 1. Engaging in horseplay. 2. Carelessness or recklessness causing damage to, defacement or destruction of building, equipment or other District property or the property of others. Note 1 Continued 3. Smoking in restricted areas. 4. Unsatisfactory work performance. 5. Excessive tardiness or absenteeism. 6. Posting, writing on or defacing bulletin boards, walls, equipment or other material or altering or removing notices therefrom. 7. Leaving regularly assigned work location without notifying your immediate supervisor. 8. Creating or contributing to unsanitary or otherwise poor housekeeping conditions. 9. Reckless driving or parking improperly on District premises. 10. Failure to observe department working hour schedule, starting time, rest and meal periods. 11. Sleeping, loafing or other abuse of time during assigned working hours. 12. Interfering with any employees' performance of duties. 13. Performing unauthorized personal work on District time; and/or with District equipment or supplies. 14. Failure to punch time card as instructed. 15. Violation of two (2) or more of the above-stated work rules during any twenty-four (24) hour period of time may result in immediate discharge. [2] Sections 1201(a)(1) and (5) of PERA provide: Section 1201. (a) Public employers, their agents or representatives are prohibited from: (1) Interfering, restraining or coercing employes in the exercise of the rights guaranteed in Article IV of this act. * * * * * * (5) Refusing to bargain collectively in good faith with an employe representative which is the exclusive representative of employes in an appropriate unit, including but not limited to the discussing of grievances with the exclusive representative. [3] The appeals filed by the parties were consolidated, both at the trial court and on appeal to this Court. [4] The District raises before this Court for the first time the argument that the PLRB's and the trial court's decision imposes an unreasonable burden upon the District's resources. Upon review of the record, this issue was not raised below and therefore, is deemed waived. Beecham Enterprises, Inc. v. Zoning Hearing Board of Kennedy Township, 125 Pa.Commonwealth Ct. 20, 556 A.2d 981 (1989). [5] Section 701 of PERA provides: Section 701. Collective bargaining is the performance of the mutual obligation of the public employer and the representative of the public employes to meet at reasonable times and confer in good faith with respect to wages, hours and other terms and conditions of employment, or the negotiation of an agreement or any question arising thereunder and the execution of a written contract incorporating any agreement reached but such obligation does not compel either party to agree to a proposal or require the making of a concession. [6] Section 702 of PERA provides: Section 702. Public employers shall not be required to bargain over matters of inherent managerial policy, which shall include but shall not be limited to such areas of discretion or policy as the functions and programs of the public employer, standards of services, its overall budget, utilization of technology, the organizational structure and selection and direction of personnel. Public employers, however, shall be required to meet and discuss on policy matters affecting wages, hours and terms and conditions of employment as well as the impact thereon upon request by public employe representatives.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1526965/	549 S.W.2d 29 (1977) CATTLE FEEDERS, INC., Appellant, v. Jo Ann JORDAN and G. F. Jordan, Appellees. No. 1152. Court of Civil Appeals of Texas, Corpus Christi. March 10, 1977. 30 Fly, Moeller & Stevenson, Victoria, William C. Reiff, Houston, for appellant. Marion M. Lewis and Jackie W. Marr, Guittard & Henderson, Victoria, for appellees. OPINION NYE, Chief Justice. Suit was brought by Cattle Feeders, Inc., the appellant herein, against Jo Ann and G. F. Jordan, appellees, seeking specific performance of an option to purchase 91.755 acres of land in Goliad County. Trial was before a jury. From a judgment denying all relief, appeal has been perfected to this Court. On January 15, 1971, Cattle Feeders, Inc. entered into a lease agreement with Jo Ann and G. F. Jordan covering some 91.755 acres of land in two noncontiguous tracts. This land is located north of U. S. Highway 59 in 31 Goliad County and is divided by a farm to market road. This acreage was part of a large tract of land in the same area which was either owned or leased by Cattle Feeders, Inc. as a part of their cattle feedlot operation. The lease stated that it was for farming, grazing and livestock feeding purposes only. The term was 5 years. The lease provided that all fences and water reservoirs constructed by the tenant were to remain on the premises. The lease, by its terms, granted Cattle Feeders an option to purchase the land in question based on certain conditions precedent, one of which was at least 90 days' written notice of such election to purchase. The option agreement provided that time was of the essence concerning exercising the option to purchase. In either April or May of 1971, Cattle Feeders alleged that it had sent a letter to the Jordans expressing its desire to exercise the option and purchase the land. No copy of this letter was produced or introduced into evidence. On December 5, 1975, Cattle Feeders sent a letter to the Jordans in which they tendered the first purchase payment for the land pursuant to the terms set out in the option agreement. The Jordans refused this check on the grounds that they had not been notified of Cattle Feeders' intent to exercise its option as provided for in the option agreement. Shortly thereafter, Cattle Feeders brought this suit for specific performance of the option agreement on two grounds. The first theory was that it had in fact properly exercised the option by giving written notice 90 days prior to January 15, 1976. Alternatively, Cattle Feeders urged that in the event that Cattle Feeders had not satisfied the requirement of the option agreement, the Jordans were estopped from asserting the 90 day notice requirement. The Jordans, after excepting to certain allegations in Cattle Feeders' pleadings, specifically denied Cattle Feeders' claims and brought a cross-action for immediate possession of the land. At the beginning of the trial, the Jordans filed a motion in limine to exclude from the jury all of the evidence pertaining to waiver or estoppel on the part of the Jordans. Although the trial court granted the motion, all of the excluded evidence is before us on bill of exceptions. The jury found that no written notice of the exercising of the option was mailed to Mrs. Jordan by Cattle Feeders; that Mrs. Jordan did not receive any such notice; and that Cattle Feeders was not damaged by Mrs. Jordan's refusal to surrender possession of the land to them. Cattle Feeders does not attack these findings by the jury in this appeal. Therefore, the question as to whether or not the appellant properly exercised the written option agreement is not before us. Through two points of error, Cattle Feeders allege that the trial court erred in refusing to permit the appellant to present to the jury, by evidence and special issues, its alternative theory that Cattle Feeders was entitled to specific performance of the option contract on equitable grounds. The appellant is relying on the language in Jones v. Gibbs, 133 Tex. 627, 130 S.W.2d 265 (1939, opinion adopted) to the effect that strict compliance with the terms or conditions of an option is excused when such failure is brought about by certain conduct of the optionor. The crux of Cattle Feeders' argument is that the appellees engaged in such conduct as would have excused strict compliance with the terms of the option agreement and the trial court erred in refusing to allow Cattle Feeders to present this evidence to the jury. It is, therefore, necessary that we carefully review appellant's bill of exceptions evidence to determine the validity of appellant's points of error. Appellant Cattle Feeders' first bill of exceptions covered the testimony of a Mr. Carl Knabe who did some clearing work on the land in question. Mr. Knabe testified that he burned off brush, root-plowed, raked the land and stacked and burned roots. He testified that this work was done in June and July of 1970 and that he charged Cattle Feeders $40.00 to $42.00 per acre for the work. He testified that this work makes the land more productive and 32 increased the value of the land. He also testified that the value of such services at the time of the trial was approximately $80.00 per acre. The next testimony excluded by the trial court was that of the president of the appellant's corporation, a Mr. Pat Hencerling. Mr. Hencerling testified that in June and July of 1970, Cattle Feeders executed certain documents with the appellee concerning this land. He testified that these documents were later embodied in the lease agreement. He testified that the lease agreement was part of an overall transaction between the parties to purchase the land and that the land in question was leased to Cattle Feeders and not purchased outright so as to gain a tax advantage for the appellees. He testified that the lease price was about $10.00 per acre above the going rate. He testified that he cleared the land, planted various grasses and built ponds on the land. He also testified that he had the land sloped for the feed yards and constructed a mobile home park for his employees. He testified he paid approximately $40.00 to $45.00 per acre to clear the land, several hundred dollars per acre to slope certain land and $1,500.00 each for the three ponds that were constructed. He also testified he spent $35.00 to $45.00 per acre to plant grass on approximately 5 acres to prevent erosion. He testified that the corporation spent between $10,000.00 and $12,000.00 to construct the mobile home park. He testified that it also spent approximately $2,000.00 on fences. He stated that he spent about $60.00 per acre to fertilize some 80% of the land in 1975 and planted oats at a cost of $40.00 per acre. In summary, he testified he would not have spent any of this money if he was not under the impression that Cattle Feeders either owned the land or would acquire the land. He then pointed out on a map other land in the immediate area which the corporation had previously purchased from the appellees. He testified that all this work on the land in question was clearly visible from the road adjacent to the land and that the appellees were seen in the vicinity of the property. On cross-examination under the bill of exceptions, Hencerling stated that he had the right, under the lease, to make all the improvements and that appellees could not have stopped any of the improvements. He admitted that he had never discussed the improvements with the appellees. Finally, Hencerling stated that the reason he made all the improvements was his reliance on the written notice to appellees. The final testimony under the bill of exceptions was that of the appellee Jo Ann Jordan. Mrs. Jordan testified that she owned land in the vicinity of the land in question which she leased or used to graze cattle. She stated that since 1974, she visited the area about once very two weeks but between 1971 and 1975, she only occasionally visited the area. She said she observed the improvements on the subject land. She testified she always thought appellant would exercise its option but never knew this for a fact. She said her assumption was based on the improvements and the integration of the land into the remainder of the appellant's operations. She said she refused the tendered money because she was no longer bound by the agreement. She stated that prior to December 5, 1975, she received no communication from appellant indicating an intent to exercise its option. She stated that had the option been properly exercised she would have sold the land to appellant as per the agreement. The only remaining question involved in this case is whether or not the appellant is entitled to the land in question through some act or acts of the appellees which excused or prevented the exercising of the option agreement. As a general rule, in absence of equities, an optionee is held to strict compliance with the terms of an option agreement. Zeidman v. Davis, 161 Tex. 496, 342 S.W.2d 555 (1961); Tidwell v. Lange, 531 S.W.2d 384 (Tex.Civ.App.Waco 1975, no writ). The equities which will excuse strict compliance with the terms of an option agreement are set out in Jones v. Gibbs, 130 S.W.2d 265 (Tex.Com.App.1939, opinion 33 adopted), see pp. 272-273. These equitable principles can be summarized. An optionee will be excused from strict compliance where his conduct in failing to comply was not due to willful or gross negligence on the part of the optionee but was rather the result of an honest and justifiable mistake. In addition, equity will also excuse strict compliance where the strict compliance was prevented by some act of the optionor such as waiver or misleading representations or conduct. There is no evidence in the record that Cattle Feeders' failure to provide appellees with timely notice of its intent to exercise the option was the result of an honest and justifiable mistake. To the contrary, the record indicates that the appellant simply never notified the appellees of its intention to exercise the option. The written notice, even if sent, was never received by appellees. Next, we consider waiver and estoppel. Waiver, whether express or implied, is an intentional release, relinquishment, or surrender of a right that is at the time known to the party making it. In order to constitute a waiver, it is essential that there be an existing right, benefit or advantage, a knowledge (actual or constructive) of the existence and an actual intention to relinquish it. It must be a voluntary act made with full knowledge of the facts. Rio Delta Land Company v. Johnson, 475 S.W.2d 346 (Tex.Civ.App.Corpus Christi 1971, writ ref'd n. r. e.). A waiver takes place where one dispenses with performance of something which he has a right to exact, and occurs where one in possession of any right, whether conferred by law or by contract, with full knowledge of material facts does or forbears to do something, and such action is inconsistent with his right or his intention to rely upon it. Ford v. Culbertson, 158 Tex. 124, 308 S.W.2d 855 (1958); First National Bank of Midland v. Stoutco, Inc., 530 S.W.2d 619 (Tex.Civ.App.San Antonio 1975, writ dism'd); Zurich Insurance Company v. Wiegers, 527 S.W.2d 511 (Tex.Civ.App.Austin 1975, no writ); Rice v. Travelers Indemnity Company, 526 S.W.2d 698 (Tex.Civ.App.Waco 1975, writ ref'd n. r. e.); Texana Oil Company v. Stephenson, 521 S.W.2d 104 (Tex.Civ.App.El Paso 1975, no writ). We have carefully reviewed all of the record and find that there is no evidence of any waiver. Even appellant's president testified there were no oral agreements concerning the lease. The only evidence of implied waiver is the fact that appellee was in the area occasionally, knew of some of the improvements to the land and that appellant was using the land. In order to establish an implied waiver, there must be a clear unequivocal and decisive act showing such a purpose. Corrin v. Slagle, 300 S.W.2d 657 (Tex.Civ.App.Fort Worth 1957, writ ref'd n. r. e.); Bounds v. Home Mut. Life & Accident Ass'n No. 1, 290 S.W.552 (Tex.Civ.App.Amarillo 1927, no writ). There is simply no evidence anywhere in the record that appellee waived her right to notice of appellant's intention to exercise its option. The elements of equitable estoppel are: 1) a false representation or concealment of material fact; 2) made with actual or constructive knowledge of the facts; 3) to a party without knowledge or means of knowledge of the real facts; 4) made with the intention that it should be acted on; and 5) the party to whom it was made must have relied on or acted on it to his prejudice. Gulbenkian v. Penn, 151 Tex. 412, 252 S.W.2d 929 (1952); Clifton v. Ogle, 526 S.W.2d 596 (Tex.Civ.App.Fort Worth 1975, writ ref'd n. r. e.); Connally v. Home Insurance Company, 525 S.W.2d 252 (Tex. Civ.App.Amarillo 1975, writ ref'd n. r. e.); Astro Sign Company v. Sullivan, 518 S.W.2d 420 (Tex.Civ.App.Corpus Christi 1974, writ ref'd n. r. e.). Before an estoppel will arise, there must be certainty to every intent. Rio Delta Land Company v. Johnson, supra. The evidence totally fails to establish any false representation or concealment on the part of the appellees. In fact, the evidence clearly shows that the appellees did nothing to prevent the appellant Cattle Feeders from exercising the option in question. Failure to prove one of the essential *34 elements of estoppel is fatal to the cause of action. Barfield v. Howard M. Smith Company of Amarillo, 426 S.W.2d 834 (Tex.Sup. 1968). After reviewing all of appellant's bill of exceptions evidence, it is unnecessary for us to determine the correctness of the trial court's action in preventing the jury from hearing this evidence. Even if all of the evidence had been submitted to the jury, it would not have supported a judgment favorable to appellant's claim to equitable relief. Appellant's points of error are overruled. The judgment of the trial court is AFFIRMED.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1526964/	319 Md. 25 (1990) 570 A.2d 840 CHEVRON, U.S.A., INC. ET AL. v. WARREN ROBERT LESCH ET AL. No. 86, September Term, 1988. Court of Appeals of Maryland. March 7, 1990. Motion for Reconsideration Denied April 2, 1990. Donald E. Sharpe (Elizabeth C. Kelley, Piper & Marbury, David D. Patton, all on brief), Baltimore, Charles N. Ketterman (Montedonico & Mason, Chartered, both on brief), Baltimore, for petitioners. Glenn E. Bushel (Ira L. Oring, Melnicove, Kaufman, Weiner & Smouse, P.A., Baltimore, H. Patrick Stringer, Jr. and Mudd, Harrison & Burch, Towson, all on brief), for respondent. Argued before MURPHY, C.J., and ELDRIDGE, COLE, RODOWSKY, McAULIFFE, ADKINS and BLACKWELL,[] JJ. McAULIFFE, Judge. Dr. Warren R. Lesch and his wife were severely burned and suffered the loss of their home and its contents when an explosion occurred in their garage in July 1985. The Lesches filed suit in the Circuit Court for Harford County, contending that the explosion was caused by the negligence of Malcolm Weeks, an employee of Walker's Chevron, Inc. (Walker's Chevron). Walker's Chevron owned and operated an automobile service station business located on Conowingo Road in Bel Air, Maryland. It leased the premises, and also purchased gasoline, oil, and lubricants from Bay Oil, Inc. (Bay Oil), a jobber.[1] Walker's Chevron was a "branded station"; that is, it displayed the signs and colors of a particular brand, Chevron, and sold only that brand of gasoline and oil.[2] Bay Oil purchased the Chevron products that it sold to Walker's Chevron from Chevron U.S.A., Inc. (Chevron U.S.A.), a national oil company. The Lesches sued Weeks, Walker's Chevron, Bay Oil, and Chevron U.S.A. The claims against Weeks and Walker's Chevron are based on Weeks's alleged negligence in failing to properly repair a leak in the gas tank of the Lesch automobile, and on the vicarious liability of Walker's Chevron as the employer of Weeks. The claim against Bay Oil is grounded on the theory that Walker's Chevron and its employees were servants of Bay Oil, subject in fact to its control. The complaint against Chevron U.S.A. proceeds on theories of apparent agency, or agency by estoppel. The Lesches contend that Chevron U.S.A. created, or knowingly allowed to exist, a situation that actually conveyed to the Lesches the reasonable belief that Weeks was an employee of Chevron U.S.A., and therefore possessed the skill that they had the right to expect of one under the control and supervision of a major oil company. They entrusted the repair work to Weeks and Walker's Chevron because of that belief, and they suffered damage because of that reliance. Before trial, Bay Oil and Chevron U.S.A. filed motions for summary judgment. Judge Cypert O. Whitfill granted the motions, concluding from facts not in dispute that Bay Oil neither possessed nor exercised that degree of control over Walker's Chevron which would give rise to vicarious liability, and that any belief entertained by the Lesches that employees of Walker's Chevron were employees of Chevron U.S.A. was not justified by the facts, and was unreasonable as a matter of law. With the concurrence of all parties, and under circumstances we find were appropriate, Judge Whitfill entered final judgment in favor of Bay Oil and Chevron U.S.A., expressly finding that there was no just reason for delay. Maryland Rule 2-602(b). The plaintiffs appealed, and the Court of Special Appeals reversed, directing that both judgments be vacated. Lesch v. Chevron, 75 Md. App. 669, 542 A.2d 1292 (1988). We granted certiorari, and we now reverse the judgment of the intermediate appellate court. The facts surrounding the repair in question, and the subsequent explosion, are as follows. On 14 July 1985, Dr. Lesch became aware that the gas tank of his Buick automobile was leaking, apparently as a result of having been struck by a metal rod he had run over earlier in the day. He pushed the car out of his garage and hosed down the garage floor. The next morning, he called Walker's Chevron, with whom he dealt regularly, and reported the problem. Weeks arranged to have Dr. Lesch's car towed to the service station, and after determining that there was a small puncture in the tank, called Dr. Lesch. The content of that conversation is in dispute, but in any event, Weeks proceeded to attempt a repair. He cleaned the tank in the area of the hole with a solvent, pressed air conditioning duct tape into or over the hole, inserted a screw into the hole and covered the patch with a multi-purpose epoxy. After allowing the epoxy to set up for one to two hours, Weeks put several gallons of gasoline in the tank and checked it for leaks. Finding none, he filled the tank and parked the car. Dr. Lesch picked up the car the next day. Weeks explained the nature of the repair to Dr. Lesch, and said he had not observed any leaks. Weeks suggested, however, that Dr. Lesch "keep an eye on it." That afternoon and evening, Dr. Lesch made several checks for evidence of leaks, but saw nothing. The next morning, however, he and his wife smelled an odor of gasoline, and went to the garage to investigate. Dr. Lesch said that he was careful not to turn on any lights, or to activate the electric garage door opener. Perceiving a significant odor of gasoline in the garage, he stated that he disengaged the garage door from the electric opening device, and manually raised the door. He said that when the door reached a certain height it activated a light on the housing of the electric door opener, and the explosion occurred. Dr. Lesch suffered second degree burns to 45 percent of his body, and Mrs. Lesch incurred second and third degree burns to 45 percent of her body. Their home and all of its contents were destroyed by the ensuing fire. Additional facts pertaining to the relationship that existed between the Lesches and Walker's Chevron, and between the several defendants, as well as additional facts bearing on the possible appearance of an agency relationship between Walker's Chevron and Chevron U.S.A., will be set forth as we discuss the separate theories of liability. I. Bay Oil The Claim of Actual Agency Bay Oil is a petroleum products jobber doing business primarily in Harford, Cecil and Baltimore counties. It has, for some time, purchased petroleum products from several national gasoline producers, and sold those products to branded and unbranded retail gasoline service stations. It became a Chevron jobber in 1972, after which it provided Chevron products to branded Chevron dealers. Contractual rights and obligations between Bay Oil and Chevron U.S.A. for the period of time involved in this case were controlled by a Branded Jobber Petroleum Products Agreement dated 11 September 1984. As part of this agreement, Bay Oil was authorized to supply Chevron products and "insignia"[3] to those retail stations that were approved by Chevron U.S.A. as acceptable outlets for Chevron branded products. The service station involved in this case was first approved as a Chevron branded station in 1976. The business of that station was then owned by Ben Walker, and was operated as a sole proprietorship. Ben Walker had been in the service station business for some time, and had owned the business at this particular station since the mid-1960's. Prior to that time, he had owned a service station business on Rock Spring Road, approximately two miles from the Conowingo Road station. The Rock Spring Road location was a branded Sinclair station, and Ben Walker traded there as Walker's Sinclair. When he moved his business to Conowingo Road, he continued to operate as Walker's Sinclair. In the mid or late 1960's, B.P. Oil, Inc. bought Sinclair, and Walker's Sinclair became Walker's BP. In 1976, Bay Oil obtained a leasehold interest in the Conowingo Road property from B.P. Oil, Inc., and in turn entered into a sublease with Ben Walker. It was at that time that Bay Oil entered into a Reseller's Contract with Walker, and Walker's BP became Walker's Chevron. The original Reseller's Contract, which was apparently extended by an oral agreement of the parties, was a fairly simple document consisting of two pages. Bay Oil agreed to sell and deliver, and Ben Walker agreed to buy, certain quantities of Chevron gasoline, oil, and lubricants. Additionally, Bay Oil agreed to lease an eight foot internally lighted Chevron sign and a credit card imprinter to Walker. The contract did not grant Bay Oil any control over the operation of Walker's business, and included this provision: It is the spirit and intent of this contract that Buyer will have the right to conduct and carry on the business of selling at retail, automobile fuel and gasoline and lubricating oils and greases, wholly free and independent of any domination or control by Seller; and nothing in this contract is intended or shall be construed to give Seller any domination or control of Buyer's said business. The original lease agreement between Bay Oil and Walker's Chevron was also an uncomplicated pre-printed document consisting of two pages. It provided, at paragraph 10, that: The provisions of this lease shall not be construed as reserving to the Lessor any right to exercise any control over the business or operations of the Lessee conducted upon the leased premises or to direct in any respect the manner in which any such business and operations shall be conducted. Although these provisions are not controlling, they may be of assistance in determining the intent of the contracting parties. In support of their contention that Bay Oil exercised actual control over Walker's Chevron, plaintiffs point to a letter of 16 December 1982 from Bay Oil to Ben Walker. This letter advised Walker "of certain problems regarding the operation of your service station," and stated that if Walker wished to continue to occupy the premises, then he would be expected to conform to certain conditions. The conditions stated in the letter were: 1. The station will be kept clean and free of debris and trash at all times. 2. The station will be opened seven days per week no later than 7:00 a.m. and closed no earlier than 8:00 p.m. 3. The station will be properly lighted in a manner to give the appearance the station is open for business between sundown and 8:00 p.m. 4. All junk cars will be removed immediately, no more than three motor vehicles shall remain outside overnight and no automobile shall remain on the premises for more than one week. 5. You will be expected to furnish a deposit of $700.00 as security for future payments of rent. 6. Gas will be paid for in full at the time of delivery. 7. Monthly rent will be calculated based on the previous month's sales according to the attached schedule. 8. We will bill you for rent at the beginning of each month. Your rent shall be due upon receipt of the bill. The Court of Special Appeals, characterizing this letter as an ultimatum, held that its contents constituted sufficient evidence of Bay Oil's power to control the conduct of Walker's Chevron to permit a trier of fact to find the existence of a master-servant relationship. Lesch v. Chevron, supra, 75 Md. App. at 698-700, 542 A.2d 1292. We do not agree. In evaluating the relationship that existed between these parties to determine whether Bay Oil may be held vicariously liable for the torts of employees of Walker's Chevron, we keep in mind that not every close relationship will create that liability. One may be an agent of another, owing to his principal the fiduciary obligations of loyalty and general obedience, but at the same time not be sufficiently under the control of the principal to be considered a servant. See Brady v. Ralph Parsons Co., 308 Md. 486, 510-512, 520 A.2d 717 (1987). The relationship of master and servant exists only when the employer has the right to control and direct the servant in the performance of his work and in the manner in which the work is to be done. Id. at 510; Mackall v. Zayre Corp., 293 Md. 221, 230, 443 A.2d 98 (1982). In Keitz v. National Paving Co., 214 Md. 479, 491, 134 A.2d 296 (1957), this Court said: [T]here are at least five criteria that may be considered in determining the question whether the relationship of master and servant exists. These are: (1) the selection and engagement of the servant, (2) the payment of wages, (3) the power to discharge, (4) the power to control the servant's conduct, (5) and whether the work is a part of the regular business of the employer. Standing alone, none of these indicia, excepting (4), seems controlling in the determination as to whether such relationship exists. The decisive test in determining whether the relation of master and servant exists is whether the employer has the right to control and direct the servant in the performance of his work and in the manner in which the work is to be done. (emphasis in original). To like effect, see Whitehead v. Safway Steel Products, 304 Md. 67, 77-78, 497 A.2d 803 (1985); B.P. Oil Corp. v. Mabe, 279 Md. 632, 637-39, 370 A.2d 554 (1977). Assuming, as we do for the purpose of considering Bay Oil's motion for summary judgment, that the plaintiffs could establish that Ben Walker, and his successor, Walker's Chevron, had accepted and agreed to be bound by the conditions imposed by Bay Oil, we hold that to be insufficient evidence of the right on the part of Bay Oil to exercise the degree of control that would support a claim of vicarious liability. This exercise of control by Bay Oil flows partly from its status as landlord, and partly from its status as jobber. Provisions dealing with required cleanliness of the premises, number of cars that may be parked overnight, and revised rent structures are customary in lease agreements. See, e.g., Miller v. Sinclair Refining Company, 268 F.2d 114, 117 (5th Cir.1959); Texas Co. v. Wheat, 140 Tex. 468, 168 S.W.2d 632, 635 (1943). Because the parties apparently were in agreement that they were on a month-to-month rental basis, Bay Oil announced the change in terms as a condition to the continuation of the lease. For example, Item 2, dealing with the minimum hours of operation of the station, parallels a provision that was contained in the original, pre-printed lease, but which had not been filled in by the parties. In addition, Item 6, which provided that gas would be sold to Walker's Chevron on a C.O.D. basis, was entirely in accordance with the Reseller's Contract that existed between the parties. Individually or collectively, these conditions did not demonstrate a claim to, or exercise of, the degree of control required to establish a master-servant relationship. Summary judgment was correctly entered in favor of Bay Oil. II. Chevron U.S.A. The Claim of Apparent Agency Plaintiffs do not contend that a master-servant relationship existed between Chevron U.S.A. and Walker's Chevron, and the facts of record would not support the contention if made. Rather, plaintiffs contend that Chevron U.S.A. is liable for the negligent acts of employees of Walker's Chevron because Chevron U.S.A. influenced the plaintiffs to believe that Weeks was its employee and, reasonably relying on that apparent relationship and the care and skill that the plaintiffs believed a mechanic employed by Chevron U.S.A. would possess, they entrusted the repair to Weeks, to their detriment. This theory of liability, most often referred to as apparent agency or agency by estoppel,[4] was before us in B.P. Oil Corp. v. Mabe, supra, and more recently in Mehlman v. Powell, 281 Md. 269, 378 A.2d 1121 (1977). As we pointed out in B.P. Oil Corp. v. Mabe, supra, the law applicable to the plaintiffs' claim against Chevron U.S.A. is that set forth in Restatement (Second) of Agency, § 267 (1958): One who represents that another is his servant or other agent and thereby causes a third person justifiably to rely upon the care or skill of such apparent agent is subject to liability to the third person for harm caused by the lack of care or skill of the one appearing to be a servant or other agent as if he were such. In order to recover on this theory, in addition to showing that Weeks was negligent and that his negligence was a proximate cause of the ensuing damage, plaintiffs must show that: 1) they were misled by appearances by Chevron U.S.A. into believing that Weeks was an employee of Chevron U.S.A.; 2) this belief was objectively reasonable under all the circumstances; and, 3) they relied on the existence of that relationship in making their decision to entrust Weeks with the repairs. See B.P. Oil Corp. v. Mabe, supra, 279 Md. at 644-45, 370 A.2d 554. See also Drexel v. Union Prescription Centers, Inc., 582 F.2d 781, 791 (3rd Cir.1978). One commentator has described the first two requirements in these terms: The first [test] is objective: could a reasonable man believe that the company's manifestations of apparent authority indicate it is holding the operator out as its agent? The second is subjective: did the facts known by the plaintiff in a particular case reasonably justify his assumption that the operator was the company's agent? Comment, Service Stations Torts: Time for the Oil Companies to Assume Their Share of the Responsibility, 10 Cal.W.L.Rev. 382, 394-95 (1974). Comment a to § 267 of the Restatement (Second) of Agency discusses the third requirement: The mere fact that acts are done by one whom the injured party believes to be the defendant's servant is not sufficient to cause the apparent master to be liable. There must be such reliance upon the manifestation as exposes the plaintiff to the negligent conduct. We shall assume, without deciding, that summary judgment could not properly have been entered on the questions of whether the plaintiffs subjectively entertained the belief that Weeks was an employee of Chevron U.S.A., and whether Weeks was engaged by the plaintiffs to make the repairs as a result of that belief. We hold, however, that summary judgment was correctly entered in favor of Chevron U.S.A. on the ground that any belief so held by the plaintiffs was not objectively reasonable under all of the circumstances. Most of the alleged indicia of control relied on by these plaintiffs were identical to those relied on by the plaintiff in B.P. Oil Corp. v. Mabe, supra. The Lesches related by affidavit that: The station was known as Walker's Chevron, Inc. There was a large sign bearing the Chevron logo which was located on the parking lot of the station. The gasoline pumps had Chevron decals. The service vehicles had Chevron decals on each door. There was a Chevron emblem and slogan on the door to the service bay. There were other Chevron decals on the poles supporting the canopy over the full service island, as well as on the office desk. The gas station employees wore uniforms with Chevron emblems on them, and the gas station service tickets had the Chevron emblem on them. There was no indication at the service station that it was not associated with Chevron in any respect. * * Also, Walker's Chevron identified itself as a Chevron service station in the local yellow pages. From this, the Lesches said "it was evident to us that Walker's Chevron was associated with Chevron, a national oil company," and they thought that Chevron U.S.A. "would stand behind any repair." In B.P. Oil Corp. v. Mabe, supra, 279 Md. at 640, 370 A.2d 554, we quoted the following passage from Coe v. Esau, 377 P.2d 815, 818 (Okla. 1963): It is indeed a matter of common knowledge and practice that distinctive colors and trademark signs are displayed at gasoline stations by independent dealers of petroleum product suppliers. These signs and emblems represent no more than notice to the motorist that a given company's products are being marketed at the station. We also quoted from Reynolds v. Skelly Oil Co., 227 Iowa 163, 171, 287 N.W. 823, 827 (1939), as follows: The argument of appellee that the Skelly Oil Company was estopped because of the signs displayed and that, because of such signs, there was a presumption that the station was owned by the Skelly Oil Company has no support in reason or authority. [One may a]s well argue, that because the word `Chevrolet' or `Buick' is displayed in front of a place of business, General Motors would be estopped to claim that it was not the owner of the business. It is a matter of common knowledge that these trademark signs are displayed throughout the country by independent dealers. This "common knowledge" line of reasoning has been followed by many courts throughout the country. See, e.g., Watkins v. Mobil Oil Corp., 291 S.C. 62, 352 S.E.2d 284, 287 (1986) (sale of Mobil products, presence of Mobil signs and emblems on uniforms, and station trading as "North Main Mobil" was not sufficient evidence to establish apparent agency); Wood v. Shell Oil Co., 495 So. 2d 1034, 1039 (Ala. 1986) (presence of oil company's distinctive logo displayed on signs, literature, products, and uniforms is not sufficient evidence, in itself, to establish apparent agency because it is "common knowledge among the general public that such a logo is often displayed by independent dealers and that the only representation made by such displays is that the oil company's gasoline is sold at the service station"); Stephens v. Yahama Motor Co., Ltd., 627 P.2d 439, 442 (Okl. 1981) (display of two Conoco signs at service station not sufficient to establish apparent agency because it is common knowledge that such signs are displayed by independent dealers); Apple v. Standard Oil, Division of American Oil Company, 307 F. Supp. 107, 115 (N.D.Cal. 1969) (mere fact that service station sold Amoco gasoline and displayed Amoco signs did not constitute a "holding out" sufficient to give rise to a finding of apparent agency). In Mehlman v. Powell, supra, 281 Md. at 274, 378 A.2d 1121, Judge Eldridge made this cogent observation for the Court: [I]n B.P. Oil Corp. v. Mabe, supra, it was necessary to distinguish between the products offered for sale and the automotive services provided by the attendant. The mere fact that BP products are advertised for sale does not, in itself, justify the inference that BP is as well directly providing automotive services. (emphasis in original). A similar distinction was drawn by the District Court of Appeal of Florida in Cawthon v. Phillips Petroleum Company, 124 So. 2d 517, 521 (Fla.App. 1960). See also Sydenham v. Santiago, 392 So. 2d 357 (Fla.App. 1981); Ortega v. General Motors Corp., 392 So. 2d 40 (Fla.App. 1980). Compare Orlando Executive Park, Inc. v. Robbins, 433 So. 2d 491, 493-94 (Fla. 1983) (distinguishing "oil company cases" from other apparent agency situations). The Lesches, however, point to additional factors that they believe militate in favor of a finding of apparent agency. First, they note that Chevron U.S.A. allowed them to charge their purchases of products and repairs on a VISA credit card.[5] We do not view that fact as an indication that Chevron U.S.A. controlled the details of the operation of Walker's Chevron. It is common knowledge that major oil companies accept credit card purchases, not only of their products, but of virtually anything sold by a service station, which, at least of fairly recent date, may even include grocery as well as automotive items. Moreover, it is common knowledge that many gasoline service stations accept several different major oil company credit cards. Whatever reasonable conclusions one might legitimately draw from the widespread use of credit cards in today's society, we are not convinced that there may be numbered among them the conviction that the party furnishing the credit card slip and cooperating with the credit card company and issuing bank enjoys the control of an employer over those whose bill is paid by the charge. Additionally, the Lesches claim that Chevron U.S.A., although expressing concern in its internal communications about the use by independent dealers of the word "Chevron" in corporate names, failed to require Walker's Chevron, Inc. to change its name. We believe Chevron U.S.A.'s principal concern was with the mandate of federal law[6] that it continually monitor the use of, and protect, its hallmark, at the risk of losing it. We do not believe that the inclusion of the word "Chevron" in the corporate name of Walker's Chevron to be a significant factor in favor of the plaintiffs' claim of a reasonable belief that Chevron U.S.A. was the master of the employees of this station. The station had been known as "Walker's Chevron" long before the decision to incorporate had been made. The plaintiffs next advance an argument that, given slightly altered circumstances, might have proven persuasive. The argument deals with a campaign designed to encourage Chevron customers to utilize the service facilities of their dealers in addition to purchasing Chevron products. It is in the area of advertising that some courts have found that major oil companies, already perilously close to broad liability by reason of what appears to be rather than what really is, have occasionally gone over the precipice. See, e.g., Gizzi v. Texaco Inc., 437 F.2d 308 (3rd Cir.1971) (national advertising slogan "You can trust your car to the man who wears the star" in addition to usual indicia of branded station); Chevron Oil Company v. Sutton, 85 N.M. 679, 515 P.2d 1283 (1973) (Chevron advertised in telephone directory that its repairmen were skillful). The advertising program involved in the case before us was Chevron U.S.A.'s "We Care" program. Initiated in 1976, it provided to station owners, at a modest cost, a package of materials for display and distribution. Known as a "point-of-sale" program, it was apparently not accompanied by any national or local media advertising. Central to the "We Care" program was a dealer-customer pledge, framed for posting in the station, which read as follows: WE CARE ... for you, our customer for your comfort for your safety for your economy! If at any time our service slips, remind us, because we're working hard to prove to you ... WE CARE! This station is dedicated to this attitude and we want to take care of your car for you, properly and efficiently, so you are happy, safe and comfortable! Give us a try or tell us when we miss the mark, so we can keep up our promise ... WE CARE! The package also contained a two foot by three foot double-faced pump island sign, designed to contain a series of point-of-sale messages during the year; a large, double-faced pole sign; window signs; pressure sensitive decals; cards and "We Care" pens for distribution to customers; and, a Chevron car care guide. It is a fair inference that Walker's Chevron participated in this program, but the record does not indicate the extent of its participation. Nine years later, when this incident occurred, the only visible remnants of the program were decals bearing only the words "We Care" and the Chevron hallmark. These were located on the poles supporting the canopy over the service island, on the desk in the office, and on a service bay door. There is no suggestion in this record that Dr. Lesch or his wife ever saw any of the "We Care" promotional materials except the decals, or that these decals conveyed a message to them different in kind from that generally conveyed by the other Chevron insignia prominently displayed throughout the station. In short, the presence of the "We Care" decals under the particular circumstances present here does nothing to bolster the case of reasonable reliance. Dr. Lesch also sought to prove his reasonable reliance on the involvement of Chevron U.S.A. with Walker's Chevron by referring to a conversation he had in 1980 or 1981 with Benny Walker, son of Ben Walker. At the time of this conversation, Ben Walker had died, and his son had become an owner of the business.[7] Dr. Lesch said that he had always had the greatest respect for the integrity and mechanical ability of Ben Walker. He knew, however, that Benny Walker did not have his father's mechanical ability. For this reason, and because he was experiencing some difficulties with a vehicle that Weeks was working on for him, he inquired of Benny Walker concerning Weeks's experience and ability. He related the conversation as follows: A. Mr. Lloyd Creighton, one of the owners, mentioned to me when I inquired as to it must have been shortly after Mr. Walker passed away, and I had my son's old '67 Valiant out to Walker's to have some engine problems, that we took it back once or twice, and Mr. Weeks was working on it, and there were some problems that kept recurring. And I asked Mr. Creighton, I said, not knowing that much about Mr. Weeks at the time, and having to adjust to new mechanics, after having years of faith in Mr. Walker, I had mentioned, questioning his ability, is he a good mechanic, or does he know what he's doing. And his answer was, oh, yes, he is sent to courses or he goes to courses. And by this I assumed or believed that this was a strong implication that he did indeed attend refresher courses or modernization courses, whatever, that were perhaps given by a national organization, most likely the one his gas station was affiliated with by its logo. Q. Did he tell you which organization he went to these courses? A. No. He said, oh, yes, he's a good mechanic, he regularly is sent to, or has to go to, not as if it was his own volition, as if it was a requirement. So, I felt much more secure at that point in time, knowing that there were requirements or standards to be met by the employees. Dr. Lesch said that he inferred from that conversation that Walker's Chevron was "being backed up by the major concern of Chevron." The conversation does not support the inference. There was nothing in the answer given by Creighton that involved Chevron.[8] Moreover, if Dr. Lesch was misled, it was not by any representation of Chevron U.S.A., and it is the manifestations of the party to be charged that are significant in this analysis. See Restatement (Second) of Agency, supra at § 267; Note, Theories of Liability for Retail Franchisors: A Theme in Four Variations, 39 Md.L.Rev. 264, 280 (1979). In assessing the reasonableness of any reliance claimed by the Lesches, we also consider the history of the Lesches' dealings with the Walkers. Dr. Lesch began dealing with Ben Walker in 1959, when Walker owned the Sinclair branded service station business on Rock Spring Road. As noted above, Dr. Lesch held in high regard Ben Walker's mechanical ability and personal integrity. As a result, with the exception of warranty work on new vehicles, he had all of his automobiles serviced exclusively at Ben Walker's station. When Ben Walker moved his business to the Conowingo Road station, Dr. Lesch followed him. When Ben Walker changed from the Sinclair station to a BP station, and later from a BP station to a Chevron station, Dr. Lesch stayed with him. Dr. Lesch knew that Ben Walker owned the business at that time and recognized also that Chevron did not employ Ben Walker. In describing the time of the transition from BP to Chevron, Dr. Lesch testified: When his British Petroleum station became a part of the Chevron system. Or Chevron was the one who, I can't say employed him, but was the organizational head, or his supplier of gasoline and gasoline-related products. (emphasis added). After Ben Walker's death in 1980, Dr. Lesch knew that the business continued to be privately owned.[9] He described Lloyd Creighton as "a part owner of the station." The national product branding that existed at Walker's Chevron in 1985 differed very little from that which we found to exist in B.P. Oil Corp. v. Mabe, supra. Here, as there, we conclude that the reasonable inference that may be drawn from such indicia is that products of the featured national oil producer are sold at that station. The problem presented by a factual situation of this kind was well stated in an article dealing with vicarious liability appearing in the Yale Law Journal: The negligent repair cases pose somewhat more difficult issues. Certainly, the mere display of brand-name petroleum products hardly constitutes a representation about the skill of an auto mechanic. It may, however, lead a few customers to believe that the financial resources of the oil company are available to satisfy the judgment in the event of faulty repairs, or even that the mechanic has received some training from the oil company. Whether such beliefs are reasonable, however, is another question. Just as it is inefficient to allow sellers to deceive buyers, it is in general inefficient to impose liability on sellers for illogical or unreasonable beliefs of buyers. To do so would impose costs on sellers that are attributable to buyers' unpredicable idiosyncrasies, and would thereby lead to higher prices and to a smaller scale of operation with no attendant loss-avoidance benefits. Thus, the requirement of reasonable or justifiable reliance in the apparent authority rule is efficient, and it is certainly questionable whether the mere display of brand name logos and products at a service station constitutes a reasonable basis for any specific customer beliefs about the skill or financial status of the enterprise and its employees. (footnote omitted). A. Sykes, The Economics of Vicarious Liability, 93 Yale L.J. 1231, 1277 (1984). It was not reasonable for the Lesches to conclude that Chevron owned or operated the station, or that it so controlled the employees of the station so as to be considered their master, and therefore responsible for their negligence. The facts of this case, viewed in light most favorable to the plaintiffs, do not support the imposition of vicarious liability against Chevron U.S.A. JUDGMENT OF THE COURT OF SPECIAL APPEALS REVERSED; CASE REMANDED TO THAT COURT WITH INSTRUCTIONS TO AFFIRM THE JUDGMENT OF THE CIRCUIT COURT FOR HARFORD COUNTY; COSTS IN THIS COURT AND IN THE COURT OF SPECIAL APPEALS TO BE PAID BY RESPONDENTS. NOTES [*] Blackwell, J., now retired, participated in the hearing and conference of this case while an active member of this Court but did not participate in the decision and adoption of this opinion. [1] A "jobber" is an individual or corporation who purchases gasoline products from a wholesaler for resale to a dealer. See Maryland Code (1975, 1983 Repl.Vol.) § 11-301(h) of the Commercial Law Article. [2] Walker's Chevron sold other automotive products that were neither manufactured nor sold by Chevron U.S.A., Inc. [3] The agreement defined "insignia" as "trademarks, service marks, trade names, color schemes and service station designs." [4] Although often spoken of interchangeably, and in some factual situations indistinguishable in effect, the concepts of apparent agency and agency by estoppel are somewhat different. See Medical Mut. Liab. v. Mutual Fire, 37 Md. App. 706, 721, 379 A.2d 739 (1977); Restatement (Second) of Agency, Comment d to § 8 (1958). [5] The Lesches signed credit card slips that bore the name "Chevron U.S.A., Inc.", and the Chevron hallmark. They were billed by, and made payments to, First Omni Bank, through which their VISA card was issued. [6] See Oberlin v. Marlin American Corp., 596 F.2d 1322, 1327 (7th Cir.1979), discussing the requirements of the Lanham Act, 15 U.S.C. §§ 1051 et seq. [7] Ben Walker died in 1980. His wife and son incorporated the business that year, and conveyed an ownership interest to Lloyd Creighton, who was also a manager at the station. [8] The record discloses that Weeks had approximately 23 years experience as a mechanic. He had attended schools given by Citgo and Mercedes-Benz, as well as seminars given by various product suppliers. He was certified in various mechanical specialities by the National Institute of Automotive Service Excellence. He had never attended a school given by Chevron, nor was he aware of any such schools. [9] Because the record clearly demonstrates that Dr. Lesch was aware that Walker Chevron was privately owned and operated, we need not consider Chevron U.S.A.'s argument that because all persons are presumed to know the law, and because Maryland law prohibits operation of a retail service station by a producer or refiner of petroleum products, Maryland Code (1957, 1988 Repl.Vol.) Art. 56, § 157E, all consumers must be charged with knowledge that Chevron did not operate the station.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1526983/	549 S.W.2d 117 (1977) Leevert AIKENS, Movant-Appellant, v. STATE of Missouri, Respondent. No. 38179. Missouri Court of Appeals, St. Louis District, Division One. February 15, 1977. Motion for Rehearing or Transfer Denied March 15, 1977. Application to Transfer Denied May 10, 1977. 119 Robert C. Babione, Public Defender, Robert G. O'Blennis, Asst. Public Defender, St. Louis, for movant-appellant. John D. Ashcroft, Atty. Gen., Preston Dean, W. Mitchell Elliott, Asst. Attys. Gen., Jefferson City, George A. Peach, Circuit Atty., Thomas M. Daly, Asst. Circuit Atty., St. Louis, for respondent. PER CURIAM. Appellant, Leevert Aikens, appeals from an order of the circuit court of the City of St. Louis entered on May 18, 1976, overruling his motion to vacate sentence filed pursuant to Rule 27.26 V.A.M.R. In 1970 appellant was found guilty of the offense of rape and was sentenced under the second offender act to twenty years in the department of corrections. The conviction was affirmed by the Supreme Court. State v. Aikens, 473 S.W.2d 746 (Mo. 1971). On October 21, 1975, appellant filed his pro se motion to vacate and set aside this conviction pursuant to Rule 27.26. The motion was amended on the date of the evidentiary hearing by court-appointed counsel, the public defender. Although alleging several grounds[1] not pertinent here, the thrust of the motion and the point briefed on appeal is that movant-appellant was denied effective assistance of trial counsel because his retained attorney failed to "adequately investigate" the facts of the case and "failed to interview or produce witnesses for the defendant." Appellant complains on this appeal that he saw his attorney retained by his mother only once before the trial of his cause, some four or five months prior to trial, and that the attorney failed to investigate the case and interview and produce two witnesses for the defense. On the day of trial, appellant informed counsel that he wanted two individuals to testify for hima woman, Mrs. Eltha Harris, and "[a] man by the name of George, I never did find his last name out." On the evidentiary hearing on the motion, movant testified: "Well, my lawyer he never did reject anything that was going down in my trial because he wasn't aware of a lot of things because he didn't have any time to investigate it." [2] On the evidentiary hearing, movant testified that his mother, his wife and his brother testified for him in the original trial, but that Mrs. Harris and George did not. Appellant indicated that these two missing witnesses "could have spotted me from the time I was left and came on the scene when the crime was." His mother and other witnesses, he contends, could only account for a time earlier than the offense. Movant did not know the phone number of "George," knew where he lived, but did not tell counsel where he worked. He testified that he told his counsel about "George" but counsel stated that "he didn't need him because as long as I had my mother and wife and sister and them that was enough." When questioned by the court, appellant said he did not know the addresses of the two witnesses but "I could find the house." He testified that he informed counsel about Mrs. Harris and told him where she lived but that "he told me I had enough witnesses as long as I had my mother and my wife and my brother and sister to say I was at home . . . I didn't need the rest of them." He testified that on the evening of the offense he "went by this woman's, Eltha Harris. She owed me ten dollars and 120 told me to come by and pick it up so I went by there, and she wasn't at home, and her kids were there. . . ." He then left Mrs. Harris' house and "went over to" George who was getting out of his car. George asked him, "`Where you going,'" and movant replied, "`I am going to East St. Louis.'" George dropped him off and he saw a woman, the victim, "standing like she was in a trance" in this alley, and when the police "screamed and said `What are you doing back in the alley?' [s]he kind of woke up `cause of the lights in the alley flashing, . . . I broke and ran." The only other witness at the evidentiary hearing was the assistant circuit attorney who tried the cause. He testified that defense counsel "did everything he could with what he had." On May 18, 1976, the trial court made its findings of fact and conclusions of law. The court found that the appellant did not meet Mrs. Harris that evening of the rape, since she was not at home, and that appellant did not know the address, telephone number, or the last name of "George." The court concluded that (1) the movant "failed by a preponderance of the evidence to clearly demonstrate [that] the actions of counsel went beyond errors of judgment on trial strategy and were of such character as to result in substantial deprivation of Movant's right to a fair trial. Myrick v. State, 507 S.W.2d 42 ([Mo.App.] 1974)," and (2) the movant failed to establish by a preponderance of the evidence that defense counsel failed to make an effort to locate the witnesses or that the "witnesses were essential to the Defendant-Movant's case. Sykes v. State, 458 S.W.2d 319 ([Mo.] 1970)." The court denied the relief sought in the motion. Movant appealed. In reviewing the judgment of the trial court denying the appellant's Rule 27.26 motion, we bear in mind the basic principles of such review. The burden of proof to establish the charge of ineffective assistance of counsel is on the movant. This burden is not met unless it is clearly demonstrated that the acts of counsel went beyond errors of judgment or trial strategy and were of such character as to result in a substantial deprivation of movant's right to a fair trial. McQueen v. State, 475 S.W.2d 111 (Mo. banc 1971); Nelson v. State, 537 S.W.2d 689 (Mo.App. 1976). We will not disturb the findings, conclusions and judgment of the trial court unless the same are clearly erroneous. Rule 27.26(j). Under well-settled principles relating to a motion filed pursuant to Rule 27.26 summarized in Nelson v. State, supra, 537 S.W.2d at 693, we hold that the court did not err in denying the relief sought in appellant's motion to vacate. Upon a review of the trial court's order, the order is not "clearly erroneous." Rule 27.26(j). A finding is clearly erroneous when the reviewing court is left with the definite and firm conviction that a mistake has been committed. The main thrust of appellant's contention is that counsel did not adequately investigate his case prior to trial and failed, although requested to do so, to interview and produce two witnesses at trial who allegedly would have aided his alibi defense, hence, counsel was ineffective. There is no question that an accused is entitled to effective assistance of counsel. The test is whether the efforts of counsel and the representation by the attorney have reached a level of adequacy so that the defendant had a fair trial. Hall v. State, 496 S.W.2d 300, 303 (Mo.App. 1973); McQueen v. Swenson, 498 F.2d 207 (8th Cir. 1974). As stated in Anderson v. State, 487 S.W.2d 455, 460 (Mo. 1972), [quoting Robinson v. United States, 448 F.2d 1255, 1256 (8th Cir. 1971)]: ". . . `In order to assert a Sixth Amendment infirmity on this ground, the circumstances must demonstrate that which amounts to a lawyer's deliberate abdication of this ethical duty to his client. There must be such conscious conduct as to render pretextual an attorney's legal obligation to fairly represent the defendant.'" But, in order to show ineffectiveness, a movant has a heavy burden to carry. 121 Counsel is vested with broad latitude and he is not to be adjudged ineffective by reason of what, in retrospect, appears to be errors of judgment or trial strategy which did not produce an acquittal or some other desired result. Lahmann v. State, 509 S.W.2d 791, 794 (Mo.App. 1974). To find ineffectiveness, the acts of trial counsel must have been of such character as to result in a substantial deprivation of the movant's right to a fair trial. Nelson v. State, supra, 537 S.W.2d at 695. Appellant complains that counsel did not adequately investigate his case prior to trial and failed to produce two witnesses. We have never laid down a hard and fast rule which requires counsel to conduct an investigation and interviews of witnesses in all cases and under all circumstances. Hall v. State, supra, 496 S.W.2d at 304; McQueen v. State, supra, 475 S.W.2d at 114. When counsel does not interview or produce certain witnesses, it must be shown that the evidence which could have been uncovered by reasonable investigation would have proved helpful to the defendant, McQueen v. Swenson, supra, 498 F.2d at 220, or ". . would have turned up anything helpful, something `which would have aided or improved the appellant's position.' . . ." Curry v. State, 504 S.W.2d 97, 99 (Mo. 1974). The record here reveals that there were several witnesses who testified in the original proceeding. As to the other two witnesses, there is no clear showing that they would have proved helpful or would have turned up something which would have aided or improved appellant's position. Mrs. Harris was not at home when appellant stated that he went to her house to recover the repayment of a loan, and appellant did not know "George," his phone number, his last name or the address. At trial when appellant mentioned to counsel the lack of these two witnesses, counsel indicated that as long as he had appellant's mother, brother and wife to attempt to establish the defense of alibi that was sufficient. Under all these circumstances, we cannot conclude that trial counsel was "ineffective" in not interviewing or producing these two witnesses. See Sykes v. State, supra 458 S.W.2d at 320if counsel had investigated there probably would have been somebody "`around there'" who would have seen the occurrence. Defense counsel has wide latitude in the conduct of a defense. Trial strategy is an inadequate basis for an attack on the competency of counsel. Coles v. State, supra, 495 S.W.2d at 687; Nelson v. State, supra, 537 S.W.2d at 695. Appellant relies on Thomas v. State, 516 S.W.2d 761 (Mo.App. 1974). In Thomas, counsel for the movant made no effort to interview persons who might establish or corroborate a defense because he had earlier prevailed on a motion to suppress evidence. The court held that counsel failed to perform his duty to investigate and prepare his client's cause having been given information that movant was working on the date of the offense for a cab company and was given names of certain witnesses. The court reversed and remanded for the purpose of having a hearing on the issue of whether prejudice flowed to the movant by reason of the failure of counsel to make a reasonable investigation. Thomas, supra, is not controlling here. Counsel there made no effort to contact witnesses whose names had been given him and who could establish that he could not have been at the scene of the robbery; counsel was content to rely only on previous motions filed. The cause here was not a case, as in Thomas, of "failure of counsel to pursue the obvious line of investigation of the alibi defense but rather to rely upon his pretrial motions and forensic courtroom abilities. . . ." State v. Thomas, supra, 516 S.W.2d at 767. Here witnesses were produced. According to movant's own testimony, Mrs. Harris was not at home and therefore could not have corroborated appellant's alibi. There is no showing in this record that the other witness, "George," would have proved helpful to the defense even if his last name, phone number or address had been furnished counsel for the defense. Without this basic information we cannot conclude that counsel was ineffective in 122 failing to locate "George" or produce him at trial. We conclude, therefore, that the trial court was not clearly erroneous in denying movant's motion to vacate sentence. We have carefully studied the transcript on this motion and have examined the transcript in the original trial, the trial court's findings of fact and conclusions of law and the briefs of the parties and the authorities therein. We conclude that the judgment of the trial court was not clearly erroneous and hence affirm the judgment. The judgment is affirmed. All the Judges concur. NOTES [1] The motion alleged that the state suppressed favorable evidence of laboratory results of his clothes which were taken from him when arrested, and that there was no basis for the Second Offender Act, § 556.280, since he was without counsel in Florida. At the evidentiary hearing, the laboratory report was introduced which showed nothing of evidential value, and the trial court found that the prior conviction was based upon an earlier Missouri, not a Florida, conviction. These matters were abandoned on this appeal. Since appellant raised these issues in the trial court and received an adverse ruling on them, the failure to appeal these issues causes the judgment of the trial court to be final as to them. Coles v. State 495 S.W.2d 685, 686 (Mo.App. 1973); Myrick v. State, 507 S.W.2d 42, 43 (Mo.App. 1974). [2] He meant by this: "Well, because he said now, let's go, everything was going wild, and I could, I could see that he just wasn't doing his job defending me."	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1526984/	119 B.R. 465 (1990) In re Yamid and Mallely ASSAF. Bankruptcy No. 86-1417S, Misc. No. 90-0249. United States District Court, E.D. Pennsylvania. June 15, 1990. MEMORANDUM OF DECISION McGLYNN, District Judge. This is an appeal from an order of the Bankruptcy Court imposing sanctions on an attorney for contempt by reason of his failure to comply with previous orders of the court. Review by this court is de novo.[1] 466 On March 25, 1986, Charles F. Volz, Jr., Esquire filed a joint Chapter 13 bankruptcy case on behalf of the above named debtors. A plan of Reorganization was confirmed on September 2, 1986. A proof of claim as a secured creditor (mortgagee) was filed on behalf of Harleysville Savings Association. On July 28, 1988, Harleysville filed its first motion for relief from the automatic stay in order to foreclose upon the debtors' home at 1719 Leon Drive, Hatfield, Pennsylvania. No response was filed by the debtors, either personally or by counsel, and an Order granting Harleysville relief from the automatic stay was entered on August 30, 1988. On January 18, 1989, the debtors, through their counsel, Volz, filed a motion seeking to reinstate the automatic stay. The matter was reported settled on February 16, 1989, but no stipulation to that effect was forthcoming. Accordingly, the bankruptcy court entered an Order on April 24, 1989, scheduling a hearing on the motion to reinstate for May 2, 1989. Volz failed to appear at the hearing on May 2, 1989. The bankruptcy court entered an Order under date of May 3, 1989 directing Volz to appear at the continued hearing on May 9, 1989. Volz appeared, submitted a stipulation of settlement pursuant to which the bankruptcy court entered an order reinstating the stay on June 6, 1989. On December 20, 1989, Harleysville filed a second motion for relief from the automatic stay in order to foreclose on the mortgaged property. A hearing on this motion was scheduled for January 18, 1990. On January 16, 1990, the wife-debtor filed an Answer to the motion pro se, stating that the husband-debtor had left the home, that she desired to oppose Harleysville's motion but that Volz had refused to respond to her requests for legal assistance. Volz failed to appear at the January 18, 1990 hearing and on January 19, 1990, the bankruptcy court entered an Order directing Volz to appear at the continued hearing scheduled for February 1, 1990 to represent the wife-debtor and to show cause why some or all of the fees paid to him by the debtor should not be refunded. Without explanation, Volz failed to appear at the February 1, 1990 hearing. The wife-debtor did appear and attempted to represent herself. On February 5, 1990, the court entered an Order (a) rescheduling a hearing on Harleysville's motion for March 20, 1990, (b) directing Volz to repay the $645 in fees that the debtors had paid to Volz for his service, said sum to be remitted to Harleysville as a credit against the debtors' mortgage arrearages and (c) to consider further sanctions against Volz "in light of his continuing pattern of ignoring the orders" of the bankruptcy court. Volz failed to appear at the March 20 hearing and failed to remit $645 to Harleysville as ordered. The bankruptcy court found that Volz's conduct manifested a blatant disregard for the directives of the court and impeded the court in its efforts to adjudicate Harleysville's motion. Based on these findings, the bankruptcy court, on March 19, 1990, entered the following Order: 1. Charles E. Volz, Jr. ("Volz") is forthwith suspended from the practice of law in the Bankruptcy Court for the Eastern District of Pennsylvania. 2. Volz shall be reinstated to practice if and only if he pays the sum of $645 to the Deputy, which sum, if and when paid, shall be remitted by the Deputy to Harleysville for application to the Debtors' mortgage account. 3. Volz is directed to submit to this court, on or before April 12, 1990, a list of all open cases in which he represents any parties in this court, including the full caption and bankruptcy number of the case, the parties represented, the fee chargeable to the client, and the amount paid to him on account of that fee to date. 4. A further hearing is scheduled at the following date, time and place to determine what further penalties for civil contempt and for criminal contempt should be imposed upon Volz and what report of the facts set forth herein must be submitted to the Disciplinary 467 Board of the Supreme Court of Pennsylvania, the Chief Judges of the District Court for the Eastern District of Pennsylvania and the Court of Appeals for the Third Circuit, and the Office of the United States Attorney pursuant to Canon 3(B)(3) of the Code of Judicial Conduct as a result of the actions described herein: Tuesday, APRIL 24, 1990, at 10:00 A.M. in Courtroom No. 2 (Room 3718), United States Court House, 601 Market Street, Philadelphia, PA 19106. Acting in accordance with Bankruptcy Rule 9020(e), Volz filed objections to the order of contempt in which he conceded most of the historical facts; i.e., that he never filed a motion to withdraw as counsel and that he did not appear at the hearings and that he did not remit the $645 as directed by the court. He defends his conduct on the grounds that the $645 fee was previously confirmed by the court as reasonable, that he was relieved of his obligation to represent the wife-debtor by her action in entering an appearance pro se and by her lack of cooperation and bad faith, and any imposition on the court was the result of wife-debtor's conduct, and not counsel's. It seems to me that these contentions should have been placed before the court at the show-cause hearing on February 1, 1990 which was scheduled for that specific purpose. Volz failed to appear at that hearing despite being ordered to do so. He had a second opportunity to present his side of the case at the hearing which took place on March 20, 1990 and again he failed to attend the hearing. In any event, his clients' lack of cooperation does not excuse his failure to comply with the direct orders of the court. DISCUSSION The bankruptcy court has authority to issue any order, process or judgment to carry out the provisions of Title 11. 11 U.S.C. § 105(a). The bankruptcy court has authority to take any action or make any determination necessary or appropriate to enforce or implement orders and rules or to prevent an abuse of process and to act sua sponte when it is issuing orders or taking any action. Id. "One of the inherent powers of any federal court is the admission and discipline of attorneys practicing before it." In re Corn Derivatives Antitrust Litigation, 748 F.2d 157, 160 (3rd Cir.1984), cert. denied, 472 U.S. 1008, 105 S. Ct. 2702, 86 L. Ed. 2d 718 (1985). Mitchell v. Hilaire, 901 F.2d 1179, 1188 (3rd Cir. 1990) (Attorney who filed an appearance in 3rd Circuit must conduct himself in accordance with the rules and orders of the `3rd Circuit' and is subject to discipline if the rules or orders are not complied with). See also In re Abrams, 521 F.2d 1094, 1099, 1101 (3rd Cir.1975) cert. denied sub nom., United States District Court v. Abrams, 423 U.S. 1038, 96 S. Ct. 574, 46 L. Ed. 2d 413 (1975). There is ample authority for a bankruptcy court to use civil contempt to enforce its orders and to discipline attorneys before it. Civil contempt orders entered by a bankruptcy judge are constitutional. In re Stephen W. Grosse, P.C., 84 B.R. 377, 387 (Bankr.E.D.Pa.1988), aff'd, 96 B.R. 29, 32 (E.D.Pa.1989) (Fullam, Ch.J), aff'd mem. sub nom. Dubin v. Jakobowski, 879 F.2d 856 (3rd Cir.1989), cert. denied, ___ U.S. ___, 110 S. Ct. 501, 107 L. Ed. 2d 504 (1989). The sanction ordered here was a suspension of practice in the bankruptcy court until Volz remits to the mortgagee the $645 paid to him for legal services by the debtor. Thus the contempt is civil rather than criminal contempt because it is being used to coerce Volz into compliance with the court order rather than punish him. In re Clark, 91 B.R. 324, 337 (Bankr. E.D.Pa.1988). See, also Gregory v. Depte, 896 F.2d 31, 34 (3rd Cir.1990). [Civil contempt must coerce or compensate.] Hicks v. Feiock, 485 U.S. 624, 632-34, 108 S. Ct. 1423, 1429-32, 99 L. Ed. 2d 721, 732-33 (1988). Numerous cases support the authority of bankruptcy courts to suspend or disbar an attorney as a sanction for contempt. See D.H. Overmyer Co., Inc. v. Robson, 750 F.2d 31, 33 (6th Cir.1984) (attorney admitted pro hoc vice suspended for failing to comply with court rule regarding *468 disclosure of conflicts); In re Pearson, 108 B.R. 804 (Bankr.S.D.Fla.1989) (attorney suspended pending completion of continuing legal education program for failing to file a memorandum requested by court); In re Heard, 106 B.R. 481, 484 (Bankr.N.D. Ohio 1989) (attorney suspended for one year for making a series of bad faith filings on his own behalf); In re Nesom, 76 B.R. 101, 102 (Bankr.N.D.Tex.1987) (attorney suspended from practice for 60 days for forging debtor's signature on schedules); In re Derryberry, 72 B.R. 874, 876-86 (Bankr.N.D.Ohio 1987) (Lawyer previously convicted of embezzlement of funds and perjury in connection with administration of bankruptcy court estates was disbarred); In re Printree, Ltd., 40 B.R. 131, 133 (Bankr.S.D.N.Y.1984) (attorney could be disbarred for submitting a bad check) (dictum); and In re Lowe, 18 B.R. 26 (Bankr.N.D.Ga.1982); and 18 B.R. 20 (Bankr.N.D.Ga.1981) (Lawyer temporarily suspended and then disbarred from practice for developing office procedures in which a non-lawyer was delegated full responsibilities to handle his bankruptcy cases). The order of the Bankruptcy Court will be affirmed. NOTES [1] The defendant Volz made objections within ten days of service of the contempt order in accordance with Bankruptcy Rule 9020(c). Bankruptcy Rule 9020(c) provides for the contempt order to be reviewed in accordance with Bankruptcy Rule 9033 if objections are made within ten days of service of the contempt order. Bankruptcy Rule 9033(d) provides for a de novo review.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527016/	119 B.R. 80 (1990) RENT-A-TAINMENT, INC./MAIL N' THINGS, Appellant, v. UNITED STATES of America, on Behalf of its Agency, the UNITED STATES POSTAL SERVICE, Appellee. Civ. A. No. 90-15-NN. United States District Court, E.D. Virginia, Newport News Division. May 23, 1990. 81 Michael Patrick Murray, Leslie W. Lickstein, Falls Church, Va., for appellant. Anita K. Henry, Asst. U.S. Atty., U.S. Dist. Court, Norfolk, Va., for appellee. OPINION AND ORDER REBECCA BEACH SMITH, Bankruptcy Judge. This matter is before the court on appeal from a final order, dated January 2, 1990, of the United States Bankruptcy Court for the Eastern District of Virginia. The appellant contends that the bankruptcy court erred in granting summary judgment to the United States Postal Service (hereinafter referred to as "Postal Service"). The bankruptcy court held that the Postal Service was exercising its police and regulatory powers in attempting to terminate its contract with appellant and therefore was not subject to the automatic stay pursuant to 11 U.S.C. § 362(b)(4). Because a material fact is in dispute, the case is being remanded to the bankruptcy court with directions to determine the facts in issue and to then evaluate whether the Postal Service is exempt from the automatic stay pursuant to Section 362(b)(4) in light of those findings and the law set forth in this Opinion. A. Background On March 10, 1988, the Postal Service awarded Rent-A-Tainment, Inc./Mail N' Things (hereinafter referred to as "debtor") a contract to operate a "contract postal unit" at the Oyster Point Business Park in Newport News, Virginia. The debtor's sole compensation for operating the postal unit would be a nominal annual fee of $100. A contract postal unit is a post office. With the exception that it is operated by persons who are not Postal Service employees, a contract postal unit offers the same services as that of an ordinary post office. The postal unit operated by the debtor provided several services, including: sale of stamps, stationery, and money orders; handling of domestic mail; and handling of first class international mail. In December, 1988, Newport News Postmaster Walter Neilson received a complaint from a customer who alleged that a package she had mailed via United States Mail at the postal unit operated by the debtor was delivered instead by United Parcel Service (hereinafter referred to as "UPS"). As a result of this complaint, the United States Postal Inspection Service conducted an investigation which revealed that the debtor was misappropriating Postal Service funds and committing fraudulent acts relating to its contract with the Postal Service. Specifically, the investigative report indicated that the debtor would charge customers the Postal Service rate to mail packages but it would instead send them with UPS at a lower rate and keep the difference between the amount paid by the customer and the amount charged by UPS. Postmaster Neilson received the results of this report in May, 1989. By letter dated May 30, 1989, Postmaster Neilson advised the debtor that their contractual 82 agreement was being withdrawn and cancelled due to the irregularities discovered in the investigation. On May 30, 1989, the Postal Service physically closed down the postal unit by removing all Postal Service property from the debtor's premises. The actions of the Postal Service on May 30, 1989, did not legally terminate the agreement between the parties, however, because the contract provided that only the contracting officer, Mr. Keith Utley, Jr., could effectively terminate the contract on behalf of the Postal Service. On May 31, 1989, the debtor sought a temporary restraining order to prevent termination of the contract by the Postal Service. The debtor filed its motion in bankruptcy court because it had filed a petition under Chapter 11 of the Bankruptcy Code, 11 U.S.C. §§ 101 et seq., on March 9, 1989. Since the contract stated that any claims and disputes must be resolved pursuant to the Contract Disputes Act of 1978, the bankruptcy court concluded that it lacked jurisdiction to address the claim and it dismissed the debtor's motion. In re Rent-A-Tainment, Inc./Mail N' Things, Bankruptcy Case No. 89-00292-NN-B, Order at 2 (June 14, 1989). On June 30, 1989, the debtor filed an administrative claim with the contracting officer, pursuant to the requirements of the Contract Disputes Act of 1978, alleging that it should be compensated due to the Postal Service's attempted termination of the contract. The debtor claims that the postal unit attracted "substantial numbers" of customers to its place of business generating three hundred dollars per day in income over and above normal sales. Rent-A-Tainment, Inc./Mail N' Things v. United States, Civil Action No. 90-15-NN, Opening Brief of Appellant at 5 (Mar. 27, 1990) (hereinafter referred to as "Appellant's Brief"). On September 25, 1989, the Postal Service moved for relief of the bankruptcy court's automatic stay pursuant to the debtor's pending Chapter 11 proceeding, in order that the Postal Service could properly terminate the contract. At that time, the Postal Service alleged that its actions on May 30, 1989, were excepted from the automatic stay pursuant to 11 U.S.C. § 362(b)(4) which permits the commencement or the continuation of an action by a governmental unit to enforce the governmental unit's "police or regulatory powers" in spite of an automatic stay. The Postal Service explained that in order for the Postal Service Board of Contract Appeals to assume jurisdiction of the debtor's June 30, 1989, administrative claim, the Postal Service would need to properly terminate the contract in accordance with the applicable contractual provisions. On October 2, 1989, the debtor brought a claim for damages in the bankruptcy court, pursuant to 11 U.S.C. § 362(h), against the Postal Service for allegedly violating the automatic stay provision. In response, on October 23, 1989, the Postal Service moved for summary judgment on its claim of relief from the stay and for dismissal of the debtor's claim for damages. The bankruptcy court addressed the Postal Service's September 25th motion and the debtor's October 2nd motion at a hearing conducted on November 22, 1989. At the November 22nd hearing, the bankruptcy court advised that "the basic issue [in this case] is whether relief from stay is even required." In re Rent-A-Tainment, Inc./Mail N' Things, Bankruptcy Case No. 89-00292-NN-B, Transcript of Proceedings at 15 (Nov. 22, 1989) (hereinafter referred to as "Tr."). It concluded that the Postal Service is a legitimate monopoly, that the Postal Service was exercising its police and regulatory powers in its dealings with the debtor and, therefore, that relief from the stay was not required, that no violation of the stay had occurred, and that there were no grounds for damages. Tr. at 16. The court stated: "I just think it's a police and regulatory matter." Tr. at 16. On January 2, 1990, the bankruptcy court entered a final order denying the "damages sought by the debtor pursuant to 11 U.S.C. 362(h)" and concluding "that the attempted termination of the applicable contract by Postmaster Walter Neilson on or about May 30, 1989 was not subject to the automatic stay of this Court." In re Rent-A-Tainment, Inc./Mail N' Things, 83 Bankruptcy Case No. 89-00292-NN-B, Order at 2 (Jan. 2, 1990). No reasons for this conclusion were stated in the Order, and, in fact, the reasons that followed in the paragraph were specifically deleted by the bankruptcy court. Id. The debtor then noted this appeal from the January 2, 1990, final order of the bankruptcy court, which in effect granted the Postal Service's Motion for Summary Judgment and Motion to Dismiss filed October 23, 1989, thereby giving the Postal Service relief from the automatic stay, and denied the debtor's motion for damages for violation of the automatic stay filed October 2, 1989. B. Legal Analysis Upon the debtor's filing of its petition under Chapter 11, the automatic stay provisions of Section 362 of the Bankruptcy Code, 11 U.S.C. § 362, went into effect by operation of law. Section 362(a)(1) automatically stays the commencement of any action or proceeding against the debtor that could have been commenced before the petition was filed. The parties do not dispute that the Postal Service's actions in seeking to terminate its contract with the debtor are covered by the language of Section 362(a)(1). The Postal Service asserts, however, that its actions are excepted from the automatic stay by Section 362(b)(4). Section 362(b)(4) provides that the filing of a petition in bankruptcy "does not operate as a stay under subsection (a)(1) of this section, of the commencement or continuation of an action or proceeding by a governmental unit to enforce such governmental unit's police or regulatory power." There is no question that the Postal Service is a governmental unit. Thus, the only question raised on appeal is whether the bankruptcy court erred in granting summary judgment on the ground that the Postal Service's May 30, 1989, attempt to terminate its contract with the debtor was an action to enforce its police or regulatory power, thereby excepting the action from the operation of the automatic stay under 11 U.S.C. § 362(b)(4).[1] The court at this juncture does not address, and indeed it would be inappropriate for the court to address, the propriety of the measures taken by the Postal Service to terminate the contract. The bankruptcy court held that it lacked jurisdiction to reach the merits of this claim and any other disputes arising under the contract since the parties agreed to resolve such matters pursuant to the Contract Disputes Act of 1978. In re Rent-A-Tainment, Inc./Mail N' Things, Bankruptcy Case No. 89-00292-NN-B, Order at 2 (June 14, 1989). Neither party has appealed this decision. The courts have applied two similar tests for determining whether action taken by a governmental unit constitutes an exercise of that unit's "police or regulatory powers": the pecuniary purpose test and the public policy test. See, e.g., In re Herr, 28 B.R. 465, 468-69 (Bankr.D.Me.1983). The pecuniary purpose test is based on the following language from the legislative history of this section: [S]ection [362(b)(4)] is intended to be given a narrow construction in order to permit governmental units to pursue actions to protect the public health and safety and not to apply to actions by a governmental unit to protect a pecuniary interest in property of the debtor or property of the estate. 124 Cong.Rec. H11,092 (daily ed. Sept. 28, 1978) (statement of Rep. Edwards), reprinted in 1978 U.S.Code Cong. & Admin. News 5787, 6436, 6444-45. House and Senate reports provide the following guidance for determining which types of governmental actions are excepted: [W]here a governmental unit is suing a debtor to prevent or stop violation of fraud, environmental protection, consumer protection, safety, or similar police or regulatory laws, or attempting to fix damages for violation of such a law, the action or proceeding is not stayed under the automatic stay. 84 S.Rep. No. 989, 95th Cong., 2d Sess. 52, reprinted in 1978 U.S.Code Cong. & Admin.News 5787, 5838; H.R.Rep. No. 595, 95th Cong., 2d Sess. 343, reprinted in 1978 U.S.Code Cong. & Admin.News 5787, 6299. Thus, with respect to the pecuniary purpose test, the court's focus is on whether the governmental action is directed "primarily" to the "protection of the [government's] pecuniary interest in the debtors' property and not to matters of public safety and health." In re State of Missouri, 647 F.2d 768, 776 (8th Cir.1981), cert. denied, 454 U.S. 1162, 102 S. Ct. 1035, 71 L. Ed. 2d 318 (1982); see NLRB v. Edward Cooper Painting, Inc., 804 F.2d 934, 942 (6th Cir.1986); In re Herr, 28 B.R. 465, 468 (Bankr.D.Me.1983); In re Sampson, 17 B.R. 528, 530 (Bankr.D.Conn.1982). Only if the government's actions are motivated primarily by pecuniary concerns is it then subject to the automatic stay. The public policy test, on the other hand, distinguishes between those governmental proceedings which are initiated primarily to further a public policy or interest and those which are initiated primarily to vindicate private rights. In re Dan Hixson Chevrolet Co., 12 B.R. 917, 920 (Bankr.N.D.Tex. 1981). Only governmental action undertaken primarily to further a public policy concern is excepted from the automatic stay pursuant to Section 362(b)(4). It is clear that regardless of which test is applied, courts must engage in a very fact-specific inquiry in order to determine the primary motivation for the governmental unit's actions.[2] Appellant strongly urges this court to reverse the bankruptcy court's decision because the evidence does not support the conclusion that the Postal Service was exercising its police and regulatory powers in attempting to terminate the contract. Further, appellant contends that because the bankruptcy court's decision lacks both specific factual findings and analysis of the tests relevant to this exception, an appellate court cannot effectively review the correctness of the bankruptcy court's decision. During the November 22, 1989 hearing, the bankruptcy court held that relief from the automatic stay was not required and stated the following: I think the basis issue is whether relief from stay is even required. Relief from stay is an equivalent of an injunction. It goes into effect immediately upon the filing of the case. Now, Congress has said the code does provide an exemption. Otherwise, people could use [the automatic stay], as a defense, as a cover, as a cloak to prevent police and regulatory matters, even to stop criminal trials. The question, then, is is this a police and regulatory matter. It's clear, and I think 85 the Court can take judicial notice of the fact that the United States Postal Service has a monopoly on the Postal Service, an official Postal Service of the United States Government. It can, apparently, enter into contracts for agents and others to be a part of that, but this Court is of the opinion that because of the status of that, that basically you do have here a police and a regulatory matter, and that relief from stay is not required to police the granting of Postal Service's and to withhold. . . . I just think it's a police and regulatory matter. It's a good issue that sometimes ought to be settled by a higher court. Tr. at 15-16. Even the Postal Service, while strenuously urging this court to affirm the decision below, concedes that one cannot ascertain from either the bankruptcy court's order of January 2, 1990, or from the record what facts were relied upon by the court to reach its conclusion that the Postal Service was exempt from the stay. Appellee's Brief at 2. The bankruptcy court did not engage in any review on the record of the evidence submitted by the parties and then indicate the material facts not in dispute prior to granting the Postal Service's Motion for Summary Judgment. Nor did the bankruptcy court make any analysis of the legal tests relevant to the exception to the automatic stay. Importantly, there are facts in issue which need to be determined by the bankruptcy court in order to draw legal conclusions in the case. And, the principal conflict between the parties on appeal centers on the Postal Service's reasons for attempting to terminate its contract with the debtor on May 30, 1989. The Postal Service, relying on the affidavits of Postmaster Walter Neilson and Keith Utley, Jr., the contracting officer, asserts that the attempted termination of the underlying contract was to protect the public at large from the fraudulent and criminal activities of the debtor. Appellee's Brief at 19-20. The debtor, relying on the same affidavit of Postmaster Neilson, argues that the Postal Service was motivated instead by a desire to protect postal funds and property. Appellant's Brief at 17. Specifically, Postmaster Neilson, in his affidavit, states: At the time when I sought to terminate the contract between the United States Postal Service and Rent-A-Tainment, Inc., I believed that my actions were justified by the investigative report which I had received, which alluded to conduct that was not in the economic interest of the Postal Service and/or to reported conduct that was fraudulent and/or criminal as reported. In re Rent-A-Tainment, Inc./Mail N' Things, Bankruptcy Case No. 89-00292-NN-B, Affidavit of Postmaster Walter Neilson at 2 (Nov. 18, 1989). Thus, at minimum, this evidence reveals a factual conflict between the parties over whether the Postal Service's primary purpose in attempting to terminate the contract was the prevention of fraud on the American public or the protection of the Postal Service's monetary interests. Under both the pecuniary purpose test and the public policy test, the bankruptcy court had to find that the Postal Service was acting primarily to protect the public interest in order to exempt it from the automatic stay pursuant to Section 362(b)(4). The bankruptcy court, however, made no specific findings and provided no analysis on this essential point. Moreover, the Affidavit of Postmaster Neilson clearly reflects two reasons for the termination of the contract, without any indication of the primary reason for the attempted contract termination, thereby leaving a material fact in dispute which must be resolved by the trial court through further proceedings. As such, summary judgment under Rule 56 of the Federal Rules of Civil Procedure is inappropriate because a material fact is in dispute. Accordingly, it is ORDERED that the bankruptcy court's final order of January 2, 1990, excepting the Postal Service's attempted termination of the applicable contract on May 30, 1989, from the automatic stay pursuant to Section 362(b)(4) be VACATED, and that the case be REMANDED to the bankruptcy court for fact-finding proceedings and disposition in accordance with this Opinion. 86 The Clerk is DIRECTED to send a copy of this Opinion and Order to all counsel and to the bankruptcy court. NOTES [1] The disposition of the other motions before the bankruptcy court, namely the debtor's motion for damages for violation of the stay, and the Postal Service's motion to dismiss the claim for damages all flow from the granting of the Postal Service's motion for summary judgment on its claim for relief from the automatic stay. [2] During oral argument before this court on April 11, 1990, and in its brief, the Postal Service asserted that protection of the public, under either of the tests relevant to this area, does not have to be the sole motivation for a governmental unit's actions just as long as it is one reason for such action. Rent-A-Tainment, Inc./Mail N' Things v. United States, Civil Action No. 90-15-NN, Postal Service's Memorandum in Support of the Bankruptcy Court Decision Reached Below at 16 (Mar. 28, 1990) (hereinafter referred to as "Appellee's Brief"). In support of its argument, the Postal Service relies on two cases which hold that the exception to the automatic stay in Section 362(b)(4) should be construed broadly. See Matter of Commonwealth Oil Refining Co., 805 F.2d 1175, 1184 (5th Cir.1986), cert. denied, 483 U.S. 1005, 107 S. Ct. 3228, 97 L. Ed. 2d 734 (1987) (case law supports court's conclusion that Section 362(b)(4) should be construed broadly and that its application is not limited to only those instances where an urgent public necessity can be shown); Penn Terra Ltd. v. Dept. of Envtl. Resources, 733 F.2d 267, 273 (3d Cir.1984) (in order to prevent the exception to the automatic stay from preempting state laws enacted to protect the public interest, the court found that "the exception to the automatic stay provision contained in subsections 362(b)(4) and (5) should itself be construed broadly, and no unnatural efforts be made to limit its scope."). The Postal Service, however, does not dispute that the weight of authority favors the application of either the pecuniary purpose test or the public policy test in determining the primary impetus for the governmental unit's actions. Appellee's Brief at 16. These tests are consistent with the Postal Service's position that a concern for the public interest does not have to be the exclusive reason for the government's conduct since they require a finding only as to the primary motivation for the government's actions. However, the tests are inconsistent with the Postal Service's position that a desire to protect the public must merely constitute a reason for the government's actions, a position with which this court disagrees.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527040/	118 N.J. 75 (1990) 570 A.2d 429 STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT, v. THOMAS FULLER, A/K/A ANDREW J. DE BRACEY, AND GREGORY LOYER, DEFENDANTS, AND MICHAEL TRAPP, A/K/A ROBERT W. JORDAN, DEFENDANT-APPELLANT. The Supreme Court of New Jersey. Argued January 2, 1990. Decided March 5, 1990. 76 Mordecai Garelick, Assistant Deputy Public Defender, argued the cause for appellant (Alfred A. Slocum, Public Defender, attorney). A. Peter DeMarco, Assistant Prosecutor, argued the cause for respondent (Nicholas L. Bissell, Jr., Somerset County Prosecutor, attorney). 77 Catherine A. Foddai, Deputy Attorney General, argued the cause for amicus curiae Attorney General of New Jersey (Peter N. Perretti, Jr., Attorney General, attorney). The opinion of the Court was delivered by CLIFFORD, J. We granted leave to appeal, 117 N.J. 66, 570 A.2d 429 (1989), to consider whether the bright-line rule of State v. Hartley, 103 N.J. 252, 511 A.2d 80 (1986), required the police authorities to readminister the Miranda warnings before interrogating defendant. On receiving those warnings shortly after his arrest, defendant exercised his right to remain silent, immediately following which he started to discuss with the arresting officer certain aspects of the case. The officer refused to speak with defendant absent defendant's request that he do so. When defendant evidenced his willingness to talk about the crimes for which he had been arrested, the officer, after first taking some precautionary measures described below, obtained an inculpatory statement, without, however, repeating the Miranda warnings. Relying on Hartley, the trial court suppressed defendant's statement. The Appellate Division reversed. State v. Fuller, 231 N.J. Super. 66, 554 A.2d 1364 (1989). We affirm. I Acting on information concerning the whereabouts of defendant-appellant, Michael Trapp, wanted in connection with a robbery, burglary, and kidnapping, Lt. Gazaway of the Hillsborough Township Police Department participated in defendant's arrest in New York City. On the way to a Manhattan police station defendant told Gazaway that he was carrying a knife, later identified as belonging to the victim of the crimes. When they arrived at the station house, Gazaway gave defendant the warnings required by Miranda v. Arizona, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694 (1966). Defendant acknowledged 78 that he understood his Miranda rights, and when asked if he would waive them and speak with Gazaway, he replied that he would not. Thereupon Gazaway terminated the discussion, remaining in the same room with defendant but attending to other work. About a minute or so after invoking his right to remain silent, Trapp asked Gazaway, "How did you find out where I would be?" He also inquired about what had happened to "the other guy." Gazaway responded that because defendant had originally refused to discuss the matter, the officer could not talk to him about the investigation unless defendant "voluntarily requested" that he do so. According to Gazaway, defendant expressed his willingness to talk about his role in the offenses as long as he did not have to "implicate anyone else involved." At that point Gazaway asked another detective to step into the room. In the presence of defendant and the second officer, Gazaway then recited the foregoing events, namely, the previous furnishing of the Miranda warnings, defendant's acknowledgement that he understood his rights, and his exercise of the right to silence, followed just moments later by defendant's "voluntar[y] request to talk * * as long as [Gazaway] did not make him implicate any other people who may have been involved in the robberies with him." Before the second officer left the room, defendant confirmed the accuracy of Gazaway's recitation and said he was willing to talk. He then responded to Gazaway's questioning with the statement that is the subject of this appeal. In suppressing the statement the trial court found that although Trapp had knowingly, intelligently, and voluntarily waived his right to remain silent, there remained the threshold issue of whether the police had scrupulously honored defendant's previously-asserted right to remain silent. According to the trial court, our opinion in Hartley, supra, 103 N.J. at 267, 511 A.2d 80, announced a "bright-line, inflexible requirement that fresh Miranda [warnings] must be given after a suspect 79 has asserted the right to remain silent in order to satisfy the `scrupulously honored' requirement," and that that bright-line rule applies not only when, as in Hartley, the police initiate further interrogation after a hiatus in the discussion but also, as in this case, when "the defendant resumed communications with the police." The Appellate Division disagreed, concluding that "the rule established in Hartley is limited by its facts and expressed holding to those cases of `police-initiated custodial interrogation.'" 231 N.J. Super. at 72, 554 A.2d 1364 (quoting Hartley, supra, 103 N.J. at 256, 511 A.2d 80). Because "in this case it was the defendant who initiated further conversation with Gazaway [that] led to the further interrogation with the resulting oral statement," ibid., the Appellate Division reversed the trial court's order suppressing the statement and remanded the matter for trial. Id. at 76, 554 A.2d 1364. II A In an effort to protect a criminal suspect's privilege against self-incrimination, the United States Supreme Court, in Miranda v. Arizona, supra, 384 U.S. 436, 86 S.Ct. 1602, 16 L.Ed.2d 694, dictated that custodial interrogation must cease immediately on defendant's request. The Court did not, however, establish guidelines for when interrogation may begin again until it decided Michigan v. Mosley, 423 U.S. 96, 96 S.Ct. 321, 46 L.Ed.2d 313 (1975). The Mosley Court held that "the admissibility of statements obtained after the person in custody has decided to remain silent depends under Miranda on whether his `right to cut off questioning' was `scrupulously honored.'" Id. at 102-03, 96 S.Ct. at 325-26, 46 L.Ed.2d at 320-21. It concluded that the "scrupulously honor" requirement had been met in Mosley's case. In Mosley the police arrested the defendant on suspicion of robbery and carefully informed him of his rights when they 80 took him into custody. He acknowledged that he understood his rights but refused to discuss the charges, whereupon the police stopped the questioning. Two hours later, after rewarning defendant of his Miranda rights, the police interrogated defendant through a different officer, who asked about an unrelated crime. Defendant made incriminating statements at that time. The Court stated: This is not a case * * * where the police failed to honor a decision of a person to cut off questioning, either by refusing to discontinue the interrogation upon request or by persisting in repeated efforts to wear down his resistance and make him change his mind. In contrast to such practices, the police here immediately ceased the interrogation, resumed questioning only after the passage of a significant period of time and the provision of a fresh set of warnings, and restricted the second interrogation to a crime that had not been a subject of the earlier interrogation. [423 U.S. at 105-06, 96 S.Ct. at 327, 46 L.Ed.2d at 322.] Justice Stewart, writing for the majority, recognized that a literal interpretation of the language in Miranda, "interrogation must cease," would lead to "absurd and unintended results." To permit the continuation of custodial interrogation after a momentary cessation would clearly frustrate the purposes of Miranda by allowing repeated rounds of questioning to undermine the will of the person being questioned. At the other extreme, a blanket prohibition against the taking of voluntary statements or a permanent immunity from further interrogation, regardless of the circumstances, would transform the Miranda safeguards into wholly irrational obstacles to legitimate police investigative activity, and deprive suspects of an opportunity to make informed and intelligent assessments of their interest. [Id. at 102, 96 S.Ct. at 325, 46 L.Ed.2d at 320.] This Court addressed the question of whether an accused's previously-invoked right to silence had been scrupulously honored in State v. Hartley, supra, 103 N.J. 252, 511 A.2d 80. Unlike the Supreme Court in Mosley, however, we adopted a bright-line minimum test, in the context of police-initiated interrogation, for determining whether a defendant's previously-invoked right to remain silent has been scrupulously honored. Hartley was arrested on suspicion of murder and robbery. After being informed of his rights at the time of his arrest, he declined to speak with the police. The authorities again administered 81 the Miranda warnings after taking Hartley into custody, and again he refused to talk. Questioning immediately ceased. About one and one-half hours later, an FBI agent told Hartley that if he was going to make a statement, the time was "now." Hartley then made a full confession. The federal agent did not readminister Miranda warnings at any time preceding the confession. Several minutes after the confession, New Jersey authorities readministered Miranda warnings to Hartley and he repeated his confession. Claiming the confessions were obtained in violation of his common-law and fifth-amendment privileges against self-incrimination, Hartley moved to exclude the confessions. The trial court admitted the statements, finding that Hartley had voluntarily waived his right to silence. A jury convicted Hartley of felony murder and a divided Appellate Division panel affirmed. On appeal to this Court we held that before an accused's previously-asserted right to remain silent may be deemed to have been "scrupulously honored," law-enforcement authorities must, at a minimum, readminister the Miranda warnings. In the absence of those renewed warnings any inculpatory statement given in response to police-initiated custodial interrogation after the right to silence has been invoked is inadmissible. In addition, we determine that a police failure scrupulously to honor an accused's earlier-invoked right to silence amounts to a violation not simply of Miranda's prophylactic rules but of the accused's privilege against self-incrimination. Therefore, any statement that a suspect may make after his right to silence has not been scrupulously honored is unconstitutionally compelled as a matter of law. (Emphasis added.) [103 N.J. at 256, 511 A.2d 80.] Today's inquiry, then, focuses on who initiated the custodial interrogation the police or defendant and on the legal significance of that determination. The distinction between police-initiated and defendant-initiated conversation has been addressed both by the United States Supreme Court and by this Court in the context of the fifth-amendment right to counsel. Oregon v. Bradshaw, 462 U.S. 1039, 103 S.Ct. 2830, 77 L.Ed.2d 405 (1983); Edwards v. Arizona, 451 U.S. 477, 101 S.Ct. 1880, 68 L.Ed.2d 378, reh'g denied, 452 U.S. 973, 101 S.Ct. 3128, 69 L.Ed.2d 984 (1981); State v. Kennedy, 97 N.J. 278, 478 A.2d 723 (1984); State v. Wright, 97 N.J. 113, 477 A.2d 1265 (1984). Edwards 82 established a bright-line rule: once an accused has invoked the right to counsel, questioning must cease until counsel is available, unless the accused initiates the discussions. 451 U.S. at 484-85, 101 S.Ct. 1880, 68 L.Ed.2d at 386. To determine whether an accused has "initiated" the conversation, a plurality of the Supreme Court in Bradshaw and four dissenting justices formulated separate tests, adverted to by the Appellate Division in this case. See 231 N.J. Super. at 72-73, 554 A.2d 1364. The plurality test, relied on by this Court in State v. Wright, supra, 97 N.J. at 124-25, 477 A.2d 1265, requires that the suspect "evince[] a willingness and a desire for a generalized discussion about the investigation," 462 U.S. at 1045-46, 103 S.Ct. at 2834-35, 77 L.Ed.2d at 412, whereas the dissent would call for a showing that defendant initiated further communication "about the subject matter of the criminal investigation," id. at 1052, 103 S.Ct. at 2838, 77 L.Ed.2d at 418. We agree with the court below that under either test, "it can be said that defendant `initiated' the further conversation about the subject matter of the criminal investigation." 231 N.J. Super. at 73, 554 A.2d 1364. In reaching that conclusion we recognize, of course, that not every question or statement an accused makes after invocation of the right to silence will have the same legal effect. Questions that an accused might ask regarding food, drink, and other necessities surely would not qualify as defendant-initiated conversations for the purposes of today's inquiry. On the other hand Trapp's two questions, "How did you know where I would be?" and "What happened to the other guy?" leave no doubt that he was inviting discussion of the crimes for which he was being held. The facts before us are readily distinguishable from those in Hartley. Lt. Gazaway did not approach defendant and ask him to reconsider and waive his right to silence. There is no allegation that the police applied pressure of any kind to override defendant's will. Defendant invoked his right to remain 83 silent, the police ceased the interrogation, and, within a minute or two, defendant himself broke the brief silence and began asking the detective questions about the investigation. By contrast, the defendant in Hartley had invoked his right to silence and was then approached by a law-enforcement officer who told him that if he were going to make a statement, the time was "now." Further, before the authorities suggested that Hartley reconsider his previous invocation of his right to silence, defendant gave no indication that he had changed his mind about making a statement. Not only are the facts of this case not the kind present in Hartley, they are not the kind we had in mind when we established our bright-line, minimum-requirement rule: the police must furnish fresh Miranda warnings before they initiate custodial interrogation following a defendant's invocation of the right to silence. And although the members of the Court retain their conscientiously-held differing views on the correctness of our Hartley decision, we see no need to rehash that disagreement, for on this basic proposition we are all in accord: different procedural safeguards are appropriate when the police attempt to resume discussions about the investigation after a suspect in custody has expressed a desire to remain silent from those that are appropriate when the accused opens up the dialogue. Without, therefore, intimating unanimity in the holding of Hartley, we do express our unanimous agreement on what that holding is, as stated at the outset of that opinion: "In the absence of * * renewed [Miranda] warnings any inculpatory statement given in response to police-initiated custodial interrogation after the right to silence has been invoked is inadmissible." 103 N.J. at 256, 511 A.2d 80 (emphasis added). Because it was the defendant who in this case initiated the discussion, the Hartley holding does not control the outcome. B Defendant urges us to extend the Hartley rule to include those situations in which a defendant initiates further 84 conversation with the authorities regarding the investigation. We decline to do so. As Hartley confirms, the admissibility of statements made by an accused after invoking the right to silence depends on the resolution of two separate inquiries: first, was the right scrupulously honored; second, was the waiver knowing, intelligent, and voluntary? This Court considered several important factors before imposing a per se minimum requirement, when police initiate further discussion, that fresh Miranda warnings be administered to satisfy the "scrupulously honored" inquiry. First, we relied on Miranda itself, which recognized "`without proper safeguards the process of in-custody interrogation of persons suspected or accused of crime contains inherently compelling pressures which work to undermine the individual's will to resist and to compel him to speak where he would not otherwise do so freely.'" Hartley, supra, 103 N.J. at 262, 511 A.2d 80 (quoting Miranda, supra, 384 U.S. at 467, 86 S.Ct. at 1624, 16 L.Ed.2d at 719). Further, the Hartley Court wished to "impress upon the accused that his right to remain silent is still in effect and that he need not speak unless it be by his own desire." Id. at 287, 511 A.2d 80. In light of those considerations, we ruled in Hartley that if police are going to ask the accused to reconsider a previously-announced decision to remain silent, they must at the least readminister Miranda warnings as a reminder that the suspect can refuse. Recognizing the variety of ways in which the police can request the defendant to reconsider, and the variety of factors to consider in the analysis, the Court imposed as a minimum that fresh Miranda warnings be administered. We did not, however, state that fresh Miranda warnings alone are sufficient to satisfy the requirement that the right be scrupulously honored, only that they are indispensable. Defendant argues that fresh Miranda warnings should be required in situations in which the accused initiates the conversation after previously invoking the right to remain silent 85 because there may be a misapprehension that once he or she begins to speak, the right to remain silent has irretrievably and irrevocably been relinquished. But absent police conduct that would lead to such a misapprehension, there is little justification for imposing a requirement of fresh Miranda warnings in the "scrupulously honor" inquiry. When the police immediately cease interrogation at the defendant's request and do nothing that can be considered coercive, such as resume questioning, we see no satisfactory rationale for such a requirement. Although a rule that calls for fresh Miranda warnings would serve important goals of Hartley other than the "scrupulously honor" concern, such as simplicity and uniformity of administration, those additional goals afford insufficient justification, standing alone, for extension of our bright-line rule to defendant-initiated conversations. We conclude that without police activity aimed at changing the defendant's mind, the critical element supporting the imposition of the bright-line rule is missing. C Thus far we have concluded that in defendant-initiated conversation following the exercise of the right to silence, the police need not readminister the Miranda warnings as an indispensable element of their duty scrupulously to honor that right. That conclusion addresses one dimension of the "scrupulously honor" requirement, but the inquiry does not end there. We still must determine whether any of the other circumstances would undercut the Appellate Division's conclusion that the authorities scrupulously honored defendant's right to silence. Beyond that, we must determine whether, if the police honored the right, defendant validly waived it. The facts surrounding the arrest and defendant's giving the statement are undisputed. Undoubtedly the police ceased questioning immediately on hearing defendant's invocation of his right to silence. No evidence has been offered that would 86 suggest that the police acted in any way that might be perceived as coercive. The Appellate Division noted that even after defendant had asked the detective how the police knew where he would be and what happened to "the other guy," the detective had informed defendant that he, the detective, could not talk with him unless defendant waived his right to remain silent, which he had invoked just moments before. 231 N.J. Super. at 74, 554 A.2d 1364. Defendant indicated that he understood the situation but was willing to discuss his involvement in the crimes under investigation as long as he did not have to implicate anyone else. Further, the detective sought another police officer to verify what had just transpired between the defendant and the detective. Ibid. We agree with the court below that the detective's actions subsequent to the immediate cessation of questioning on defendant's invocation of his right to silence adequately support a finding that defendant's right was scrupulously honored. 231 N.J. Super. at 77, 554 A.2d 1364. Because each situation must be evaluated on its own facts, however, we would not characterize those actions as indispensable to such a finding that is, we would not want this opinion to be read as requiring a police officer to summon a colleague to verify the exchange between himself and the defendant under similar circumstances. Further, we agree with the Appellate Division's assessment that the subsequent actions of Lt. Gazaway would not be sufficient in themselves to satisfy the bright-line rule requiring fresh Miranda warnings were the rule applicable in this case. Ibid. After concluding that the authorities scrupulously honored defendant's previously-invoked right to silence, the Appellate Division next addressed the question of the waiver of that right. We agree with the determination of both the trial court and Appellate Division that defendant beyond a reasonable 87 doubt knowingly, intelligently, and voluntarily waived his right to silence. The circumstances make defendant's waiver abundantly clear. The authorities reminded him of his previous decision not to talk and informed him that Lt. Gazaway would not talk with him unless he voluntarily waived his previously-invoked right to silence. Having recently escaped from a prison in Florida, defendant stated that he was facing many years behind bars, and did not mind discussing the crimes under investigation so long as he did not have to implicate anyone else. Then the detective recounted those events in the presence of defendant and a second officer. Defendant acknowledged their veracity and admitted his participation in the Hillsborough burglary. The proof of waiver could scarcely be clearer. III In sum, the bright-line rule established by Hartley requiring fresh Miranda warnings applies only to situations of police-initiated custodial interrogation following an accused's invocation of the right to remain silent. The administration of fresh Miranda warnings in that context is necessary, but not necessarily sufficient, for a finding that the accused's previously-invoked right to silence has been scrupulously honored. Fresh Miranda warnings are not required for a finding that the accused's previously-invoked right to silence has been scrupulously honored when the accused initiates dialogue with the authorities regarding the investigation. A court must examine the circumstances surrounding each instance individually. After the court determines that the defendant's previously-invoked right to silence has been scrupulously honored, it must make a separate inquiry into whether any subsequent waiver of that right was beyond a reasonable doubt knowing, intelligent, and voluntary under the totality of the circumstances. Because the record before us satisfies the foregoing requirements, we affirm the judgment of the Appellate Division, which *88 reversed the order suppressing defendant's statement and remanded the case for trial. For affirmance Chief Justice WILENTZ, and Justices CLIFFORD, HANDLER, POLLOCK, O'HERN, GARIBALDI and STEIN 7. Opposed None.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527091/	82 Md. App. 111 (1990) 570 A.2d 360 NEAL PARDOE McKINNEY v. STATE OF MARYLAND. No. 926, September Term, 1989. Court of Special Appeals of Maryland. March 2, 1990. James B. Kraft (Kraft, Balcerzak & Bartlett, on the brief), Columbia, for appellant. Valerie Smith, Asst. Atty. Gen. (J. Joseph Curran, Jr., Atty. Gen., Baltimore, and Frank R. Weathersbee, State's Atty. for Anne Arundel County, Annapolis, on the brief), for appellee. Argued before ALPERT, BLOOM and KARWACKI, JJ. BLOOM, Judge. In a non-jury trial in the Circuit Court for Anne Arundel County, appellant, Neal McKinney, was convicted on the second count (third degree sexual offense)[1] in each of three indictments that had been consolidated for trial over his objection. The court imposed consecutive prison terms, suspended them, and placed appellant on probation. He thereupon brought this appeal, in which he contends that the trial court erred: 1. in directing him to testify at the outset of his case; 2. in granting the State's motion to consolidate the three indictments for trial; 3. in not granting his motion for new trial; 4. in failing to exclude the testimony of Bill Jump, whose statements and reports were withhold during discovery; and 5. in finding sufficient evidence to convict him on the second count in each indictment. Our review of the record discloses no factual basis for the first contention and no legal basis for the third, fourth, and fifth contentions. We agree, however, that the trial court erred in consolidating the three indictments, and we shall reverse the convictions and remand for new trials on that basis. We must address the sufficiency issue because, regardless of the basis for reversal, if we were to conclude that the evidence was insufficient to support any of the convictions, a retrial on that charge would be barred. Tibbs v. Florida, 457 U.S. 31, 102 S. Ct. 2211, 72 L. Ed. 2d 652 (1982); Warfield v. State, 315 Md. 474, 502, 554 A.2d 1238 (1989). We need not and will not discuss the first, third, or fourth contention. Facts On 31 May through 3 June 1988, Bryant Woods Elementary School held an outdoor education program at Camp Letts in Anne Arundel County, where appellant served as a volunteer counselor. Appellant had recently retired from his position as a fifth grade teacher and was in the process of finding a position in a different field. The allegations of misconduct by appellant were made by three female students, who were campers at Camp Letts. Each of them asserted that appellant touched her breasts, buttocks, and vaginal area. As the State concedes, this alleged sexual contact occurred through, not under, the girls' clothing, and there was no physical injury. Appellant emphatically denied that he ever intentionally touched any of the girls' breasts, buttocks, or vaginal areas. In response to a question from his attorney, appellant conceded that it was possible that he accidentally touched one or more of the girls, but on cross-examination he was steadfast in his denial that he even accidentally or unintentionally ever touched any of the girls on the breast or buttocks, or in the area of the vagina. He freely admitted that in order to encourage or comfort a camper he would from time to time engage in normal, socially acceptable physical contact with a child. He would occasionally hug a child, or pat her on the back, rub her feet or ankles, or apply insect repellant. At mealtime he might tap a child on the knee to get her attention when he asked her to pass the bread or milk. Nevertheless, he consistently denied that any sexual contact or touching of private parts of any child's body ever occurred. I Maryland Code Ann., art. 27, § 464B(a)(3) (1987 Repl.Vol., as amended), provides that a person is guilty of a sexual offense in the third degree if the person engages in sexual contact with another person who is under 14 years of age and the person performing the sexual contact is four or more years older than the victim. All three of the alleged victims were under the age of 14, and appellant was unquestionably more than four years older than any of them. As used in § 464B, the term "sexual contact" is defined in Md. Code Ann., art. 27, § 461 as: the intentional touching of any part of the victim's or actor's anal or genital areas or other intimate parts for the purpose of sexual arousal or gratification or for abuse of either party and includes the penetration, however slight, by any part of the person's body, other than the penis, mouth or tongue, into the genital or anal opening of another person's body if that penetration can be reasonably construed as being for the purpose of sexual arousal or gratification or for abuse of either party. It does not include acts commonly expressive or familial or friendly affection, or acts for accepted medical purposes. One of the alleged victims testified that one day, while at lunch, appellant told her he was proud of her, patted her, rubbed her leg, and touched her vagina. On another occasion, appellant, who was sitting behind her, reached around her and touched her breasts. On the last day of camp, appellant hugged her and rubbed her buttocks. A second complaining witness testified that she was seated next to appellant during a meal and he patted her in the genital area. On another occasion she was scraping food from her plate when appellant reached around from behind her and slid his hands down her chest and stomach as he helped her clean her plate. The third alleged victim testified that on four occasions appellant sat next to her at mealtimes and rubbed her leg and touched her vaginal area. Once, when she was about to perform a skit at campfire, appellant patted her buttocks. And on another occasion, when she was scraping food from her tray, appellant reached around from behind her, scraped her tray, and brought his hands over her chest. Appellant points to certain discrepancies between the girls' testimony and pretrial statements they had made to their teachers, their principal, and a social worker. The resolution of such discrepancies and the credibility of the witnesses and their testimony was for the trier of fact. An appellate court, in determining whether the evidence introduced at trial was sufficient to support a conviction, does not weigh the evidence or determine the credibility of witnesses. On review, the test of sufficiency is whether the evidence, viewed in the light most favorable to the prosecution, was sufficient to convince a rational fact-finder of the existence of every element of the offense beyond a reasonable doubt. Jackson v. Virginia, 443 U.S. 307, 319, 99 S. Ct. 2781, 2789, 61 L. Ed. 2d 560 (1979); Branch v. State, 305 Md. 177, 183, 502 A.2d 496 (1986). Pellucidly, the evidence in this case meets that test. II In its motion to consolidate the three cases for trial, the State alleged merely that joinder would be convenient and non-prejudicial. Although appellant objected that a joint trial of all three indictments would be highly prejudicial, the court granted the State's motion. Now the State argues that, despite the prejudice to appellant, joinder was permissible and within the court's sound discretion because evidence supporting each indictment would be admissible at a trial on either or both of the other indictments. We disagree. Maryland Rule 4-253 provides for joinder of multiple offenses in the same charging document and for joint trial of multiple offenses. It also provides for severance where joinder would be prejudicial. It states: (a) Multiple Offenses. Two or more offenses, whether felonies or misdemeanors or any combination thereof, may be charged in separate counts of the same charging document if the offenses charged are of the same or similar character or are based on the same act or transaction or on two or more acts or transactions connected together or constituting parts of a common scheme or plan. Maryland Rules of Procedure, Rule 4-203(a). (b) Joint Trial of Offenses. If a defendant has been charged in two or more charging documents, either party may move for a joint trial of the charges. In ruling on the motion, the court may inquire into the ability of either party to proceed at a joint trial. Maryland Rules of Procedure, Rule 4-253(b). (c) Prejudicial Joinder. If it appears that any party will be prejudiced by the joinder for trial of counts, charging documents, or defendants, the court may, on its own initiative or on motion of any party, order separate trials of counts, charging documents, or defendants, or grant any other relief as justice requires. In McKnight v. State, 280 Md. 604, 375 A.2d 551 (1977), the Court of Appeals pointed out that Rule 4-253(c) (then Rule 745c) was patterned on Rule 14 of the Federal Rules of Criminal Procedure. Under the Maryland rule, as is true under its federal counterpart, severance is committed to the discretion of the trial judge, and the standard established by the rule is one that was applied at common law: "... The matter of a misjoinder is generally left to the discretion of the trial court, and the courts will guard against injustice and abuse whenever apparent, and not permit such a joinder of counts as will embarrass the traverser in his defense...." Simmons v. State, 165 Md. 155, 165-66, 167 A. 60 (1933) (citations omitted). 280 Md. at 608, 375 A.2d 551. Also noted in McKnight is that the rationale usually offered to justify joinder of similar offenses that a single trial effects an economy by saving time and money to the prosecution, the defendant, and the criminal justice system is questionable unless the evidence would be mutually admissible. Where the evidence is not mutually admissible, each crime must be separately proved by its own evidence and witnesses. 280 Md. at 609, 375 A.2d 551. McKnight adopted the rule that a defendant charged with similar but unrelated offenses is entitled to a severance when he establishes that the evidence as to each individual offense would not be mutually admissible at separate trials. This rule is based upon recognition of the fact that similar offense joinder is prejudicial to the defendant in three important respects. First, he may be embarrassed or confounded in presenting separate defenses. Secondly, the jury may cumulate the evidence of the various crimes charged and find guilt when, if the offenses were separately considered, it would not do so. At the least, the joinder of multiple charges may produce a latent hostility that by itself may prejudice the defendant's case. Thirdly, the jury may use the evidence of one of the crimes charged, or a connected group of them, to infer a criminal disposition on the part of the accused. Joinder will not cause any additional prejudice to the defendant if the evidence of one crime would be admissible in the trial of the other, but it is clear that, where offenses are joined for trial because they are similar in character but where the evidence would not be mutually admissible, the prejudicial effect is apt to outweigh the probative value of such evidence. Id. at 609-612, 375 A.2d 551. See also State v. Kramer, 318 Md. 576, 569 A.2d 674 (1990); Tichnell v. State, 287 Md. 695, 415 A.2d 830 (1980); State v. Jones, 284 Md. 232, 395 A.2d 1182 (1979). It is necessary, therefore, that we examine this case in the context of what has come to be known as the "other crimes rule." We must determine whether, in a separate trial on one of the indictments, evidence to the effect that appellant committed an offense charged in either or both of the other indictments would be admissible. In State v. Faulkner, 314 Md. 630, 552 A.2d 896 (1989), the Court of Appeals discussed the "other crimes rule" and its applicability in terms of a rule of exclusion of evidence with certain exceptions: We have often addressed the admissibility of "other crimes" evidence. Generally, "evidence of a defendant's prior criminal acts may not be introduced to prove that he is guilty of the offense for which he is on trial." Straughn v. State, 297 Md. 329, 333, 465 A.2d 1166, 1168 (1983). See Tichnell v. State, 287 Md. 695, 415 A.2d 830 (1980); State v. Jones, 284 Md. 232, 395 A.2d 1182 (1979); Cross v. State, 282 Md. 468, 386 A.2d 757 (1978); McKnight v. State, 280 Md. 604, 375 A.2d 551 (1977); Ross v. State, 276 Md. 664, 350 A.2d 680 (1976); see generally 5 L. McLain Maryland Practice: Maryland Evidence § 404.5, at 352 (1987). Evidence of other crimes may tend to confuse the jurors, predispose them to a belief in the defendant's guilt, or prejudice their minds against the defendant. Ross, 276 Md. at 669, 350 A.2d at 684; see also Hoes v. State, 35 Md. App. 61, 71, 368 A.2d 1080, 1086, cert. denied 280 Md. 731 (1977) ("jury may be predisposed to convict [the defendant's] `reputation'"). Evidence of other crimes may be admitted, however, if it is substantially relevant to some contested issue in the case and if it is not offered to prove the defendant's guilt based on propensity to commit crime or his character as a criminal. Ross, 276 Md. at 669, 350 A.2d at 684; see generally C. McCormick, Evidence § 190 (E. Cleary 3d ed. 1984); L. McLain, supra, § 404.5, at 353. Thus, there are numerous exceptions to the general rule that other crimes evidence must be suppressed. Evidence of this type may be admitted if it tends to establish motive, intent, absence of mistake, a common scheme or plan, identity, opportunity, preparation, knowledge, absence of mistake or accident. See Ross at 669-670, 350 A.2d at 684; C. McCormick, supra, § 190, t 558-564; L. McLain, supra, § 404.5, at 353. But, because of the potential danger involved, the admission of other crimes evidence "should be subjected to rigid scrutiny by the courts...." Ross at 671, 350 A.2d at 685. Additionally, the evidence proffered to the trial judge must be clear and convincing in establishing the accused's involvement in the other crimes. Cross, 282 Md. at 478, 386 A.2d at 764. When a trial court is faced with the need to decide whether to admit evidence of another crime that is, evidence that relates to an offense separate from that for which the defendant is presently on trial it first determines whether the evidence fits within one or more of the Ross exceptions. That is a legal determination and does not involve any exercise of discretion. See Cross, 282 Md. at 474, 386 A.2d at 761; Moore v. State, 73 Md. App. 36, 44, 533 A.2d 1, 5 (1987), cert. denied, 311 Md. 719, 537 A.2d 273 (1988). If one or more of the exceptions applies, the next step is to decide whether the accused's involvement in the other crimes is established by clear and convincing evidence. Lodowski v. State, 302 Md. 691, 728, 490 A.2d 1228, 1247 (1985), defendant's petition for cert. denied, 475 U.S. 1086, 106 S. Ct. 1469, 89 L. Ed. 2d 725, vacated, 475 U.S. 1078, 106 S. Ct. 1452, 89 L. Ed. 2d 711, rev'd on other grounds, 307 Md. 233, 513 A.2d 299 (1986); Cross, 282 Md. at 478, 386 A.2d at 764. We will review this decision to determine whether the evidence was sufficient to support the trial judge's finding. If this requirement is met, the trial court proceeds to the final step. The necessity for and probative value of the "other crimes" evidence is to be carefully weighed against any undue prejudice likely to result from its admission. Cross, 282 Md. at 474, 386 A.2d at 761 [citations omitted]. This segment of the analysis implicates the exercise of the trial court's discretion. Id.; Moore, 73 Md. App. at 44-45, 533 A.2d at 5. In Harris v. State, 81 Md. App. 247, 567 A.2d 476 (1989), Judge Moylan, writing for this Court, suggested that the "other crimes rule" is not really a rule of exclusion and the "exceptions" to it are not really exceptions. He posited that it is more accurate to express the rule as one of inclusion with one exception a rule that evidence of other crimes is generally admissible if relevant to any material fact in issue. The one exception to that rule is that other crimes evidence offered only to prove a propensity to commit crimes is excluded because its prejudicial effect greatly outweighs any probative value it might have. So long as it is recognized that the "exceptions" to the rule of exclusion are not exhaustive and should not be narrowly construed, it matters little whether the "other crimes rule" is deemed to be a rule that other crimes evidence is generally excluded, with several exceptions, or a rule that such evidence is generally admitted, with one exception. The evidence is excluded if it has no relevancy other than to show criminal propensities; it is admissible if it is relevant to any other material fact in issue, the exceptions to the rule of exclusion being a well established list of matters other than propensity that other crimes evidence may logically tend to prove. Faulkner sets forth those generally recognized "exceptions" to the other crimes rule the list of those matters other than propensity which other crimes evidence may tend to establish as follows: motive, intent, a common scheme or plan, identity, opportunity, preparation, knowledge, and absence of mistake or accident. Also, other crimes evidence may be admitted when the several offenses are so connected in time or circumstances that one cannot be fully shown without proving the other, Ross, 276 Md. at 670, 350 A.2d 680, and in prosecutions for certain sex offenses, to show a display of passion or propensity for illicit sexual relations, but only with the particular person concerned in the crime on trial. Berger v. State, 179 Md. 410, 414, 20 A.2d 146 (1941). Clearly, neither of the last two are applicable in this case. The State suggests no basis for mutual admissibility other than those oft recognized exceptions set forth above, and we can think of none. The question then arises as to whether, in a trial on any one of the three indictments, evidence of sexual contact with either of the two girls who were not the alleged victims of the crime on trial (1) would tend to establish motive, intent, common scheme or plan, identity, opportunity, preparation, knowledge, or absence of mistake or accident; and (2) if so, the matter or thing such evidence might tend to establish would be at all material to the case. The second part of the question is as important as the first, for in order to be admissible, evidence must be material as well as competent and relevant. Green v. State, 81 Md. App. 747, 569 A.2d 741 (1990). "The term `relevance' refers to the required relationship between the evidence offered and the fact it is offered to prove.... "Evidence is relevant if it has any tendency to make existence of a material fact more probable or less probable than it would be without the evidence." ..... "The term `materiality' refers to the required relationship between that fact and an issue which is the proper subject of proof in the case. "... A material fact is a fact that is of legal consequence to the determination of the issues in the case." Green, at 753-754, 569 A.2d at 744, 745, quoting McLain, Maryland Evidence § 401.1. See also Paige v. Manuzak, 57 Md. App. 621, 632, 471 A.2d 758 (1984); Staley v. Staley, 25 Md. App. 99, 106, 335 A.2d 114 (1975). Evidence tending to show the commission of all three offenses would not be relevant to, that is, not tend to establish, motive, opportunity, preparation, or knowledge. Such evidence would not tend to prove intent except in the sense of propensity, for which it would be inadmissible, as overly prejudicial, Faulkner, supra; Harris, supra, or in the sense of passion for the victim, for which it would be inadmissible because that "exception" is limited to evidence of similar conduct with the person concerned in the case. Berger, supra. The other crimes evidence would not be mutually admissible to prove identity because identity, not being an issue in the case, was immaterial. See Commonwealth v. Kasco, 322 Pa.Super. 62, 469 A.2d 181 (1983). The common scheme or plan "exception" might mean either of two things: (1) a modus operandi, which is but one means of establishing identity and thus would not be material in the case sub judice, or (2) a plan to commit one offense as part of a grand scheme to commit others, such as a theft of nitroglycerine for use in blowing open a safe. In the latter sense, the other crimes evidence in a separate prosecution of appellant for sexual contact with one child evidence of similar conduct with a different child would not be relevant because it would not tend to prove that kind of common scheme. Confronted with the relevancy and materiality limitations on the use of the other crimes evidence in this case, the State seized on the absence of mistake "exception" as justification for the joinder. In so doing, it relies on appellant's rather ambiguous response to a question propounded by defense counsel and the off-hand way counsel representing appellant on this appeal referred to that response. Defense counsel asked appellant, with respect to each of the alleged victims, whether he had intentionally touched that child on the breasts, vagina, or buttocks. Appellant responded that he did not. Then defense counsel asked him: I want you to think about this very carefully, Mr. McKinney. Could any acci could you have touched these girls accidentally or incidentally during that four-day period? Appellant responded: It's possible. It was very crowded in the dining hall. There were numbers of people standing in line, moving plates and trays and taking cups back, and also very crowded at the campfire. The statement of facts in appellant's brief describes that part of appellant's testimony thusly: He testified that he never intentionally touched [any of the three girls] on the breasts, vagina, or buttocks. He said that he could have touched the girls accidentally or incidentally during the four day period. From that the State fashions an argument that appellant had asserted a defense of accident or accidental touching of the victims' anal or genital areas or other intimate parts, wherefore the other crimes evidence would be mutually admissible in separate trial of the three indictments under the absence of mistake or accident exception. The State has simply misconstrued appellant's testimony and his counsel's characterization of it. In answering his attorney's question, appellant conceded that he may have accidentally touched the girls, but he did not say that he touched them on any intimate part of the body. Any reason to assume, from the juxtaposition of the questions relating to intentional touching of intimate parts and to accidental touching, that the latter also referred to intimate parts of the body, was almost immediately dispelled during cross-examination. The prosecutor repeatedly asked appellant about his accidentally rubbing a child's leg, or accidentally touching a child's breasts while scraping trays or hugging her. In responding to each such question, appellant denied ever touching any of the girls' breasts, vaginas, or buttocks at any time, even by accident. Appellant never asserted a defense of accident or mistake; the only disputed issue in each case was whether there had been any touching of any of the girls' anal or genital areas or other intimate parts. The combined testimony of the three alleged victims might very well have tended to disprove any defense based on accident or mistake, but since no such defense was asserted, there was no material fact to be established by the other crimes evidence. We conclude, therefore, that the other crimes evidence would not have been mutually admissible in separate trials on the three indictments. Consequently, under the rule laid down in McKnight, the court should not have granted the State's motion to consolidate the indictments for trial. That does not end the discussion, however. McKnight was an appeal from convictions resulting from a jury trial. So far, the cases that have followed, cited, and quoted McKnight have also involved jury trials. See State v. Jones, supra; Tichnell v. State, supra; State v. Kramer, supra. The rule laid down in McKnight was predicated upon the belief that the prejudicial effects of a misjoinder of charges are too great to be dispelled by curative instructions, and some of those prejudicial effects are described in terms of jury reactions to joinder and the introduction of what in separate trials would be excluded as other crimes evidence. This case requires us to decide whether in a non-jury trial misjoinder of similar offenses is sufficiently prejudicial to the defendant as to amount to an abuse of discretion requiring reversal. The principal prejudicial effects of misjoinder that the Court noted in McKnight may be rephrased as follows: 1. The accused may be embarrassed or confounded in presenting separate defenses. 2. The jury may cumulate the evidence of the various crimes charged and find guilt where, if the offenses were tried separately, it would not do so. 3. Multiple charges may produce latent hostility. 4. A jury that believes the accused is guilty of one offense may infer from that guilt a criminal disposition on the part of the accused, which may be a persuasive factor in determining guilt on the other charges. The third and fourth categories of prejudicial effect would be greatly diminished in a non-jury trial. A judge, with his or her training and experience, is not likely to be made hostile to the accused by the fact that there are multiple charges, and we may assume that a judge would not be persuaded to convict an accused on the basis that if he committed one of the crimes he is a bad person with criminal propensities and therefore likely to have committed the others. If these were the only prejudicial effects of a misjoinder of similar offenses, we might well decline to find an abuse of discretion in a non-jury trial. The first prejudicial effect on the above list is an entirely different matter. If misjoinder somehow embarrasses or confounds the accused in presenting separate defenses, the prejudice is the same in a non-jury trial as in a jury trial. Here the ruling that the three indictments would be tried together was made before appellant elected a non-jury trial. If there had been any contention that the joinder ruling had caused appellant to forego a jury trial in order to minimize the prejudice, that factor alone might have been so prejudicial that reversal would be required. That does not appear to have been the case. Although the court had earlier granted the State's motion to consolidate, appellant made no reference to that ruling in choosing a non-jury trial. Indeed, after waiving the jury he brought up the matter of consolidation and asked the court to reconsider its ruling. Appellant does not assert or even suggest that the consolidation of the three cases in some manner embarrassed or confounded him in presenting separate defenses and, considering the nature of the cases and the simple, single defense presented to all of them, we can think of no prejudice fitting that category. It is the second category on the list of prejudicial effects of similar offense misjoinder that is of primary concern in this case. Taken separately, the evidence to support each indictment was far from overwhelming. Each girl's testimony as to appellant's conduct was fairly general in nature, sparse in corroborative detail, and somewhat inconsistent with what she had earlier related to her teacher and the social worker. By virtue of the joinder, however, each child's testimony was reinforced and thus made more believable by the testimony of the others. As trier of fact, a judge may not be as influenced as a jury would be by the image of the accused as a bad man with a propensity for crime that is evoked by other crimes evidence. But a judge is no less likely than a jury to be influenced prejudicially in the perception of witness credibility that is generated by testimony of several witness describing similar conduct by the accused. Any trier of fact, whether judge or jury, who might doubt one child's testimony about the type of conduct ascribed to appellant would be more likely to believe it if other children testify to similar acts. We hold, therefore, that even in a court trial similar offense joinder over the accused's objection, when the evidence in support of each charge would not be admissible in a separate trial of the others, is sufficiently prejudicial as to amount to an abuse of discretion. For that abuse of discretion in this case, we must reverse the convictions and remand for new and separate trials. JUDGMENTS REVERSED; CASE REMANDED FOR NEW AND SEPARATE TRIALS. COSTS TO BE PAID BY ANNE ARUNDEL COUNTY. NOTES [1] Md. Code Ann., art. 27, § 464B (1987 Repl.Vol., as amended).	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1528467/	205 B.R. 216 (1996) In re Miguel MEDINA and Vicki Kathleen Medina, Debtors. UNITED STATES of America, Internal Revenue Service, Appellant and Cross-Appellee, v. OFFORD FINANCE, INC., Miguel Medina, and Vicki K. Medina, Appellees and Cross-Appellants. BAP No. OR-95-1535, OR-95-1616 (Cross-Appeal), Bankruptcy No. 693-6202-PSH11. United States Bankruptcy Appellate Panel of the Ninth Circuit. Argued and Submitted May 23, 1996. Decided December 23, 1996. 217 218 Virginia Cronan Lowe, U.S. Department of Justice, Tax Division, Washington, DC, for U.S. (I.R.S.). Larry C. Hammack, Crain, Austin & Guy, Medford, OR, for Offord Finance, Inc. Before: VOLINN, JONES, and HAGAN, Bankruptcy Judges. OPINION VOLINN, Bankruptcy Judge. OVERVIEW The Internal Revenue Service (IRS) moved for relief from the automatic stay to apply by way of set-off to the debtors' tax liability certain proceeds arising from contracts entered into between Medina Reforestation (Medina) and the United States Department of Agriculture (USDA). Appellee, Offord Financing, Inc. (Offord), which financed the debtors, claims priority to the payments against the IRS by virtue of a security interest or assignment. BACKGROUND FACTS The debtors, Miguel and Vicki Medina, are husband and wife. During the periods at issue, Miguel owned Medina, a proprietorship that planted and maintained trees on forest lands under reforestation contracts with the United States Forest Service through the USDA.[1] The proceeds of three of these contracts are involved here. Pursuant to an April, 1993, agreement between Offord and Medina, Offord provided financing to Medina by paying Medina 95% of the value of invoices submitted to the USDA by Medina in exchange for Medina's rights in the invoices. The court below found that Offord took an absolute assignment of Medina's interest in some of the invoices and had only a security interest in the proceeds of other of the invoices. See In re Medina, 177 B.R. 335, 345 (Bankr.D.Or. 1994). Offord perfected its security interest 219 in the latter contracts by recording on April 16, 1993. Offord notified the IRS of the contract assignments on May 13 and 14, 1993. The debtors filed their Chapter 11[2] case on May 17, 1993.[3] The IRS filed a timely proof of claim of over $730,000 for personal income taxes and FICA payments owed for a period of several years.[4] Because the debtors had not filed all of their tax returns, the IRS' proof of claim included estimated amounts. Offord timely filed a proof of claim for nearly $90,000. At the time the debtors filed bankruptcy, the USDA had not paid for all of the work performed.[5] The IRS moved for relief from the stay to apply the unpaid amounts from the USDA contracts against the debtors' tax liability. Offord claimed priority to these funds. The debtors do not claim the contract proceeds. During a telephone hearing prior to its ruling, the bankruptcy court indicated it wanted to verify some of the IRS's claims and asked the IRS to provide tax returns filed post-petition by the debtors for pre-petition taxes. In response to this request, the IRS submitted to the court four returns filed by the debtors after bankruptcy for pre-petition taxes (the "requested returns"). In a published opinion, the bankruptcy court ruled that, as a prerequisite for offset, debts must be valid, enforceable, mutual and liquidated. See Medina, 177 B.R. at 349. The court concluded that Medina's debt to the IRS was valid, enforceable, and of a mutual character. However, the court found most of the IRS's claims were not liquidated. Thus, of an approximate total of $750,000 shown on the IRS's proof of claim, the court granted relief from the automatic stay to allow the IRS to set off just over $50,000.[6] The court ordered the balance of the payments due under the contracts (approximately $68,000) to be paid to Offord. In a motion to alter or amend the court's judgment, the IRS offered evidence to justify its proof of claim, which included tax returns filed by the debtors pre-petition and therefore not submitted to the court (as distinguished from those returns the debtors filed following bankruptcy for pre-petition tax periods that the court requested and the IRS provided). In addition, the IRS argued that the court made minor computational errors. In a letter opinion following rehearing, the court corrected the computational errors, but refused to hear any evidence about how the IRS arrived at its figures; the court ruled that none of the evidence the IRS sought to enter was "newly discovered" within the meaning of Fed.R.Civ.P. 59: "all is [sic] evidence that was in the possession of the IRS or was available upon discovery to the IRS and that it chose, for whatever reason, not to introduce." Generally when the IRS assesses a tax, it is considered for bankruptcy purposes to be a definite amount owed and, therefore, liquidated. Although the trial court recognized 220 this fact, it concluded in its letter ruling that where offset against a derivative third party is involved, the rule changes:[7] this tax rule should not apply where the IRS seeks to use its right of offset to defeat the rights of third parties to funds due to the debtor. In those cases . . . a tax liability is not `liquidated' for purposes of setoff when an amount is assessed unless the IRS can provide evidence showing a reasonable basis for the assessment, either in the form of a filed tax return or other evidence of the basis upon which the assessment rests. In addition, the court stated that "under § 553 the decision of whether to allow setoff is within the sound discretion of the court" and that the "court may disallow offset to avoid unfair treatment of other creditors." The court stated: it would be manifestly unfair to Offord to allow the IRS to offset assessed taxes unless the IRS has shown that the assessment was based either on a pre-petition filed return or some other reasonable basis absent a filed return and Offord had a opportunity to challenge the accuracy of the amounts assessed. Finally, the court did not allow the IRS to set off amounts owed to it based on two of the requested returns because it found that they included post-petition taxes. Offord requested that the trial court apply the doctrine of marshalling and require the IRS to satisfy its claims out of the proceeds of the real property on which it had a tax lien. The court stated that it was unable to apply the doctrine because it did "not yet know the amount of the government's allowed tax claim." Medina, 177 B.R. at 355. It noted "that if the tax claim, as allowed, is close to the size stated in the government's proof of claim, depending on the number and value of assets otherwise available to the IRS to satisfy the debt, marshalling might be a useless act. . . . [and therefore] Offord would not benefit from application of the doctrine." Id. The IRS filed this timely appeal.[8] Offord filed a timely cross-appeal arguing that the bankruptcy court erred when it permitted setoff and when it refused to apply the doctrine of marshalling. ISSUES Whether the court erred when it refused to lift the stay to allow the IRS to set-off its claim against the debtors against the money the USDA owed to the debtors. Whether the court erred when it declined to apply the doctrine of marshalling to the IRS's claims. STANDARD OF REVIEW The disallowance of a setoff is within the discretion of the trial court and will not be set aside unless found to be a clear abuse of discretion. In re Buckenmaier, 127 B.R. 233, 236 (9th Cir. BAP 1991). The bankruptcy court abuses its discretion where its ruling is based on an erroneous view of the law or on a clearly erroneous finding. Cooter & Gell v. Hartmarx Corp., 496 U.S. 384, 405, 110 S. Ct. 2447, 2460-61, 110 L. Ed. 2d 359 (1990). DISCUSSION A creditor's ability to offset a debt owed to a debtor against a claim it has against the debtor is governed by section 553.[9] Section 553 does not create, but merely 221 preserves, a creditor's rights under nonbankruptcy law.[10]See In re Bacigalupi, Inc., 60 B.R. 442, 445 (9th Cir. BAP 1986); 4 Collier on Bankruptcy, ¶ 553.02 at 553-10 (15th ed. 1996). The bankruptcy court held that, to be offset, debts must be valid, enforceable, mutual and liquidated.[11]Medina, 177 B.R. at 349. On appeal, Offord argues that there is no mutuality of obligation between it and the IRS while the IRS argues that the bankruptcy court applied an incorrect definition of liquidated; according to the IRS, under the appropriate definition, all of its claims are liquidated. Mutuality of debts and claims. Offord's claim that there is no mutuality of obligation[12] between the federal government's claims and the debts it owes because this is a "triangular" transaction that is, the IRS is attempting to set off a debt it owes to Offord against a claim it has against Medina is incorrect. The debtors cannot assign any greater rights than they possess. On appeal, Offord does not dispute that, had the debtors not assigned their right to receive payment under the USDA contracts, the IRS would be permitted to set off the debtors' tax liability against the amount due the debtors on the USDA contracts. If the debtors would be subject to the IRS's right of setoff, so must Offord, which is only asserting a derivative right. See In re Defense Services, Inc., 104 B.R. 481, 484-85 (Bankr. S.D.Fla.1989) (on similar facts, allowed IRS to set off debt that had been assigned). But see In re Fairfield Plantation, 147 B.R. 946 (Bankr.E.D.Ark.1992) (on similar facts, did not allow the IRS to set off debt that had been assigned). We believe the Defense Services case to be the better reasoned. Assignees of debts may be able to avoid the assignor's defenses when the claims mature following notification of the assignment. See Rest. of Contracts, § 336 cmt. d (1979) ("After receiving notification of an assignment, an obligor must treat the assignee as owner of the right and cannot assert against him a defense or claim arising out of a subsequent transaction. . . . [or] set off an unrelated claim which matures after notification is received."). See also 4 Corbin on Contracts § 897 at 600-601 (1951 & Supp.1993) (stating, relative to assignment, that at common law, if the claim of setoff arises out of a collateral transaction prior to notice of the assignment, it is available against the assignee if it existed as a matured claim at the time of the assignment). The court below found that the IRS' claims against the debtors were matured at the time of notification.[13]See Medina, 177 222 B.R. at 354. Nevertheless, as indicated, Offord did not notify the IRS about the assignments until after virtually all of the work had been performed by Medina and all but one of the invoices had been submitted to the USDA. Thus, because the requisites of mutuality and maturity existed prior to notification by the assignee, the bankruptcy court correctly found that Offord was subject to the IRS's claim of a right to assert setoff. Liquidity of IRS claims. However, the bankruptcy court found that the IRS's claims were not liquidated because the IRS did not "provide evidence showing a reasonable basis for the assessment, either in the form of a filed tax return or other evidence of the basis upon which the assessment rests."[14] The court indicated that, had the IRS been asserting setoff against the debtors themselves, rather than against Offord, the result may have been different. In addition, the court refused to hear evidence offered by the IRS on rehearing because it was not "newly discovered" within the meaning of Fed.R.Civ.P. 59. The bankruptcy court committed reversible error when it denied the IRS claims for the reason that the IRS had not submitted evidence of the basis for its assessments. The IRS relied on both the presumptive validity of a filed proof of claim and on the court's statement that it wished to only review the requested returns. A proof of claim executed and filed in accordance with the applicable Bankruptcy Rules is prima facie evidence of the validity and amount of the claim. Fed. R.Bankr.P. 3001(f). Under section 502(a), a proof of claim as filed is "presumptively valid unless a party in interest submits an objection." In re Hobdy, 130 B.R. 318, 320 (9th Cir. BAP 1991). See also In re Consolidated Pioneer Mortgage, 178 B.R. 222, 225 (9th Cir. BAP 1995). Once such a claim has been filed, the burden then shifts to the objecting party to present evidence to overcome the prima facie case. In re Murgillo, 176 B.R. 524, 529 (9th Cir. BAP 1995); In re Holm, 931 F.2d 620, 623 (9th Cir.1991) ("the allegations of the proof of claim are taken as true. If those allegations set forth all the necessary facts to establish a claim and are not self-contradictory, they prima facie establish a claim. Should objection be taken, the objector is then called upon to produce evidence and show facts tending to defeat the claim by probative force equal to that of the allegations of the proofs of claim themselves."). In addition, assessments made by the IRS are presumed to be correct. United States v. Janis, 428 U.S. 433, 440-41, 96 S. Ct. 3021, 3025-26, 49 L. Ed. 2d 1046 (1976); Paccar, Inc. v. Commissioner, 849 F.2d 393, 400 (9th Cir.1988). None of the parties has ever disputed the existence or amount of the debtors' liability to the IRS. Nevertheless, the trial court sua sponte determined that because the IRS did not initially provide sufficient information to prove its claim it would be precluded from doing so. However, when examining the existence, validity or enforceability of the claim, the judge should have provided an opportunity to the IRS to show whether the filed proof of claim was accurate and valid. None of the parties questions the trial court's power to do so. The dissent states that "[c]ourts which have addressed the issue of whether a tax debt was liquidated have required some showing of proof beyond the IRS' proof of claim." However, the cases cited in support of this statement turned on challenges by 223 parties to the IRS claim requiring it to put on proof. See In re Ekeke, 198 B.R. 315, 317 (Bankr.E.D.Mo.1996) ("debtors objected to the IRS claim"); In re Elrod, 178 B.R. 5, 6 (Bankr.N.D.Okla.1995) ("Debtors filed an objection to the allowance of the claim"). As we stated above, the parties do not dispute that the judge has the power to determine the existence, validity or enforceability of the claim. Here, as explained above, the IRS had filed a valid proof of claim and no party has objected to it. Given this circumstance, we believe that if the IRS claim as submitted was questionable, the IRS should have been afforded an opportunity to be heard prior to its rejection by the court. The bankruptcy court characterized as equitable its refusal to allow the IRS to set off its claims against the USDA's debts. Although the allowance or disallowance of a set off is a decision which ultimately rests within the sound discretion of the trial court, see Bacigalupi, 60 B.R. at 445, the setoff right "is an established part of our bankruptcy laws . . . [and] should be enforced `unless compelling circumstances . . .' require otherwise." In re Buckenmaier, 127 B.R. 233, 237 (9th Cir. BAP 1991) (quoting Bohack Corp. v. Borden, Inc., 599 F.2d 1160, 1165 (2d Cir.1979)). Because the court did not cite any compelling circumstances for not allowing the setoff (other than those discussed above), the court's refusal to allow set off was an abuse of discretion and the case should be remanded to allow the court to apply the appropriate standards.[15] In addition to these principal issues, the parties raise three additional issues on appeal.[16] Rejection of forms filed by IRS. As discussed above, the IRS submitted tax forms filed by the debtors post-petition for pre-petition taxes. The court below did not allow the IRS to set off any of its claims that were based upon the debtors' 1993 Forms 940 and 941 because the pre-printed forms ostensibly covered post-petition periods and therefore "on their face, purport to include post-petition obligations of an unknown amount." However, the debtor's accountant indicated on each of the forms that the applicable period ended May 17, 1993, the date the debtors filed their petition in bankruptcy. Thus, it was clearly erroneous for the court to rule that the forms included post-petition obligations. Applicability of doctrine of marshalling. The doctrine of marshalling is an equitable remedy which the bankruptcy court may apply in its discretion. In Oregon, it has been defined as a "basic principle of equity that where a senior creditor has recourse to two funds and a junior creditor has recourse to but one of them, the senior creditor must seek to satisfy itself first out of the fund in which the junior creditor has no interest." Community Bank v. Jones, 278 Or. 647, 678, 566 P.2d 470, 488 (1977). The bankruptcy court correctly found that it could not apply the doctrine of marshalling; the real property which is valued at approximately $175,000 and has approximately $90,000 in liens superior to the IRS's liens is insufficient to satisfy the IRS claims which total more than $750,000. Disallowance of penalties and interest on liquidated debt. When determining the amount of the IRS's setoff, the bankruptcy court did not 224 allow the IRS penalties and interest due on one of the requested returns (the debtors' individual 1991 tax return) because the IRS's initial proof of claim did not contain a claim for penalties and interest. Because the IRS had not filed an amended proof of claim at the time of the hearing, the court stated that the initial proof of claim was the only proof of claim in evidence at the hearing. The IRS argues, without providing legal support, that interest and penalties on a liquidated tax liability, such as that found on the debtor's individual 1991 tax return, must also be liquidated because they "are merely mathematical computations based on the tax liability." Because of our ruling on the principal issue, it is not necessary to resolve this issue on appeal. Fed.R.Civ.P. 15 provides that leave to amend "shall be freely given when justice so requires" and allows an amended pleading to relate back to the date of the original pleading whenever the new claim or defense arises out of the same conduct, transaction or occurrence. The amendment of claims process is analogous to amendment of pleadings under Fed.R.Civ.P. 15. In re Solari, 63 B.R. 115 (9th Cir. BAP 1986). Therefore, on remand, the IRS should be provided the opportunity to amend its proof of claim and request penalties and interest on the original claim. CONCLUSION The trial court appropriately found that the IRS was entitled to offset claims for which the debtors had filed tax returns against moneys the USDA owed to the debtors. However, the court improperly denied the IRS its right to prove the basis for its offset. The court should have allowed the IRS to provide evidence of the taxes owed by the debtors so that its offset claim could be heard. The trial court's rulings allowing setoff of certain IRS claims and denying application of marshalling are AFFIRMED; the trial court's ruling denying setoff of IRS claims is VACATED. We REMAND for further proceedings consistent with this opinion. JONES, Bankruptcy Judge, dissenting: I respectfully dissent from the majority opinion. I would affirm the bankruptcy court based on the following grounds. A. Liquidity The bankruptcy court held that the IRS's claims were not liquidated because the IRS did not "provide evidence showing a reasonable basis for the assessment" of its claim. The majority holds that the IRS may rely on the presumptive validity of its proof of claim in order to meet its burden of proof for setoff. I disagree. The burden of proving the right to setoff rests with the party asserting that right. In re County of Orange, 183 B.R. 609, 615 (Bankr.C.D.Cal.1995). In order to meet its burden of proof, a creditor must show that the debt was liquidated. Although the term liquidated is not defined in the Bankruptcy Code, the Ninth Circuit has stated that "the question of whether a debt is liquidated turns on whether it is subject to `ready determination and precision in computation of the amount due.'" In re Fostvedt, 823 F.2d 305, 306 (9th Cir.1987). A debt is not subject to "ready determination" if the court must conduct an extensive and contested evidentiary hearing in which substantial evidence is required to establish the amount of the debt or liability, as opposed to a simple hearing on the amount of the debt. In re Wenberg, 94 B.R. 631, 634 (9th Cir. BAP 1988), aff'd, 902 F.2d 768 (9th Cir.1990). The bankruptcy judge is in the best position to determine whether an extensive hearing is required. Id. at 635. The majority holds that the IRS met its burden of proof through the prima facie validity of its proof of claim, or at least the court should have allowed the IRS an opportunity to show how it arrived at its figures. Courts which have addressed the issue of whether a tax debt was liquidated have required some showing of proof beyond the IRS's proof of claim. In In re Ekeke, 198 B.R. 315, 318 (Bankr.E.D.Mo.1996), the court required that the IRS make a prima facie showing as to the amount of its claim regarding calculation of the debt through the debtor's tax returns. This showing was in addition 225 to the IRS's filed proof of claim. In In re Elrod, 178 B.R. 5, 6 (Bankr.N.D.Okla. 1995), although the IRS had filed a proof of claim, the court held that the tax debt was unliquidated because the court could not determine the amount of the IRS's claim without holding an evidentiary hearing. The IRS's proof of claim is irrelevant. More relevant is the rule that a tax assessment is presumptively correct. The bankruptcy court stated that the rationale to this rule is that if the assessment is incorrect, the taxpayer has access to the documents which could dispute the correctness of the assessment. However, the court stated that this same rationale is not applicable when the IRS seeks to use its right of setoff to defeat the rights of third parties. The third party will not have access to the documents required to dispute the validity of the assessment. In such a case, the court held that the tax debt will not be considered liquidated unless the IRS can show a reasonable basis for the assessment, such as a filed tax return or otherwise. I agree. The bankruptcy court did give the IRS an opportunity to provide a basis for its assessments. After the initial hearing on the IRS's motion, the bankruptcy court was made aware of the fact that the debtors had filed tax returns for pre-petition tax periods after the original proof of claim was filed. The court, in a telephonic conference, requested copies of these returns so that the court could review the amount of tax that the debtors claim they owed. The court held these taxes liquidated. If the IRS had other returns or other evidence which would substantiate the precise amount of the remaining tax debt, the IRS should have submitted its evidence, as it was the IRS who was responsible for meeting its burden of proof. The burden was not on the court to specifically request evidence of which the court was not aware, especially where much of the tax debt was for years in which no return was filed. The bankruptcy court held as liquidated the tax debt for years for which a filed return was submitted to the court. The court found that the IRS had not met its burden of proof on the balance of the tax debt and held the debt to be unliquidated. The bankruptcy court was in the best position to determine the extent of the evidence needed to determine the precise amount of the debt. The court determined that the IRS would have to submit some evidence supporting the assessment because it was asserting its right to offset against a third party. The IRS did not submit the necessary evidence and the court was not required to specifically request each document that would support the assessments. The balance of the tax debt could not be precisely determined by simple mathematical computation and was not subject to ready determination as most of the debt was for years in which no return was filed. As such, the bankruptcy court properly held that the balance of the debt was not liquidated. B. Maturity The majority states that "[t]he court below correctly found that the IRS claim against the debtors were matured at the time of notification." This is a mischaracterization of the bankruptcy court's holding. The bankruptcy court held that the IRS held a matured claim only for liquidated taxes. Medina, 177 B.R. at 354. The court stated, "[t]he IRS held a matured claim against the debtors for the balance of the liquidated taxes. Therefore, as to those taxes for which setoff is otherwise available under nonbankruptcy law, the IRS has priority over Offord as assignee." Id. The only claims which the court held to be liquidated and therefore available for setoff were for tax debt for years in which the debtor filed a return. Thus, the bankruptcy court held that only those tax debts for years in which a return was filed were liquidated and matured. This distinction is of importance as the majority opinion holds that the bankruptcy court abused its discretion in ruling certain IRS claims to be unliquidated. Claims for tax debt in which no return has been filed or no assessment made are not matured for purposes of setoff in these circumstances, where a third party intervenes and perfects its lien. The IRS's tax lien arises only at the time that assessment is made pursuant to § 6321 of the Internal Revenue Code. Where the debtor has filed a return, which is a selfassessment, 226 the claim is matured. I agree with the bankruptcy court that the IRS claims for years in which a return was filed were both liquidated and matured. However, to the extent that the majority opinion holds that all of the IRS claims were matured, I disagree. C. Discretion of the bankruptcy court The law is clear that the ultimate decision on the allowance of setoff rests within the discretion of the bankruptcy court. The majority opinion holds that the bankruptcy court abused its discretion because it did not cite any compelling circumstances for disallowing the setoff. In this case, there were sufficiently compelling circumstances to deny the setoff. The IRS received notification of the debtor's assignment to Offord while it held an unliquidated, unrecorded tax debt in essence a secret lien. See C. Richard McQueen and Jack F. Williams, Tax Aspects of Bankruptcy Law and Practice, § 8.07 at 8-9 (2d ed. 1995) (stating that until the IRS properly files a notice of lien, the IRS holds a secret lien). Offord was helpless to protect itself against the IRS's claim to offset based upon a secret lien. An assignee has a duty to protect itself against potential setoff claims before taking an assignment by checking for recorded IRS liens or requesting copies of the assignor's filed tax returns. If there are no recorded liens, as in this case, and if the debtor did not file any returns, the assignee is helpless to protect itself from an offset based on a secret lien. In the meantime, here the assignee extended new value necessary for the debtor to complete its reforestation contracts while unknowingly subjecting itself to the IRS's claim for offset. The majority states that if a potential assignee requests copies of filed tax returns which are not produced, the assignee is put on notice that something is amiss, such as the possibility of unassessed taxes. This suggestion however, flies in the face of the wealth of recording lien perfection statutes that have long established a policy requiring that liens be recorded in a certain place, at which place a potential creditor or assignee would be able to search for recordation and become informed of a perfected lien. Under these statutes, a potential creditor or assignee is only required to search for a recorded lien, so that it does not have to ask a debtor about the existence of liens and risk an incomplete or inaccurate response. The recording lien perfection statutes instead provide for a creditor's sole method for protecting its lien through recordation, which the IRS failed to do. If a court allows the IRS to setoff claims for taxes in which the debtor did not file a return and the IRS did not record a lien, then the assignment of the contract proceeds is defeated by the secret lien. Such a situation leaves the assignee with no means of protecting itself from setoff claims of which it was unaware, and presents sufficiently compelling circumstance for disallowance of setoff. Accordingly, I would affirm the decision of the bankruptcy court. NOTES [1] In addition, Vicki owned Vicki Medina Church Company, a similar proprietorship that is not at issue on this appeal. [2] Unless otherwise indicated, all references to "chapter" or "section" are to the Bankruptcy Code, 11 U.S.C. §§ 101-1330; references to "rule" or "Fed.R.Bankr.P." are to the Federal Rules of Bankruptcy Procedure §§ 1001-9036, which make applicable certain Federal Rules of Civil Procedure ("Fed.R.Civ.P."). [3] The debtors had previously filed a Chapter 13 case which was dismissed on May 6, 1993. The IRS had given notice of a sealed bid sale of the debtors' property prior to the Chapter 13 filing, which was stayed by virtue of the Chapter 13. After dismissal, the IRS again filed notice of sale which was again stayed by virtue of the Chapter 11 filing on May 17, 1993. [4] The IRS's June, 1993 proof of claim has been amended several times. The latest proof of claim is for over $750,000. [5] The USDA issued checks payable to Medina for some of the work performed. These uncashed checks are currently held by the debtors' attorney pending resolution of this appeal. In addition, the debtors in possession have cashed some checks issued on these contracts and used the proceeds as cash collateral. This use is not at issue in this appeal. [6] The approximately $50,000 in setoffs were to come from the contract payments held by the USDA and, if necessary, the checks held in trust by the debtors' attorney. In addition, the court found the IRS had a valid tax lien on the foregoing contract payments in the amount of $18,975.08 and the IRS was granted relief to foreclose that lien. [7] The court, in its letter ruling, stated that the "rule that an assessment issued on an un-filed return is presumptively correct works well in the context of disputes between the IRS and non-filing taxpayers" because the taxpayers, unlike third parties, have access to documents that could arguably prove that the assessment is incorrect. [8] Upon rehearing, the court increased the amount found to be secured by the IRS' tax lien. The IRS' opening brief raises the amount of the IRS' total secured lien as an issue; however, the IRS does not provide a substantive argument and the bankruptcy court's ruling will stand. See Miller v. Fairchild Indus., 797 F.2d 727, 738 (9th Cir.1986) (We "will not ordinarily consider matters on appeal that are not specifically and distinctly argued in appellant's opening brief."). [9] Section 553 provides in pertinent part that "this title does not affect any right of a creditor to offset a mutual debt owing by such creditor to the debtor that arose before the commencement of the case under this title against a claim of such creditor against the debtor that arose before the commencement of the case." See also Section 542(b) (stating, with exceptions not relevant here, that "an entity that owes a debt that is property of the estate and that is matured, payable on demand, or payable on order, shall pay such debt to, or on the order of, the trustee, except to the extent that such debt may be offset under section 553 of this title against a claim against the debtor"). [10] The trial court ruled that Section 553 applied only to those invoices assigned to Offord because the debtors had no interest in the invoices purchased by Offord. See Medina, 177 B.R. at 355. [11] The court below relied on In re Hancock, 137 B.R. 835, 839 (Bankr.N.D.Okla.1992) for the proposition that to be setoff debts must be liquidated. This is not the rule in this circuit. See In re Buckenmaier, 127 B.R. 233, 239 (9th Cir. BAP 1991) (stating that "the Bankruptcy Code, with its expansive definitions of the terms `claim' and `debt,' protects the right of a creditor to assert a setoff despite the lack of certainty that the claim will actually accrue"). [12] The concept of mutuality contains several elements. To be mutual the debts must be in the same right and between the same parties, standing in the same capacity. 4 Collier on Bankruptcy ¶ 553.04[2] at 553-22 (15th ed. 1996). [13] The dissent disagrees with the majority opinion to the extent "all of the IRS claims were matured." Section 6151 of the Internal Revenue Code provides, with exceptions not relevant here: "when a return of tax is required under this title or regulations, the person required to make such return shall, without assessment or notice and demand from the Secretary, pay such tax to the internal revenue officer with whom the return is filed, and shall pay such tax at the time and place fixed for filing the return (determined without regard to any extension of time for filing the return)." 26 U.S.C. § 6151. The Ninth Circuit Court of Appeals has interpreted this section to provide that taxes are due and payable on the due date of the return, not on the date of assessment or some other date. Pan American Van Lines v. United States, 607 F.2d 1299, 1303 (9th Cir.1979). See also Federal Deposit Ins. Corp. v. United States, 654 F. Supp. 794, 806 (N.D.Ga. 1986) ("Under Section 6151 of the Internal Revenue Code, regardless of when federal taxes are actually assessed, the taxes are considered as due and owing, and constitute a liability as of the date the tax return for the particular period is required to be filed."). [14] The Ninth Circuit Court of Appeals and the BAP have held that, for purposes of section 109(e), a debt is liquidated if it is capable of "ready determination:" [T]he definition of `ready determination' turns on the distinction between a simple hearing to determine the amount of a certain debt, and an extensive and contested evidentiary hearing in which substantial evidence may be necessary to establish amounts of liability. On this issue, the bankruptcy judge has the best occasion to determine whether a claim will require an overly extensive hearing. In re Wenberg, 94 B.R. 631, 634-35 (9th Cir. BAP 1988), aff'd, 902 F.2d 768 (9th Cir.1990). [15] The dissent, while acknowledging that an assignee has "a duty to protect itself against potential setoff claims before taking an assignment by checking for recorded IRS liens or requesting copies of the assignor's filed tax returns," indicates that Offord should nevertheless be protected in this case: where, as here, there are no recorded liens and the debtor did not file tax returns, the "assignee is helpless to protect itself from an offset." Factors function in an environment where they must look for and be alert to warning signs. Had Offord requested copies of filed tax returns from the debtors (there is no evidence it did), the fact that Medina could not produce certain returns would have put it on notice that something was amiss, including the possibility of unassessed taxes. In any event, it was not the obligation of the IRS to see to it that tax returns were filed. If the debtor was errant in this respect, the equities are at least as favorable to the IRS as they are to Offord. [16] The dissent appears to raise an issue to the effect that an IRS tax lien has been overridden by a perfected security agreement in favor of Offord. This issue was not argued by Offord on appeal and therefore we do not consider it here.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1528508/	205 B.R. 922 (1996) In re FAMOUS RESTAURANTS, INC., Debtor. Bankruptcy No. 92-11160-PHX-SSC. United States Bankruptcy Court, D. Arizona. September 10, 1996. 923 924 Michael E. Lindsay, Cohen, Brame & Smith, P.C., Denver, CO, Movant. Patrick R. Barrowclough, Kalish Forrester, P.C., Phoenix, AZ, for Movant. Sean P. O'Brien, Gust Rosenfeld, Phoenix, AZ, for Respondent, Heller Financial. Cathy Reece, Fennemore Craig, Phoenix, AZ. MEMORANDUM DECISION SARAH SHARER CURLEY, Bankruptcy Judge. I. Preliminary Statement This is the final analysis of the rather prolonged and convoluted history concerning the quest of the law firm of Cohen, Brame & Smith (the "Firm") to recover attorneys' fees and costs as to its representation of the Debtors.[1] The Firm has abandoned any request for compensation as an administrative expense of the Debtors' bankruptcy estates. The Firm's most recent application focuses on 11 U.S.C. § 506(c) and the request to surcharge the collateral of Heller Financial, Inc. ("Heller"), the secured creditor of the Debtors. The Court conducted Bankruptcy Rule 7016 conferences and held evidentiary hearings on August 14, 1995, and December 13, 1995. Other than the Motion for Enforcement of Consensual Property Surcharge, the Response by Heller, and Reply by the Firm, the parties requested no additional briefing in this matter.[2] The parties also filed Stipulated Facts regarding Contested § 506(c) Surcharge, which the Court has considered in its decision.[3] After the conclusion of the evidentiary hearing on December 13, 1995, this Court took the matter under advisement. In this Memorandum Decision, this Court has set forth its findings of fact and conclusions of law pursuant to Rule 7052 of the Rules of Bankruptcy Procedure. The issues addressed herein constitute a core proceeding over which this Court has jurisdiction. 28 U.S.C. §§ 1334 and 157. II. Factual Discussion The Firm is located in Denver, Colorado, and represents a significant number of public and private businesses, including numerous restaurant companies. The Firm has represented the Debtors and their predecessors-in-interest in general corporate matters since 1979. Roger C. Cohen, a shareholder and director of the Firm, has been licensed to practice law in the state and federal courts of Colorado since 1961. Mr. Cohen was the lawyer at the Firm principally responsible for the legal services provided to the Debtors. Other lawyers at the Firm also rendered 925 services to the Debtors. Mr. Cohen was a director of Famous Restaurants, Inc., and Famous Restaurants of Utah, Inc., two of the Debtors herein. Mr. Cohen resigned as director on September 9, 1992.[4] On September 16, 1992, each of the Debtors filed a Chapter 11 bankruptcy petition in the District of Arizona. Fennemore Craig, P.C. ("Fennemore Craig") was approved by the Bankruptcy Court as general bankruptcy counsel for the Debtors. Upon the filing of their bankruptcies, the Debtors requested that the Firm continue to represent them with respect to corporate, securities, and real estate matters.[5] The ability of Fennemore Craig to provide legal services to the Debtors in the aforesaid matters was adversely affected by their lack of background in the business affairs of the Debtors, although Fennemore Craig had the expertise in these areas of practice.[6] The Firm agreed to provide such continued services under the same compensation arrangement that existed prior to the filing of the Debtors' bankruptcy petitions, with the services to be charged at the standard hourly rates for the time spent, and reimbursement for costs, disbursements and other expenses incurred by the Firm.[7] On September 18, 1992, this Court executed an Interim Financing Order (the "Interim Financing Order"). The Interim Financing Order was the product of successful negotiations between the Debtors and Heller, and those parties indicated their consent to and approval of the Interim Financing Order in writing.[8] Paragraph 4 of the Interim Financing Order provides as follows: Except as otherwise provided in paragraph 28 herein, in consideration for [Heller's] performance hereunder the surcharge provisions of Section 506(c) of the Code and the enhancement of collateral provisions of Section 552 of the Code shall not be imposed upon [Heller] or its collateral.[9] Paragraph 28 of the Interim Financing Order also provides: Notwithstanding any other provision of this Order, [Debtor] is entitled to utilize the proceeds of the Post-Petition Indebtedness, Pre-Petition and Post-Petition Collateral, or any cash or cash proceeds in which [Heller] has a lien or interest, and, to the extent not paid from the proceeds identified above, to seek a surcharge against [Heller's] Pre-Petition and Post-Petition Collateral, to pay [Debtor's] professional fees and costs which are approved by the Court as follows: (a) fees and expenses incurred by Fennemore Craig up to a maximum total of $350,000.00 (provided that the unapplied retainer of approximately $45,000.00 from [Debtor] that was held by Fennemore Craig at the time of the filing of petitions shall count as part of the $350,000.00), (b) fees and expenses incurred by [the Firm] up to a maximum total of $5,000.00 per month, and (c) fees and expenses incurred by Hanover Associates Inc. up to a maximum total of $25,000.00 per month. All entitlements discussed in this paragraph shall survive the termination of [Heller's] agreement to lend money or otherwise extend credit to [Debtor] or [Debtor's] ability to borrow money and seek financial accommodations from [Heller].[10] On October 6, 1992, the Debtors filed an application to employ the Firm as special counsel pursuant to 11 U.S.C. § 327(e).[11] At its own risk, the Firm continued to render postpetition services to the Debtors. At a hearing conducted on December 22, 1992, this Court noted the objections of the United States Trustee and the Unsecured 926 Creditors Committee to the retention of the Firm and rendered an extensive decision on the record denying the Firm's employment as special counsel to the Debtors. The Court noted that Mr. Cohen had been a director of several of the Debtors up to one month prior to the filing of the bankruptcy petitions. As such, Mr. Cohen had apparently been part of the process in selecting his Firm as counsel. Mr. Cohen would naturally want to defend his business decisions while a director, which role was not consonant with any counsel representing the Debtors in their new roles as fiduciaries for creditors and interested parties. The Firm would also want to defend its prior legal analyses, such as the preparation of filings for the Securities and Exchange Commission and other corporate documents, particularly in light of the Debtors' financial deterioration and inability to enter into an out-of-court workout with Heller. There was also the likelihood that the Firm had received a substantial prepetition preference. For instance, the Debtors' Statement of Financial Affairs indicated that the Firm received $373,188.89 in payments within the year preceding the Debtors' September 16, 1992 petition date.[12] The Court entered its order denying the employment of the Firm as the Debtors' special counsel on January 25, 1993.[13] The Debtors filed an appeal from the Interim Financing Order.[14] On July 30, 1993, the Debtors filed an application seeking compensation for the Firm on a number of grounds (the "Application").[15] The Application sought recovery of an administrative expense pursuant to 11 U.S.C. §§ 503(b)(1) and (b)(4).[16] The Application also requested relief for the Firm pursuant to 11 U.S.C. § 506(c). On September 28, 1993, Heller filed an objection to the Application opposing recovery of attorneys' fees and costs by the Firm as either an administrative expense or collateral surcharge.[17] On September 29, 1993, the United States Trustee for the District of Arizona filed her comments in opposition (the "Comments") to the Application.[18] On November 4, 1993, Heller withdrew its objection to the Firm's Application.[19] At a hearing on November 5, 1993, Heller's Arizona counsel stated Heller's position on the record. Counsel stated: My understanding is solely if the court approves the administrative expense of this application then [Heller] will pay those fees.[20] Upon further request for clarification by the Firm from Arizona counsel, Heller's counsel then stated: 927 If the court approves the application or surcharge Heller would be prepared to follow the court's order.[21] . . . . . I think as far as I am aware the only agreement was assuming this application is granted by the court then in that situation we will step up and pay those fees. If on the other hand, this court decides that the fee application should not be granted then we will not be responsible for the fees.[22] The Firm and the Court then engaged in an extensive discussion concerning the Firm's position as to why it should still be compensated although its retention as special counsel had never been approved. The Firm argued that it could render services, at some reduced level, in the ordinary course of the Debtors' business without any employment order. The reduced level of services need only be approved by the Court for reasonableness. Once the Court approved the compensation as reasonable, the Firm argued that it could then seek recovery from Heller pursuant to the Interim Financing Order and 11 U.S.C. § 506(c). Fennemore Craig, counsel for the Debtors, stated that it was in agreement with the Firm's analysis under Section 506(c).[23] The attorney with the United States Trustee's Office noted that she was disturbed that the Firm had continued to render services even though its employment as special counsel had been denied. Moreover, she stated that although the Firm was only supposed to render services as special counsel in the general corporate area, the Firm had expended a considerable amount of time and effort on the Debtors' reorganization issues and matters; that is, of the $48,000 in attorneys' fees and costs incurred by the Firm, the sum of $20,000 was for reorganization issues and matters. As such, the Firm could not claim that the services were rendered in the ordinary course of the Debtors' business or were simply incidental in nature.[24] The attorney for the United States Trustee's Office also stated that if the Firm sought compensation pursuant to Section 503(b)(1) or Section 506(c), the Firm had to be employed as special counsel for the Debtors.[25] Of course, the Court had denied such employment as of January 25, 1993. The Debtors continued with the prosecution of the appeal concerning the denial of employment of the Firm. The only other parties to the appeal were the Official Unsecured Creditors' Committee of the Debtors and the United States Trustee for the District of Arizona. The Debtors, the Unsecured Creditors' Committee and the United States Trustee stipulated in June 1994 that the Debtors' appeal on behalf of the Firm should be dismissed.[26] On or about June 25, 1994, the appeal was dismissed by order of the Arizona Federal District Court.[27] Therefore, this Court's order denying the Firm's employment as special counsel was no longer subject to being revisited or collaterally attacked. The August 14, 1995 and December 13, 1995 evidentiary hearings before this Court focused on a number of additional critical factual issues: (1) did the Interim Financing Order serve as the requisite consent of Heller to have its collateral surcharged?; (2) did the January 10 and 11, 1993 discussions between the agent for the Debtors and a representative of Heller serve as an independent basis for the requisite consent of Heller for a Section 506(c) surcharge?; and (3) did the withdrawal of Heller's objection to the initial Application of the Firm bar Heller from subsequently objecting to the Firm's current Motion for Enforcement of Consensual Surcharge? As to the evidence presented on the first factual issue concerning the Interim Financing Order, the parties focused on the language in the Interim Financing Order which 928 provided that the Debtors' "professionals fees and costs which are approved by the Court" would be paid.[28] Although counsel for the Debtors testified that "approval" of the fees and costs did not necessarily, in her mind, require employment of the professional, Heller's counsel testified that Heller strenuously objected to the retention of the Firm as counsel for the Debtors, both prepetition and postpetition. Heller was concerned about the Firm's connection with the Debtors, since Mr. Cohen of the Firm was also, almost to the point of filing of the bankruptcy petitions, a director of several Debtors. Heller questioned the ability of the Firm to represent the Debtors in their new role as fiduciaries to all creditors and interested parties. Heller also did not want its collateral utilized to pay all postpetition debts or obligations of the Debtors, and Heller specifically negotiated those debts to be paid with its collateral. Heller's counsel testified that the Interim Financing Order in Paragraph 28 only carved out potential payments of those professionals that had sought employment pursuant to 11 U.S.C. §§ 327(a) or 327(e). Approval of the Court was still necessary. Therefore, Heller's counsel concluded that pursuant to the Interim Financing Order, no fees or costs could be paid to any professional that was not employed pursuant to an order of the Bankruptcy Court. Debtors' counsel testified that professionals were usually required to be employed before they could be paid, but noted that certain courts had held that an attorney seeking a Section 506(c) surcharge need not be employed as a professional pursuant to Section 327.[29] Every professional listed in Paragraph 28 of the Interim Financing Order had sought employment pursuant to 11 U.S.C. § 327. Only the Firm had its employment denied. Also the party which the Debtors sought to surcharge, Heller, specifically interpreted the Interim Financing Order as requiring employment of the professional before the fees and costs could be paid. Therefore, this Court concludes from a factual standpoint that the "approval" language in the Interim Financing Order required, among other things, the Court's approval of the Firm's employment. As to the second factual issue, the parties presented evidence as to the January 10 and 11, 1993 discussions between the Debtors' agent[30] and a representative at Heller.[31] The Debtors' agent was retained prepetition to effectuate an out-of-court settlement with Heller. Postpetition, the Debtors' agent assisted in negotiating a plan of reorganization.[32] The Debtors' agent also believed that Mr. Cohen of the Firm was still one of the Debtors' directors at the time the decision was made as to the services to be rendered by Fennemore Craig, the Debtors' bankruptcy 929 counsel, and the services to be rendered by the Firm as general corporate counsel.[33] the Debtors' agent also conceded that the legal services rendered by the Firm included determining whether the Debtors had a lender liability claim against Heller, which services did not benefit Heller.[34] As to the conversations between the Debtors' agent and a representative of Heller in January 1993, the Debtors' agent testified that he was aware that the Firm's employment had not been approved by this court on the basis of a "conflict,"[35] and that he engaged in discussions with Heller's representative to determine an alternative basis to pay the Firm.[36] However, Heller did not provide the unconditional consent that the Debtors' agent or the Firm sought. The only agreement that was reached was simply if the Court approved the payment to the Firm "on some basis within the dollar amount of the parameters that were outlined," Heller would pay the Firm's attorneys' fees and costs.[37] With respect to the third factual issue concerning Heller's withdrawal of its objection to the Debtor's Application as to the Firm's attorneys' fees and costs, the Firm presented evidence concerning the October 22, 1993 letter forwarded to Heller's Arizona counsel, which stated in part: Heller's objection to this application was unexpected and, as shown below, a breach of Heller's express agreement to not object to the application. . . . . . During discussions held on January 10 and 11, 1993, concerning this matter, Hugh Wilder agreed on behalf of Heller that Heller would not object to the filing of an application by this [Firm] for payment on the basis of substantial contribution, and that if the Court allowed for such payment, Heller would abide by its original agreement in the Interim Financing Order for the payment of not more than $5,000 per month. . . . [38] Please consider this letter this firm's demand that Heller immediately withdraw its objection to the pending Application and, for the purpose of remedying any negative impact which the objection may have already had, file a pleading with the court fully reversing Heller's previous position concerning the same. Should Heller fail to take such action and [the Debtors'] pending application be denied, we will immediately file suit against Heller including, without limitation, claims for breach of contract, tortious interference with business relations, breach of duty of good faith and fair dealing, and fraudulent misrepresentation.[39] This letter is self-serving. The Firm clearly wanted Heller to withdraw its objection, yet many of the statements made in the letter were not supported by the evidence before this Court. For instance, the letter describes an "express agreement" to not object to the Application and to permit the Firm to recover on the basis of a "substantial contribution" to the estate pursuant to 11 U.S.C. § 503(b)(4). In fact, this Court has concluded that the "agreement," if any, was conditional or limited and required the Court's approval of the employment of the Firm and any attorneys' fees and costs to be paid to the Firm. Heller questioned whether the Firm would ever be able to recover under Section 503. The Firm and the Debtors' agent also used the term "substantial contribution" to the estate, and only if the Firm made such a showing to the Court would the Firm be paid. Such language has nothing to do with a secured creditor agreeing to have its collateral surcharged under Section 506(c). Because the Firm drafted the letter and did not refer to a Section 506(c) surcharge therein, the letter seriously undermines the Firm's argument that a Section 506(c) surcharge was ever discussed or 930 agreed to by Heller. Finally, although the Firm, at one point in time, had asserted a claim pursuant to 11 U.S.C. § 503(b)(1) or (b)(4), the Firm withdrew its request for compensation under said Sections. Therefore, the letter has no evidentiary effect as to the Section 506(c) surcharge issue. When Heller did withdraw its objection to the Debtors' Application concerning the Firm's attorneys' fees and costs, it was also done without prejudice. Counsel for Heller credibly testified that Heller saw no reason to engage in separate litigation in another forum with the Firm, on the basis of fraud, breach of contract or similar allegations, when the United States Trustee's Office was already objecting to the Firm being paid. Finally, Heller withdrew its objection to the Application on November 4, 1993; the Firm filed its current Motion for Enforcement on June 7, 1994; and the Debtors withdrew, by way of stipulation, their appeal of this Court's order denying the Firm's employment in June 1994. Given the number of months which elapsed between the various events, the Firm has made no showing that it waived certain rights or took certain actions as a result of anything that Heller proposed or did. Moreover, this Court concludes that the Firm simply took a calculated risk that it would recover its attorneys' fees and costs although its employment was denied. Concerning the actual Application for payment of the Firm's attorney's fees and costs, the Court has reviewed a number of pleadings and considered the testimony of Mr. Cohen before this Court.[40] The initial Application filed by the Firm with the Court was deficient in a number of ways.[41] First, the Firm provided no detailed description of the services rendered. Such entries as "correspondence with Mr. Mullen," "Telephone Conference with Mr. Gardner," "Telephone Conference with Mr. Mullen," "Research and Draft Memorandum," and "Review Fennemore Craig Memorandum" provided no guidance to this Court as to the legal services rendered by the Firm.[42] Moreover, the Court advised the Firm of the Application's deficiencies at the November 5, 1993 hearing. The Firm then filed, on February 22, 1994, a Memorandum which attached the Firm's slightly more detailed billing statements.[43] An entry such as "correspondence with Mr. Mullen" became "Correspondence with Mr. Mullen Re: Bank and Green Leaf'; "Telephone Conference with Gardner" became "Telephone Conference with Mr. Gardner Re: Bank" or "Telephone Conference with Mr. Gardner Re: Purchase."[44] However, many entries were still not adequately explained, such as 1.5 hours for "Research and Consideration of Litigation"; 1.25 hours to review "file materials" on "Green Leaf," "Lender Liability," and "Cardinal"; 1.25 hours on "Consideration of Lender Liability Claim"; 1.50 hours on "Prepare Memorandum Re: Various Aspects of Bankruptcy"; 1.25 hours for "Preparation for and Conference with Mr. Mullen Re: Green Leaf and Heller"; 1.00 hour for "Telephone Conferences with Messrs. Mullen and Gardner Re: Green Leaf, Heller and Lender Liability"; 1.00 on "Consideration of Alternatives Re: Sale of Company"; and 1.50 hours for "Correspondence with Green Leaf and Heller Re: Sale."[45] Finally, at the time of trial, Mr. Cohen testified as to the services rendered and provided additional exhibits which provided an overview of the services rendered. For instance, 931 under the category of "Heller Financial, Bankr. Reorganization and Related Matters," for which the Firm incurred $20,335 in attorneys' fees, the Court learned that such services were done solely at the request of the "Board of Directors and Officers of the Debtors" and that the Firm considered the purchase offers of Heller and Green Leaf Ventures for Debtors' businesses and whether the Debtors had a lender liability claim against Heller.[46] Mr. Cohen testified that he estimated that 20 percent of the services in the "Heller Financial" category considered the lender liability claim against Heller. However, such evidence does not reflect that the legal services were reasonable or that they benefitted Heller or assisted Heller in the preservation of its collateral. Rather, the Firm was rendering broad-based services at the request of, and for the benefit of, the Debtors. III. Legal Issues I. Whether the Firm may pursue a Section 506(c) surcharge although its request to be appointed special counsel was denied. II. Whether Heller consented to the use of its collateral to pay the Firm's attorneys' fees and costs. III. Whether Heller is barred by the doctrines of waiver or estoppel from asserting any objection to the Firm's Section 506(c) surcharge. IV. Legal Analysis I. Whether the Firm may pursue a Section 506(c) surcharge although its request to appoint special counsel was denied. The Firm initially argues that it is entitled to compensation pursuant to 11 U.S.C. § 506(c), which provides: The trustee may recover from property securing an allowed secured claim the reasonable, necessary costs and expenses of preserving, or disposing of, such property to the extent of any benefit to the holder of such claim. 11 U.S.C. § 506(c) (1996). The Firm principally relies on the decision of Central Bank of Mont. v. Cascade Hydraulics & Util. Serv., Inc. (In re Cascade Hydraulics & Util. Serv., Inc.), 815 F.2d 546 (9th Cir.1987), for the proposition that the Firm is entitled to compensation. In the Cascade Hydraulics case, Central Bank had a prepetition perfected security interest on the debtor's goods, merchandise, and inventory. When the debtor filed its bankruptcy petition, Central Bank objected to the use of its cash collateral. Although Central Bank subsequently stipulated to the use of its cash collateral, it agreed that only certain limited administrative expenses would be paid. The parties continued with the arrangement for a period of five months, at which time the debtor proposed to liquidate its assets via a plan of reorganization. Cascade Hydraulics, 815 F.2d at 547. After the sale, the bankruptcy court ordered that certain administrative expenses be paid, including $6,752.67 in attorney's fees. Id. The decision does not state whether the attorney's fees were those of debtor's counsel, although presumably that was the case. The Cascade Hydraulics court enunciated two general principles of bankruptcy law: (i) "encumbrances" are paid prior to administrative expenses, and (ii) administrative expenses may not generally be charged against a secured creditor's collateral. Id. at 548. Under the Bankruptcy Act, the exceptions to the second general principle were: (1) administrative expenses incurred primarily for the benefit of the secured creditor; (2) administrative expenses caused by the secured creditor; and (3) administrative expenses consented to by the secured creditor. Id. The Bankruptcy Code has codified the exceptions in 11 U.S.C. § 506(c), with the requirement that the debtor must show the expenses are: (1) reasonable; (2) necessary; and (3) beneficial to the secured creditor. Id. See also Treasurer of Snohomish County, Wash. v. Seattle First Nat'l Bank (In re Glasply Marine Indus., Inc.), 971 F.2d 391, 932 393-94 (9th Cir.1992); Lines v. North Coast Prod. Credit Ass'n (In re James E. O'Connell Co.), 893 F.2d 1072, 1074 (9th Cir.1990). In the Cascade Hydraulics case, the debtor made no showing that the costs or expenses were reasonable or necessary. On the benefit issue, the court concluded that the debtor must show in "quantifiable terms that it expended funds directly to protect and preserve the collateral." The Cascade Hydraulics court noted that "section 506(c) is not intended as a substitute for the recovery of administrative expenses normally the responsibility of the debtor's estate." Cascade Hydraulics, 815 F.2d at 548. The debtor's broad assertions that Central Bank benefitted from the adequate protection payments or that Central Bank's cooperation with the debtor was a benefit were insufficient to meet the benefit provision of the test. Id. The debtor's ordering of additional inventory and the debtor's submitting of bimonthly statements to Central Bank, without more, simply represented an incidental benefit to Central Bank and did not reflect a direct correlation between Central Bank's benefit and the disposition or preservation of its collateral. Id. at 549. Applying the Cascade Hydraulics case to the facts herein, this Court concludes that the Firm has failed to meet the Section 506(c) test. Under the first prong as to whether the expenses were "reasonable," a review of the Firm's billing statements and the exhibits at trial still reflect inadequate documentation to show that the compensation requested for the services rendered was reasonable. At the November 5, 1993 hearing, this Court engaged in an extensive discussion with the Firm's counsel noting the deficiencies in the Firm's Application. Although certain exhibits at trial assisted the Court in obtaining a better idea of what the Firm did, the evidence presented was still inadequate.[47] The Court expected a detailed description of all services rendered, the person performing the services, etc. Instead, the Firm presented a broad-based analysis, such as the fact that $20,220.50 was expended on Heller and reorganization issues. These services included an analysis of the Debtors' lender liability claim against Heller, and negotiations with the purchasers of the Debtors' assets. Only the directors and officers of the Debtors requested that such work be done. The Firm also included in the "Heller category" review of the Debtors' plan and disclosure statement even though the Debtors had already had Debtors' bankruptcy counsel prepare said documents with the assistance of Debtors' business people. The Debtors' agent also had not even reviewed the Application to determine the reasonableness of the fees and costs of the Firm. Next, the Court must consider the denial of the Firm as special counsel in determining whether the services rendered were "necessary." Mr. Cohen was a director of several of the Debtors up to within one month of the filing of the bankruptcy petition. It would be natural to defend the business decisions that he had made previously, including the selection of the Firm to represent the Debtors. It would be natural for him and his Firm to defend the legal positions previously advocated by the Firm. Given Mr. Cohen's close relationship to the Debtors almost to the point of the Debtors' filing, the Firm's retention was not in the best interest of the estate. The Firm had also prepared Securities and Exchange Commission filings and other corporate documents for the Debtors. Since the Debtors had encountered financial problems prepetition and had been unable to effectuate an out-of-court workout with Heller, this Court certainly questioned the Firm's ability to provide legal counsel to the Debtors in corporate areas. There was also a substantial question of whether the Firm had obtained a prepetition preference. Based upon the foregoing, it is hard to understand how the Firm's services were necessary. In fact, given the circumstances, just the opposite is true. Given the substantial issues raised by the Court concerning the Firm's employment, the Debtors' most prudent course of action should have been to retain other counsel. Certainly the Debtors did somewhat reduce their attorneys' fees and costs by using the Firm. However, the Firm 933 presented only general statements as to the cost reduction, and no credible evidence as to a specific or quantifiable reduction. Moreover, since Heller's counsel was already extensively involved in the Debtors' reorganization and had reviewed all, or almost all, documents prepared by any of Debtors' counsel, the Debtors should have considered permitting Heller's counsel to perform many of the legal services necessary to preserve Heller's collateral. From this Court's standpoint, it appears that the Firm duplicated the services that were being performed, or could have been performed, by the Debtors' or by Heller's counsel. On the "benefit" prong of the Section 506(c) test, the Firm has also failed to meet its burden of proof. The Firm "must establish in quantifiable terms that it expended funds directly to protect and preserve the collateral." Id. (emphasis added). Although the services rendered by the Firm may have been of some incidental benefit to Heller, given the broad description of the services rendered and the services already rendered by Heller's counsel, this Court concludes that there was no direct correlation between the services rendered by the Firm and the actual disposition or preservation of Heller's collateral. In essence, the Firm was representing the Debtors nothing more. Thus, the incidental benefits derived by Heller from the Firm's representation do not trigger Section 506(c). Id. Moreover, such standard potential administrative expense claims should not be transformed into Section 506(c) claims when the Court does not approve them as administrative expenses. See FDIC v. Jenson (In re Jenson), 980 F.2d 1254, 1260 (9th Cir.1992) (holding that § 506(c) "was not intended as a substitute for recovery of normal administrative expenses from the debtor's estate,") (citing In re Proto Specialties, Inc., 43 B.R. 81, 83 (Bankr.D.Ariz.1984)); Cascade Hydraulics, 815 F.2d at 548 (holding that § 506(c) "is not intended as a substitute for the recovery of administrative expenses normally the responsibility of the debtor's estate.") This Court has denied compensation to the Firm based upon the Firm's failure to meet the Section 506(c) test. The Court should also consider to what extent a professional may recover under Section 506(c) although the professional's employment has not been approved by the bankruptcy court. In another Ninth Circuit decision, North County Jeep & Renault, Inc. v. General Elec. Capital Corp. (In re Palomar Truck Corp.), 951 F.2d 229 (9th Cir.1991) (per curiam), cert. denied, 506 U.S. 821, 113 S. Ct. 71, 121 L. Ed. 2d 37 (1992), a proposed purchaser of the estate's assets continued to operate the debtor's business pending the bankruptcy court approval of the proposed purchaser's offer. Ultimately, the assets were sold to a different party and the proposed purchaser sought a Section 506(c) surcharge against the collateral of the secured creditor for the costs and expenses incurred by the proposed purchaser prior to the sale. Although the proposed purchaser did not seek prior bankruptcy court approval of its administrative expense claim before expending the costs and expenses to keep the debtor's business going, the bankruptcy court did subsequently approve the administrative expense claim. Palomar Truck, 951 F.2d at 230. The Ninth Circuit stated, "[p]rior court approval may make a claim for administrative expenses more palatable, but it is nowhere required in the Code." Id. at 232. However, this broad statement in Palomar may not be applied to all administrative expenses. The Ninth Circuit has consistently taken a different view as to professionals. If a professional is to act on behalf of the bankruptcy estate, the bankruptcy court must approve the employment of the professional. Okamoto v. THC Finc. Corp. (In re THC Fin. Corp.), 837 F.2d 389, 391-92 (9th Cir.1988); DeRonde v. Shirley (In re Shirley), 134 B.R. 940, 943-44 (9th Cir. BAP 1992). The professional is not in a more favorable position, if the professional seeks Bankruptcy Court approval but the employment is not approved. McCutchen, Doyle, Brown & Enersen v. Official Comm. of Unsecured Creditors (In re Weibel, Inc.), 176 B.R. 209 (9th Cir. BAP 1994). In the Weibel case, the Bankruptcy Appellate Panel stated that "[c]ompensation to professionals acting on behalf of the estate must be based on provisions of the Code. The Code does not 934 provide for fee awards based on state law theories such as quantum meruit." Weibel, 176 B.R. at 212. The Weibel Panel also cited with approval the earlier decision of In re Shirley, and noted: [C]ourt approval of the employment of counsel for a debtor in possession is sine qua non to counsel getting paid. Failure to receive court approval for the employment of a professional in accordance with § 327 and Rule 2014 precludes the payment of fees. Id. at 211 (quoting In re Shirley, 134 B.R. at 943-44). Since the law firm in Weibel never received bankruptcy court approval to act on behalf of the debtor in possession, it advanced the argument that it could be compensated pursuant to 11 U.S.C. §§ 330(a) and 503(b)(2) simply as the "debtor's attorney."[48] The Panel stated that Section 330 divided attorneys into two categories: those that were employed pursuant to Section 327 and those that served as the debtor's attorneys. Although Section 330 was amended in 1994 and deleted the reference in the preamble to "debtor's attorney," the Weibel analysis is still important in this Court's consideration of the transaction between a debtor in possession and its counsel. A debtor in possession must act as a fiduciary, since it has control of the bankruptcy estate. 11 U.S.C. § 1107(a) (1996).[49] As to any professional employed by a debtor in possession, that professional is: expected to act only in the best interests of the estate. Therefore, court approval of its employment is necessary. If a debtor is not in possession, these same concerns do not come into play. Counsel for the debtor then, to the extent it gets involved in the case, represents the debtor and not the estate or the creditors. Therefore, court approval of employment is not necessary. Weibel, 176 B.R. at 212. The Weibel Panel concluded that there could be instances in which a debtor was not in possession, but the debtor's attorneys nevertheless conferred a benefit upon the estate for which the attorneys should be compensated. Id. (citing In re Xebec, 147 B.R. 518 (9th Cir. BAP 1992) (allowing debtor's counsel some compensation from estate although a trustee was in place)). Therefore, compensation may be only awarded under Section 330 to the "debtor's attorney" if the debtor is not in possession and the other requirements of Section 330 have been met. Id. at 212. The Weibel Panel also considered whether a professional might seek compensation pursuant to 11 U.S.C. § 503(b)(1) to avoid the requirements of Section 503(b)(2) which only 935 awards compensation to professionals pursuant to 11 U.S.C. § 330. The Panel concluded that since Subsections (b)(1) and (b)(2) of Section 503 would pose nearly identical tests to a professional, the specific provisions of Section 503(b)(2) must control. Id. at 213.[50] Therefore, the Panel refused to let the attorneys seek compensation pursuant to Section 503(b)(1). In this case, the Debtors were always debtors in possession. Based upon principally the Shirley and Weibel decisions, the Firm could not act as a professional for the Debtors without obtaining Bankruptcy Court approval of the employment of the Firm. Because this Court's order denying employment of the Firm became a final order, the Firm was never able to obtain the requisite Court approval. Notwithstanding, the Firm relies upon Cristopher v. Mir (In re Boh! Ristorante, Inc.), 99 B.R. 971 (9th Cir. BAP 1989), for the proposition that so long as the Firm is being paid by a third party in this case, potentially by Heller the Court need not be concerned about employment issues and whether the Firm, as special counsel, has met the standards of 11 U.S.C. § 327(e). First, the Panel in Boh! Ristorante recognized that it was authorizing the payment of fees and costs to debtor's counsel under "limited circumstances," so the effect of the decision has also been limited. Boh! Ristorante, 99 B.R. at 973. Next, the Panel stated that it was focusing on 11 U.S.C. § 329[51] and the debtor's transactions with its attorneys, rather than 11 U.S.C. § 330. However, subsequent decisions of the Panel, such as Weibel, have clarified that at least in chapter 11 cases, Section 330 pertains to a debtor in possession's transactions with its attorneys and an attorney seeking compensation pursuant to the Bankruptcy Code. Therefore, Boh! Ristorante has been limited in its application to only those cases involving debtors, not debtors in possession, that have retained counsel and the attorneys are not seeking compensation under any provision of the Bankruptcy Code. The foregoing analysis is derived from the language of Sections 329 and 330. Section 330 provided prior to the 1994 amendments that it pertained to the "debtor's attorney" and to a professional employed under Section 327 or Section 1103. The current version of Section 330 pertains to professionals employed under Section 327 or Section 1103, or to the debtor's counsel in chapter 12 or chapter 13 cases. 11 U.S.C. §§ 330(a)(1) and (a)(4)(B).[52] Therefore, there has been no 936 substantive change at least as to counsel for a chapter 11 debtor in possession, since a debtor in possession employs its counsel pursuant to the provisions of Section 327. Either version of Section 330 also incorporates the language that Section 330 is "subject to . . . 329." In turn, Section 329 provides that it is applicable to all debtor's transactions with its attorneys "whether or not such attorney applies for compensation under this title." Of course, the reference to "title" is to Title 11 of the United States Code. In this case, the Firm only had transactions with the Debtors as debtors in possession. Therefore, the Weibel and Shirley decisions mandate that any such professional obtain court approval for employment. It is undisputed that the Firm never obtained such approval; therefore, the Firm is not justified in believing it would be compensated for its services. See Law Offices of Ivan W. Halperin v. Occidental Fin. Group, Inc. (In re Occidental Fin. Group, Inc.), 40 F.3d 1059 (9th Cir.1994); First Interstate Bank of Nev., N.A. v. CIC Inv. Corp. (In re CIC Inv. Corp.), 192 B.R. 549, 552 (9th Cir. BAP 1996). As a result, the Firm should not be permitted to utilize Section 506(c) to circumvent the order of this Court denying employment. The Firm also provided broad-based legal services, such as review and determination of whether certain leases should be assumed by the Debtors, analysis of a lender liability lawsuit against Heller, and determination of whether a preference lawsuit should be instituted against a principal of the Debtors. Compensation of an attorney rendering such broad-based legal services should be subject to the analysis of Section 330 and whether compensation is appropriate thereunder. The Firm has sought compensation under Section 506, which contains some of the elements of Section 330, but is also more expansive, including costs and expenses of individual creditors, not professionals. However, as the Weibel decision noted, the more specific provision of the Code should control over the more general; that is, in this case, Section 330 should control over Section 506. Because the Firm concedes that it no longer seeks compensation pursuant to Section 330, it has effectively precluded this Court's approval of its compensation. II. Whether Heller consented to the use of its collateral to pay the Firm's attorneys' fees and costs. This Court has already concluded that the Firm did not meet any prong of the Section 506(c) test. However, the issue of whether Heller consented, expressly or impliedly, to a surcharge of its collateral really addresses only an exception to the third prong or "benefit" prong of the Section 506(c) test. Therefore, even if the Firm had met the "benefit" prong of the Section 506(c) test, it still would not be entitled to compensation. On the consent issue, the Firm relies upon In re Evanston Beauty Supply, Inc., 136 B.R. 171 (Bankr.N.D.Ill.1992), which states that a secured creditor may expressly or impliedly consent to the services being rendered to the creditor. Such consent is an exception to the "benefit" prong of the Section 506(c) test. Evanston Beauty Supply, 136 B.R. at 177. In addition, the Ninth Circuit decision of Cascade Hydraulics noted that, under the Bankruptcy Act, the secured creditor could consent to have certain administrative expenses paid from its collateral, and that such an exception had generally been codified in 11 U.S.C. § 506(c). Cascade Hydraulics, 815 F.2d at 548. Therefore, although not expressly stated by the Ninth Circuit, one may assume that consent by a secured creditor would be an appropriate exception to the direct benefit prong of the Section 506(c) test. Heller did, at times, expressly and unconditionally consent to the use of its collateral to pay certain costs and expenses of 937 administration. For instance, at the December 13, 1995 hearing before this Court, Heller's counsel specifically testified, and the record of this Court so reflects, that the Debtors' employees should be paid pursuant to a Section 506(c) surcharge. As to the Firm, however, any consent by Heller was limited or conditional. As previously discussed by this Court, the January 10 and 11, 1993 discussions between the Debtors' agent and a representative of Heller did not provide the requisite implied or express consent on the Section 506(c) surcharge issue.[53] The Interim Financing Order did provide a limited or conditional consent for a Section 506(c) surcharge; however, the Firm needed to obtain approval of its employment and its fees and costs before Heller was required to pay the Firm. The Firm did not obtain the requisite Court approvals. III. Whether Heller is barred by the doctrines of waiver or estoppel from asserting any objection to the Firm's Section 506(c) surcharge. The Firm argues that it is entitled to a surcharge under the doctrines of waiver and estoppel. The Firm initially relies on Heller's withdrawal of its objection to the Debtors' Application requesting compensation for the Firm as a form of waiver. To reiterate, on July 30, 1993, the Debtors filed an application to compensate the Firm for postpetition services rendered and costs incurred predicated on an administrative expense pursuant to 11 U.S.C. §§ 503(b)(1) and (b)(4)[54] and a property surcharge pursuant to 11 U.S.C. § 506(c). On September 28, 1993, Heller filed a lengthy objection as to all relief requested by the Firm, including an objection to the relief requested under Section 506(c). On November 4, 1993, Heller filed a withdrawal of its objection. The Firm argues that Heller "intentionally and knowingly filed the withdrawal of its prior objection, thereby waiving its right to oppose the surcharge request."[55] However, as this Court pointed out to the Firm's counsel at closing argument on December 13, 1995, withdrawal of a pleading is normally done without prejudice. Heller did not indicate to the Firm or the Court that the withdrawal was with prejudice or that Heller would no longer pursue the surcharge issue. The Court did not enter any order stating that the withdrawal was with prejudice. In fact, such an order would probably be improper in light of the Ninth Circuit decision of Resorts Int'l, Inc. v. Lowenschuss (In re Lowenschuss), 67 F.3d 1394 (9th Cir.1995), cert. denied, ___ U.S. ___, 116 S. Ct. 2497, 135 L. Ed. 2d 189 (1996) (holding that judge abused discretion in ordering that claim be withdrawn with prejudice when creditor was not prepared to go to trial on the scheduled date and time and told bankruptcy judge that it wished to withdraw its claim, pursue litigation in another forum and potentially reassert its claim in the bankruptcy proceedings at a later date depending on the outcome of related litigation). In this case, Heller presented credible evidence that the withdrawal of the objection resulted from Heller's belief that the United States Trustee's Office in the District of Arizona would vigorously pursue its separate Comments, filed on September 29, 1993, to the July 30, 1993 Application filed by the Debtors to approve compensation to the Firm. Although the United States Trustee objected to the Firm's having its fees and costs approved and paid as any type of administrative expense of the bankruptcy estates, the United States Trustee understandably took no position on the surcharge issue other than to note that she believed that a professional seeking compensation pursuant to Section 506(c) still needed to be employed pursuant to 11 U.S.C. § 327. Therefore, Heller assumed the risk that the United States Trustee would be successful in its objection on the administrative expense issue and that the Court would not enter a separate 938 final order on the surcharge issue. Ultimately, the Firm withdrew its request for any type of administrative expense, did not obtain a separate Court order on the Section 506(c) surcharge issue as to the Application, and filed its most recent Motion for Enforcement of Consensual Property Surcharge, thereby affording Heller the opportunity to object on just the discrete surcharge issue. Heller's risk assessment was correct. However, Heller's risk assessment does not lead to a valid claim that Heller waived certain rights against the Firm. Next, the Firm relies upon the Ninth Circuit decision of Cukierman v. Mechanics Bank of Richmond (In re J.F. Hink & Son), 815 F.2d 1314 (9th Cir.1987), for the principle that estoppel applies to orders entered in bankruptcy proceedings. A party should not, through language and conduct, lead other interested parties to consent to the terms and conditions of a proposed order and, therefore, lead the Court to execute the order. See Hink, 815 F.2d at 1318. Of course, the Firm considers only the Interim Financing Order in its analysis. However, as this Court has previously noted, the Interim Financing Order required "approval" of the Firm's employment and the fees and costs before the fees and costs would be paid by Heller. All of the professionals, including the Firm, were seeking employment, at that time, pursuant to Section 327. It was reasonable for Heller and the Court to assume that employment was a part of the "approval" process. From this Court's standpoint, it was the Firm's responsibility, not Heller's, to notify this Court, if the Interim Financing Order did not require approval of the Firm's employment. If any party was not completely candid with the Court, it was the Firm. Therefore, it is difficult to award the Firm compensation on the basis of estoppel. Moreover, the Firm does not discuss this Court's order denying the Firm's employment in its analysis. This Court cautioned the Firm, by making statements on the record, that the Firm was at risk in rendering any services to the Debtors. Nevertheless, the Firm sought to circumvent this Court's order by attempting to enter into an "agreement" with Heller. This agreement was not as favorable as the Firm had hoped. However, this Court must seriously question any estoppel argument, when the party seeking equity has attempted to circumvent a specific Court order denying employment. The Firm also apparently makes an equitable estoppel argument on the basis that it caused the Debtors to withdraw the pending appeal of this Court's order denying the Firm's employment based upon the agreement entered into with Heller. Pursuant to Heltzel v. Mecham Pontiac, 152 Ariz. 58, 730 P.2d 235 (1986), Arizona law requires that the following elements be proven to establish equitable estoppel: (1) conduct by one which induces another to believe in certain material facts; and (2) the inducement results in acts in justifiable reliance thereon; and (3) the resulting acts cause injury.[56] Even considering the Heltzel case, the Firm has not set forth the requisite facts to establish estoppel. The Firm had a limited agreement with Heller as a result of the January 10 and 11, 1993 discussions. On November 4, 1993, Heller withdrew its objection to the Application, but the withdrawal was without prejudice at a time when the United States Trustee was still pursuing her Comments. Based upon these limited facts, the Firm nevertheless elected to stipulate to dismissal of the appeal in June 1994 regarding the Firm's employment order. Heller did not induce the Firm to change its position. The Firm never requested that this Court enter any final order on the Application concerning the Firm's compensation. The Firm simply made an improper risk assessment. Therefore, when the Firm filed this Motion for Enforcement, it gave Heller the opportunity to address the Section 506(c) surcharge issue. V. Conclusion This Court concludes that the Firm is not entitled to the payment of its attorneys' fees and costs by means of a Section 506(c) surcharge against Heller's collateral. This *939 Court will enter a separate order which is consistent with this Memorandum Decision. NOTES [1] The jointly administrated proceedings include: (1) Famous Mexican Restaurants of Idaho, Inc., Case No. 92-11153; (2) Famous Mexican Restaurants of Utah, Inc., Case No. 92-11154-PHX-SSC; (3) Famous Mexican Restaurants of Arizona, Inc., Case No. 92-11155-PHX-SSC; (4) Famous Restaurants of Anchorage, Inc., Case No. 92-11156-PHX-SSC; (5) Garcia's of the Carolinas, Inc., Case No. 92-11157-PHX-SSC; (6) Fiesta Enterprises, Inc., Case No. 92-11158-PHX-SSC; (7) Garcia's Restaurants, Inc., Case No. 92-11159-PHX-SSC; (8) Famous Restaurants, Inc., Case No. 92-11160; (9) BGB Investment Co., Case No. 92-11161-PHX-SSC; and (10) Famous Fish Restaurants, Inc., Case No. 92-11163-PHX-SSC. [2] The Motion for Enforcement is Docket Entry No. 922; the Response, Docket Entry No. 935; and the Reply, Docket Entry No. 938. [3] Docket Entry No. 966. [4] Docket Entry No. 966, ¶¶ 1-6. [5] Id. ¶¶ 7-9. [6] Id. ¶ 9. [7] Id. ¶¶ 9-10. [8] Id. ¶¶ 11-12. [9] Movant's Ex. 5, ¶ 4. A copy of the original Interim Financing Order was admitted into evidence at the August 14, 1995 evidentiary hearing, and is also attached to the Stipulated Facts as Exhibit A. [10] Movant's Ex. 5, ¶ 28 (emphasis added). [11] Docket Entry No. 43. [12] Docket Entry No. 51, Statement of Financial Affairs, Item 3b. [13] Movant's Ex. 6. See also Docket Entry No. 177. [14] Movant's Ex. 10. See also Docket Entry No. 230. [15] Movant's Ex. 2. See also Docket Entry No. 712. [16] 11 U.S.C. §§ 503(b)(1) and (4) provide: (b) After notice and a hearing, there shall be allowed administrative expenses, other than claims allowed under section 502(f) of this title, including (1)(A) the actual, necessary costs and expenses of preserving the estate, including wages, salaries, or commissions for services rendered after the commencement of the case; [and] . . . . . (4) reasonable compensation for professional services rendered by an attorney or an accountant of an entity whose expense is allowable under paragraph (3) of this subsection, based on the time, the nature, the extent, and the value of such services, and the cost of comparable services other than in a case under this title, and reimbursement for actual, necessary expenses incurred by such attorney or accountant[.] However, any compensation under § 503(b)(4) was predicated upon a finding that the creditor which requested its attorneys' or accountants' fees and costs be paid had made, for instance, a "substantial contribution in a case under chapter . . . 11 of this title[.]" See 11 U.S.C. § 503(b)(3)(D). [17] Docket Entry No. 777. [18] Docket Entry No. 779. [19] Docket Entry No. 825. [20] Movant's Ex. 7 at 5, lines 23-26. [21] Id. at 6, lines 24-26. [22] Id. at 7, lines 17-25. [23] Id. at 29, lines 1-11. [24] Id. at 31-33. [25] Id. at 33-34. [26] Movant's Ex. 11. [27] Movant's Ex. 12. [28] Movant's Ex. 5, ¶ 28; see supra notes 9-10 and accompanying text. [29] At the time she testified, she did not cite any specific authority for this proposition. [30] The parties stipulated that Mr. Hartwell McIntyre Gardner's testimony could be presented by way of deposition transcript. Mr. Gardner resides in Connecticut and could not attend the hearings before this Court. See Movant's Ex. 1. Because certain objections were noted at the time of the deposition, the Court will also rule on those matters at this time. Movant's Ex. 1 at 14, lines 2-5, objection sustained lack of foundation; at 18, lines 15-18, objection sustained lack of foundation; at 19, line 2, objection sustained lack of foundation; at 19, lines 18-19, objection sustained lack of foundation; at 20, lines 8-9, objection sustained lack of foundation; at 20, lines 21-22, objection sustained lack of foundation; at 27, line 20, objection overruled; at 31, lines 4-5, objection overruled. Mr. Gardner testified at Movant's Ex. 1, page 17, lines 1-6, that the Debtors' employees worked with Fennemore Craig and the Firm to renegotiate the leases at a number of locations. Therefore, when Mr. Gardner testified, he focused only generally on the services rendered by the Firm and based his statements upon hearsay; that is, based upon information given to him by individuals at the Debtors. Also given the fact that Mr. Gardner was an adviser to the Debtors, no foundation was laid as to the information relied upon by Mr. Gardner to form an opinion as to whether the Firm's services were reasonable or necessary to preserve or dispose of Heller's collateral or whether the services were of benefit to Heller. Mr. Gardner conceded, for instance, that he had never received and reviewed a copy of the fee application of the Firm. Id. at 37, line 24, to 38, line 11. [31] The representative for Heller was Hugh Wilder. [32] Movant's Ex. 1 at 9, lines 10-20. [33] Id. at 24-25. [34] Id. at 31-32. [35] Id. at 15-16. [36] Id. at 34. [37] Id. at 35, lines 16-18. [38] Respondent's Ex. A, at 1. [39] Id. at 1-2. [40] The Court has reviewed the billing statements to Movant's Ex. 2; the Firm's Memorandum in Support thereof, Docket Entry No. 892; and Movant's Exs. 3-4. Mr. Cohen testified on August 14, 1995. [41] Movant's Ex. 2. [42] Id. at "Heller Financial and Reorganization" invoice, dated March 31, 1993; "RCC" entries on October 12, 1992, October 27, 1992, October 28, 1992, October 30, 1992, November 9, 1992, November 10, 1992, and November 16, 1992. [43] Docket Entry No. 892. [44] Compare Movant's Ex. 2 with Docket Entry No. 892, "Heller Financial and Reorganization" invoice, dated March 31, 1993; "RCC" entries on October 12, 1992, October 27, 1992, October 28, 1992, and October 30, 1992. [45] See supra note 44 for documents to compare, except that these are "RCC" entries on October 28, 1992, November 10, 1992, November 26, 1992, November 30, 1992, December 2, 1992, December 7, 1992, and December 8, 1992. [46] Movant's Ex. 3 at 7-8 and Movant's Ex. 4 at 2, ¶ 7. [47] See Movant's Exs. 2-4. [48] At the time of the Weibel decision, Section 11 U.S.C. § 330(a)(1) provided as follows: (a) After notice to any parties in interest and to the United States trustee and a hearing, and subject to sections 326, 328, and 329 of this title, the court may award to a trustee, to an examiner, to a professional person employed under section 327 or 1103 of this title, or to the debtor's attorney (1) reasonable compensation for actual, necessary services rendered by such trustee, examiner, professional person, or attorney, as the case may be, and by any paraprofessional persons employed by such trustee, professional person, or attorney, as the case may be, based on the nature, the extent, and the value of such services, the time spent on such services, and the cost of comparable services other than in a case under this title[.] 11 U.S.C. § 330(a)(1) (amended 1994). The 1994 amendments to Section 330 deleted the reference to "debtor's attorney" and, hence, drew into question the ability of said attorney in a chapter 7 proceeding to receive any compensation pursuant to Section 330. Section 503(b)(2) further provides: (b) After notice and a hearing, there shall be allowed administrative expenses, other than claims allowed under section 502(f) of this title, including . . . . . (2) compensation and reimbursement awarded under section 330(a) of this title[.] 11 U.S.C. § 503(b)(2) (1996). [49] 11 U.S.C. § 1107(a) provides: (a) Subject to any limitations on a trustee serving in a case under this chapter, and to such limitations or conditions as the court prescribes, a debtor in possession shall have all the rights, other than the right to compensation under section 330 of this title, and powers, and shall perform all the functions and duties, except the duties specified in sections 1106(a)(2), (3), and (4) of this title, of a trustee serving in a case under this chapter. 11 U.S.C. § 1107(a) (1996). [50] Section 503(b)(2), incorporating § 330, permits reasonable compensation for "actual, necessary services rendered by" the attorney. 11 U.S.C. § 503(b)(2) (1996). Section 503(b)(1) provides for payment of administrative expenses of the "actual, necessary costs and expenses of preserving the estate." 11 U.S.C. § 503(b)(1) (1996). [51] 11 U.S.C. § 329 provides: (a) Any attorney representing a debtor in a case under this title, or in connection with such a case, whether or not such attorney applies for compensation under this title, shall file with the court a statement of the compensation paid or agreed to be paid, if such payment or agreement was made after one year before the date of the filing of the petition, for services rendered or to be rendered in contemplation of or in connection with the case by such attorney, and the source of such compensation. (b) If such compensation exceeds the reasonable value of any such services, the court may cancel any such agreement, or order the return of any such payment, to the extent excessive, to (1) the estate if the property transferred (A) would have been property of the estate; or (B) was to be paid by or on behalf of the debtor under a plan under chapter 11, 12, or 13 of this title; or (2) the entity that made such payment. 11 U.S.C. § 329 (1996). [52] Section 330(a)(1) now provides: (a)(1) After notice to the parties in interest and the United States Trustee and a hearing, and subject to sections 326, 328, and 329, the court may award to a trustee, an examiner, a professional person employed under section 327 or 1103 (A) reasonable compensation for actual, necessary services rendered by the trustee, examiner, professional person, or attorney and by any paraprofessional person employed by any such person; and (B) reimbursement for actual, necessary expenses. 11 U.S.C. § 330(a)(1) (1996). Section 330(a)(4)(B) now provides: In a chapter 12 or chapter 13 case in which the debtor is an individual, the court may allow reasonable compensation to the debtor's attorney for representing the interests of the debtor in connection with the bankruptcy case based on a consideration of the benefit and necessity of such services to the debtor and the other factors set forth in this section. 11 U.S.C. § 330(a)(4)(B) (1996). Therefore, the revised § 330 only creates an ambiguity as to whether debtor's counsel in a chapter 7 proceeding may be compensated pursuant to Title 11. This Court is only focusing on chapter 11 proceedings. [53] Given the recollection of Debtors' agent and the subsequent letter by the Firm, the only issue that was discussed was the potential payment of the Firm if it could show that it made a "substantial contribution" as a creditor to the Debtors' chapter 11 proceedings. See 11 U.S.C. §§ 503(b)(3) and (b)(4). The Firm did not pursue this argument before this Court. [54] See supra note 15. [55] Docket Entry No. 938 at 2, lines 20-22. [56] Heltzel, 152 Ariz. at 61, 730 P.2d at 238.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1528543/	205 B.R. 358 (1997) In re Petition of Alison J. TRECO and David Patrick Hamilton, as Liquidators of Meridien International Bank Limited (In Liquidation), Debtor in Foreign Proceedings. No. 96 Civ. 3170 (SS), Bankruptcy No. 95 B 44326 (JLG). United States District Court, S.D. New York. February 10, 1997. 359 Otterbourg, Steindler, Houston & Rosen, P.C., Kurt J. Wolff, (Daniel Wallen, of counsel), New York City, for Appellants, The Bank of New York and JCPL Leasing Corp. Stroock & Stroock & Lavan, Melvin A. Brosterman (David Bolton, of counsel), New York City, for the Liquidators of Meridien International Bank. MEMORANDUM AND ORDER SOTOMAYOR, District Judge. Appellants, The Bank of New York and JCPL Leasing Corp. (collectively the "Bank"), appeal from an order signed by the Bankruptcy Court on March 12, 1996 (the "Modified Order"). For the reasons to be discussed, the Modified Order is affirmed. BACKGROUND On December 8, 1995, the Bankruptcy Court, by the Hon. James L. Garrity Jr., entered a Preliminary Injunction Order (the 360 "Order") enjoining the commencement or continuation of any proceeding against the debtor Meridien International Bank Limited ("MIBL"): except for the action styled as The Bank of New York et ano v. Meridien BIAO Bank Tanzania Limited, et al., 95 Civ. 4856 (SS) and any claims, counterclaims, cross-claims or third-party claims asserted or to be asserted in such action (collectively the "Bank of New York Action"); provided, however, that as against MIBL the Bank of New York Action may be prosecuted only to determine whether and to what extent any of the assets at issue in such action are property of MIBL's Estate; . . . (Temporary Restraining Order, Designation No. 30; E.O.D. No. 25 at 2) (emphasis added). Thereafter, the parties advised this Court in the Bank of New York action that a dispute existed between the parties concerning the scope of the Order which MIBL was moving to modify. The Court determined that because the issue concerned the scope of the Order, the matter was better adjudicated by Judge Garrity. On March 12, 1996, the Bankruptcy Court signed a modification of its Initial Order (the "Modified Order"). By retracting the "provided, however" clause from the initial order, the Modified Order enjoined all proceedings, including the Bank of New York action, as to MIBL. The Modified Order was premised on the following findings of fact and conclusions of law set forth on the record by the Bankruptcy Court on March 7, 1996: I have had an opportunity to consider all the arguments that were made on the record, as well as to review the papers, filed both in support of the motion as well as in opposition to the motion. I have determined that with due respect to those who have objected that I am going to modify the injunction to the extent requested by the Liquidators. Now, the reason I am doing that is because I believe, number one, as I had determined I believe there is cause under Section 304, as I have already indicated, 304 to issue the injunction. Those facts have not changed. Moreover, I persuaded that given the litigation in the District Court, that if we hold on to the or I should say enjoin any action, any action against the Debtors and thus in the first instance consider the issue of whether what is the extent of the Debtor's interest in the various assets that we are going to be in a position, one, to do it faster, but second, our efforts in that regard may help to alleviate potential conflict and confusion in the District Court. Moreover, from the perspective of the estate we've got everyone, the litigation can go forward here. I know there was discussion with respect to the need to make the determination, as Koreag tells us, as to what is property of the estate. I certainly don't read Koreag as saying we can't do it. I believe we do have the jurisdiction to make that determination in the first instance and from that the parties will have their rights. Finally, I believe that in an effort to what I think will streamline and simplify the resolution of the issue at least, in the first instance, I think if it starts here we are going to lend, one, some assistance to what is happening in the District Court from the perspective of taking at least one issue out of that litigation and being in a position to deal with it quickly. Second, given the varied interest or alleged interest in the assets, for example, the spare plane parts The Bank of New York's claim of approximately $200,000 against those parts, now that's something that can be dealt with quickly. Then you've got the other parties making claims to the proceeds. We may be in a better position to facilitate resolution, consensual resolution, of some of the competing claims if the matter is retained in this Court. For all of those reasons, I find that the injunction should be modified to the extent requested by the movants and I respectfully overrule the objections to the request. (3/7/96 Hearing Tr. at 5-7). Appellant filed this appeal arguing, inter alia, that the Bankruptcy Court erred as a matter of law by (1) granting an injunction in 361 the Modified Order that was broader than necessary to protect the debtor's assets; (2) failing to make specific findings of fact and conclusions of law as required by Fed. R.Civ.P. 52 and as applied to the Bankruptcy Court by Fed.R.Bankr.P. 7052 and 1018; (3) arrogating to itself a non-core determination of what property belongs to MIBL, thereby resulting in judicial waste and inefficiency; (4) not applying judicial estoppel to MIBL's motion; and (5) failing to recognize that an interpleader action in the district court is not subject to an automatic stay. MIBL opposes the appeal. DISCUSSION MIBL does not contest that BNY can appeal the Modified Order as a matter of right. See 28 U.S.C. § 158(a). I agree with BNY that the Modified Order does not merely clarify the initial Order but substantially enlarges the scope of the initial injunction. Therefore, the Bankruptcy Judge's findings of fact should be reviewed for clear error and its legal conclusions reviewed de novo. See National Union Fire Ins. Co. of Pittsburgh v. Bonnanzio, 91 F.3d 296, 300 (2d Cir.1996) ("The fact findings of the bankruptcy court are reviewed by the district court for clear error and the conclusions of law are reviewed de novo.") (citing Fed.R.Bankr.P. 8013). I. The Modified Order as Overly Broad Appellants do not challenge the Bankruptcy Court's conclusion that under 11 U.S.C. § 304, an injunction to protect the estate was warranted. Instead, appellants argue, essentially, that the injunction issued was broader than necessary to protect the interests of the estate. Appellants argue that it would not injure the estate for the District Court merely to decide who holds title to property while the Bankruptcy Court subsequently enforces any judgment rendered by the District Court. Appellants' argument rests on some fundamental misperceptions of the proceedings and relevant case law, however. First, the district court interpleader action does not fundamentally implicate title to a res. There are three claims for relief in the district court action. The first does not involve MIBL at all and is not affected by the Modified Order. It seeks a declaratory judgment that BNY was entitled to enforce the terms of a Pledge Agreement between itself and defendant Meridien BIAO BANK Tanzania Limited ("Meridien Tanzania"). Meridien Bank's Pledge Agreement secured a $15,150,000 loan to MIBL, upon which MIBL defaulted. Appellants used Meridien Tanzania's pledged accounts to satisfy MIBL's debt and appellants seek a judgment that they acted properly under the Pledge Agreement. In its submission, BNY concedes that the only way in which MIBL is implicated in the first claim is "[i]f BNY were to succeed on this claim against Meridien Tanzania, the interests of BNY in the property interpleaded in the Second and Third Claims for Relief would be substantially reduced and Meridien Tanzania's cross-claim with respect to the interpleaded assets would be increased." (Appellant Mem. at 5) (emphasis added). The second claim for relief involves entitlement to the proceeds of the sale of certain airplanes and spare parts in the possession of appellants. Appellants claim that "JCPL possesses title to the aircraft" and that "BNY has the immediate right to the first proceeds of sale to satisfy outstanding obligations under the aircraft financing arrangements." (Appellant Mem. at 5-6). Conditioned upon their losing the declaratory action against Meridien Tanzania in the first claim, appellants also assert an interest in MIBL's rights to the proceeds from the sale of parts. They claim that "to the extent that BNY is unsuccessful on its First Claim of Relief, BNY will be entitled to all or a portion of the additional sale proceeds based, among other things, on the doctrine of constructive trust, BNY's right of setoff, and contractual rights under security agreements [with Meridien Tanzania] in favor of BNY." (Appellant Mem. at 6). To the extent the other defendants in this case claim they have an entitlement superior to BNY to the proceeds at issue, those claimants are not appealing the Modified Order, and, as such, those claims can and will be heard in the Bankruptcy Court. Similarly, to the extent MIBL claims rights to those proceeds, it is satisfied to have the Bankruptcy Court hear those claims. 362 In its third claim for relief, appellants interplead various accounts, some of which they hold in the name of MIBL. There is no dispute that the accounts are in MIBL's name. Rather, appellants maintain that "accounts in the name of MIBL are subject to a constructive trust in favor of BNY or that BNY is entitled to the funds in those accounts pursuant to contractual rights under security agreements and BNY's right of set-off. . . ." (Appellant Mem. at 6). In essence, appellants argue that a constructive trust should be imposed over these accounts in appellants' favor in order to ensure that appellants are paid if Meridien Tanzania prevails and MIBL's debt to it revives. Thus, stripped to their essentials, the bulk of appellants' claims do not, as they maintain, arise from any dispute with MIBL over the title to a res. Instead, they arise from the claim of an entitlement, under constructive theories, to be paid from the debtor's estate. I concur fully with the Bankruptcy Court that In re Koreag, 961 F.2d 341 (2d Cir.), cert. denied, 506 U.S. 865, 113 S. Ct. 188, 121 L. Ed. 2d 132 (1992), in no way determined that a bankruptcy court could not determine a party's entitlement to a constructive trust over a portion of the debtor's estate. The two-part test enunciated in Koreag simply requires a court district or bankruptcy first to decide whether a trust exists and second to distribute the property. Koreag describes the test in ownership terms: "It logically follows that before a particular property may be turned over pursuant to § 304(b)(2), a Bankruptcy Court should apply local law to determine whether the debtor has a valid ownership in that property which the issue is properly posed by an adverse claimant." Id. at 349. From this language of ownership, appellants argue that the Second Circuit has characterized the constructive trust theory as a title of res issue. Appellants, however, read too much into Koreag. The Second Circuit was not addressing in Koreag whether issues of constructive trusts were core or non-core. Instead, the Court assumed the bankruptcy court had jurisdiction and simply addressed what analytical process the bankruptcy court had to follow before ordering a turnover of assets under Section 304. In short, as Judge Garrity observed, Koreag tells us what has to be determined, not who determines it. Thus, because the district court action significantly implicates issues affecting estate assets properly before the Bankruptcy Court, and because I agree with the Bankruptcy Court that it is more efficient for the Bankruptcy Court to address these issues initially, I conclude that the modified Order is not overbroad. (See also Sections III, IV, V, infra.) II. Failure to Make Specific Findings of Fact and Conclusions of Law I further reject appellants' arguments that the Bankruptcy Court's findings of fact and conclusions of law violate Fed.R.Civ.P. 52(a). See Fed.R.Civ.P. 52(a) (requiring that "in granting or refusing interlocutory injunctions the court shall . . . set forth the findings of fact and conclusions of law which constitute the grounds of its action."). In determining whether to issue the initial temporary restraining order and in deciding whether to modify that injunction on MIBL's motion, the Bankruptcy Court held at least four hearings and received and reviewed a plethora of submissions from the parties. (See Transcripts of Hearings on October 3, 1995; November 1, 1995; December 8, 1995; and February 7 and 28, of 1996.) Although brief, the Bankruptcy Court's findings of fact and conclusions of law are adequate to apprise the Court for purposes of review of the essential findings and conclusions of the Bankruptcy Court. See Inverness Corp. v. Whitehall Laboratories, 819 F.2d 48, 50 (2d Cir.1987) (per curiam) (providing that the two purposes of Rule 52(a) are to "aid[] `the appellate court by affording it a clear understanding of the ground or basis of the decision of the trial court'" and to "encourage[] the trial judge to ascertain the facts with due care and to render a decision in accord with the evidence and the law.") (citations omitted); Tekkno Labs., Inc. v. Perales, 933 F.2d 1093, 1097 (2d Cir.1991) ("Although we may proceed with our review despite inadequate findings if we `can discern enough solid facts from the record to enable [us] to render a decision, we will normally vacate the order if 363 the findings and the record are not sufficient to enable us to be sure of the basis of the decision below.") (citations and internal quotations omitted); New York State Dep't of Taxation & Finance v. Hackeling, 917 F.2d 713 (2d Cir.1990) (same); Society for Good Will to Retarded Children, Inc. v. Cuomo, 902 F.2d 1085, 1088-1089 (2d Cir.1990) (remanding with instructions to find facts "`specially' in accordance with Rule 52(a)" where district court merely made blanket conclusions of law without supporting findings of fact); Fengler v. Numismatic Americana, Inc., 832 F.2d 745, 748 (2d Cir.1987) (vacating preliminary injunction and remanding case where district court "made no factual findings to justify its grant of injunctive relief."). Cf. Fed.R.Civ.P. 52(a) ("Findings of fact, whether based on oral or documentary evidence, shall not be set aside unless clearly erroneous,. . . . It will be sufficient if the findings of fact and conclusions of law are stated orally and recorded in open court. . . ."). The Bankruptcy Court's findings of fact and conclusions of law, in addition to the "solid facts from the record" below, fully enable this Court to "be sure of the basis of the decision below." Tekkno Labs., Inc. v. Perales, 933 F.2d 1093, 1097 (2d Cir.1991). For this reason, I find that the Bankruptcy Court did not violate Fed. R.Civ.P. 52(a) in granting the modified injunction. III. Arrogation of a Non-Core Determination "The determination whether a case is a core proceeding or a non-core matter related to a case under title 11 is made by the bankruptcy judge." Federal Ins. Co. v. Sheldon, 167 B.R. 15, 21 n. 5 (S.D.N.Y.1994); see also 28 U.S.C. § 157(b)(3) (providing that "[t]he bankruptcy judge shall determine . . . whether a proceeding is a core proceeding under this subsection or is a proceeding that is otherwise related to a case under title 11."); Hassett v. BancOhio National Bank, 172 B.R. 748 (S.D.N.Y.1994) (recognizing that "some courts have construed [the language of 28 U.S.C. § 157(b)(3)] as establishing a preference for initial determination of the issue by the bankruptcy court"). But cf. Kentile Floors, Inc. v. Congoleum Corp., 1995 WL 479512 (S.D.N.Y.1995) (discussing precedent regarding whether district court or bankruptcy court should make initial determination whether matter is core or non-core). Clearly, the Bankruptcy Court's decision to enjoin the proceedings in the district court and address itself first to the issues presented by appellants was a determination that the district court action implicated core proceedings. I do not find this conclusion to be incorrect. Adopting the reasoning of the Fourth Circuit in Canal Corp. v. Finnman, 960 F.2d 396, 401-03 (4th Cir. 1992), I also conclude that a constructive trust theory of recovery can be viewed as a claim against an estate a matter within the core jurisdiction of the Bankruptcy Court. As the Court explained: Clearly, the only proper forum for determining whether assets held by a debtor are held in constructive trust is the bankruptcy court, and such proceedings should be considered core proceedings. A determination of the proper beneficiaries of that trust is inextricably tied to the finding of a constructive trust. Distribution of the trust to the proper beneficiaries necessarily is predicated upon a determination of who those beneficiaries are. The finding of a constructive trust by the bankruptcy court and a determination of the proper distribution of that trust are intimately tied to the traditional bankruptcy functions and estate, and, therefore, are core matters within the clear jurisdiction of the Bankruptcy Court. Id. at 402. In light of this precedent, and for the same reasons I did not find the modified order overly broad, I conclude that the Bankruptcy Court has not arrogated to itself a non-core proceeding. However, to the extent that the Modified Order will result in the Bankruptcy Court resolving some issues not central to its jurisdiction, I will accept its findings of fact and conclusions of law as a report and recommendation and review them de novo at the time they are issued. See International Ass'n of Machinists & Aerospace Workers, AFL-CIO v. Eastern Air Lines, Inc., 121 B.R. 428, 432 (S.D.N.Y.1990) 364 ("If the matter is determined to be a non-core proceeding the bankruptcy court may hear the matter even absent the consent of the parties, but may only issue a report to the district court."), aff'd 923 F.2d 26 (2d Cir.1991); In re Wefco, Inc., 97 B.R. 749, 751 (E.D.N.Y.1989) (providing that "a district court has the power to refer non-core related actions to the bankruptcy court for the purpose of issuing reports and recommendations as to the proper disposition of the matter"). IV. Judicial Estoppel "The doctrine of judicial estoppel prevents a party from asserting a factual position in a legal proceeding that is contrary to a position previously taken by him in a prior legal proceeding . . . judicial estoppel protects the sanctity of the oath and the integrity of the judicial process." Bates v. Long Island R.R. Co., 997 F.2d 1028, 1037 (2d Cir.), cert. denied, 510 U.S. 992, 114 S. Ct. 550, 126 L. Ed. 2d 452 (1993). I agree with appellees that judicial estoppel does not bar the Modified Order. It appears at least arguable that appellees did not support the limited injunction initially entered to the extent that it included the "carve out" provision allowing the district court action against MIBL to continue on the limited issue of determining MIBL's assets. (See 12/8/95 Tr. at 55-56 (counsel for MIBL explaining that it would be more efficient to have the determination of the trust issue resolved by the Bankruptcy Court and "that's why we argued at the outset that there should be a complete injunction"); id. ("I still think it [a complete injunction] is an appropriate way to go"); id. at 58-59).[1] Nevertheless, even if MIBL had accepted the initial Order, circumstances changed between the issuance of the initial Order and the Modified Order. When appellants sought to amend their complaint in the district court to add a constructive trust theory, the full implications of the conflict between the Bankruptcy Court's jurisdiction and that of the District Court, as well as the inherent ambiguity in the scope of the Order, became self-evident. As appellees explain: Following entry of the [initial] Order, Appellants . . . seized on the fact that actions concerning MIBL were proceeding in two separate courts . . . attempting to enlarge the scope of the "carve out" to the injunction contained in the [initial] Order. In correspondence exchanged among counsel and the courts (and during conferences) BNY continually sought to enlarge the carve out provided for in the [initial] Order, thus potentially destroying the protection provided to MIBL by the Order. (Appellee Mem. at 2). "Simply put," appellees aptly point out, "the meaning and scope of the Order were constant issues." (Id. at 8). Therefore, because MIBL's position arguably remained unchanged and because circumstances changed which precipitated a reconsideration of the initial order, I do not find that appellees should have been judicially estopped from asserting their claim to modify the initial order. As they aptly argue in their opposition papers, "[w]hile the doctrine of judicial estoppel may bar a party from inappropriately changing its position, it certainly does not bar a party from protecting its interests in the face of changed circumstances." (Appellee Mem. at 20). In any event, the Bankruptcy Court's decision clearly affirms that it had reconsidered its initial decision and decided that the confusion regarding the boundaries of responsibility between the two Courts with respect to MIBL warranted the modification sought. Hence, this serves as an independent basis for the modification of the Order upon the Bankruptcy Court's own initiative rather than MIBL's motion. V. Automatic Stay for Interpleader Finally, I disagree with appellants that the authority of the Bankruptcy Court to enjoin other proceedings under Section 304 is in any way limited by the interpretation other courts have given to the contours of the automatic stay provisions of the Bankruptcy *365 Code. (See Appellee Mem. at 26 (citing Dakota Livestock Co. v. Keim, 552 F.2d 1302, 1305 (8th Cir.1977); Price & Pierce Int'l Inc. v. Spicers Int'l Paper Sales, Inc., 50 B.R. 25, 26 (S.D.N.Y.1985); National Co-op Refinery Ass'n v. Rouse, 60 B.R. 857, 860 (D.Colo.1986); Justus v. Financial News Network, 158 B.R. 570, 573 (S.D.N.Y.1993).)). "A bankruptcy court is given broad latitude in fashioning an appropriate remedy in a § 304 proceeding." Koreag, 961 F.2d at 348. In reading the transcript of the hearing on the Modified Order, it was clear that the Bankruptcy Court was not determining that it had jurisdiction to hear all of the issues implicated in the district court action. Instead, as its findings of fact make clear, it was simply determining that to protect the estate, it could more expeditiously and with less burden on the estate, address the issues implicated by the action. I concur with the Bankruptcy Court's assessment that the district court action involves many discrete issues which do not affect MIBL and for which MIBL's presence and participation in the action would necessarily deplete the estate. As noted, the Court does not perceive the Bankruptcy Court as having decided that all issues in the district court action are subject to its adjudication. However, like the Hon. Haight in Hassett v. BancOhio Nat'l Bank, 172 B.R. 748 (S.D.N.Y.1994), I concur that an initial review of the issues involved in this matter are best undertaken by the Bankruptcy Court and that even for those the Bankruptcy Court could not adjudicate finally, its report and recommendation would assist the Court. See 28 U.S.C. § 157(c)(1); In re Houbigant, Inc. v. ACB Mercantile, Inc., 185 B.R. 680, 684 (S.D.N.Y.1995) (referring matter to bankruptcy court for report and recommendation); International Ass'n of Machinists & Aerospace Workers, AFL-CIO v. Eastern Air Lines, Inc., 121 B.R. 428, 432 (S.D.N.Y.1990) ("If the matter is determined to be a non-core proceeding the bankruptcy court may hear the matter even absent the consent of the parties, but may only issue a report to the district court."), aff'd, 923 F.2d 26 (2d Cir.1991); In re Wefco, Inc., 97 B.R. 749, 751 (E.D.N.Y.1989) (providing that "a district court has the power to refer non-core related actions to the bankruptcy court for the purpose of issuing reports and recommendations as to the proper disposition of the matter"). As the Court in Wefco explained, "[t]he classification of a proceeding as core or non-core does not determine the jurisdiction of a bankruptcy court, but instead relates to a determination of whether that court may enter a final order or judgment or whether it may only issue findings of fact and conclusions of law upon which the district court enters a final order after de novo review." In re Wefco, Inc., 97 B.R. 749, 751 (E.D.N.Y.1989). I find the Bankruptcy Court's initial review of these matters would be helpful to the Court. CONCLUSION For the reasons discussed, the Court affirms the Bankruptcy Court's Modified Order. SO ORDERED. NOTES [1] To the extent that appellants argue that MIBL did not object to the entry of the initial order and that "it was MIBL's own form of Order that was entered by the Bankruptcy Court," (Appellant Reply at 3), I find that MIBL's conduct most likely reflects their assessment that the "provided, however" clause of the initial order was a fait accompli.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527145/	221 F.Supp. 635 (1963) James MONROE et al., Plaintiffs, v. Frank PAPE et al., Defendants. No. 59 C 329. United States District Court N. D. Illinois, E. D. September 18, 1963. 636 637 638 Donald Page Moore, Overton, Marks, Simons & Moore, Chicago, Ill., for plaintiffs. John C. Melaniphy, Corp. Counsel, Benjamin E. Novoselsky, Asst. Corp. Counsel, City of Chicago, Chicago, Ill., for defendants. PARSONS, District Judge. I have before me two motions: (1) The motion of the defendants for judgment notwithstanding the verdicts; and (2) The motion of the Illinois Public Aid Commission to intervene. The facts of this case, insofar as they are pertinent to these motions, may be stated briefly as follows: Peter Saisi was murdered on the evening of October 27, 1958. When the police arrived at the scene, Mrs. Saisi explained that two Negro men had entered her home and killed her husband. She stated that the men had escaped with a sum of money and a number of white dress shirts. The day after the murder, the police had Mrs. Saisi report to Central Police Headquarters at 1121 South State Street, Chicago, Illinois, and examine some photographs. After having looked at a substantial number, Mrs. Saisi finally announced with reference to one of the photographs, "It looks like him". The photograph was that of James Monroe, age thirty, of 1424 South Trumbull Avenue, Chicago, Illinois. Between 4:00 P.M. and 12:00 Midnight on October 28, 1958, defendant Edward Cagney, the supervising sergeant of the detectives who were assigned to the homicide section of the Chicago Police Department, received the information that earlier that day Mrs. Saisi had "tentatively identified" James Monroe as being one of her husband's slayers. Thereupon, Cagney ordered that Monroe be "picked up" and placed in a "line-up" for Mrs. Saisi to observe. At Midnight, the defendant Frank W. Pape reported for duty at Central Police Headquarters. He was the Deputy Chief of Detectives, the number two ranking officer in the Detective Bureau. During the early portion of his tour of duty, he was informed of Cagney's order and that Mrs. Saisi had made a "tentative" identification of Monroe. Pape arranged to have eight subordinate policemen meet with him between five and six o'clock that morning at a designated point several blocks from the Monroe home. At the specified time and place, all of the men arrived. No one had secured or attempted to secure either an arrest or a search warrant. All of them were attired in citizen's dress. Pape briefed his men on their project and designated the positions they were to take. Then, in four unmarked squad cars, they proceeded to 1424 South Trumbull Avenue. Pape, followed by two other officers, walked to the back door of the basement apartment and rapped. In a matter of minutes, one of the Monroe children appeared at the door and turned on the kitchen light. Through the window of the door, Pape displayed his badge and asked, "Is Monroe here?" The door was opened. Pape entered inquiring, "Where is James Monroe?" The child replied, "He is in the front bedroom". Pape led the way down the long hallway and into the dark bedroom. Turning on his flashlight, he found James and Flossie Monroe in bed. Monroe was ordered out of bed and taken into the front room. Monroe was either totally naked or clothed only with a T-Shirt. Mrs. Monroe was allowed to pull a blanket about herself as she was gotten out of the bed by one of the officers. Several of the officers who had been stationed outside gained entry through the front door. The closets, furniture and mattresses were searched for white dress shirts and weapons, but none were found. During this flurry of activity, all members of the family were aroused. 639 The children began crying and hollering, and some began yelling abusive language at the officers in an effort to attract the officers' attention. One of the older boys, who was especially vocal in his denunciations of the officers, received a sharp blow to the head. He fell back against his brother, and the two of them falling crushed their bed to the floor. One of the smaller boys tripped over one of the officers as he attempted to run to his father's side. Mrs. Monroe's daughter attempted to leave the apartment for the purpose of "calling the police", but she was restrained. Pistols were drawn. Heated comments were flung about. Threats of killing were uttered. Monroe, handcuffed, was handed a pair of his trousers and some other clothing, which he put on, and then he was taken to Central Police Headquarters. Upon his arrival there, he was placed in the lockup. Some time before 10:00 A.M. on October 29, 1958, Monroe was placed in a lineup. Mrs. Saisi was unable to identify him. Shortly thereafter, defendant Howard M. Pierson, a Deputy Chief of Detectives, and on that day, the Acting Chief of Detectives, upon being informed that Monroe had been "cleared", made the following notation on Monroe's arrest slip: "Okay to release at 10:00 a. m., Acting Chief of Detectives Howard M. Pierson". Before Monroe was released, however, Pierson was informed by defendants Edward Bray and John Bosquette, both of whom were officers assigned to the Robbery Detail, that the Robbery Section wanted Monroe for investigation. Pierson responded, "All right, hold the release up until the Robbery Section are through with their investigation and the Commander of the Robbery Unit or the other Deputy Chief of Detectives [referring either to Frank Pape, or more probably to one James P. Hurley, who was the Acting Chief of Detectives on the 4:00 P.M. to 12:00 Midnight shift] can either book or release him whatever should be done." Thus, Monroe remained in the lockup while Bray and Bosquette arranged for robbery victims to appear at an afternoon line-up. There had been a serious plague of robberies of cab drivers. None of the witnesses, however, was able to identify Monroe. Eventually, when Deputy Commander James P. Hurley reported for work and found a James Monroe still locked up without a charge against him, Monroe, at 4:30 P.M., was released and driven to his home by Officer Bosquette. Shortly after this episode had transpired, Mrs. Saisi confessed to her personal involvement in a premeditated murder of her husband. These were the facts presented to the jury. James Monroe, his wife, Flossie, and each of their several children, instituted this civil rights action, pursuant to 28 U.S.C.A. §§ 1331 and 1343, 42 U.S.C.A. § 1983, and the Fourteenth Amendment to the Constitution of the United States, against all of the police officers involved in this incident. In the course of the trial of the case, certain of the officers were dismissed as parties defendant and the case went to the jury as to the defendants Frank Pape, Edward Cagney, Howard Pierson, John Bosquette and Edward Bray. After approximately thirteen hours of deliberation, the jurors returned their verdicts. While they found in favor of James and Flossie Monroe in the sum of $13,000, they held against each of the children. The defendants thereupon filed a post-trial motion for judgment notwithstanding the verdicts or in the alternative, for a new trial. The primary ground upon which this motion is based is that the instructions read to the jury were prejudicial. It is the defendants' contention that this Court was bound to instruct the jury simply by reading to them the pertinent statutes and case decisions without any degree of interpolation and explanation, but that the Court engaged in extended interpretation of the law. The disputed instructions follow: "This action is brought by the plaintiffs and each of them under the 640 provisions of Title 42, Section 1983 of the United States Code, which is a federal statute and which provides in relevant part as follows: `Every person who, under color of [law] 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 * .' "The phrase `under color of law' means in this case by virtue of authority vested by the Laws of the State of Illinois.[1] "Defendants in this case have admitted that in all of the acts complained of herein they, and each of them, acted under color of law within the meaning of this statute. "You are further instructed that the plaintiffs in this case, and each of them, are persons within the jurisdiction of the United States. Insofar as they are material to this case, the rights, privileges and immunities secured by the Constitution and Laws of the United States referred to in the statute above are those rights, privileges and immunities made available to all citizens and persons through the provisions of the Fourth Amendment and the Fourteenth Amendment to the Constitution of the United States.[2] "The Fourth Amendment to the Constitution of the United States provides in words and figures as follows: `The right of the people to be secure in their persons, houses, papers and effects, against unreasonable searches and seizures, shall not be violated, and no warrants shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched and the persons or things to be seized.' "The Fourteenth Amendment to the Constitution of the United States provides, insofar as it is material herein, as follows: `No state shall * * deprive any person of life, liberty, or property, without due process of law.' "For the purposes of this case, any acts of the defendants herein in that they admit having acted under color of law are the acts of the State of Illinois within the meaning of the Fourteenth Amendment.[3] "The elements of the offenses charged by each of the plaintiffs are: (1) That he or she is a person within the jurisdiction of the United States; (2) that the defendants charged acted under color of law; and (3) that, in the course of such action, such defendants deprived such plaintiffs of rights, privileges and immunities as set out in the Fourth and Fourteenth Amendments to the Constitution of the United States above. "If you shall find, from all of the evidence and upon a greater weight of the evidence, as to any plaintiff that he or she has established each of such elements of the offense as charged as against any defendant or defendants, then you shall find in such case for such plaintiff and against such defendant. But if you find from your consideration of all the evidence that such plaintiff has failed to establish by the greater weight of the evidence any one of such elements of the offenses so charged as against a defendant so charged, then you shall find against 641 such plaintiff and in favor of such defendant. "The plaintiffs' theory of this case is that the plaintiff, James Monroe, sustained damages as a result of the deprivation of rights, privileges and immunities secured to him by the Constitution and Laws of the United States as a result of the conduct of the defendants, Edward Cagney, Frank Pape, Howard Pierson, John Bosquette, and Edward Bray, in that, on or about October 28, 1958, the defendant Edward Cagney ordered his arrest, without a warrant and without probable cause, and that pursuant thereto he was unlawfully arrested and detained, and, in the course of such unlawful arrest and detention, he was subjected to personal abuse; that at or about the hour of 5:45 A.M., on October 29, 1958, the defendant Frank Pape, with a number of other officers under his command and direction, unlawfully entered the apartment of the plaintiff and unlawfully arrested and unlawfully caused the arrest of the plaintiff, and in the course of said arrest submitted the plaintiff to abuse, and further unlawfully searched and caused the search of the home of such plaintiff and, as a result thereof, caused the unlawful detention of the plaintiff, in the course of which he was subjected to abuse. And, further, that the defendants Howard Pierson, John Bosquette, and Edward Bray, without a warrant and without probable cause, on or about the hour of 10:00 A.M., on October 29, 1958, caused the unlawful arrest and detention and false imprisonment of the plaintiff until 4:30 P.M. of that day, in the course of which detention they denied him the right to appear before the nearest magistrate or judge in the County without unnecessary delay, and further subjected him to abuse. "It is the general theory of the case of the plaintiff James Monroe that as to each of the defendants above their conduct to him was unlawful and unreasonable and otherwise violative of his constitutional rights. It is the theory of all of the plaintiffs, including James Monroe, that on or about October 29, 1958, at the hour of 5:45 A.M. more or less, the defendant Frank Pape unlawfully entered their home, unlawfully subjected their home to an unreasonable search and seizure and, in the course thereof, unlawfully detained them and subjected them to abuse, in violation of rights granted to them by the Constitution and Laws of the United States. "The theory of the defendants in the case is that the order of arrest without a warrant issued by the defendant Edward Cagney was issued upon probable cause and was lawful; that entry into the apartment of the defendants for the purpose of performing an arrest of the plaintiff James Monroe by the defendant Frank Pape and other officers under his command was performed according to law; that it was unnecessary that he have an arrest warrant or a search warrant; that neither the arrest of James Monroe nor the search of the home was performed illegally or in an unreasonable manner; that the detention of James Monroe which followed was in accordance with law and was reasonable; that his further detention, from 10:00 A.M. to 4:30 P.M., on October 29, 1958, did not constitute a new arrest and detention, but was a lawful detention; and that in the course thereof he was not abused and that all of the acts of the defendants were lawful; that the plaintiffs were at no time abused; that none of the acts of the defendants were unreasonable; and that no rights guaranteed to the plaintiffs by the Constitution and Laws of the United States in any manner were denied to any of the plaintiffs. * * * * * 642 "And now I shall give you certain special instructions with relation to the law of arrest and search and seizure, to be applied to this case. This is an area of law requiring of lawyers years of study to fully understand, but there are certain basic principles which, if carefully presented and attentively received, can serve all of us adequately in our acquiring the law to be applied to the facts of this case. "In the course of these special instructions many terms will be used which are peculiar to the field of law enforcement and with which all of us are acquainted. For example, we all know that an `arrest' signifies the restraint of a person by or on behalf of state or governmental authority, serving as the commencement of a detention or imprisonment of that person within the physical custody of that authority.[4] We all know that a `search' implies the authoritative invasion and quest and generally an examination of or into the person, the property, the premises or the personal effects of a person for the purpose of locating a person or thing or fact material to an issue at law.[5] And we know that a `seizure' implies the taking possession by lawful authority of a person, thing or fact located in the process of the performance of a search.[6] "Two terms which are used again and again in this area of the law are somewhat technical in their implications, and require of us special consideration. They are the terms `probable cause' and `reasonableness'. "For example, it is said that an arrest may be made without a warrant when a crime has in fact been committed and the arresting officer has probable cause for making the arrest. The statutes of Illinois replace the term `probable cause for making the arrest' with the term `has reasonable ground for believing that the person [arrested committed the crime]'.[7] Whichever of the terms is used, the idea to be conveyed is that the information justifies more than a suspicion, though it need not contain evidence sufficient to bring about a conviction.[8] Therefore, probable cause for 643 an arrest without a warrant, is reasonable ground of probability supported by circumstances sufficiently strong in themselves to warrant a cautious man in believing the accused guilty.[9] `Probable cause' or `reason to believe', therefore, is like a third quarter percentile: it is more information than would justify the officer in saying, `From all the circumstances I suspect this is the man'; but it need not be such information as would justify the officer in saying, `From all the circumstances I know this is the man'. "And then there is the term `reasonableness'. We speak of what a `reasonable man' would do under the circumstances. We speak of `reasonable ground', of `reason to believe', or `reasonable search', or `reasonable conduct'. What is reasonable is just what the term implies: Under all the facts, and considering all the circumstances, what thought or conduct would be founded upon reason.[10] To apply this concept you must place yourself in the position of the person about whom you are talking, and in that position you must think and act as a `reasonable man.'[11] From this perspective you ask yourself what thought or conduct would be founded upon reason. For `reason' is rationalized understanding and the exercise of the reasoning faculty by the mind rightly exercising right thinking.[12] "The rule of `reason' permeates this whole field of law, and in any given situation, the answer as to what was lawful and what was unlawful will be found, in the light of all of the facts of the whole of the incident, by determining what was reasonable. "This long prevailing standard seeks to safeguard citizens from rash and unreasonable interference 644 with privacy and from unfounded charges of crime; while at the same time it seeks to give fair leeway for enforcing the law in the community's protection. Because many situations which confront officers in the course of the execution of their duties are more or less ambiguous, room must be allowed for uncertainties on their part. The burden upon them should never be greater than that they act upon those uncertainties reasonably as reasonable men. Requiring more of them would unduly hamper law enforcement. To allow less would be to leave the citizen at the mercy of the officer's whim or caprice. "And now, with your understanding this `Rule of Probable Cause' and this `Rule of Reasonableness', let me proceed on into these special instructions on the law of arrest and search and seizure. "The principal guarantee provided citizens against tyranny of a police state in the administration of criminal law lies in the authority of the judicial branch of our government to exercise checks upon the actions of the executive branch. Thus, with relation to `arrest', the question of probable cause, or reason to believe that the person to be arrested committed the crime, must always be checked by a judicial officer.[13] If the arrest is to be made with a warrant, the arresting officer presents the information upon which he relies as establishing probable cause to a judicial officer, a judge or justice of the peace, who passes upon the sufficiency of the information. If the judicial officer considers the information sufficient, he issues his judicial authority to the officer to make the arrest. We call it an arrest warrant. "On the other hand, if the arrest is to be made without a warrant, at the earliest reasonable time after the arrest, and in the presence of the person arrested, the arresting authority presents the information relied upon as establishing probable cause for the arrest, before the judicial officer or magistrate who passes upon the sufficiency of the information.[14] If he finds it sufficient, he approves the arrest which already had been made. This procedure is called presentment for arraignment. This is not to be confused with what is sometimes known as `booking', a voluntary procedure of a police department exercised in the interest of all persons arrested, whether with or without a warrant, by which the arresting officer, with the approval of his commanding officer and without unnecessary delay after effecting the arrest, shall make a public record in the police department of the person arrested and the charge upon which he was arrested. The arraignment is the presentment of the arrested person before a judicial officer required by the law of the state. "Therefore, the law of the State of Illinois, in such words and figures as are material here provides: `When a complaint is made under oath before a judge or justice of the peace that a criminal offense has been committed, and upon examination of the complaint the judge or justice of peace finds that there is reasonable grounds to believe that a certain person has committed the crime, he shall issue a warrant for the arrest of such person.'[15] "And the law of the State of Illinois, in such words and figures as are material here, further provides: `An arrest may be made by a police officer without a warrant, when a 645 criminal offense has in fact been committed, and he has reasonable ground for believing that the person to be arrested committed it.'[16] "And the law of the State of Illinois, in such words and figures as are material here, further provides: `And when an arrest is made without a warrant, the person arrested shall, without unnecessary delay, be taken before the nearest magistrate, who will hear the case, and the person shall be examined, and shall otherwise be dealt with as in cases of arrests upon warrant.'[17] "It is to be noted that this latter provision calls for arraignment `without unnecessary delay'. It is the law that necessary delay is such delay as is necessary to the facilities reasonably available for transmitting the arrested person to the committing magistrate, as well as the availability of the committing magistrate in the usual course of his business. Delay that is necessary is not that which would relate to further investigation to establish the probable cause which should have existed before the arrest. However, since the command, without unnecessary delay, must be considered as not calling for mechanical or automatic obedience, what constitutes `necessary delay' must be determined from all the circumstances attendant upon the arrest and the detention prior to the arraignment.[18] During a reasonable detention prior to arraignment caused by `necessary delay', as hereinabove it has been described, it is not unlawful for the arresting officer or the detaining officer to utilize the availability of the person arrested to further investigate the crime for which he was arrested, in an effort to obtain additional facts which may be needed in the trial of the case against him, since the legality of the arrest without a warrant will be determined by the judicial officer on the basis of the facts available to the arresting officer prior to the arrest, and not those acquired afterwards.[19] The arrested person has the protection that if his arrest without a warrant was unlawful in the first instance because of the insufficiency of probable cause at the time of arrest, he will be discharged and evidence about the same crime obtained from him after or as an incident of his arrest cannot later be used against him.[20] 646 "It is not unlawful for a person to be released, after an arrest without a warrant, without his having been taken before a committing magistrate for arraignment, nor does that fact standing alone render his arrest unlawful. That fact, however, is a circumstance to be considered with all other evidence in a determination of whether in the first instance there was probable cause for his arrest. "A person lawfully arrested without a warrant cannot complain about his detention before arraignment, if it is not caused by unnecessary delay, and if his detention in all its aspects is reasonable, considering all the circumstances.[21] "An arrest may be made anywhere and at any time.[22] If the arrest be lawful, that is, by warrant, or if without warrant, on probable cause, the fact that it is made in a private place rather than in a public place does not make it any less lawful. Because of the fundamental concept in our law of the ancient adage that `A man's home is his castle', entry into a house or apartment or other place of abode commonly known as a home, for the purpose of making an arrest inside, may be made only after the arresting officer has given notice to a responsible person therein of his authority and his purpose.[23] Failure to give notice to a responsible person of the authority of the arresting officer and his purpose, before entry, will render an ensuing arrest within unlawful.[24] But if proper notice is given, the arresting officer may then enter; and if he is denied admittance he may break open any outer door or inner door or window of the house or any part of the house, using only such force as is necessary, to gain entrance to perform that arrest.[25] And in determining the legality of an entry for the purpose of performing an arrest, the questions of the adequacy of the notice, the responsibleness of the person to whom notice is given, and the necessity of breaking to enter, if there was such a breaking, are questions of fact to be decided under all of the circumstances, and from all the evidence.[26] "There are emergency exceptions to these rules, however.[27] The first emergency exception is that in the hot pursuit of a person to be arrested, the arresting officer may proceed behind him into the home without giving notice. The second emergency exception is that if it is necessary, under all the circumstances, that entry without notice be made in order to protect the life of the arresting officer, notice need not be given. A third emergency exception is that if the very fact of giving notice will permit the escape of the person to be arrested, notice need not be given. Under any of these exceptions to notice, what is reasonable must be determined from all the circumstances, including those circumstances relating to the availability of other times and places for making the arrest, the information supporting reason to believe that notice will result in the escape of the person to be arrested, and such considerations as the presence of other and innocent persons on the inside and the probability and degree of injury or harm to them which would reasonably rest 647 upon the nature of the entry. The rule to apply in any such instance is the rule of reason, as hereinbefore described to you. "The law relating to search and seizure is more restricted than the law relating to arrest.[28] This is because the Constitution of the United States and the Constitution of the State of Illinois expressly provide limitations upon invasions of the privacy of the individual and his home and personal effects. "The Constitution of the United States, in such words and figures as are here material, provides: `The right of the people to be secure in their persons, houses, papers and effects, against unreasonable searches and seizures, shall not be violated, and no warrant shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched and the persons or things to be seized.' "And the Constitution of the State of Illinois, in such words and figures as are here material, provides: `The right of the people to be secure in their persons, houses, papers and effects, against unreasonable searches and seizures shall not be violated; and no warrant shall issue without probable cause, supported by affidavit, particularly describing the place to be searched, and the persons or things to be seized.' "It is first to be noted that both constitutional provisions contemplate the issuance of search warrants for the purpose of searching for people as well as for things. Accordingly, an entry which otherwise would be for the purpose of performing an arrest, under circumstances where there is no probable cause or reason to believe that the person to be arrested is in fact on the inside, would constitute an entry for the purpose of performing a search for such person, and would thus have to be governed by the law relating to searches and seizures. "The laws of the State of Illinois provide for the issuance of a search warrant by a judge or justice of the peace for searches in the daytime, and by two judges or justices of the peace for searches in the nighttime, to locate certain specified things, including among them firearms possessed by persons not authorized by law to carry them.[29] As in the case of an arrest warrant, the question of probable cause, or reason to believe, is determined by the judicial officer before such search is made.[30] "Also, as in the case of an arrest, an officer may enter a home to execute a search pursuant to a search warrant, after giving notice to a responsible person of his authority and purpose; and if he be refused entry, using no more force than is necessary, he may break open any outer or inner door or window of a house or anything therein, in order to execute the search pursuant to such warrant.[31] "Although there may be an arrest without a warrant, upon probable cause, under the laws of Illinois, though the law may be different in other states, there may not be a search of a home without a warrant.[32] In Illinois there are two exceptions 648 to this rule. The first exception is that the person whose place is to be searched, himself or herself, may consent to a search of the place, and a search performed pursuant to such consent will be a lawful search, even though without a warrant.[33] The second exception is that after the performing of a lawful arrest, the person arrested, his reasonably proximate surroundings and rooms in which he is or resides, may be searched, as an incident of his arrest, to find weapons that would be dangerous to the arresting officer, and to find evidence establishing and fruits resulting from the crime of which he was arrested.[34] Whether such a search following an arrest is lawful will be determined on the lawfulness of the arrest in the first instance, and upon the reasonableness of the search in the last instance.[35] "The law does not specify what is or is not reasonable conduct in the performance of a search. The constitutional admonition is a general one prohibiting `unreasonableness' in searches. "What constitutes a reasonable search, then, must be determined upon the application of the rule of reasonableness to all the circumstances, from the perspective of a reasonable person in the same position of the searching officer at the time and under the conditions attending the search.[36] "From what I have now said, you may observe that the rule of `reason' permeates the whole field of arrest and search and seizure, and the answer as to what was lawful and what was unlawful in any given matter will be found by you from all the facts before you as to what, if anything, was reasonable, and what, if anything, was unreasonable." I find the criticisms of the defendants with regard to these instructions untenable. The instructions consist of a synthesization and interpretation of all the Federal and State statutes and case decisions that are applicable to this case. And under the circumstances of this case and the rather complex law applicable thereto, I think it was quite proper to take the instructions as requested by the respective parties, add thereto the Court's own instructions, and therefrom formulate a general charge embracing all the matters of law arising on the pleadings and the evidence.[37] I believe this was the best way to intelligently and adequately instruct the jurors in an area of the law which otherwise would more than likely be misconstrued by them or remain in their minds 649 as a concoction of unintelligible legal language. Accordingly, defendants' motion for judgment notwithstanding the verdicts, or for a new trial, should be, and the same hereby are, denied. The final matter before me is the request of the Illinois Public Aid Commission for leave to intervene. The motion is brought pursuant to Article VIII, Section 8-19, of the Illinois Charities and Public Welfare Act (Ch. 23, Sec. 819, Ill.Rev.Stats.), which provides in pertinent part as follows: "The Commission shall have a charge upon all claims, demands and causes of action for injuries to an applicant for or recipient of assistance for the total amount of assistance provided for the recipient and his dependents from the time of injury to the date of recovery upon such claim, demand or cause of action. `Recipient', as used herein, means the grantee of record and any person whose assistance needs are included in the assistance awarded to the grantee of record. * * The charge shall attach to any verdict, judgment or decree entered and to any money or property which may be recovered on account of such claim, demand, cause of action or suit from and after the time of the service of the notice. * * " It is alleged that the plaintiff, Flossie Monroe, had received Aid to Dependent Children since October 29, 1958, and that at the time of the filing of this motion the amount received, up to and including August 31, 1962, (after which time plaintiff voluntarily withdrew from receiving such support) was $8,451.00. Rule 24 of the Federal Rules of Civil Procedure provides for both permissive intervention and intervention as of right. In each instance timely application must be made. However, whether as of right or by permission of the Court, Rule 24 is silent as to what constitutes timely application. Even though the petition was filed after the verdicts had been entered, under the circumstances of this case, and due to the nature of the requested intervention, the petition is timely within the meaning of that term as used in Rule 24.[38] No harm, prejudice, or burden will result to any of the parties because the petition is filed on January 11, 1963, rather than on an earlier date. Indeed, the merits of the petition would not have been considered until the verdicts had been rendered anyway, for if the verdicts had been favorable to the defendants, there would have been no need to consider the petitioner's claim. But there are other requirements under Rule 24 which must be complied with before one may be permitted to intervene. Under sub-part (a) one may intervene as a matter of right: (1) When a statute of the United States confers an unconditional right to intervene; or (2) when the representation of the applicant's interest by existing parties is or may be inadequate and the applicant is or may be bound by a judgment in the action; or (3) when the applicant is so situated as to be adversely affected by a distribution or other disposition of property which is in the custody or subject to the control or disposition of the court or an officer thereof. The Illinois Public Aid Commission may not intervene as a matter of right for three reasons. (1) There is no statute of the United States which confers such right upon the petitioner, and the State of Illinois is powerless to create a right to be heard in a Federal Court where that right does not exist under the laws of the United States, especially where the State's claim arises under its own law, where the State is neither an indispensable nor a necessary party, and where there is no diversity of citizenship to support the jurisdictional requirements of the Court.[39] (2) The 650 petitioner will in no way be bound by the judgment in this action. (3) The petitioner will not be adversely affected by the disposition of this case, and even if it were, this Court does not have the required "custody" of property, nor any property as a result of the judgment in this case which is subject to its control or disposition. It would indeed require a strained construction of Rule 24(a) for petitioner to fall within its provisions. Nor may petitioner intervene by permission under sub-part (b) of Rule 24. There is no statute of the United States which confers such right on petitioner, nor does petitioner's claim have a question of law or fact in common with the main action. Furthermore, the intervention, if allowed, would most certainly prejudice the adjudication of the rights of the plaintiffs. The motion to intervene would be denied on the basis of this rule alone. Even were we to assume that the petitioner might intervene under the rule, the petition nevertheless would have to be dismissed on its merits. The Illinois statute not only denies due process and equal protection of the laws, as applied to the facts of this case, but more, it stands in derogation of the full enforceability of the Federal law and thus would conflict with the supremacy clause of the United States Constitution. Art. VI, Cl. 2.[40] Accordingly, petitioner's motion to intervene is denied. NOTES [1] Monroe v. Pape, 365 U.S. 167, 168-187, 81 S.Ct. 473, 5 L.Ed.2d 492. See also: Williams v. United States, 341 U.S. 97, 98-100, 71 S.Ct. 576, 95 L.Ed. 774; Screws v. United States, 325 U.S. 91, 107-113, 65 S.Ct. 1031, 89 L.Ed. 1495; United States v. Classic, 313 U.S. 299, 326, 61 S.Ct. 1031, 85 L.Ed. 1368. [2] Elkins v. United States, 364 U.S. 206, 213, 80 S.Ct. 1437, 4 L.Ed.2d 1669. See also: Wolf v. Colorado, 338 U.S. 25, 27-28, 69 S.Ct. 1359, 93 L.Ed. 1782, as modified by Mapp v. Ohio, 367 U.S. 643, 650-660, 81 S.Ct. 1684, 6 L.Ed.2d 1081. [3] See Note 1, supra. [4] Hogan v. Stophlet, 179 Ill. 150, 154, 53 N.E. 604, 606, 44 L.R.A. 809 ("arrest" means "the apprehension or detaining of the person in order to be forthcoming to answer to an alleged or suspected crime"); People v. Mirbelle, 276 Ill.App. 533, 540-542 (excellent discussion of the meaning of the word "arrest"). See also: United States v. Scott, D.C., 149 F.Supp. 837, 840 ("the term arrest may be applied to any case where a person is taken into custody or restrained of his full liberty, or where the detention of a person in custody is continued even for a short period of time"; "a restriction of the right of locomotion or a restraint of the person"). [5] Weeks v. United States, 232 U.S. 383, 397, 34 S.Ct. 341, 346, 58 L.Ed. 652 ("search" means a "quest by an officer of the law"); Hale v. Henkel, 201 U.S. 43, 76, 26 S.Ct. 370, 50 L.Ed. 652 (same); Haerr v. United States, 5 Cir., 240 F.2d 533, 535 ("[a] search implies an examination of one's premises or person with a view to the discovery of contraband or evidence of guilt to be used in prosecution of a criminal action"; "[t]he term implies exploratory investigation or quest"); McDonald v. United States, 83 App.D.C. 96, 166 F.2d 957, 958 ("`search' connotes uncovering that which is hidden"); People v. Cattaneo, 6 Ill.2d 122, 125, 126 N.E.2d 692 ("[a] `search' implies a prying into hidden places"); People v. Exum, 382 Ill. 204, 210, 47 N.E.2d 56, 59 (same); People v. Marvin, 358 Ill. 426, 428, 193 N.E. 202, 203 (same; "[a] search implies an invasion and quest with some sort of force, either actual or constructive"). [6] Weeks v. United States, supra ("seizure contemplates a forcible dispossession of the owner"); Hale v. Henkel, supra (same); Lee v. United States, 95 U.S. App.D.C. 156, 221 F.2d 29, 30 (no seizure in legal sense where forceful dispossession not involved). [7] 38 S.H.Ill.Ann.Stats. § 657. [8] Brinegar v. United States, 338 U.S. 160, 175, 69 S.Ct. 1302, 1310, 93 L.Ed. 1879 (probable cause "is a reasonable ground for belief of guilt" which means "less than evidence which would justify condemnation" or conviction but "more than bare suspicion"); Bucher v. Krause, 7 Cir., 200 F.2d 576, 582 ("mere suspicion" is "a wholly inadequate basis for action under Illinois Law"); United States v. Johnson, 113 F.Supp. 359, 360 ("[p]robable cause means more than suspicion"); People v. Jones, 16 Ill.2d 569, 573, 158 N.E.2d 773, 776 ("`[r]easonable cause' or `reasonable grounds' * * * means something less than evidence which would result in conviction"); People v. Galloway, 7 Ill.2d 527, 535, 131 N.E.2d 474 (a suspicion must be founded upon facts supporting a reasonable belief that the prisoner is guilty of a crime); People v. Barg, 384 Ill. 172, 177, 51 N.E.2d 168, 171 ("arrests upon bare suspicion are not permitted under the law"); People v. Exum, 382 Ill. 204, 211, 47 N.E.2d 56 (same); People v. Henneman, 373 Ill. 603, 606, 27 N.E.2d 448 (same); People v. Brewer, 355 Ill. 348, 357, 189 N.E. 321 (same). [9] Henry v. United States, 361 U.S. 98, 101-102, 80 S.Ct. 168, 170-171, 4 L.Ed.2d 134 ("[p]robable cause exists if the facts and circumstances known to the officer warrant a prudent man in believing that the offense has been committed"); Draper v. United States, 358 U.S. 307, 310-313, 79 S.Ct. 329, 331-333, 3 L.Ed.2d 327 ("[p]robable cause exists where `the facts and circumstances within [the arresting officers'] knowledge and of which they had reasonably trustworthy information [are] sufficient in themselves to warrant a man of reasonable caution in the belief that' an offense has been or is being committed"); Brinegar v. United States, supra, 338 U.S. at 175-176, 69 S. Ct. at 1310-1311, 93 L.Ed. 1879 (same); People v. Jones, supra, 16 Ill.2d at 574, 158 N.E.2d at 776 (same); People v. La Bostrie, 14 Ill.2d 617, 622, 153 N.E.2d 570 (similar); People v. Barg, supra (similar). [10] United States v. Rabinowitz, 339 U.S. 56, 59-64, 70 S.Ct. 430, 432-435, 94 L. Ed. 653 ("[t]he recurring questions of the reasonableness of searches must find resolution in the facts and circumstances of each case"); Go-Bart Importing Co. v. United States, 282 U.S. 344, 357, 51 S.Ct. 153, 75 L.Ed. 374 (similar); People v. La Bostrie, supra, 14 Ill.2d at 621-622, 153 N.E.2d at 572-573 (similar). [11] Henry v. United States, supra, 361 U.S. at 102, 80 S.Ct. at 171, 4 L.Ed.2d 134; People v. Watkins, 19 Ill.2d 11, 18, 166 N.E.2d 433; People v. La Bostrie, supra, 14 Ill.2d at 622, 153 N.E.2d at 573. [12] State v. Smith, 22 N.J. 59, 123 A.2d 369. [13] 38 S.H.Ill.Ann.Stats. § 662 et seq.; Giordenello v. United States, 357 U.S. 480, 485-486, 78 S.Ct. 1245, 2 L.Ed.2d 1503. [14] 38 S.H.Ill.Ann.Stats. § 660. [15] 38 S.H.Ill.Ann.Stats. § 663. [16] 38 S.H.Ill.Ann.Stats. § 657. [17] 38 S.H.Ill.Ann.Stats. § 660. [18] See: 1 Chitty, Cr.Law, 59, 60; 2 Hale, 95, 96, 119, 120, Cf.; Mallory v. United States, 354 U.S. 449, 451-456, 77 S.Ct. 1356, 1 L.Ed.2d 1479; United States ex rel. Weber v. Ragen, 7 Cir., 176 F.2d 579, 583-584; Mooradian v. Davis, 302 Mich. 484, 5 N.W.2d 435; Peloquin v. Hibner, 231 Wis. 77, 285 N.W. 380. [19] Cf., United States v. Carignan, 342 U.S. 36, 39, 72 S.Ct. 97, 99, 96 L.Ed. 48 ("[s]o long as no coercive methods by threats or inducements to confess are employed, constitutional requirements do not forbid police examination in private of those in lawful custody or the use as evidence of information voluntarily given"). [20] Rios v. United States, 364 U.S. 253, 261-262, 80 S.Ct. 1431, 1436, 4 L.Ed.2d 1688 (where an arrest is unlawful "then nothing that happened thereafter could make that arrest lawful, or justify a search as its incident"); Upshaw v. United States, 335 U.S. 410, 411-414, 69 S. Ct. 170, 93 L.Ed. 100 (similar) (Cf., McNabb v. United States, 318 U.S. 332, 341-345, 63 S.Ct. 608, 87 L.Ed. 819 (even though arrest may in fact have been lawful, under strict federal rule, evidence obtained thereafter through interrogation may not be used against prisoner where he was not carried forthwith before a committing magistrate)); People v. Edge, 406 Ill. 490, 496, 94 N.E.2d 359 (an arrest for questioning upon bare suspicion is without sanction of law); People v. Henneman, 367 Ill. 151, 153-154, 10 N.E.2d 649 (the arrest must be legal or the search is illegal); People v. Ford, 356 Ill. 572, 576, 191 N.E. 315 (discovery of evidence after arrest cannot relate back to, and operate as a justification for arrest); People v. Scalisi, 324 Ill. 131, 150, 154 N.E. 715 (when police seek to arrest a person without probable cause for questioning, said arrest is unlawful). [21] See note 18. [22] 38 S.H.Ill.Ann.Stats. § 659. [23] 38 S.H.Ill.Ann.Stats. § 695; Cf., Weeks v. United States, 232 U.S. 383, 390-391, 34 S.Ct. 341, 58 L.Ed. 652. [24] Cf., Accarino v. United States, 85 U.S. App.D.C. 394, 179 F.2d 456, 456-465 (excellent discussion of the law as it relates to notice and right of entry). [25] 38 S.H.Ill.Ann.Stats. § 695. [26] Cf., Accarino v. United States, supra. [27] Cf., Accarino v. United States, supra. [28] Lee v. United States, 98 U.S.App.D.C. 97, 232 F.2d 354, 354-357; United States v. Scott, D.C., 149 F.Supp. 337, 840-842. [29] 38 S.H.Ill.Ann.Stats. §§ 691-694. [30] Johnson v. United States, 333 U.S. 10, 13-14, 68 S.Ct. 367, 92 L.Ed. 436; 38 S.H.Ill.Ann.Stats. § 691 et seq.; People v. Elias, 316 Ill. 376, 381, 147 N.E. 472; People v. Prall, 314 Ill. 518, 522, 145 N. E. 610. [31] See notes 23 and 24, supra. [32] See note 28; People v. Grod, 385 Ill. 584, 592, 53 N.E.2d 591 (under both the United States and Illinois Constitutions, the home of a person generally may not be searched without a warrant). [33] Zap v. United States, 328 U.S. 624, 628, 66 S.Ct. 1277, 90 L.Ed. 1477; People v. Preston, 341 Ill. 407, 416, 173 N.E. 383, 77 A.L.R. 631; People v. Akers, 327 Ill. 137, 138, 158 N.E. 410. [34] United States v. Rabinowitz, 339 U.S. 56, 57-66, 70 S.Ct. 430, 94 L.Ed. 653; Harris v. United States, 331 U.S. 145, 150-155, 67 S.Ct. 1098, 91 L.Ed. 1399; People v. Watkins, 19 Ill.2d 11, 17-20, 166 N.E.2d 433; People v. West, 15 Ill. 2d 171, 174-177, 154 N.E.2d 286; People v. La Bostrie, 14 Ill.2d 617, 621, 153 N.E.2d 570; People v. Heidman, 11 Ill.2d 501, 508, 144 N.E.2d 580; People v. Tillman, 1 Ill.2d 525, 529, 116 N.E.2d 344. [35] United States v. Rabinowitz, supra; People v. Watkins, supra. [36] United States v. Rabinowitz, supra; People v. Watkins, supra. [37] See: Northern Pacific Railway Company v. Haugan, 8 Cir., 184 F.2d 472, 477 (court need not use exact language of requested instructions); Southern Pacific Company v. Guthrie, 9 Cir., 180 F.2d 295, 301 (it belongs to the judicial office to exercise discretion as to the style and form in which to expound the law); Gray v. Dieckmann, 1 Cir., 109 F.2d 382, 388 (a judge in instructing a jury cannot be held up to the exactitude of legal expression but must apply his instructions with a broad brush); Radius v. Travelers Insurance Company, 9 Cir., 87 F.2d 412, 414 (all that is required is that the jury be fully and fairly instructed on the law of the questions before it for determination). [38] Cf., Wolpe v. Poretsky, 79 U.S.App.D. C. 141, 144 F.2d 505, 508 (intervention allowed after final decree). [39] Cf., Chicago, Rock Island & Pacific Railroad Company v. Studey, 346 U.S. 574, 580, 74 S.Ct. 290, 98 L.Ed. 317 (state's procedural provisions cannot control the privilege of removal granted by the federal statute); Holmberg v. Armbrecht, 327 U.S. 392, 395, 66 S.Ct. 582, 90 L.Ed. 743 (federal courts apply their own principles in enforcing federal rights); Penn General Casualty Company v. Com. of Pennsylvania ex rel. Schnader, 294 U.S. 189, 197, 55 S.Ct. 386, 79 L.Ed. 850 (the jurisdiction conferred on the district courts by the Constitution and laws of the United States cannot be affected by state legislation); The Pusey & Jones Company v. Hanssen, 261 U.S. 491, 497-498, 43 S.Ct. 454, 67 L.Ed. 763 (a remedial right to proceed in a federal court cannot be enlarged or diminished by a state statute); Lone Star Package Car Company v. Baltimore & Ohio Railroad Company, 5 Cir., 212 F.2d 147, 154 (the jurisdiction of the federal court does not depend upon the statutes of the several states); Humble Oil & Refining Company v. Sun Oil Company, 5 Cir., 190 F.2d 191, 197 (rule 24 does not confer upon a federal court jurisdiction to adjudicate a state's claim or require the court to permit a state to intervene where jurisdiction depends solely upon diversity of citizenship and the presence of the state as a party litigant would defeat the jurisdiction of the court); Davidson v. Gardner, 7 Cir., 172 F.2d 188, 191 (Congress alone determines and limits the jurisdiction of the courts of which it is the creator); Davis v. Ensign-Bickford Company, 8 Cir., 139 F.2d 624, 626 (the jurisdiction of federal courts is not and never has been controlled by state law). [40] Free v. Bland, 369 U.S. 663, 666, 82 S.Ct. 1089, 8 L.Ed.2d 180 (any state law, however clearly within a state's acknowledged power, which interferes with federal law, must yield); McKnett v. St. Louis & San Francisco Railway Company, 292 U.S. 230, 234, 54 S.Ct. 690, 78 L.Ed. 1227 (a state may not discriminate against rights accruing under federal laws); Caldwell v. Alabama Dry Dock & Shipbuilding Company, 5 Cir., 161 F.2d 83, 85 (same); Buck v. Swanson, D.C., 33 F.Supp. 377, 387 (a state statute, though enacted in pursuance of the police power, is void if in contravention of any express provision of the Federal Constitution or of a valid federal statute, or if it constitutes an interference with matters that are within the exclusive scope of federal power), rev'd on other grounds, Marsh v. Buck, 313 U.S. 406, 61 S.Ct. 969, 85 L.Ed. 1426.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/815523/	Case: 11-15054 Date Filed: 01/17/2013 Page: 1 of 14 [DO NOT PUBLISH] IN THE UNITED STATES COURT OF APPEALS FOR THE ELEVENTH CIRCUIT ________________________ No. 11-15054 Non-Argument Calendar ________________________ D.C. Docket No. 1:10-cr-00397-WSD-LTW-1 UNITED STATES OF AMERICA, Plaintiff-Appellee, versus BIDEMI BELLO, a.k.a. Ola Williams, a.k.a. Abidemi A. Bello, a.k.a. Nimota Folashade Bello, a.k.a. Wasilat O. Williams, a.k.a. Bidemi A. Bello, Defendant-Appellant. ________________________ Appeal from the United States District Court for the Northern District of Georgia ________________________ (January 17, 2013) ON PETITION FOR REHEARING Case: 11-15054 Date Filed: 01/17/2013 Page: 2 of 14 Before DUBINA, Chief Judge, TJOFLAT and KRAVITCH, Circuit Judges. PER CURIAM: We grant Appellant Bidemi Bello’s petition for rehearing, vacate our previous panel opinion, and substitute the following opinion in lieu thereof: Following her convictions for two counts of forced labor, two counts of trafficking with respect to forced labor, one count of document servitude, one count of harboring for financial gain, and two counts of unlawful procurement of naturalization, Appellant Bidemi Bello challenges the two forced labor convictions, raising an issue regarding the Sixth Amendment right to a unanimous jury verdict. Bello argues that the district court erred in refusing to instruct the jury that it must find unanimously the unlawful means by which she coerced her two victims into forced labor. After considering the record and the arguments of the parties, we affirm the convictions. I. A. Facts Bello, who emigrated to the United States, took trips to her native country, Nigeria, where she recruited two teenage girls to work for her as nannies through false promises of a better life in America. In both situations, Bello brought the girls into the United States illegally and made the girls her domestic slaves by 2 Case: 11-15054 Date Filed: 01/17/2013 Page: 3 of 14 means of physical abuse, psychological abuse, and various threats. While the maltreatment of each victim was very similar, our analysis requires that we separately recount the testimony and evidence concerning each young woman. 1. Laome’s Forced Labor First, Bello recruited Olawunmi Olatunbosun (“Laome”), a 17 year old from a very poor family in Nigeria.1 Laome spoke no English. Bello promised Laome and her father that if Laome worked as Bello’s nanny, Bello would pay her a monthly salary, send money to the family in Nigeria, and allow Laome to attend school in America. Bello brought Laome to the United States illegally in October 2001 where she lived with Bello in a large home outside of Atlanta. Bello required Laome to cook, clean, and complete daily household chores in addition to caring for T., Bello’s baby. Bello denied Laome access to available tools at the home that would speed her work, such as a lawnmower, vacuum cleaner, washing machine, or dishwasher. Instead, Bello required Laome to cut the grass by hand, sweep the carpet with a broom, and hand-wash dishes, clothes, and diapers. Bello demanded that Laome clean the bathrooms and a backyard fence daily, regardless of whether they were dirty. Laome did these tasks while 1 The superseding indictment identifies Olawunmi Olatunbosun as “O.O.” Trial transcripts and the jury instructions refer to her by the nickname “Laome,” which we also adopt for ease of reference. 3 Case: 11-15054 Date Filed: 01/17/2013 Page: 4 of 14 simultaneously caring for T; thus, Laome often carried the baby with her on her back. Laome was also responsible for caring for T. during the night if T. cried. If Laome permitted T. to cry, Bello would beat Laome. When she was at home, Bello never contributed to household upkeep or the care of her child. Over the two and a half years that Laome worked for Bello, Bello never paid her directly, although she did send a total of $300 to Laome’s parents. Laome never attended school as Bello promised. Bello secured Laome’s obedience and labor by abusing Laome and threatening her. If household chores did not satisfy Bello, she hit and beat Laome with the back of her hand, a shoe, a wooden spoon, an extension cord, a belt, a hanger, a broom, or any item close at hand. On occasion, Bello stood on Laome’s stomach while beating her. She also threatened to beat and kill Laome or send her to jail in Nigeria. Bello told Laome that if she answered the door or talked to the neighbors, the police would take Laome to jail. Laome believed all of Bello’s threats. Bello further abused Laome by calling her dumb, stupid, poor, dirty, ugly, demonic, a slave, a witch, and a bitch. Bello took Laome with her to her church and told her church pastor that Laome was a witch. Bello required Laome to sleep on the couch, even though the home had extra bedrooms. Bello forbid Laome from using any of the home’s bathtubs, and 4 Case: 11-15054 Date Filed: 01/17/2013 Page: 5 of 14 instead, required Laome to bathe with a bucket. Bello dressed Laome in her old clothes and underwear, cut her hair short against her wishes, and gave her no privacy, requiring her to change clothes in a hallway near a closet where Laome kept her belongings. Bello did not feed Laome well and often forced her to eat old, moldy food. If Laome threw up the food, Bello made her eat her vomit. Laome could not go and come from the house as she pleased. She had no cell phone, keys to Bello’s home, or personal money. Laome made no friends of her own in the United States. After Laome told Bello that Laome’s father called the house, Bello beat and kicked her for hours and forced her to stand naked for a day with one hand and one foot on the ground and the other foot in the air. Eventually, in May 2004, Laome escaped Bello’s home with the assistance of two of Bello’s friends who observed the abuse. 2. Dupe’s Forced Labor After Laome’s escape, Bello needed someone else to care for her home and T., so she returned to Nigeria and recruited Olayemia Shorinola (“Dupe”).2 Dupe also came from modest means, but she knew a little English from school. Again, Bello promised Dupe’s father that she would treat Dupe like family and put her 2 The superseding indictment identifies Olayemia Shorinola as “O.S.” Trial transcripts and the jury instructions refer to her by the nickname “Dupe,” which we also adopt for ease of reference. 5 Case: 11-15054 Date Filed: 01/17/2013 Page: 6 of 14 through school in America in exchange for Dupe’s care for T., who was then about three years old. Bello also told Dupe’s father that Dupe would be expected to help out around the house a little. Dupe’s care for T. was intended to be rendered in exchange for Bello’s providing Dupe with an education. Bello used false information and documents to bring Dupe illegally into the United States in the fall of 2004. Upon arrival at Bello’s home, Bello put Dupe to work and required her to constantly busy herself with housework, yard work, and childcare. Dupe usually began working around 5:00 in the morning and was not permitted to rest or have a day off. If T. woke up during the night, Dupe had to care for her. Bello did no childcare or chores herself. As with Laome, Dupe was not allowed to use available appliances for her chores. Once, when Bello learned that Dupe used the washing machine and caused it to malfunction, Bello slapped her. Bello frequently slapped, hit, beat, and cursed Dupe. She insulted Dupe’s family, called her stupid, a witch, and a slave. When Dupe fled from Bello’s abuse, Bello would just corner her against a wall and then beat her more. More than once, Bello caused Dupe to bleed. Usually the beatings were for what Bello deemed unsatisfactory job performance, but at other times, Bello beat Dupe for accidents and mistakes, or for standing up for herself by talking back to Bello. 6 Case: 11-15054 Date Filed: 01/17/2013 Page: 7 of 14 Dupe showed marks on her face to people at Bello’s church and told them that Bello beat her. Dupe was required to sleep on the floor and bathe with a bucket, even though the house had spare bedrooms and bathrooms. Bello forced Dupe to cut her hair short, against her wishes. Dupe could not eat the food she prepared for Bello; rather, Bello bought Dupe cheap foods that were about to expire. On one occasion, Bello forced Dupe to eat spoiled leftovers. Like Laome, Dupe was not given a key to the house or a cell phone. She could not go outside without Bello’s permission. Bello tried harder to isolate Dupe than she tried with Laome, forbidding Dupe from speaking to people at her church. Like Laome, Dupe had no other contacts in America, and Bello did not allow Dupe to contact or be contacted by her family in Nigeria. Dupe did not believe there was anything she could do about her situation. Dupe believed that Bello had powerful friends in government in Nigeria who could have her or her parents arrested. As with Laome, Bello told Dupe that American law enforcement would put Dupe in jail or send her back to Nigeria if she ever called the police. Bello never paid Dupe or her family, and she never sent Dupe to school as promised. Eventually, in the spring of 2006, Dupe escaped Bello’s home, using money given to her by Bello’s friends to call a taxi. 7 Case: 11-15054 Date Filed: 01/17/2013 Page: 8 of 14 B. Relevant procedural history Bello was arrested in August 2010. A grand jury indicted Bello on nine counts, two counts of which were for the forced labor of Laome (Count One) and Dupe (Count Four). Counts One and Four of the superseding indictment charged that Bello, in violation of 18 U.S.C. § 1589, knowingly obtained the labor and services of both victims: (1) by means of threats of serious harm to and physical restraint against the victims or another person; (2) by means of a scheme, plan, and pattern intended to cause the victims to believe that, if they did not provide labor or services, they or others would suffer serious harm; and (3) by means of the abuse and threatened abuse of the law and legal process.3 Bello’s case proceeded to trial. At the charging conference, and later in writing, Bello objected to the Government’s proposed instruction describing the elements of forced labor to be proved on Counts One and Four. Bello argued that the jury must be instructed to unanimously agree as to the prohibited means by which she obtained Laome and Dupe’s labor. The court overruled the objection, which she renewed after the jury 3 The superseding indictment, the Government’s requested jury instructions, and the jury charge all follow the original version of 18 U.S.C. § 1589, in force from 2000 to 2008. We also reference the original, 2000 version of the statute in effect prior to the 2008 amendments, as this statute was in effect at the time of Bello’s offense conduct. 8 Case: 11-15054 Date Filed: 01/17/2013 Page: 9 of 14 was charged. The jury found Bello guilty on eight of nine counts charged, including Counts One and Four. The district court sentenced Bello to a term of imprisonment of 140 months on Counts One, Two, Four, and Five; 120 months on Counts Seven, Eight, and Nine; and 60 months on Count Three, all to run concurrently for a total of 140 months’ imprisonment. Upon her release from prison, Bello will serve three years’ supervised release. Bello was also ordered to pay restitution in the amount of $144,200. Bello timely appealed, contesting the jury instructions’ failure to require unanimity as to the means by which Bello coerced Laome and Dupe to work. II. We review the legal accuracy of a jury instruction de novo. United States v. Prather, 205 F.3d 1265, 1270 (11th Cir. 2000). However, we review for an abuse of discretion a district court’s rejection of a requested jury instruction. United States v. Moore, 525 F.3d 1033, 1046 (11th Cir. 2008). III. On appeal, Bello reiterates her objection to the jury’s instruction on the forced labor offenses. Bello contends that, pursuant to her Sixth Amendment right to a jury trial and a unanimous jury verdict, the court should have required the jury to unanimously find not only that she coerced Laome and Dupe into forced labor 9 Case: 11-15054 Date Filed: 01/17/2013 Page: 10 of 14 by some prohibited means, but also the specific statutory means by which she obtained their labor. She further contends that because Counts Two, Three, and Five include as an element the underlying violation of the forced labor statute, her conviction on these counts also must be reversed. Similarly, she argues that Count Eight must be reversed because it required a finding that Bello was not entitled to naturalization as a U.S. citizen at the time she sought naturalization because she committed a crime for which she had not been arrested, i.e., the crime of forced labor. The Government counters that the three means of coercion identified in the statute are not elements of the offense of forced labor. Rather, coercion, by any, some, or all of the three means, is the element that requires a unanimous jury verdict, and the jury was adequately instructed to find unanimously that Bello knowingly obtained forced labor by at least one of the means identified in the statute. The Government contends that the statutory text, legislative history, and narrow scope of conduct encompassed in 18 U.S.C. § 1589 compel the conclusion that the methods of coercion listed in the statute are simply means, not individual elements of the forced labor crime. Alternatively, the Government argues that even if the instruction given was erroneous, any error was harmless because the Government presented overwhelming evidence that Bello coerced her victims by 10 Case: 11-15054 Date Filed: 01/17/2013 Page: 11 of 14 all three of the enumerated methods of coercion. The statute in dispute, 18 U.S.C. § 1589(a), states that [w]hoever knowingly provides or obtains the labor or services of a person— (1) by threats of serious harm to, or physical restraint against, that person or another person; (2) by means of any scheme, plan, or pattern intended to cause the person to believe that, if the person did not perform such labor or services, that person or another person would suffer serious harm or physical restraint; or (3) by means of the abuse or threatened abuse of law or the legal process, shall be fined . . . or imprisoned . . . , or both. Consistent with the text of the statute, the district court instructed the jury on Counts One and Four as follows: To find a Defendant guilty of forced labor, you must find that the Government has proven each of the following three elements beyond a reasonable doubt: First, that the Defendant provided or obtained the labor or services of another person. Second, that the Defendant did so through at least one of the following prohibited means: One, by threats of serious harm to, or physical restraint against the person or any other person; Or, two, by a scheme, plan or pattern intended to cause the person to believe that non-performance of labor or services would 11 Case: 11-15054 Date Filed: 01/17/2013 Page: 12 of 14 result in serious harm to that person or any other person; Or three, by the abuse or threatened abuse of law or the legal process. And thirdly — this is the third element — that the defendant acted knowingly. ... If you find that the defendant used one of the prohibited means, you must then determine whether such use was sufficient to cause [either victim] reasonably to believe that she had no choice but to remain working for the defendant. [R. 81 at 1154–56 (emphasis added).] The court also instructed the jury generally that “[a]ny verdict you reach in the jury room, whether guilty or not guilty, must be unanimous. In other words, to return a verdict, you must all agree.” [Id. at 1169.] It is clear that “a jury in a federal criminal case cannot convict unless it unanimously finds that the Government has proved each element” of the crime charged. Richardson v. United States, 526 U.S. 813, 817, 119 S. Ct. 1707, 1710 (1999) (emphasis added). It is unclear, however, whether the means of coercion in § 1589 should be treated as elements of a forced labor offense, requiring a jury’s unanimous agreement as to which means of coercion were employed. The question presents an issue of first impression in this circuit or any federal circuit. Nevertheless, we will not resolve the issue in this instance because we are 12 Case: 11-15054 Date Filed: 01/17/2013 Page: 13 of 14 confident that even if the district court committed a constitutional error, the error was harmless. We employ the harmless error analysis enunciated by the Supreme Court in Chapman v California, 386 U.S. 18, 87 S. Ct. 824 (1967), because this is a direct appeal. See generally, Brecht v. Abrahamson, 507 U.S. 619, 637, 113 S. Ct. 1710, 1721-22 (1993). Thus, we must consider whether the error here “was harmless beyond a reasonable doubt.” Chapman, 386 U.S. at 24, 87 S. Ct. at 828. The record before us indicates that the verdicts on Counts One and Four would not have likely differed if the court instructed the jury to find unanimously the means by which Bello coerced Laome and Dupe to work for her. The Government presented evidence that: (1) Bello both threatened to beat and actually beat both Laome and Dupe; and (2) Bello engaged in a persistent pattern of abuse of both Laome and Dupe that led them to believe that disobeying Bello would result in continued, and possibly more serious, abuse; and (3) Bello threatened to subject both Laome and Dupe, or their families, to arrest and imprisonment in the United States, Nigeria, or both. Congress defined forced labor as knowingly obtaining a person’s labor through at least one prohibited means of coercion. See 18 U.S.C. § 1589(a). Therefore, whether the jury might have failed to unanimously agree that Bello employed at least one prohibited 13 Case: 11-15054 Date Filed: 01/17/2013 Page: 14 of 14 statutory means of coercion when the Government demonstrated Bello’s use of all three prohibited means is harmless beyond a reasonable doubt. Furthermore, because the verdicts on Counts One and Four were unaffected by the court’s instructions, any error was likewise harmless as to Bello’s other convictions that included as an element a violation of the forced labor statute. Consequently, we hold that even if the district court’s instruction was insufficient insofar as it did not require unanimity as to the prohibited means of coercion, any error was harmless. Likewise, we conclude that the district court’s rejection of Bello’s requested jury instruction was not an abuse of discretion. IV. For the foregoing reasons, we affirm Bello’s convictions as to Counts One and Four, the substantive forced labor offenses, and as to Counts Two, Three, Five, and Eight, the counts that Bello argues are dependent upon the guilty verdict as to Counts One and Four. AFFIRMED. 14	01-03-2023	01-17-2013
https://www.courtlistener.com/api/rest/v3/opinions/2813677/	OSCN Found Document:PRESCOTT v. OKLAHOMA CAPITOL PRESERVATION COMMISSION OSCN navigation Home Courts Court Dockets Legal Research Calendar Help Previous Case Top Of Index This Point in Index Citationize Next Case Print Only PRESCOTT v. OKLAHOMA CAPITOL PRESERVATION COMMISSION2015 OK 54Case Number: 113332Decided: 06/30/2015THE SUPREME COURT OF THE STATE OF OKLAHOMA Cite as: 2015 OK 54, __ P.3d __ NOTICE: THIS OPINION HAS NOT BEEN RELEASED FOR PUBLICATION. UNTIL RELEASED, IT IS SUBJECT TO REVISION OR WITHDRAWAL. DR. BRUCE PRESCOTT, JAMES HUFF, DONALD CHABOT, and CHERYL FRANKLIN, Plaintiffs-Appellants, v. OKLAHOMA CAPITOL PRESERVATION COMMISSION, Defendant-Appellee. ON APPEAL FROM THE DISTRICT COURT OF OKLAHOMA COUNTY; STATE OF OKLAHOMA; HONORABLE THOMAS E. PRINCE ¶0 Oklahoma citizens challenged the placement of a Ten Commandments Monument on the grounds of the Oklahoma State Capitol under Article 2, Section 5 of the Oklahoma Constitution. The trial court entered summary judgment for the Defendant and denied injunctive relief. Citizens appealed, and we retained the case. We hold that the Ten Commandments Monument violates Article 2, Section 5 of the Oklahoma Constitution, is enjoined, and shall be removed. DISTRICT COURT'S JUDGMENT REVERSED; MATTER REMANDED FOR FURTHER PROCEEDINGS CONSISTENT WITH THIS OPINION Ryan Kiesel, Brady Henderson, ACLU of Oklahoma Foundation, Oklahoma City, Oklahoma, Attorney for Plaintiffs-Appellants E. Scott Pruitt, Patrick Wyrick, Cara N. Rodriguez, Office of the Oklahoma Attorney General, Oklahoma City, Oklahoma, Attorney for Defendant-Appellee Hiram Sasser, Liberty Institute, Plano, Texas, Attorney for Defendant-Appellee Paul D. Clement, George W. Hicks, Jr., Taylor A.R. Meehan, Bancroft PLLC, Washington, DC, Attorneys for Amicus Curiae Mark E. DeForrest Mark D. Spencer, McAfee & Taft, Oklahoma City, Oklahoma, Attorney for Amicus Curiae Mark E. DeForrest PER CURIAM ¶1 Oklahoma citizens Bruce Prescott, James Huff, and Cheryl Franklin (complainants) seek removal of a Ten Commandments monument from the Oklahoma Capitol grounds. The monument was a gift from another Oklahoma citizen and was placed on the Capitol grounds pursuant to a Legislative act that was signed by the Governor. While conceding that no public funds were expended to acquire the monument, complainants nonetheless maintain its placement on the Capitol grounds constitutes the use of public property for the benefit of a system of religion. Such governmental action is forbidden by Article 2, Section 5 of the Oklahoma Constitution. ¶2 The trial court ruled that the monument did not violate Article 2, Section 5 and entered a summary judgment denying complainants' request for an injunction. This Court reviews de novo the constitutional issue and the legal question resolved by the summary judgment. Sw. Bell Tel. Co. v. Okla. State Bd. of Equalization, 2009 OK 72, ¶ 10, 231 P.3d 638, 641. Upon de novo review, the trial court's ruling is reversed. ¶3 In deciding whether the State's display of the monument in question violates Article 2, Section 5, the intent of this provision must be ascertained. Draper v. State, 1980 OK 117, ¶ 8, 621 P.2d 1142, 1145. Such intent is first sought in the text of the provision. Id. Words of a constitutional provision must be given their plain, natural and ordinary meaning. Lepak v. McClain, 1992 OK 166, ¶ 7, 844 P.2d 852, 854. ¶4 The text of Article 2, Section 5 states: § 5. Public money or property - Use for sectarian purposes. No public money or property shall ever be appropriated, applied, donated, or used, directly or indirectly, for the use, benefit, or support of any sect, church, denomination, or system of religion, or for the use, benefit, or support of any priest, preacher, minister, or other religious teacher or dignitary, or sectarian institution as such. The plain intent of Article 2, Section 5 is to ban State Government, its officials, and its subdivisions from using public money or property for the benefit of any religious purpose. Use of the words "no," "ever," and "any" reflects the broad and expansive reach of the ban. See Coffee v. Henry, 2010 OK 4, ¶ 3, 240 P.3d 1056, 1057. ¶5 To reinforce the broad, expansive effect of Article 2, Section 5, the framers specifically banned any uses "indirectly" benefitting religion. As this Court has previously observed, the word "indirectly" signifies the doing, by an obscure, circuitous method, something which is prohibited from being done directly, and includes all methods of doing the thing prohibited, except the direct means. Haynes v. Caporal, 1977 OK 166, ¶ 7, 571 P.2d 430, 433. Prohibiting uses of public property that "indirectly" benefit a system of religion was clearly done to protect the ban from circumvention based upon mere form and technical distinction. ¶6 In authorizing its placement, the Legislature apparently believed that there would be no legal impediment to placing the monument on the Capitol grounds so long as (1) the text was the same as the text displayed on the Ten Commandments monument on the grounds of the Texas State Capitol, and (2) a non-religious historic purpose was given for the placement of the monument. To be sure, the United States Supreme Court case of Van Orden v. Perry, 545 U.S. 677 (2005), ruled that the Texas Ten Commandments monument did not violate the Establishment Clause in the First Amendment to the United States Constitution. However, the issue in the case at hand is whether the Oklahoma Ten Commandments monument violates the Oklahoma Constitution, not whether it violates the Establishment Clause. Our opinion rests solely on the Oklahoma Constitution with no regard for federal jurisprudence. See Michigan v. Long, 463 U.S. 1032, 1040-41 (1983). As concerns the "historic purpose" justification, the Ten Commandments are obviously religious in nature and are an integral part of the Jewish and Christian faiths. ¶7 Because the monument at issue operates for the use, benefit or support of a sect or system of religion, it violates Article 2, Section 5 of the Oklahoma Constitution and is enjoined and shall be removed. DISTRICT COURT'S JUDGMENT REVERSED; MATTER REMANDED FOR FURTHER PROCEEDINGS CONSISTENT WITH THIS OPINION ¶8 Reif, C.J., Kauger, Watt, Winchester, Edmondson, Taylor, Gurich, JJ., concur. ¶9 Combs, V.C.J., Colbert, J., dissent. Citationizer© Summary of Documents Citing This Document Cite Name Level None Found. Citationizer: Table of Authority Cite Name Level Oklahoma Supreme Court Cases CiteNameLevel 1992 OK 166, 844 P.2d 852, 63 OBJ 3757, Lepak v. McClainDiscussed 2009 OK 72, 231 P.3d 638, SOUTHWESTERN BELL TELEPHONE CO. v. OKLA. STATE BD. OF EQUALIZATIONDiscussed 2010 OK 4, 240 P.3d 1056, COFFEE v. HENRYDiscussed 1977 OK 166, 571 P.2d 430, HAYNES v. CAPORALDiscussed 1980 OK 117, 621 P.2d 1142, Draper v. StateDiscussed	01-03-2023	07-01-2015
https://www.courtlistener.com/api/rest/v3/opinions/1320757/	200 Va. 159 (1958) ROSSO AND MASTRACCO, INCORPORATED, TRADING AS GIANT OPEN AIR MARKET v. GIANT FOOD SHOPPING CENTER OF VIRGINIA, INCORPORATED, GIANT FOOD SHOPPING CENTER, INCORPORATED, A DELAWARE CORPORATION, AND LEBRAD, INCORPORATED, ETC. Record No. 4820. Supreme Court of Virginia. September 10, 1958. Joseph E. Baker and M. R. Broudy (Richard F. Broudy; Broudy & Broudy, on brief), for the appellant. Thomas H. Willcox (William P. Dickson, Jr.; Raymond R. Dickey; Bernard Gordon; Robert F. Rolnick; Willcox, Cooke, Savage & Lawrence; Danzansky & Dickey, on brief), for the appellees. Present, Eggleston, C.J., and Spratley, Buchanan, Miller, Whittle and Snead, 1. Words or symbols used in connection with one's goods or services acquire a secondary meaning when they have become associated in the mind of the public with the origin of the goods or services. Unfair use of the trade name, or a simulation of it, constitutes unfair competition. Each case turns on its own facts, and one alleging unfair competition has the burden of proof to show that use of the name by another will result in prejudice of his interests. 2. Where unfair competition is charged, confusion or the likelihood of confusion is a fundamental issue. The test is whether the resemblance between the names is so close that it is likely to confuse a prospective buyer or customer exercising ordinary caution in his dealings. 3. Plaintiffs, trading as Giant Open Air Market, sought to enjoin defendant from using the name "Giant" in the conduct of its business in or around Norfolk, alleging that plaintiffs' trade name had acquired in the minds of the public a secondary meaning associating it with their store and that the public was misled by defendants' use of a simulation of it. The trade names of the respective parties were held, however, to be so different that no person of ordinary intelligence using ordinary care should confuse one with the other. The trial court therefore correctly dismissed the plaintiffs' bill. Appeal from a decree of the Circuit Court of the city of Norfolk. Hon. Clyde H. Jacob, judge presiding. The opinion states the case. SPRATLEY SPRATLEY, J., delivered the opinion of the court. Rosso and Mastracco, Incorporated, a Virginia corporation, trading as Giant Open Air Market, instituted this proceeding to enjoin the defendant, Giant Food Shopping Center of Virginia, Incorporated, from using the word "Giant," or any similar name or designation, in the conduct of the business of the latter, then or thereafter to be conducted in the City of Norfolk, Virginia, and the surrounding area. The plaintiff alleged in its bill that its trade name, "Giant Open Air Market", had acquired a secondary meaning, that is, a peculiar significance that associated it with plaintiff's store, in the mind of the public it served; and that the word "Giant" in the trade name of the defendant was likely to cause, and had caused, confusion among the consuming public in the area served by the plaintiff, to the damage of the plaintiff. Giant Food Shopping Center, Incorporated, a Delaware corporation, the sole owner of Giant Food Shopping Center of Virginia, Incorporated, was, on its motion, admitted as a defendant. Likewise, Lebrad, Incorporated, a Delaware corporation, the proposed operator of the store of the Virginia corporation, was, on motion of the plaintiff, made a party defendant. Giant Food Shopping Center of Virginia, Incorporated, hereinafter referred to as the defendant, answered, denying all of the material allegations in plaintiff's bill, and filed a cross-bill seeking to restrain plaintiff from using the word "Giant" in its trade name. In its answer it alleged that the names "Giant Food" and "Giant Food Shopping Center" had been used by it and the other defendants, in Virginia, since 1941, and in the Washington, D.C. metropolitan area since 1935; that the defendant operated a total of seventeen stores, three of which were in Virginia; and that their yearly rate of sales was in a large amount. The intervening defendant and the added defendant adopted the answer and cross-bill of the original single defendant. 161 The case was heard ore tenus. Plaintiff presented its evidence and announced that it rested its case. Thereupon defendant moved to strike the evidence on the ground "that there had been no showing as to confusion" between the trade names of the respective parties. The court, in a verbal opinion, stated that while the actual trade name, "Giant Open Air Market," had been shown to have a secondary meaning identifying it with plaintiff's business, there was no evidence to show that the single word "Giant" had acquired such a meaning, by use, registration, printing, or advertisement. The court then added that it was further of opinion that the trade names of the respective parties were "not so similar as to deceive the ordinary buyer," or create confusion. The motion to strike was then sustained and the bill of the plaintiff was ordered to be dismissed. Upon motion of defendants, the cross-bill was dismissed without prejudice. Plaintiff contends that the evidence viewed in the light most favorable to it shows that its trade name had acquired a secondary meaning, and that the defendant had unfairly used a simulation of it. In addition, it assigns error to the refusal of the court to admit certain testimony. The defendant having moved to strike the evidence of the plaintiff, the effect was to submit the case for the decision of the chancellor, viewing the evidence in the light most favorable to plaintiff. The chancellor having sustained the motion, the question before us is whether the evidence, viewed as above stated, shows that the defendant was guilty of unfair competition. Kiss Gale, 187 Va. 667, 674, 675, 47 S.E.2d 353. In order to sustain its action for an injunction, the burden was on the plaintiff to show facts which clearly and satisfactorily entitled it to such relief. Stoneman Wilson, 169 Va. 239, 248, 192 S.E. 816. It must also be remembered that when a matter is submitted to the sound discretion of a chancellor, the determination will not be set aside unless it is shown to be clearly erroneous. 1 M.J., Appeal and Error, \|\| 277 and 278. * By Code, \| 8-122.1, Acts 1954, Chapters 605, the legislature modified the holding in Kiss Gale, supra, as to procedure after a motion to strike has been overruled. The evidence, so far as pertinent, may be summarized as follows: In 1939, W. P. Rosso began trading as the "Open Air Market" at the present place of business of the plaintiff: 339 Campostella Road, in the City of Norfolk, Virginia. In 1944-45, he entered into a partnership with his brother, L. H. Rosso, and Vincent J. Mastracco, and they continued the business as "Open Air Market," under the 162 firm name of Rosso and Mastracco. In 1948, the partnership altered its trade name by prefixing the word "Giant" to the words "Open Air Market," and continued thereafter as "Giant Open Air Market." Subsequently, the plaintiff's business was incorporated as Rosso and Mastracco, Incorporated. The plaintiff corporation has advertised extensively by means of newspapers, radio, television and billboards throughout the City of Norfolk and the surrounding territory, Tidewater, Virginia, and Eastern North Carolina. Every one of its newspaper and billboard advertisements shows its trade name as "Giant Open Air Market." The newspaper advertisements described it as "Virginia's Most Unusual Store, Giant Open Air Market, Open Twenty-four Hours a Day, Campostella Road, at Campostella Bridge." However, on several occasions in its radio and television advertisements, it referred to itself as "Giant." Through honest advertising, reasonable or cheaper prices, and friendly treatment of customers, it has built up a very large business. Various kinds of merchandise have been included in addition to food and groceries, and a bakery shop opened. In 1952 or 1953, some of plaintiff's officers and its general manager visited certain stores of the defendants in Washington, D.C., Alexandria and Richmond, and observed the character of the business conducted in their stores, the facilities offered, and the physical set-ups. In June, 1956, officers of plaintiff saw a newspaper article announcing that the Giant Food Shopping Center of Virginia, Incorporated, had entered itno a contract for the construction of a store to be opened by it under the name of "Giant Food" or "Giant Food Shopping Center." In November of that year, plaintiff repainted the sign above its store, which bore its trade name, and in the repainting increased the size of the word "Giant" substantially, and reduced the size of the words "Open Air Market." It then began to place more and more emphasis on the word "Giant" in its advertising. It also announced its intention to build a new store for its own use on the east side of Campostella Road, near its present location. The June, 1956, advertisement of the defendants showed that they were planning the construction and operation of a store in the Southern Shopping Center in Norfolk, at Tidewater Drive and Little Creek Road, six or seven miles distant from the location of plaintiff's store. It contained a picture of the architects' conception 163 of the proposed building, which showed a sign at the top of the structure, consisting of the words "Giant Food." Below the picture there appeared the name "Giant Food Shopping Center of Virginia, Incorporated." In March, 1957, defendant caused to be published in a Norfolk, Virginia, newspaper the following advertisement: "Southern" Shopping Center OPENS April , 1957 Little Creek Road and Tidewater Drive. GIANT FOOD 36 Giant Supermarkets Serving Maryland. Virginia, And The District of Columbia. }"Since 1947 Giant Food Stores have quadrupled in number with ten of America's most beautiful food stores now serving the Old Dominion state." The first "Open Air Market" was what its name implies, that is, a market in the open; but as its business increased the major portion of its operations was conducted in a large one-story room. The exhibits show that the store buildings of the respective parties differ greatly in architecture, color, and equipment. The store of the plaintiff is somewhat outmoded in structure and in equipment, while defendant's store is modern in structure and in such particulars as lighting, 164 color, space, and departmental service. The respective trade names as used are wholly different, except as to the word "Giant." Plaintiff advertises as an unusual store; while defendant advertises not as one store but as a large chain of modern stores. The full names of each of the parties appearing on their stationery, on their signs, and on their advertisements are clearly different. The manner in which the respective names are used and displayed, the character and appearance of the two stores show a substantial variance and distinction. In 1955, plaintiff, for the first time, filed a certificate under Virginia Code, \| 59-169, the so called "Trader's Act," setting forth that it traded under the name of "Giant Open Air Market." At the same time, it also got its first business license under that trade name. A majority of plaintiff's witnesses had never seen or heard of defendant's stores or its advertisements. About the time defendant announced the opening of its store, and the need for employees, the plaintiff announced its intention to build a new store for its own use. This operated to create some confusion in the minds of several witnesses as to the ownership and names of the new and proposed stores. It is apparent that the confusion was due to incidental circumstances, lack of investigation or failing to exercise reasonable care, rather than to any mere similarity in the respective trade names. The doctrine of secondary meaning as an element of unfair competition embraces a great area of the law, and has been discussed and considered in many cases. The definition and elements of secondary meaning may be briefly stated as follows: "Words and symbols used in connection with one's goods, services, or business, or physical attributes of goods, not capable of being appropriated as a technical trade mark, are deemed to have acquired a secondary meaning when they have become associated in the minds of purchasers or customers with the source or origin of goods or services rather than with the goods or services themselves." Annotation, 150 A.L.R., page 1079. See also 87 C.J.S., Trade-marks, Trade-names and Unfair Competition, \| 90, pages 319 et seq.; 52 Am. Jur., Trademarks, Tradenames and Trade Practices, \| 72, pages 554 et seq. "To constitute unfair competition in respect to a trade-name, two elements must be present. The name must have acquired a secondary meaning or significance that identifies the plaintiff, and the defendant must have unfairly used the name or a simulation of it, to the prejudice 165 of the plaintiff's interests." 150 A.L.R., Annotation, page 1076. One who claims that a name used by him in connection with his business has acquired a secondary meaning has the burden of proof, and that burden is a substantial one, that is, must be sustained by a fair preponderance of evidence or by substantial evidence sufficient to show that the use of the trade name by another will result to the prejudice of the complainant. 150 A.L.R. 1078. Courts generally are in agreement that unfair competition is a question of fact, or of mixed law and fact, and each case must depend for its correct solution on its own peculiar facts and circumstances. Crump Co. v. Lindsay, 130 Va. 144, 160, 107 S.E. 679, 17 A.L.R. 747. 18 M.J., Trade-marks, Trade-names and Unfair Competition, \| 4, page 488; 87 C.J.S. Trade-marks, Trade-names and Unfair Competition, \| 100, pages 346 et seq. Cf. 52 Am. Jur., Trade-marks, Tradenames and Trade Practices, \| 77, page 557. Proof of confusion, or the likelihood of confusion, between trademarks or trade names is a fundamental issue when unfair competition is charged. In Virginia we have adopted the general rule that in determining the exercise of unfair competition in the use of trademarks or trade names, the test is whether the resemblance between them is so close that it is likely to confuse a prospective buyer or customer exercising ordinary caution in his dealings. Va. Baking Co. Sou. Biscuit Works, 111 Va. 227, 68 S.E. 261, 30 L.R.A.(N.S.) 167; Crump Co. Lindsay, supra. The judgment of the eye and the ear is more satisfying than other evidence as to the possibility that a party may be deceived so as to take one article or one store for that of another. Glenmore Distilleries Co. National Distillers Products Corp., (Va.) 23 F.Supp. 928, affirmed in 101 F.2d 479, Cert. denied 307 U.S. 632, 59 S.Ct. 835, 83 L.ed. 1515. See also Standard Brands, Inc. Eastern Shore Canning Co., (Va.) 172 F.2d 144, Cert. denied 337 U.S. 925, 69 S.Ct. 1171, 93 L.ed. 1733; Vol. 3 Callman, Unfair Competition and Trade Marks, 2d Ed., pages 1444, 1461. In Va. Baking Co. Sou. Biscuit Works, supra, in determining whether the marks "Crown" and "Jamestown" used on "ginger snaps" and "jumbles," respectively, infringed upon the use of the same names in connection with soda crackers and small cakes, known as "drops," this was said: "It is not sufficient that some person might possibly be misled, 166 but the similarity must be such that "any person, with such reasonable care and observation as the public generally are capable of using and may be expected to exercise, would mistake one for the other.'" International Trust Company International Loan & Trust Company, 153 Mass. 271, 278, 26 N.E. 693, 695, 10 L.R.A. 758. (111 Va., page 230)." * * "'The defendant will not be injoined from using certain trademarks or labels, when they are not so similar to the ones used by the plaintiff, in appearance or in connection of the words, as to deceive a person of ordinary intelligence, using ordinary care." White Trowbridge, 216 Pa. 11, 64 Atl. 862. (111 Va., pages 230, 231). In Crump Co. Lindsay, 130 Va., supra, at page 160, we said with respect to unfair competition that "The essential element of unfair trading is deception, by means of which goods of one dealer are palmed off as those of another, whereby the buyer is deceived, and the seller receives the profit which, but for such deception, he would not have received." The same rule applies to unfair use of trade names tending to deceive. The word "Giant," as found in the full name of each of the parties, is an adjective. In common and ordinary acceptance, it is descriptive of tremendous, or extraordinary, size. It is applicable to the size of the stores and the extent of their business operations. It bears no relation to the peculiar type or character of merchandise which the parties here offered for sale. Plaintiff's trade name connotes a large open market area; while defendant's name connotes a large supplier of food. Viewed as common words, the respective trade names look and sound different. They bear no resemblance except in the use of the word "Giant." They are so different that there is no good reason why any person of ordinary intelligence, using reasonable care and observation, should confuse one with the other, either through the advertisements mentioned, or the physical character of the store buildings. There is a fundamental difference in appearance and sound, clearly distinguishable to the eyes and ears of an observant person. Confusion as to names is not shown by a mere casual misunderstanding, or mistaken ideas. *167 We find no merit in plaintiff's contention that the trial court erred in refusing to admit testimony concerning the operation and sales of the Giant Esso Center, a gasoline station. Neither plaintiff nor the defendant was engaged in the gasoline business and the Giant Oil Company, Incorporated, a subsidiary of the plaintiff, which operated the gasoline station, is not a party to this suit. There may have been a score, or more, of good reasons why Giant Esso Center increased its sales, such as location, surroundings, facilities, availability, prices charged, and services rendered. Upon consideration of the whole evidence, we are of opinion that the plaintiff failed to show clearly and satisfactorily, that it has used the word "Giant" alone in such a manner as to give it a secondary meaning. Its actual trade name is "Giant Open Air Market," which has acquired a secondary meaning. We are further of opinion that the names "Giant Food" or "Giant Food Department Store" are not so similar to "Giant Open Air Market" as to deceive persons of ordinary intelligence, using ordinary care. For the foregoing reasons, the decree of the trial court is affirmed. Affirmed.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527127/	119 B.R. 28 (1990) In re FANSAL SHOE CORP. d/b/a Marlowe Shoes, Debtor. Bankruptcy No. 87-B-20304. United States Bankruptcy Court, S.D. New York. September 24, 1990. Fischoff & Gelberg, Garden City, N.Y., for debtor. Greenstone, Sokol, Behot and Fiorenzo, Hackensack, N.J., Goldman, Greenbaum & Milner, P.C., New York City, for creditor. DECISION ON MOTION TO MODIFY PLAN OF REORGANIZATION HOWARD SCHWARTZBERG, Bankruptcy Judge. Fansal Shoe Corp. d/b/a Marlowe Shoes ("Fansal"), the former debtor in this confirmed 29 Chapter 11 case, has moved pursuant to 11 U.S.C. § 1127(b) to modify its confirmed plan of reorganization to add four additional unsecured creditors to its schedule of unsecured debts and to include those debts in its confirmed plan of reorganization because the debts were allegedly inadvertently omitted from its schedules. FINDINGS OF FACT 1. Fansal filed with this court its petition for reorganizational relief under Chapter 11 of the Bankruptcy Court on June 23, 1987. It continued to manage its business as a debtor in possession in accordance with 11 U.S.C. §§ 1107 and 1108. 2. Fansal is a corporation organized under the laws of the State of New Jersey, originally engaged in the retail sale of shoes in New York and New Jersey. 3. On January 27, 1989, this court entered an order confirming Fansal's amended Chapter 11 plan of reorganization. Pursuant to the plan, the holders of administration priority claims were paid in cash equal to the allowed amounts of such claims within five days of the effective date of the plan. All tax claims having priority in accordance with 11 U.S.C. § 507(a)(3) were to be paid over a period not to exceed three years from the effective date of the plan. Fansal's counsel has stated that all administration and priority tax claims have been fully paid pursuant to the plan. 4. The unsecured claims are to be paid in cash at the rate of 9% as follows: 1.25% to be paid not later than 2 years after the effective date of the plan; 3.75% not later than 3 years after the effective date of the plan; 5% not later than 5 years after the effective date of the plan. 5. There was no evidence that any distribution has yet been made to any of the allowed unsecured claim holders. 6. Two of the four omitted creditors are law firms. They are the firms of Goldman, Greenbaum & Milner, P.C. in New York and Greenstone, Sokol, Behot and Fiorenzo in New Jersey. There firms were retained by Ira Marlowe when he was president of the debtor corporation in 1986. The two law firms were retained to defend an action commenced by Ira Marlowe's ex-wife in connection with a matrimonial dispute which also sought dissolution of the corporate debtor. 7. After the matrimonial action was commenced by Ira Marlowe's ex-wife, he turned over control of the debtor corporation to his sister, Ronnie Marlowe, who was the president of the corporation when it filed its Chapter 11 petition on June 23, 1987. 8. Ira Marlowe testified that the two law firms were aware of the Chapter 11 petition filed by Fansal. This point is conceded by Martin Goldman, an officer of Goldman, Greenbaum & Milner, P.C. in his affidavit sworn to September 7, 1990, in which he states in part as follows: 2. At and prior to the time of the filing of the bankruptcy petition in the above-entitled matter, the Debtor, by its principal officer, Ronnie Marlowe, states that because of the superior knowledge of the facts possessed by this firm, the Debtor was requesting that this firm continue representing it and to coordinate with the law firm of Greenstone, Sokol, Behot and Fiorenzo those matters which it had been engaged to work on prior to the bankruptcy. Ms. Marlowe indicated that the debt of Goldman, Greenbaum & Milner, P.C. would be and had been consciously left off the list of creditors so that the debt in question would not be discharged in bankruptcy. Ms. Marlowe instructed Goldman, Greenbaum & Milner, P.C. not to even file a proof of claim in bankruptcy since she stated that Goldman, Greenbaum & Milner, P.C. would be paid notwithstanding the bankruptcy. 9. On August 25, 1989, the law firm of Greenstone, Sokol, Behot and Fiorenzo commenced an action against Fansal in the Superior Court of New Jersey for prepetition legal fees. On February 16, 1990, this law firm obtained a judgment against Fansal in the amount of $8,944.75, plus costs and interest. Thereafter, the law firm obtained a writ of execution from the Superior Court of New Jersey dated March 5, 30 1990, directing the Sheriff of Bergen County to execute against the property of Fansal to satisfy the judgment. 10. Fansal's current president, Ronnie Marlowe, testified that she was unaware that her brother retained the New Jersey law firm when he was president of the debtor. She testified that she first became aware of the claims when she received a certified letter from the New Jersey law firm on March 7, 1989. However, the New Jersey law firm had previously mailed two bills for their services to Marlowe Shoes at its Fort Lee, New Jersey address, dated December 23, 1988 and January 25, 1989, addressed to the attention of Ronnie Marlowe, the current president of Fansal. Both letters predated this court's confirmation order, dated January 27, 1989. DISCUSSION A plan proponent's right to modify a confirmed Chapter 11 plan is governed by 11 U.S.C. § 1127(b) which provides as follows: (b) The proponent of a plan or the reorganized debtor may modify such plan at any time after confirmation of such plan and before substantial consummation of such plan, but may not modify such plan so that such plan as modified fails to meet the requirements of sections 1122 and 1123 of this title. Such plan as modified under this subsection becomes the plan only if circumstances warrant such modification and the court, after notice and a hearing, confirms such plan as modified, under section 1129 of this title. Manifestly, a confirmed plan may not be modified after substantial confirmation, which is defined in 11 U.S.C. § 1101 as follows: (2) "substantial consummation" means (A) transfer of all or substantially all of the property proposed by the plan to be transferred; (B) assumption by the debtor or by the successor to the debtor under the plan of the business or of the management of all or substantially all of the property dealt with by the plan; and (C) commencement of distribution under the plan. Substantial consummation does not occur until all three elements delineated in subsections (A), (B) and (C) have been satisfied because the statute is written in the conjunctive. U.S. v. Novak, 86 B.R. 625, 628 (D.S.D.1988); Federal Land Bank of Louisville v. Gene Dunavant and Son Dairy (In re Gene Dunavant and Son Dairy), 75 B.R. 328, 332 (M.D.Tenn.1987); In re Bedford Springs Hotel, Inc., 99 B.R. 302, 303 (Bank.W.D.Pa.1989); In re Charterhouse, 84 B.R. 147, 152 (Bankr.D.Minn. 1988). In order to support a proposed modification, the proponent has the burden of establishing that the plan has not been substantially consummated. In re U.S. Repeating Arms Co., 98 B.R. 138, 140 (Bankr. D.Conn.1989). In the instant case, the confirmed Chapter 11 plan did not provide for the transfer of any property as authorized under subsection (A) of 11 U.S.C. § 1101(2) and the debtor continued to operate the business and assumed the management of all the property dealt with by the plan, as described in subsection (B). Therefore, the only element in question for purposes of determining whether or not the plan was substantially consummated within the meaning of 11 U.S.C. § 1101(2) relates to subsection (C) which requires "commencement of distribution under the plan." In re Earley, 74 B.R. 560, 563 (Bankr.C.D.Ill. 1987). It is now well-settled that substantial consummation may occur even though the debtor has not distributed to the creditors substantially all of the amounts called for by the plan because substantial consummation requires only that there was a "commencement of distribution under the plan." U.S. v. Novak, 86 B.R. at 630; In re Hayball Trucking, Inc., 67 B.R. 681, 683 (Bankr.E.D.Mich.1986). The reference to a transfer of all or substantially all of the property proposed by the plan to be transferred as stated in subsection (A) of 11 U.S.C. § 1101(2) has significance only *31 when the plan calls for the transfer of property by the debtor in addition to the distribution of dividends to creditors. If the plan does not call for any property transfers and the debtor continues to manage the property dealt with under the plan there is no additional percentage of payments test to be applied in determining if a substantial consummation of a confirmed plan has occurred; the only requirement is the commencement of distribution within the plan. U.S. v. Novak, 86 B.R. at 630; In re Hayball Trucking, Inc., 67 B.R. at 683. In the instant case the debtor has commenced distribution under the plan and has fully paid the class of administration claims as well as the priority tax claimants. Hence, the debtor has substantially consummated its Chapter 11 plan and is precluded by 11 U.S.C. § 1127(b) from modifying the terms of the confirmed plan. CONCLUSIONS OF LAW 1. This court has jurisdiction of the subject matter and the parties pursuant to 28 U.S.C. § 1334 and 28 U.S.C. § 157(a). This is a core proceeding in accordance with 28 U.S.C. § 157(b)(2)(A). 2. The confirmed debtor has failed to establish that its confirmed Chapter 11 plan of reorganization has not been substantially consummated within the meaning of 11 U.S.C. § 1101(2). 3. The confirmed debtor's motion to modify a substantially consummated Chapter 11 plan of reorganization by adding four additional creditors is denied because 11 U.S.C. § 1127(b) bars the modification of a substantially consummated Chapter 11 plan of reorganization. IT IS SO ORDERED.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/503751/	842 F.2d 1308 269 U.S.App.D.C. 13 OFFICE OF CONSUMERS' COUNSEL, STATE OF OHIO, Petitioner,v.FEDERAL ENERGY REGULATORY COMMISSION, Respondent,Public Service Commission of the State of New York, PublicService Commission of West Virginia, Process Gas ConsumersGroup, Columbia Gas Distribution Companies, UGI Corporation,Dayton Power and Light Company, Columbia Gas TransmissionCorporation, Pennsylvania Gas and Water Company, ConsumerAdvocate for the Commonwealth of Pennsylvania, WashingtonGas Light Company, Interstate Natural Gas Association ofAmerica, Cities of Charlottesville and Richmond, Virginia,Consumer Advocate Division of the Public Service Commissionof West Virginia, Cincinnati Gas & Electric Company, et al.,Baltimore Gas and Electric Company, Public UtilitiesCommission of Ohio, Texas Eastern Transmission Corporation,Transwestern Pipeline Company, Exxon Corporation, MarylandOffice of People's Counsel, Intervenors. Nos. 84-1099, 84-1100, 84-1135, 84-1142, 84-1143, 84-1146,84-1179 and 84-1444. United States Court of Appeals,District of Columbia Circuit. March 29, 1988. Frederick Moring and Jennifer N. Waters, Washington, D.C., were on the second renewed motion of Associated Gas Distributors to enforce the mandate. Jerome M. Feit, Sol., and Joel M. Cockrell, F.E.R.C., Washington, D.C., were on the motion of the F.E.R.C. to enlarge the mandate. John H. Pickering, Timothy N. Black, Gary D. Wilson, Neal T. Kilminster, Susan McAndrew, Washington, D.C., Stephen J. Small, Charleston, W.Va., Ronald N. Carroll, Baltimore, Md., and Giles D.H. Snyder, Charleston, W.Va., were on the response of Columbia Gas Transmission Corp. C. Roger Hoffman, Douglas W. Rasch, Houston, Tex., Charles M. Darling IV and Stephen L. Teichler, Washington, D.C., were on the reply of Exxon Corp. Before WALD, Chief Judge, MIKVA and EDWARDS, Circuit Judges. Opinion for the Court filed by Circuit Judge HARRY T. EDWARDS. HARRY T. EDWARDS, Circuit Judge: 1 This case, which has already resulted in two published opinions from this court, is before us again on cross-motions by petitioners Associated Gas Distributors et al. ("AGD") to enforce the mandate, and by respondent Federal Energy Regulatory Commission ("FERC" or "Commission") to "enlarge" the mandate to encompass the remedy it has adopted. For the reasons that follow, we grant FERC's motion and deny that of AGD. 2 Our principal opinion in this case was issued over two years ago. In Office of Consumers' Counsel, State of Ohio v. FERC ("OCC I "), 783 F.2d 206 (D.C.Cir.1986), we affirmed the Commission's finding that certain practices and contract clauses of Columbia Gas Transmission Corporation ("Columbia") were imprudent under section 5 of the Natural Gas Act, 15 U.S.C. Sec. 717d (1982), and we directed the Commission to determine and order a remedy for these violations.1 In so doing, however, we made clear that we were leaving it to FERC to determine the appropriate cure: "We do not presume to dictate or even suggest appropriate remedies for Columbia's section 5 violations." 783 F.2d at 236. 3 Last year we granted a motion by AGD to enforce the mandate, finding that FERC's Order on Remand of May 27, 1987,2 did not constitute compliance with the mandate because of its flawed understanding of "prospective" relief under section 5. Office of Consumers' Counsel, State of Ohio v. FERC ("OCC II "), 826 F.2d 1136 (D.C.Cir.1987). We reiterated that FERC was required to impose a remedy for the section 5 violations it had found, and stated that whatever remedy the Commission imposed was to be effective as of January 16, 1984--the date of FERC's finding of imprudence. 4 In responding to an argument advanced by Columbia about FERC's alleged lack of "power under Sec. 5 to set aside or modify clauses in producer contracts relating to nonjurisdictional gas," 826 F.2d at 1139 n. 2 (quoting Associated Gas Distribs. v. FERC, 824 F.2d 981, 1027 n. 30 (D.C.Cir.1987)), we observed that neither FERC nor Columbia had previously relied on this argument, that we were not bound by dicta from another case, and that our initial opinion had "clearly assumed ... that in imposing remedies under section 5 FERC had the power to modify Columbia's illegal take-or-pay provisions." Id. Our comments in the cited footnote, while intended to reject any intimation that footnote 30 of Associated Gas constituted the law of this circuit or affected the law of this case, were not a mandate to FERC to take any particular approach in determining the appropriate remedy for section 5 violations. Indeed, OCC II, like its predecessor, made clear that "the nature of the remedy" was a matter for the Commission. 826 F.2d at 1140. 5 On December 22, 1987, AGD filed a renewed motion to enforce the mandate. On January 19, 1988, while that motion was pending, FERC issued its Order Granting in Part and Denying in Part Rehearing of Commission's Order on Remand and Addressing Request for Clarification. Columbia Gas Transmission Corp., 42 F.E.R.C. p 61,021 (1988) ("Order on Remand II"). In that order, as well as in a Motion to Enlarge Mandate to Encompass Remedy, filed with this court on the same date, the Commission specified that its order was "issued subject to leave of" this court, 42 F.E.R.C. at 61,123, because the Commission had "departed from the remedial approach envisioned by this court in OCC II." Motion to Enlarge at 3. The Commission justified its action on the ground that "the remedies adopted in the remand order 'are at least as effective, if not more effective than any other remedy we could lawfully devise.' " Id.3 6 It appears that FERC may have assumed--perhaps because of a misreading of our footnote 2 in OCC II --that we intended to require the Commission to modify the offending clauses in Columbia's contracts with its producers. However, our judgment in OCC II did not purport to reach that issue. Rather, we merely noted that our decision in OCC I was rendered on the assumption that FERC had the power to modify Columbia's illegal take-or-pay provisions--since no party at that point had presented an argument to the contrary. As this litigation has unfolded, however, it has become increasingly clear that "[i]t is yet unresolved by the Commission as to whether the Commission has the authority to modify take or pay provisions in contracts for deregulated gas." Brief for Respondent FERC at 60 n. 67, OCC I. 7 We also recognize that the Commission may wish to avoid deciding an important, unsettled jurisdictional issue in the difficult context of this highly complex case. We have no objection to such a course if, indeed, a fully adequate remedy can be devised in this case without the necessity of reaching a decision on the permissibility of contract modification. It appears to us that such a remedy, along the lines FERC suggests, is possible here, because the consequence of FERC's proposed remedy is to cure the effects of Columbia's imprudent practices insofar as the petitioners--Columbia's customers and others affected by the price at which it sells gas--are concerned. 8 FERC's proposed remedy consists of two parts. First, the Commission has imposed a cap on passthrough of gas costs under contracts found abusive, or other contracts with similar provisions. Passthrough in such cases will be limited to the price of competing fuels in Columbia's service area. 42 F.E.R.C. at 61,120, 61,122. Second, in a companion order also issued on January 19, 1988, the Commission denied Columbia's application to pass through the costs it has incurred in reforming the contracts found to be abusive or imprudent. Columbia Gas Transmission Corp., 42 F.E.R.C. p 61,022 (1988). Thus, the ill effects of Columbia's imprudent contracts have been cured, so far as AGD is concerned. The Commission's two orders will ensure that it is not the petitioners who will bear the burden created by Columbia's behavior found to have been imprudent. 9 It is highly noteworthy that, in justifying this remedy, FERC has made it clear that Columbia will not be allowed to pass through costs paid to reform contracts that are affected by the cap: 10 The record in this case shows that Columbia's contracts for section 107 gas resulted in excessive gas costs, in large part, because Columbia failed to take into account the costs of the relevant competitive fuel (No. 6 fuel oil) in its market areas. As a result, these contracts pulled Columbia's gas costs out of line. Therefore, the appropriate remedy is to limit Columbia's pass through of gas costs under these contracts to the price of the competitive fuel in Columbia's market areas. By targeting these contracts, and permanently limiting the pass through of costs under these contracts, Columbia is given an incentive to renegotiate the price paid under these contracts (if it has not already done so). Moreover, as we hold in a companion order, Columbia's pass through of costs paid to reform these contracts also will be disallowed because Columbia's ratepayers should not have to pay to reform contracts that violate the standards of the Act. 11 42 F.E.R.C. at 61,122 (footnote omitted). We can find no fault with FERC's proposed remedy, so long as every facet remains intact. This means, for example, that the Commission may not hereafter vary its position denying Columbia passthrough of costs incurred to reform the offending contracts. Such a change of position would require FERC to reconsider entirely the appropriate remedy for the section 5 violations in this case. 12 AGD, the sole opponent of FERC's motion, mounts no effective attack on the adequacy of the remedy FERC proposes. Its argument is, in essence, that the Commission's remedy is inadequate simply because it is "different from [a] Section 5 remedy." AGD Response in Opposition to Motion to Enlarge Mandate at 14 (emphasis in original). First, it states, FERC's "price cap remedy" leaves Columbia's contracts with its producers intact, thus burdening only Columbia and not the producers. Id. The short--and sufficient--answer to this assertion is that this is no concern of AGD's. In the absence of any claim by a party actually injured, we will not concern ourselves with allegations by a party whose interests are not impaired. See Singleton v. Wulff, 428 U.S. 106, 113-14, 96 S.Ct. 2868, 2873-74, 49 L.Ed.2d 826 (1976).4 13 Second, AGD states that the Commission's remedy "addresses only the contract price, not the take-or-pay level found to be unjust and unreasonable." AGD Response at 14. This assertion is simply incorrect, for the evil of Columbia's high take-or-pay provisions is that they yield a higher gas cost (by forcing Columbia to cut back first on cheaper gas not covered by these contracts). See OCC I, 783 F.2d at 229. A remedy that imposes a cap on the costs Columbia can pass through to its customers quite clearly deals with the take-or-pay level found to be unjust and unreasonable. 14 Finally, AGD suggests that FERC's remedy is somehow flawed because it fails to cover the three-year period between January 16, 1984 (the date as of which OCC II specified that the remedy was to take effect), and April 1, 1987 (the date as of which the Commission's passthrough cap is effective). AGD Response at 14. This claim is unfounded. In 1985, Columbia and its customers entered into a comprehensive settlement, Article II of which "provides for specified settlement sales and transportation rates for the settlement period [April 1, 1985, to March 31, 1987], including a commodity rate of $3.60 per Dth, representing an 11.5 percent reduction from Columbia's [then] current commodity rate." Columbia Gas Transmission Corp., 31 F.E.R.C. p 61,307, at 61,675 (1985). "Columbia's 11.5 percent reduction in its commodity rate, from $4.07 per Dth to $3.60 per Dth, reduce[d] the total charges to be paid by Columbia's customers over the settlement period by $628 million." Id. at 61,680. As consideration for these and other benefits given to its customers, Article VII of the settlement agreement provides that "Columbia will have no refund obligation on grounds of fraud, abuse, similar grounds, or imprudence relating to any of its purchasing practices during the period March 1, 1982--March 31, 1987." Id. at 61,676. 15 In reviewing the provisions of the settlement agreement, the Commission found that, 16 [b]ecause the settlement results in immediate, direct savings close to or exceeding the refunds claimed by [those who challenged the settlement], obligates Columbia to additional transportation, and preserves the ability of the Commission to order refunds after the settlement period, we conclude that the waivers in Article VII are reasonable. 17 Id. at 61,681. AGD is bound by this finding, and by the waivers in Article VII of the settlement agreement. Therefore, the price cap proposed by FERC is properly limited to the period subsequent to March 31, 1987. Any remedy to which AGD is entitled for Columbia's imprudence prior to April 1, 1987, is as defined in the parties' settlement agreement. 18 We note that FERC's approval of the settlement agreement is currently being challenged in court. Process Gas Consumers Group v. FERC, No. 87-1620 (D.C.Cir. filed Oct. 23, 1987). Should the settlement be disapproved on review, FERC will be required to revisit the question of an appropriate remedy for the period from January 16, 1984, to April 1, 1987. 19 In summary, we agree with FERC that the remedies proposed in the Order on Remand II "are at least as effective, if not more effective than any other remedy [that the Commission] could lawfully devise." For this reason, we find the Commission's proposed remedies to be consistent with this court's mandate in OCC I.5 20 We note in conclusion that judicial involvement with this case is at an end. The court's mandate has issued and it has been fully clarified. What is left to be done is in the hands of the parties, subject to the lawful direction of FERC. Therefore, the panel will not entertain any further filings in connection with this case, absent a showing of truly extraordinary circumstances. 1 We also rejected FERC's interpretation of "abuse" under section 601(c)(2) of the Natural Gas Policy Act, 15 U.S.C. Sec. 3431(c)(2) (1982). On remand, the Commission adopted a revised test for "abuse," Columbia Gas Transmission Corp., 39 F.E.R.C. p 61,219, at 61,776-77 (1987), and in the order now at issue it determined that the practices in question were "abusive" under the revised test. Columbia Gas Transmission Corp., 42 F.E.R.C. p 61,021, at 61,119-20 (1988) 2 Columbia Gas Transmission Corp., 39 F.E.R.C. p 61,219 (1987) 3 In essence, FERC proposes a cap on passthrough of gas costs, imposed under the "abuse" provisions of NGPA section 601(c)(2), together with the denial (in another proceeding) of Columbia's application for passthrough of contract reformation costs. In describing these remedies, the Order on Remand II notes that, [s]ince the Commission has already found that Columbia's purchases under its contracts for NGPA Section 107 gas violated the abuse standard of NGPA Section 601(c)(2), it is unnecessary to determine whether other practices under those contracts or other terms in those contracts (beyond the high take-or-pay clauses) were unjust and unreasonable under section 5 of the NGA. A finding of imprudence is subsumed within the finding of abuse, and having found that the purchases under those contracts were abusive on one score, the Commission finds it unnecessary to examine whether they were abusive or imprudent on other grounds as well. 42 F.E.R.C. at 61,123 4 We also note that FERC reasonably assumes that, because of the price cap, "Columbia is given an incentive to renegotiate the price paid under these contracts (if it has not already done so)." 42 F.E.R.C. at 61,122 5 Several parties have indicated in their submissions to this court that they intend to pursue various objections to FERC's orders via applications for rehearing. We emphasize that our present opinion should not be construed as deciding any issue not squarely presented by FERC's motion to enlarge the mandate	01-03-2023	08-23-2011
https://www.courtlistener.com/api/rest/v3/opinions/1527213/	221 F.Supp. 271 (1963) The CHARLESTON NATIONAL BANK, a national banking corporation, as Executor and Trustee of the Estate of James Bingham Small v. UNITED STATES of America. No. 2549. United States District Court S. D. West Virginia, Charleston Division. June 5, 1963. Robert S. Spilman, Jr., Charles B. Stacy, Charleston, W. Va., for plaintiff. Mitchell Samuelson, Washington, D. C., Harry G. Camper, Jr., Charleston, W. Va., for defendant. FIELD, Chief Judge. This case was submitted upon a stipulation between the plaintiff and the Government and, accordingly as I advised counsel at the hearing, I do not deem it necessary for me to make any definitive findings of fact. My conclusions of law will be stated herein and will be based upon the facts as stipulated. Based upon the stipulation, for the purposes of this opinion the facts may be briefly stated as follows: The decedent, Small, died testate August, 4, 1953. He was a participant in a pension plan set up by his employer, Libbey-Owens-Ford, which provided for retirement benefits in the event he reached the retirement age of 65, and which provided for death benefits payable to any beneficiary whom he might appoint in the event of his death prior to retirement or prior to his receiving all of the retirement payments. Small died while still in the employ of Libbey-Owens-Ford prior to attaining the retirement age of 65. Under the plan the employees made no payments whatever into the trust fund, all payments being made by the employer. The plan was administered by a retirement board appointed by the company. The L-O-F Plan was a qualified retirement plan under § 165 of the Internal Revenue Code of 1939. As stated above it required no contributions by the employees. Among other provisions, it provided that the company might terminate the retirement plan at any time for business reasons, and in such event, the funds accumulated should be used for the exclusive benefit of participants, retired 272 participants and their beneficiaries, and for no other purpose. It further provided that in such an event the fund should be distributed proportionately to those persons with respect to whom there might exist an obligation or liability under the plan. The company had the right to modify, amend, add to or revoke any one or more of the terms and provisions whenever such actions might become desirable or necessary to satisfy the provisions of the Internal Revenue Code relative to the qualification of the plan. Small, as a participant, had the right to designate or appoint a beneficiary of the death benefits, including the right to change the beneficiary at any time. Article IV, Section 1 b provided that "If a participant ceases to be an employee for any reason whatsoever, he shall thereupon cease to be a participant * ." Section 4 b of the same Article provided: "Neither the establishment of this Plan nor any amendment thereof shall be construed as giving any participant, employee or any person whomsoever any legal or equitable right against the Company, the Trustee or the Retirement Board, nor shall any participant, employee or any other person have any right or interest in or to the Trust Fund except as expressly granted to him under the terms of this Agreement. This Plan shall not be construed as giving any employee or participant the right to be retained in the service of the Company and he shall remain subject to discharge by the Company without regard to the existence of this Plan." The plan further provided that while the retirement age thereunder was 65 years, a participant was eligible for retirement after he had attained the age of 55, and might receive an early retirement allowance upon written application to the retirement board. However, Small did not avail himself of this early retirement option. Under the plan no separation benefits were payable from the fund to any employee whose employment might terminate prior to retirement. While the plan extended relatively broad rights to a participant to name the beneficiary of the death benefits, Article VI of the plan provided that in the event a beneficiary should attempt to dispose of or encumber the benefits, or in the event the benefits should become subject to alienation by legal process, the trustees in their discretion might either pay the benefits for the use of a beneficiary rather than directly to him, or pay the benefits to or apply them for the benefit of certain specified relatives of the participant for limited purposes. The decedent appointed his wife as sole beneficiary under the death benefit provision of the plan. Subsequent to the participant's death, Mrs. Small was advised by a representative of the company that the retirement board would extend to her a choice of four alternative modes of settlement with respect to the death benefit as follows: (1) she could elect to take an annuity payable over her life expectancy which payments would continue for her life but would terminate at her death; (2) she could receive payments of a specified amount per month which would continue for such period as the reserve under the plan might last; (3) she could take down the full amount of the reserve in a lump sum; or (4) payments could be deferred to start at a later date. Mrs. Small elected the second alternative with the provision that in the event of her death before the exhaustion of the reserve, any remaining payments should be made to her son. The first question presented is whether the commuted value of the death benefit payments under the plan was an interest in property of the decedent under Section 811(a) of the Internal Revenue Code of 1939 which was properly includible in the decedent's gross estate. Counsel for the plaintiff contend that it was not so includible and point to a ruling of the chief counsel for the Bureau of Internal Revenue rendered in the year 1937 and involving a similar provision of the Revenue Act of 1926. In that ruling, it was stated that the decedent must have had a property right in the death benefit, 273 and in view of the company's right to withdraw or modify the plan at any time, it was clear that the decedent's interest prior to his death was nothing more than an expectancy which did not constitute a property right and therefore was not includible in the gross estate. Considerable reliance is also placed by plaintiff in the decision of the District Court for the Eastern District of New York in the case of Dimock v. Corwin (D.C.1937) 19 F.Supp. 56. The plan there under consideration was quite similar to that involved in the present case. The only substantial difference between the plan in the present case and that considered in Dimock was that the latter included a provision that in the event no beneficiary had been designated by an employee prior to his death, or should the beneficiary's death precede that of the employee, then in such event the death benefits would lapse. In Dimock the Government contended that the property of the decedent was his right which he exercised "to designate the beneficiary of his death benefit." In answer to this contention, the Court stated: "The defendant's argument is that, when the decedent designated his wife to receive the benefit, `he transferred to her his beneficial interest in the plan which was intended to take effect in enjoyment at his death.' "The foregoing betrays a complete misunderstanding of the difference between the annuity payable to Mr. Folger, and the death benefit payable to his wife. As to the latter, he was possessed of nothing during his life, save the capacity to nominate a person to whom, upon his death, the company could grant a sum called a death benefit. * * " It is true the Court pointed out that it was possible under this particular plan that the exercise of the privilege to name a beneficiary might, in fact, have failed to bring about the payment of the death benefit to any person at all in the event the named beneficiary should predecease the employee. However, I do not consider that as the controlling factor in the Court's decision in view of this further observation: "The right to nominate or designate the person to receive the death benefit could not have been levied upon to satisfy a judgment against the decedent during his lifetime; had he become bankrupt, his trustee could not have realized anything thereon for creditors, nor could it have been sold or assigned by the decedent because it was merely a privilege extended to him by his employer, which was subject to withdrawal or modification at any time, under the quoted terms of the plan." This same Court had occasion to consider the question some 19 years later in the case of Molter v. United States (DC ED New York 1956) 146 F.Supp. 497. In this case the decedent had designated his widow as beneficiary under the death benefit provision, and the plan specified the possible beneficiaries therein. The company reserved the right to terminate, withdraw or modify the plan, and it was stated that the plan was not contractual and created no binding obligation upon the company. In granting the plaintiff's motion for summary judgment, the Court stated: "The foregoing Plan is not distinguishable in principle from that which was before this court in the case of Dimock v. Corwin, D.C., 19 F.Supp. 56, which was not appealed in respect of that branch of the case. That decision has not been adversely criticised in later cases." In addition to the foregoing it would appear that the case of Glenn v. Hanner, 6 Cir., 212 F.2d 483, also supports the position of the plaintiff. The Government contends that the present case falls within the principles enunciated by the Seventh Circuit in the case of Rosenberg v. United States, 309 F.2d 724. However, the facts of that case do not support the Government's position here for it is quite clear that in Rosenberg the decedent had definite 274 vested rights under the plan during his lifetime. In that case the trustee under the agreement purchased commercial insurance policies upon the lives of the individual employees which provided for life insurance prior to maturity and retirement benefits thereafter. The decedent's policy had a cash value of some $70,000.00 upon the date of his normal retirement age, November 30, 1947. However, the decedent elected to postpone his retirement and the proceeds were left at interest for a period of five years. Under this election which was agreed to by the insurer and approved by the decedent, interest on this matured value during the five-year period was payable to the decedent, and for fifteen years thereafter he was entitled to monthly payments. This arrangement was irrevocable and binding upon the decedent, and all of the other parties thereto. Under this election, in the event of the death of the decedent, the unpaid interest or monthly installments were payable to his widow or to his surviving issue. At the time of his death, the decedent had received all of the interest payments and five of the stated 180 monthly payments. In appraising these facts, the Court stated: "* * * At the time of his death the decedent was receiving monthly payments in distribution of the proceeds of the policy. His right to such payments was a legally enforceable interest. And, under the provisions of the trust relating to payments to participating employees who leave the company's employ prior to attainment of retirement age, there is no doubt but what had decedent chosen to retire one day prior to November 30, 1947, he would have been entitled to receive the entire cash value of the policy. * * * No act of the company, the insurer, or the trustee could have destroyed decedent's enjoyment of the full value of the contract had he elected to take it down nor have dispossessed the decedent of the interest he or his beneficiaries, family or estate had under the permissible settlement options." In the case of Garber's Estate v. Commissioner, 3 Cir., 271 F.2d 97, cited by the Government, it likewise appears that the decedent had become eligible for full benefits but deferred his retirement. However, he became vested with certain rights in the plan upon having attained the eligible retirement age. Neither of these cases are apposite to the facts presented in the present case, and I am in entire agreement with the Tax Court's analysis of these cases in its opinion in Estate of Edward H. Wadewitz, 39 T.C. 925. It is my conclusion that the facts of the present case bring it within the ambit of Dimock, and the death benefits under the plan here under consideration did not constitute an interest in property of the decedent under Section 811(a) of the Internal Revenue Code of 1939 as of the date of his death, and accordingly the commuted value of the death benefit payments was not properly includible in the decedent's gross estate. I also agree with counsel for plaintiff that consideration of the provisions of Sections 811(c), 811(d) and 811(f) of the Internal Revenue Code of 1939 is unnecessary inasmuch as all of these sections presuppose an interest in "property" of the decedent. In the light of my foregoing conclusion, it is unnecessary for me to pass upon the question of whether the death benefits under this plan payable to the widow qualify for the marital deduction under the provisions of Section 812. However, I might observe that it is my opinion that while the interest of the decedent's widow is a terminable interest under the provisions of the plan, nevertheless it would not be disqualified for the marital deduction since the interest which might pass to any contingent beneficiary would not under the facts here present pass to such person "from the decedent" within the meaning of Section 812(e) (1) (B). See Estate of Wilmar Mason Allen, Docket No. 85375, 39 T.C. 817. *275 For the reasons stated and in the light of the conclusions upon the stipulated facts, judgment should be rendered for the plaintiff, and counsel may prepare an appropriate order incorporating this opinion by reference therein.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/3117309/	COURT OF APPEALS FOR THE FIRST DISTRICT OF TEXAS AT HOUSTON ORDER Appellate case name: Christopher Hedlund v. The State of Texas Appellate case number: 01-12-00378-CR Trial court case number: 1749885 Trial court: County Criminal Court at Law No. 8 of Harris County Appellant, Christopher Hedlund, has filed a motion to abate the appeal and to remand the case to the trial court for an out-of-time motion for new trial. The motion is denied. Moreover, the Court of Criminal Appeals has indicated that when the record on direct appeal concerning the representation is undeveloped and does not reflect counsel’s motives, “an application for a writ of habeas corpus is [a] more appropriate vehicle [than by direct appeal] to raise ineffective assistance of counsel claims.” Rylander v. State, 101 S.W.3d 107, 110 (Tex. Crim. App. 2003); see Oldham v. State, 977 S.W.2d 354, 363 (Tex. Crim. App. 1998) (stating that such claims may be raised on habeas corpus even after rejection on appeal). It is so ORDERED. Judge’s signature: /s/ Sherry Radack  Acting individually  Acting for the Court Date: June 7, 2013	01-03-2023	10-16-2015
https://www.courtlistener.com/api/rest/v3/opinions/1527029/	119 B.R. 809 (1990) In re REDDINGTON/SUNARROW LTD. PARTNERSHIP, a Texas limited partnership, d/b/a Desert Arrow Apartment Community, Employer ID No. XX-XXXXXXX, XX-XXXXXXX, Debtor. Bankruptcy No. 11-89-01230 MA. United States Bankruptcy Court, D. New Mexico. October 11, 1990. 810 Sidney J. Diamond, El Paso, Tex. Geraldine E. Rivera, Albuquerque, N.M., for debtor. James S. Starzynski, Albuquerque, N.M., for Clark Financial Corp., Value Management Co., & PMS, Inc. Charles A. Beckham, Jr., El Paso, Tex., James L. Rasmussen, Albuquerque, N.M., for Resolution Trust Corp. Walter F. Wood, Tucson, Ariz., for Empire West. MEMORANDUM OPINION MARK B. McFEELEY, Bankruptcy Judge. This matter came before the Court on September 17, 1990, for final hearing on the Resolution Trust Corporation's motion for relief from the automatic stay. Having considered the arguments of counsel, case law, exhibits, and memoranda of law submitted by the parties, and being otherwise fully informed and advised, the Court finds the motion is not well taken and should be denied. FACTS Reddington/Sun Arrow Limited Partnership, a Texas limited partnership ("debtor"), filed for relief under chapter 11 of the Bankruptcy Code on May 1, 1989. The debtor's primary asset is an apartment complex located in El Paso, Texas, known as the Desert Arrow Apartments ("property"). At the time of the filing, Victoria Savings Association ("Victoria") held a first lien on the property and a lien on all rents from the property. On June 14, 1989, this Court entered an Agreed Order Regarding Interim Use of Cash Collateral and Providing Adequate Protection ("cash collateral order"). The cash collateral order provided that the debtor was authorized to use the rents from the property and Victoria was to be provided a portion of the rents as adequate protection of its security interest therein. Pursuant 811 to the order, Victoria has received payments of approximately $600,000. On June 28, 1989, the Federal Home Loan Bank Board ("Bank Board") appointed the Federal Savings and Loan Insurance Corporation ("FSLIC") as receiver of Victoria. The Bank Board chartered Victoria Savings Association, F.S.A. ("Federal Association"), and authorized the transfer of substantially all of the assets, deposits and certain other liabilities to the newly chartered Federal Association. The Bank Board appointed FSLIC as conservator of the newly chartered Federal Association. The Resolution Trust Corporation ("RTC") has succeeded to the rights of the FSLIC. The debtor is indebted to RTC in the approximate amount of $5,400,000. The indebtedness to RTC is secured by a first lien upon the real property and upon all rents, issues, profits, and management and services fees from the property pursuant to a Collateral Assignment of Leases, Rentals and Management Fees as well as the Deed of Trust. On July 3, 1990, the debtor filed its Second Amended Plan of Reorganization of Debtor-in-Possession ("Plan") and Second Amended Disclosure Statement. The Second Amended Disclosure Statement was approved on August 23, 1990, subject to the requirement that the debtor make certain modifications. In its plan, the debtor proposes to execute a promissory note in favor of the RTC secured by the property in the approximate principal amount of $4,000,000. The parties have stipulated that the property has a fair market value of $4,600,000. The debtor proposes to reduce RTC's secured claim by the amount received by RTC pursuant to the cash collateral order. The debtor admits that if the claim is not reduced, a plan may not be feasible. RTC has stipulated that there has been no decrease in the value of the collateral. DISCUSSION At issue is approximately $600,000 which the debtor has paid to RTC pursuant to the cash collateral order. The debtor has admitted there is no equity in the property; therefore, RTC's argument on the stay motion focused on the question of whether the property is necessary for an effective reorganization.[1] RTC contends that the property is not necessary for an effective reorganization because its claim cannot be reduced as the debtor proposes, and therefore the debtor cannot reorganize. RTC argues that the payments made by the debtor should not go to reduce the principal on the debt because the payments were made solely to protect its interest under 11 U.S.C. § 361.[2] The cash collateral order does not furnish any guidance to the Court. The order only states that "the Debtor . . . shall pay to Victoria the `net cash flow' which for the purposes of this Order shall be all rental income and other cash collateral received by the Debtor. . . ." 812 The order further provides that Victoria shall have continuing postpetition liens on all rents from the property. The parties did not specify in the cash collateral order how to treat the payments. Therefore, the Court must look to the Bankruptcy Code and case law to decide if the payments will reduce the principal on the debt owed to RTC. RTC argues that it is entitled to have the payments made pursuant to the cash collateral order as adequate protection not because the value of the collateral is decreasing but rather because the allowed secured claim is not increasing. RTC's argument centers on a change in amount of the allowed secured claim between the date of filing the petition and the date of plan confirmation. At the date of filing the petition, the value of the collateral was $4.6 million and therefore the allowed secured claim was $4.6 million.[3] The parties agree that the value of the collateral is not depreciating and thus on the date of confirmation the value remains $4.6 million. RTC argues that if the rents had been sequestered, the value of the collateral would have increased and the amount of the allowed secured claim would increase commensurately. RTC therefore contends that its position has eroded over time due to the stay and urges the Court to determine its allowed secured claim as of the date of plan confirmation. I. Determination of Allowed Secured Claim The threshold question before the Court is: What date should be used for the court's determination of the value of an allowed secured claim for purposes of determining adequate protection under § 362? Should it be the date of filing the petition or the date of plan confirmation? As an undersecured creditor, RTC would benefit from any increase in the value of the collateral in the period between the date of filing and the date of confirmation. "Value," as set out in § 506(a), is an amorphous term. It "shall be determined in light of the purpose of the valuation and of the proposed disposition or use of such property, and in conjunction with any hearing on such disposition or use or on a plan affecting such creditor's interest." In re Caraway, 95 B.R. 466, 467 (Bankr.W.D.Ky. 1988). In In re Marion Street Partnership, 108 B.R. 218 (Bankr.Minn.1989), for purposes of determining adequate protection under § 362, the court valued the collateral as of the date of filing the petition. The court held that under § 361, the creditor was entitled to be compensated for potential declines in the value of the collateral measured from that date. In the context of automatic stay litigation, other courts have also decided that determination of value as of the date of filing of the petition is appropriate under § 506(a). In re Barkley-Cupit Enter., Inc., 13 B.R. 86 (Bankr.N.D.Ga.1981), aff'd, Barkley-Cupit Enter. v. Equitable, 677 F.2d 112 (5th Cir.1982); In re Smithfield Estates, Inc., 48 B.R. 910 (Bankr.R.I.1985); In re Sun Valley Ranches, Inc., 38 B.R. 595 (Bankr.Idaho 1984); In re Born, 10 B.R. 43 (Bankr.S.D.Tx.1981). The Court is aware of the decisions in In re Seip, 116 B.R. 709 (Bankr.D.Neb. 1990), and In the Matter of Kain, 86 B.R. 506 (Bankr.W.D.Mich.1988). In both of those cases, the courts decided that the value of the collateral for purposes of confirmation of a plan should be determined as of the date of confirmation. Those courts were correct in their analysis that a value determination for plan confirmation purposes is not the same as a value determination for automatic stay purposes or for 813 determining the allowed amount of a secured claim. Valuing an allowed secured claim under § 361 as of the date of filing the petition makes the most sense in light of the Supreme Court's decision in United Savings Ass'n v. Timbers of Inwood Forest Associates, Ltd., 484 U.S. 365, 108 S. Ct. 626, 98 L. Ed. 2d 740 (1988) ("Timbers"). When Timbers was before the Fifth Circuit, the court's view was that Congress intended that a secured creditor be adequately protected only for the fixed amount of its allowed secured claim, an amount that is strictly limited to the value of the property securing the debt. In re Timbers of Inwood Forest Assoc., Ltd., 793 F.2d 1380, 1386-87, n. 7 (5th Cir.1986). The court decided that the amount of the allowed secured claim should be determined as of the date of filing the petition. Id. at 1387. This Court holds that an allowed secured claim must be determined as of the date of filing of the bankruptcy petition. The next question to be addressed is whether the payments made pursuant to the cash collateral order can reduce the principal on the debt owed to RTC. II. Treatment of Payments Made Pursuant to the Cash Collateral Order Once a creditor is subject to the automatic stay, it can receive adequate protection under § 361. These payments can be interest payments or can reduce the principal on a debt owed, among other things. However, one thing is clear an undersecured creditor whose collateral is not depreciating cannot recieve interest on its collateral during the stay to assure adequate protection. Timbers, 484 U.S. at 382, 108 S.Ct. at 635. It is undisputed that RTC is undersecured. RTC admits that its collateral is not depreciating but contends that its claim is being eroded. In support of its position, RTC cites In re Flagler-at-First Assoc., Ltd., 114 B.R. 297 (Bankr.S.D.Fla.1990). In Flagler, the court accepted the argument of the creditor that its collateral was declining in value. The court held that postpetition payments need not reduce the creditor's allowed secured claim. Flagler is distinguishable from the case at bar on two grounds. First, the court there accepted the argument that the allowed secured claim should be determined as of the date of plan confirmation. This court will determine the allowed secured claim as of the date of filing the petition. Second, the court in Flagler had more of an indication of how the parties intended that the payments be treated. Flagler's attorneys expressly agreed to a turnover of excess rents to "preserve the status quo and prevent any erosion of [the creditor's] position on the property." Id. at 300. Flagler's attorney further stated that "we'll start giving you excess [rents] now . . ., in exchange for that, we want you to consider our serious proposal regarding a restructure of this indebtedness." Id. It seems clear that the parties in Flagler contemplated that the payments would go to protect the creditor's interest and not to reduce the principal owed on the debt. Whether that was appropriate or not, it is not the situation here. RTC is an undersecured creditor and its collateral is not depreciating yet it alleges that the payments of rent received pursuant to the cash collateral order only provide adequate protection and should not go towards reduction of its allowed secured claim. Whether the allegation is that the payments are adequate protection payments, interest payments, or lost opportunity costs, the Supreme Court in Timbers made it clear that an undersecured creditor whose collateral is not depreciating is not entitled to such payments. 484 U.S. 365, 108 S. Ct. 626 (1988). In Timbers, the Court was concerned that an undersecured creditor not improve its position with respect to other creditors. Id. at 372, 108 S.Ct. at 630-31. If payments are made to an undersecured creditor, they must be allowed to reduce the allowed secured claim of the creditor. Otherwise the payments would be treated as interest payments or use value, in direct contravention of Timbers and § 506. In re Maun, 95 B.R. 94 (Bankr.S.D.Ill.1989); In re Kain, 86 B.R. 506 (Bankr.W.D.Mich.1988). RTC was secured in the amount of $4.6 million as of the date of filing. If RTC's *814 allowed secured claim were increased, the money available to pay other secured and unsecured creditors would decrease. An undersecured creditor is entitled to be protected to the extent its collateral is depreciating, but its position is not to be improved in relation to other creditors. Timbers, 484 U.S. at 372, 108 S.Ct. at 630-31. "[T]he proportions of the claim that are secured and unsecured would alter, as the stay continues since the value of the entitlement to use the collateral from the date of bankruptcy would rise with the passage of time. No one suggests this was intended." Id. In a plan of reorganization, all parties must bear some costs. As Justice Scalia stated, "[t]hat secured creditors do not bear one kind of reorganization cost hardly means that they bear none of them. . . . [U]ndersecured creditors were not entitled to postpetition interest as compensation for the delay of reorganization." Id. at 379, 108 S.Ct. at 634. Another court, in discussing creditors' costs of reorganization, noted: Normally, outside of bankruptcy, an oversecured creditor will be able to foreclose prior to the erosion of his equity cushion, just as an undersecured creditor is normally able quickly to realize upon his collateral. Each is required to make some sacrifice in Chapter 11, however, in order that all interests may benefit from a successful reorganization. . . . If reorganization is to be accomplished and the interests of creditors, stockholders and employees are all to be accommodated, some curtailment of the rights of each is clearly necessary. Congress chose to limit the rights of a secured creditor to protection of the value of its security interest. In re Lane, 108 B.R. 6, 9 (Bankr.Mass. 1989). RTC's cost as an undersecured creditor is that it must reduce its secured claim by the amount received pursuant to the cash collateral order. III. Effective Reorganization With the reduction of RTC's allowed secured claim, next the Court must examine whether an effective reorganization is feasible. For the debtor to prevail on a stay motion, the debtor must show that there is a reasonable prospect of a successful organization within a reasonable period of time. Id. 484 U.S. at 376, 108 S.Ct. at 632-33. The debtor has the burden of proof on this issue. 11 U.S.C. § 362(g)(2). A second amended disclosure statement has been approved and a confirmation hearing has been set. At the final hearing on the stay motion, the debtor demonstrated that a plan may be confirmed soon. Therefore, the debtor has met its burden of proof. The motion for relief from the automatic stay will be denied. An appropriate order will enter. This memorandum opinion constitutes the Court's findings of fact and conclusions of law. Bankruptcy Rule 7052. NOTES [1] 11 U.S.C. § 362(d)(2) provides: (d) On request of a party in interest and after notice and hearing, the court shall grant relief from the stay provided under subsection (a) of this section, such as by terminating, annulling, modifying, or conditioning such stay (2) with respect to a stay of an act against property under subsection (a) of this section, if (A) the debtor does not have equity in such property; and (B) such property is not necessary to an effective reorganization. [2] 11 U.S.C. § 361 provides: When adequate protection is required under section 362, 363, or 364 of this title of an interest of an entity in property, such adequate protection may be provided by (1) requiring the trustee to make a cash payment or periodic cash payments to such entity, to the extent that the stay under section 362 of this title, use, sale, or lease under section 363 of this title, or any grant of a lien under section 364 of this title results in a decrease in the value of such entity's interest in such property; (2) providing to such entity an additional or replacement lien to the extent that such stay, use, sale, lease, or grant results in a decrease in the value of such entity's interest in such property; or (3) granting such other relief, other than entitling such entity to compensation allowable under section 503(b)(1) of this title as an administrative expense, as will result in the realization by such entity of the indubitable equivalent of such entity's interest in such property. [3] 11 U.S.C. § 506(a) provides: 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 setoff is less than the amount of such allowed claim. Such value shall be determined in light of the purpose of the valuation and of the proposed disposition or use of such property, and in conjunction with any hearing on such disposition or use or on a plan affecting such creditor's interest.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1373746/	168 Cal. App. 2d 344 (1959) CHARLES ANDRES et al., Appellants, v. J. R. ARMSTRONG et al., Respondents. Civ. No. 18038. California Court of Appeals. First Dist., Div. One. Mar. 4, 1959. Walter H. Medak for Appellants. Breed, Robinson & Stewart for Respondents. HANSON, J. pro tem. [fn. ] This is an appeal from an order setting aside a default and default judgment--a type of appeal that is becoming much too common. The plaintiffs in their complaint filed on May 3, 1957, alleged that they purchased from the defendants a lot for the purpose of erecting a dwelling thereon, which fact was known to defendants; that the defendants represented, among other things, that a paved road would be constructed alongside the property and the lot would be safe to build a dwelling thereon; that the representations were false. Numerous extensions to answer had been granted by counsel for plaintiffs to counsel for defendants. Finally, on August 12, 1957, plaintiffs' counsel mailed a letter to counsel for defendants in which he stated: "This is to advise that unless I should be served with an Answer in the above matter by Thursday, August 15, 1957, that I will enter Default." (Emphasis added.) On receipt of the letter on August 13, 1957, counsel for defendant requested and was granted an additional oral extension which plaintiffs' counsel by his affidavit stated was to authorize him to enter a default on August 19, 1957, unless a pleading was filed "by" said date and that written confirmation of said agreement was demanded of defendants' counsel. The written confirmation sent reads as follows: "Confirming our telephone conversation of this morning it is agreed that if the answer of J. R. Armstrong and wife are not on file by August 19, 1957, you will take their default. Default, however, will not be taken against the other defendants, giving us one week to submit an answer on their behalf. [Emphasis added.]" "We thank you for your many courtesies." The pleading, duly signed and notarized, was tendered for filing on August 19, 1957, but earlier in the day counsel for plaintiff had obtained the entry of a default and so the pleading was refused. Thereupon, the defendants on August 29, 1957, caused to be filed a motion to set aside the default which recited that the default was taken against defendants through their and their attorney's mistake, inadvertence, surprise or excusable 346 neglect. The motion was accompanied by an affidavit of merits sworn to by defendant J. R. Armstrong, an affidavit by Ned Robinson, the attorney for defendants, and a proposed answer to the complaint which was not signed, but the original thereof which was tendered to the clerk on August 19, 1957, was signed and verified. To the motion thus filed affidavits in opposition were filed by counsel for the plaintiffs along with an affidavit of his secretary. Upon the hearing before the court on September 10, 1957, the court granted the motion. The plaintiffs are here contending that there is no ambiguity in the use of the word "by" in the letter of confirmation sent to him by counsel for defendants and that the word "by" as used means, in effect, "before." The answer is that Webster defines "by" as including "not later than," or "during." The same semantic problem presented itself in Fanta v. Maddex, 80 Cal. App. 513 [252 P. 630], where the court, at page 519, defined "by" as meaning "not later than." The superior court was of the same opinion in this case in granting defendants' motion. It is interesting to note that, in his opening brief, plaintiffs' counsel sets out the letter of confirmation, but adds: "No pleadings having been filed on Monday, August 19, 1957, default was entered on said date against J. R. Armstrong and Frances E. Armstrong in accordance with said letter." (Emphasis added.) Note in the above that the preposition used by plaintiffs is "on" and not "by." The uncontroverted fact is that default was taken early on August 19th before defendant had presented his answer for filing on that date. As is well stated by counsel for defendants: "But if we assume that literally, semantically, and technically appellants are correct in their contention that 'by' means 'before' the trial court's action was still proper. It seems elemental that regardless of the technical meaning of the word in question that there was an honest difference of opinion between respective counsel presenting a clear case of mistake or inadvertence." [1a] First of all, with respect to the fact that there is a direct contradiction between the statements of counsel as set forth in their affidavits as to when Mr. Armstrong signed the proposed answer, it is submitted that it was for the trial court to determine which statement was the truth. In the case under submission we are dealing with two apparently competent and so far as is known reputable 347 members of the bar. There is no suggestion in the record or in the briefs of an allegation to the effect that one or the other of them committed perjury. Yet, the indisputable fact remains that each swore to a statement which is diametrically opposed to that sworn to by the other. One of them must be false. But because of the fact that there is nothing that would cause one to doubt the integrity of respective counsel, the logical inference, it is submitted, to be drawn from their contrary statements is only that one is mistaken and not that he is committing perjury. This was probably the conclusion reached by the trial court and that mistake apparently was resolved against plaintiffs and in favor of defendants. Consequently, can it be logically argued that there was no misunderstanding--no apprehending wrongly on the part of Mr. Robinson who believed he had through August 19th? Instead of presenting a specific argument, plaintiffs in their brief examine each of the grounds set forth in Code of Civil Procedure, section 473, upon which relief from a default and default judgment might be predicated and conclude that none of the grounds exists. [2] In Hover v. MacKenzie (1954), 122 Cal. App. 2d 852, 856 [266 P.2d 60], the court said: "Code of Civil Procedure, section 473 ... is remedial in its nature and is to be liberally construed. [Citation.] [3] The policy of the law is to have every litigated cause tried on its merits; and it looks with disfavor on a party who, regardless of the merits of his cause, attempts to take advantage of the mistake, surprise, inadvertence or neglect [the statute uses the term "excusable neglect"] of his adversary. (14 Cal.Jur. 1075, 116.) [4] Reviewing courts have always looked with favor on orders excusing defaults and permitting controversies to be heard on their merits. Such orders are rarely reversed, and never unless it clearly appears that there has been a plain abuse of discretion. [Citation.] [5] Even in a case where the showing ... is not strong, or where there is any doubt as to the setting aside of a default, such doubt should be resolved in favor of the application. [Citation.] [6] All presumptions will be indulged in favor of the correctness of the order, and the burden is on the appellant to show that the court's discretion was abused. [Citation.]" (Emphasis added.) See also Yarbrough v. Yarbrough (1956), 144 Cal. App. 2d 610, 614 [301 P.2d 426] and citations for a statement 348 of the rule that the order will not be disturbed unless an abuse of discretion clearly appears, and that appellate courts are more inclined towards upholding orders vacating defaults than affirming denials of such motions, in order to dispose of the cases, where possible, upon their merits. [1b] No useful purpose will be served by a detailed recital of the interpretations that have been given to the meaning and applications of the words mistake, inadvertence, surprise, or excusable neglect set forth as grounds for relief in section 473 of the Code of Civil Procedure, and it must suffice to say that, while we have read plaintiffs' brief and argument with care, we see no ground for reversal. Judgment affirmed. Peters, P. J., and Bray, J., concurred. NOTES [fn. ] . Assigned by Chairman of Judicial Council.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527048/	428 S.W.2d 178 (1968) Alice QUINN, Plaintiff-Respondent, Lou Quinn, Plaintiff, v. Floyd R. GRAHAM, Catherine L. Graham, Elizabeth Ketcham, George Beimdiek, Agent and Attorney in Fact for Elizabeth Ketcham, Defendants, The City of Carthage, Missouri, a Municipal Corporation, Defendant-Appellant. No. 8722. Springfield Court of Appeals, Missouri. April 29, 1968. 180 James A. Dunn, Ben Pyle, Carthage, for plaintiff-respondent and for plaintiff. Laurence H. Flanigan, McReynolds, Flanigan & Flanigan, Carthage, for defendant-appellant. John R. Martin, Joplin, for defendants Graham. Edward G. Farmer, Joplin, for defendants Ketcham and Beimdiek. TITUS, Judge. The sole appeal in this cause is by the City of Carthage, a city of the third class (V.A.M.S. Chapter 77), from a judgment entered on a $5,000 jury verdict returned in the Circuit Court of Jasper County in favor of plaintiff Alice Quinn who sought damages because of an accident she is said to have encountered on a public easement. A $1,000 verdict-judgment for her husband on his derivative action was set aside by the trial court for his neglect to give the city any written notice of his claim. V.A.M.S. § 77.600; Dohring v. Kansas City, 228 Mo. App. 519, 71 S.W.2d 170. The other defendants were exculpated by the jury. Initially the city contends the trial court should have directed a verdict in its favor because the written notice given by Mrs. Quinn "is legally insufficient and defective under the mandatory provisions of" V.A. M.S. § 77.600 which provides: "No action shall be maintained against any city organized under the laws of this state as a city of the third class on account of any injuries growing out of any defect or unsafe condition of or on any bridge, boulevard, street, sidewalk or thoroughfare in said city, until notice shall first have been given in writing to the mayor of said city, within ninety days of the occurrence for which such damage is claimed, stating the place where, the time when such injury was received, and the character and circumstances of the injury, and that the person so injured will claim damages therefor from such city."[1] The questioned notice follows: "To: Ralph Rinehart, Mayor City of Carthage Carthage, Missouri "Alice M. Quinn, Carthage, Missouri gives notice to the Mayor and the City of Carthage, Jasper County, Missouri, that on November 10, 1965 at about 12:30 P.M. while walking on the sidewalk located on Chestnut Street just West of the intersection of Chestnut Street and River Street, she slipped causing her to immediately fall violently upon the sidewalk. "Alice M. Quinn states that she was severely injured and specifically her leg was fractured and broken and she received other serious and severe injuries but the full nature and extent of injuries have not yet been determined by attending doctors. "/S/ ALICE M. QUINN Alice M. Quinn "State of Missouri \| > ss. County of Jasper \| "Alice M. Quinn of legal age being duly sworn states that the facts contained in the foregoing notice are true and correct according to the best of her knowledge and belief. "/S/ ALICE M. QUINN "Subscribed and sworn to before me this 10th day of November, 1965. (SEAL) "/S/ JAMES A. DUNN Notary Public My Commission expires: 10.17.69 "I certify that notice was given to Ralph Rinehart, Mayor, at City, Clerk's office, on November 12, 1965. "/S/ VIRDEAN McREYNOLDS D. C. "/S/ Filed 11/12/65 W.E.F." 181 Plaintiffs' petition was not filed until November 4, 1966, or almost a year after the accident. Therefore it could not, as in Hunt v. City of St. Louis, 278 Mo. 213, 223-224(1), 211 S.W. 673, 676(1), serve as an acceptable substitute for the written notice the statute required to be served within ninety days of the occurrence. The petition averred, inter alia, on the casualty date "Chestnut Street was a public street * * * upon the south side of which and running immediately along the front or North of the * * * Econ-O-Wash self-service laundromat, the defendant City * * * had constructed and was maintaining a concrete sidewalk. * * * That it was the duty of defendant * * * to exercise reasonable care * * * in the construction and maintenance of the sidewalk * * * [but] defendants * * * so negligently * * * constructed and maintained the said sidewalk and approaches to and from said * * * laundromat that plaintiff was caused to * * * fall down on the ground causing injuries." Defendants were specifically charged with permitting "the sidewalk and approaches thereto to remain in an unsafe and dangerous condition," failing to warn plaintiff thereof, and allowing "a large jagged mound of concrete to remain immediately adjacent to the sidewalk in front of the * * * laundromat." Defendant city's answer was a general denial coupled with an affirmative pleading that plaintiff Alice Quinn had been contributorily negligent and "is legally barred from maintaining this action * * * for the reason that said plaintiff failed to give the written notice * * * as required by Section 77.600 VAMS * * * [and] for the reason that the purported notice * * * is legally insufficient and defective under the requirements of Section 77.600 VAMS." Exhibits and testimony reveal Chestnut Street to be an east-west avenue which extends west a distance of several blocks from River Street, a north-south thoroughfare. The roadway surface of Chestnut is paved and its north and south boundaries are outlined with curbings. There are paved concrete east-west sidewalks on both the north and south sides of Chestnut extending west from River Street. It was stipulated the "sidewalk on the north side of Chestnut Street, west of River, [is] similar in appearance" to the sidewalk on the south side of Chestnut. Between the curbs and sidewalks on both sides of Chestnut Street are unpaved areas which are commonly known and referred to by all the witnesses as "parkways." Plaintiffs conceded "the exact place where this occurrence took place is in * * * the `parkway' between the curb line and the sidewalk." The laundromat in question is situate at the southwest corner of the intersection of Chestnut and River. The front door to the building is on the north side thereof adjacent to the south edge of the south sidewalk on Chestnut. For a distance of "approximately thirty-one feet" west of River Street, both the sidewalk and parkway on the south side of Chestnut are concrete paved. This solidly paved area is in front of the east 3/5ths (our estimate) of the laundromat. West of this paved area the parkway is "dirt," and it was in the "dirt" parkway north of the west side of the laundromat building the white "concrete mass" was located. The "mass" measured thirteen inches east and west by twenty-one inches north and south. Its east end was "nearly level" with the ground but the west side extended "2 and ¾ inches" above ground level. As far as is known, Mrs. Quinn was the only witness to her fall. She left home "around noon" in her "four door sedan," accompanied only by baskets of laundry and some soap or detergent. Arriving at the laundromat she stopped the car on Chestnut Street "a little ways" west of the front door "on the wrong side of the road," headed west with the left wheels of the automobile "up against the [south] curb." Plaintiff testified: "I got out [of the car via the front door] on the driver's side, which would be the left side, and I stepped onto the parkway * * * [in] the dirt area * * * [and] knew that the parkway 182 was not sidewalk * * I walked back [east] * * * in the dirt * * * and opened the back door." She did not recall if she looked "at the ground," and her "attention was not distracted by anything." As Mrs. Quinn "reached in to get my laundry" from the back seat she was "facing the car, which would be north." She obtained a basket and turned to her right. She "probably did * * * take some steps" but did not remember taking "a step backwards toward the south before" turning. "I was standing on the parkway * * * I started to turn and I tripped and fell. * * * All I knew was I tripped and fell. * * * My right leg was under me, my elbow was on the ground." Plaintiff subsequently became aware of the existence of the "concrete mass" in the parkway and designated it as the cause of her tripping and falling. The principal injury sustained by Mrs. Quinn was "a fracture of the lateral malleolus of her right ankle." The only testimony regarding service of the notice, supra, is that the deputy city clerk personally put her "signature to that paper" and the notation, date and initials "Filed 11/12/65 W.E.F." were affixed by the city clerk, William E. Fenimore. When the deputy city clerk "got it [the notice], it was filed there in the office * * * filed in the clerk's office there in the records." The septuple requirements of V.A. M.S. § 77.600, supra, are that the notice (1) must be in writing, (2) it must be given to the mayor, (3) within 90 days of the occurrence, and it must contain a statement as to (4) the place where, (5) the time when such injury was received, (6) the character and circumstances of the injury, and a declaration (7) the person so injured will claim damages therefor from the city. Dohring v. Kansas City, supra, 228 Mo.App. at 521, 71 S.W.2d at 171. Giving of the notice in substantial compliance with the requirements of this statute is a condition precedent to the right to maintain the suit and to the right to recover damages (Shuff v. Kansas City, Mo.App., 257 S.W. 844, 846 (6); 18 McQuillinMunicipal Corporations, 3rd Ed. Revised, § 53.154, pp. 558-563), and "the giving of notice is required in every case, regardless of other sources and means of information possessed by the city." Lyons v. City of St. Joseph, 112 Mo. App. 681, 684, 87 S.W. 588. The apparent rule is that the requirements of the statute that notice must be in writing and given to the mayor within the time specified are to be strictly construed [Cole v. City of St. Joseph, Mo., 50 S.W.2d 623, 624, 82 A.L.R. 742; Ogle v. Kansas City, Mo.App., 242 S.W. 115(1)], but as to the contents of the notice the statute is to be construed liberally in favor of plaintiff and strictly against the city so that a substantial compliance is sufficient. Gershon v. Kansas City, Mo.App., 341 S.W.2d 374, 376(1); David v. City of St. Louis, 339 Mo. 241, 246(2), 96 S.W.2d 353, 356(1), 106 A.L.R. 849; 18 McQuillinMunicipal Corporations, 3rd Ed. Revised, § 53.163, pp. 588-593. Appellant-city asseverates the notice in this case was legally insufficient and defective because (a) it was not given to the mayor or to any person authorized by him to receive such notice, (b) it failed to notify the city of the "place where" plaintiff's injury was received, (c) it failed to state the "circumstances" or cause of the injury, and (d) it failed to state "that the person so injured will claim damages therefor from such city." Was there compliance with the statutory requirement the "notice shall first have been given in writing to the mayor"? It is stated in V.A.M.S. § 1.190 that "Whenever any of the statutes of this state require or imply that a notice shall be given to any person concerning or affecting any right, property, claim, duty, matter or thing of any character or nature, unless the statutes expressly direct a different method of service, the delivery of a true copy of the notice to the person intended to be notified, or the leaving of a copy at his usual place of abode with some member of his family over the age 183 of fifteen years, constitutes a valid and sufficient service of the notice." V.A.M.S. § 77.600, supra, simply provides the notice is to be "given * * to the mayor," and does not expressly or impliedly "direct a different method of service," and "as the manner of service is not prescribed, personal service is required." Peterson v. Kansas City, 324 Mo. 454, 458(1), 23 S.W.2d 1045, 1047(1). It was held in Reid v. Kansas City, 195 Mo.App. 457, 192 S.W. 1047, the accident reports filed with the city counselor by police officers and the city health commissioner could not be considered as legal substitutes for the statutory written notice which was not given by or on behalf of the plaintiff. The court stated [195 Mo.App. at 463(4), 192 S.W. at 1049(6)] the undertakings of the city counselor to defend the suit would not "create either a waiver of notice or an estoppel against the city. The statute [requiring notice] cannot be waived. * * * Even the mayor would have no power to waive notice. * * * Much less would the city counselor have such power." Nevertheless, if there be proof the mayor has expressly or apparently by custom designated some person to act as his agent or alter ego in accepting and receipting for him delivery of the required notice, delivery of such notice to the mayor's agent has been declared proper for "the receipt and acknowledgment of service of the notice * * * is a mere administrative detail which the mayor can authorize his secretary, a clerk in his office, or any other suitable agent to perform." Peterson v. Kansas City, supra, 324 Mo. at 458 (headnote 2), 23 S.W.2d at 1048(2); Powers v. Kansas City, Mo., 224 Mo.App. 70, 75-78 (headnote 1), 18 S.W.2d 545, 548-550(1). In Cummings v. Halpin, Mo.App., 27 S.W.2d 718, 720, it is stated "the opinions in the cases cited [including Reid, supra] have been overruled by the Supreme Court in * * * Peterson v. Kansas City." We do not agree. Reid, not cited in Peterson and a case where no notice of any kind was prepared or served by or for the plaintiff, merely states the mayor of a city has no authority to waive or nullify a statutory requirement of notice solemnly enacted by the legislature. This in no way appears incompatible with Peterson's recognition a duly authorized agent may perform an act to be done by his principal. V.A.M.S. § 1.060. The sufficiency of the service of the notice was not questioned in the trial court in Callahan v. Kansas City, 226 Mo. App. 408, 41 S.W.2d 894, and the court of appeals held it was too late to raise the question for the first time on appeal. The court (ex gratia it would seem) proceeded to "hold that service of the notice [on an assistant city counselor without proof of agency] was sufficient" because its receipt "was acknowledged in writing in the name of the Mayor." This appears bottomed on a quotation from Peterson, supra, that "when the assistant city counselor accepted a copy of respondent's notice and gave a written acknowledgment of its receipt, all in the name of the mayor, his act was tantamount to an affirmation on his part that he was duly authorized by the mayor so to do." We understand this quotation from Peterson to mean the counselor's acknowledgment was his affirmation that the agency previously established was so. If Callahan intends to indicate the mere written acknowledgment of the receipt of a notice on behalf of the mayor by some city official is alone sufficient to prove his agency to act for the mayor, then we cannot abide Callahan for "the law is well settled that neither the fact nor scope of agency can be established by the declarations [written or oral] of the alleged agent." Schwarze v. May Department Stores, Mo.App., 360 S.W.2d 336, 339(6). In the present case the certificate on the notice was prepared by whoever prepared the notice. Although it was signed by a deputy city clerk and read, the "notice was given to Ralph Rinehart, 184 Mayor, at City, Clerk's Office," the only evidence on record is that this recitation was not true because the notice was simply "filed in the clerk's office there in the records." There was no showing made that the notice was ever given to the mayor, and no effort was made to prove the mayor had ever directly, by implication, or through custom or usage authorized the city clerk, his deputy, or any officer of the City of Carthage to act in his stead or as his agent in receiving, on his behalf, any notice provided for in V.A. M.S. § 77.600. The only possible intimation of agency comes from the fact the deputy clerk signed the receipt and the city clerk dated and initialed it. As previously stated, this is not sufficient to prove agency, and we agree with appellant-city the notice was defective because it was not given to the mayor or to any person authorized by him to receive such notice. Nonetheless, we ferret further. Did the contents of the notice comply with the requirements that it state the "place where" the casualty occurred and "the circumstances" or cause of the injury? Many times it has been stated the purpose of V.A.M.S. § 77.600, and of other similar laws, is to protect the city from unjust or stale claims and to afford the city, by the notice required, information so it can locate with reasonable certainty the place where the accident occurred and be apprised of the circumstances or cause of the casualty with sufficient definiteness to permit its officers to undertake an investigation to ascertain the liability or nonliability of the city for the reported injury. Brickell v. Kansas City, Mo., 364 Mo. 679, 683, 265 S.W.2d 342, 345, 41 A.L.R. 2d 878; Johnston v. Kansas City, 211 Mo.App. 262, 267-268, 243 S.W. 265, 266-267; Beane v. City of St. Joseph, 211 Mo.App. 200, 205(1), 240 S.W. 840, 841-842(1); Reno v. City of St. Joseph, 169 Mo. 642, 655, 70 S.W. 123, 126. The "place where" the casualty occurred is required to be stated with sufficient particularity to enable the city to locate the place of the injury unsupplemented and unaided by anything aside from ordinary intelligence. Precise exactness is not required, and the test of substantial compliance is satisfied if the notice is reasonably sufficient to enable the city officials to locate the place. City of West Plains, Missouri v. Loomis, 8 CCA, 279 F.2d 564, 566, 92 A.L.R. 2d 459, 463; 63 C.J.S. Municipal Corporations § 925(3), pp. 360-362. "The true test in such cases is whether or not a person in the exercise of ordinary intelligence can take the notice and, with no other means of information than it suggests, go to the scene of the injury and find the spot where it occurred." Ballew v. City of St. Joseph, 163 Mo.App. 297, 301, 146 S.W. 454, 455. There must also be substantial compliance with the statute that the notice describe the circumstances or cause of the injury, i. e., advise the city with reasonable certainty as to the defect or negligent act which plaintiff claims caused the accident. This need not be done with the nicety employed in drawing a pleading, and a faulty or inadequate description of the circumstances of the injury may be aided by the description of the place of the injury, and vice versa. 63 C.J.S. Municipal Corporations § 925(4), pp. 363-364. We bear constantly in mind the statute must be reasonably construed. But on the other hand, a claimant should not be permitted to thwart the intent of the statute by indefiniteness when, with little or no effort, the true facts as to the place and circumstances of the injury may be clearly stated. "If the notice [is] so vague and indefinite in any of the particulars made essential by the statute as to be misleading, we would not hesitate in declaring it bad." Snickles v. City of St. Joseph, 139 Mo.App. 187, 192, 122 S.W. 1122, 1124. In testing the contents of a notice for reasonable compliance, we look 185 to the proof. If the degree of variance between the notice and the proof is great, the discrepancy will be fatal. Krucker v. City of St. Joseph, 195 Mo.App. 101, 103-104, 190 S.W. 644, 645-646. As to the "place where" the accident occurred, the notice simply and inaccurately stated "on the sidewalk located on Chestnut Street just West of the intersection of Chestnut Street and River Street." From the stipulation of the parties we are advised there were two sidewalks, not one, on Chestnut Street extending west of the intersection each "similar in appearance" to the other. The city would not know which of the sidewalks was involved. But assuming it was not fatal to omit designating whether the north or south sidewalk was involved, the notice locates the place on the sidewalk "just West of the intersection." The word "just" when employed as an adverb "with reference to distance * * * means barely; closely; nearly; scarcely." 50 C.J.S. Just p. 1101. Armed with only the notice and ordinary intelligence, city officials would attempt to locate the unnamed defect or cause of the accident on one or the other of the two sidewalks on Chestnut Street barely west, closely west, nearly west, or scarcely west of the intersection. Inspecting the sidewalks in this area would not permit the officials to "put a finger on the negligent defect that plaintiff claimed caused her injury." Snickles v. City of St. Joseph, supra. While "street," in a legal sense, may encompass all parts of the way, it is a matter of common knowledge, as displayed by all the parties and witnesses in this cause, that there are definite and separate areas of the entire easement devoted to different uses. The legislature recognizes the distinction by providing different systems for financing the construction and maintenance of each segment. V.A.M.S. §§ 88.507-88.530 and 88.870-88.900. The area between the curbs is generally thought of as being primarily designed for vehicular traffic. A parkway consists of that particular area of the way lying between the roadway and sidewalk or between the curb and sidewalk, while "sidewalk" is defined as "a walk for foot passengers usually at the side of the street or roadway; a foot pavement." Webster's Third New International Dictionary, 1966, p. 2113; Rentfro v. Wheelock Bros., Mo. App., 364 S.W.2d 55, 57(1); Wendegatz v. Kansas City Gas Co., Mo.App., 217 S.W.2d 269, 271(2, 3); 31 Words and Phrases, Parkway, pp. 159-161; 10 McQuillin Municipal Corporations, 1966 Revised Vol., § 30.03, pp. 620-624, § 30.05, pp. 627-628, § 30.11, pp. 641-645. Therefore, when the notice designated "the sidewalk" as the "place where," persons of ordinary intelligence would direct their attention to an inspection of the walks designed for foot passengers in an effort to locate the site and cause of the alleged fall. The proof belies the notice, for the accident did not occur on the sidewalk but "took place * * * in * * * the parkway between the curb line and the sidewalk * * * in the dirt," where plaintiff "knew the parkway was not sidewalk." The "character" or cause of the injury, insofar as the notice advises, is that "while walking on the sidewalk * * * she slipped causing her to immediately fall violently upon the sidewalk." The proof varies from this assertion to a great degree because the occurrence did not happen while plaintiff "was walking on the sidewalk" nor when she fell "upon the sidewalk." The notice is wholly void of any reference to or suggestion that any defect or negligent act of the city caused or produced the fall "upon the sidewalk." There are myriad reasons a person might slip on a sidewalk, many of which would not be the fault or responsibility of a municipal corporation. The notice gives no hint to the city officials as to what they should look for in attempting to learn with any degree of certainty the character or cause of the occurrence. Plaintiff's notice to the city was that she slipped; her testimony 186 was "I tripped and fell. * * All I know was I tripped and fell." Cognizant as we are of the cases which excuse the variance between slipping and tripping, we are also mindful those cases involved notices containing other facts sufficient to render the difference indiscernible, which the notice in this case does not. The City of Carthage officials, led by plaintiff's notice, would be searching for an unknown defect or negligent circumstance on the sidewalk (not in a parkway) on either the north or south side of Chestnut (not knowing which) that was located just or barely west of River Street, which might or would cause a person "walking on the sidewalk" to slip (not trip) and fall "upon the sidewalk." The notice in this case, as regards its contents, is so indefinite in stating "the place where" and the "circumstances of the injury" as to be misleading to city officials in attempting to ascertain the place and cause of the casualty. The notice did not state "the place where" was in the parkway on the south side of Chestnut Street west of the intersection of Chestnut and River Streets in front of the west side of the laundromat. The notice did not state the cause of the injury was a large mass of concrete located in the parkway which caused plaintiff to trip and fall. If this was actually "the place where" and the "circumstances of the injury" as known to the plaintiff when her notice was given it would have been a simple matter to prepare the notice in the manner suggested. Even had investigators espied the concrete mass in the parkway on the south side of Chestnut, they would have no notion this was the basis for plaintiff's claim, for the notice misdirected their efforts in trying to find a defect or negligent condition in an undesignated sidewalk. For the reasons stated, the trial court erred in failing to sustain the city's motion for directed verdict. Being of such mind makes it unnecessary for us to consider the other issues preserved and presented upon appeal. The judgment for the plaintiff Alice Quinn is reversed. HOGAN, P. J., and STONE, J., concur. NOTES [1] Statutes relating to the necessity of notice in maintaining actions against other cities are most similar. See V.A.M.S. §§ 73.950 (Cities of the First Class), 75.860 (Cities of the Second Class), 79.480 (Cities of the Fourth Class), and 82.210 (Constitutional Charter Cities100,000 inhabitants).	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527042/	119 B.R. 504 (1990) In re GAILEY, INC., Debtor. Joseph J. BERNSTEIN, Trustee, Plaintiff, v. Richard W. GAILEY, Billie J. Gailey, and Universal Labs, Inc., Defendants. Bankruptcy No. 85-0202, Adv. No. 87-0386. United States Bankruptcy Court, W.D. Pennsylvania. October 1, 1990. 505 506 507 Neil Y. Siegel, Bernstein & Bernstein, P.C., Pittsburgh, Pa., for plaintiff Joseph J. Bernstein, Trustee. Loraine Smith Tabakin, Tabakin, Carroll & Curtin, Pittsburgh, Pa., for defendant Billie Gailey. Patrick M. Livingston, Mansmann, Cindrich & Titus, Pittsburgh, Pa., for defendants 508 Richard W. Gailey and Universal Labs, Inc. MEMORANDUM OPINION BERNARD MARKOVITZ, Bankruptcy Judge. Before the Court is a complaint instituted by the trustee consisting of six (6) counts in which he seeks to recover the value of several allegedly improper transfers of debtor's property to and by the defendants. Defendants deny that the trustee is entitled to recover the value of the transfers under any of the legal theories set forth in the complaint. For reasons set forth below, judgment will be entered for the trustee and against Richard Gailey in the amount of $53,552.25, against Billie Gailey in the amount of $15,444.26, and against Universal Labs, Inc., in the amount of $15,039.48. I. Amendment Of Theories Of Relief The trustee in effect moved, at the beginning of trial, to amend Counts IV and VI of the complaint as originally pleaded by changing the legal theory of recovery in those counts. Count IV originally sought to recover certain transfers to Universal Labs on the theory that they were preferential under the Bankruptcy Code (11 U.S.C. § 547(b)). Count VI originally stated a claim against Billie Gailey and Richard Gailey for "diversion of corporate funds". The trustee sought at trial to amend Counts IV and VI to seek recovery on the theory that the transfers in question were fraudulent under the Code (11 U.S.C. § 548(a)). Defendants objected to the proposed amendments on the ground that they would be severely prejudiced if such amendment were permitted. FED.R.CIV.P. 15(a), which applies to adversary proceedings, provides in relevant part: A party may amend the party's pleading once as a matter of course at any time before a responsive pleading is served or, if the pleading is one to which no responsive pleading is permitted and the action has not been placed upon the trial calendar, the party may so amend it at any time within 20 days after it is served. Otherwise a party may amend the party's pleading only by leave of court or by written consent of the adverse party; and leave shall be freely given when justice so requires. Leave to amend one's pleadings "out of time" pursuant to Rule 15(a) rests in the sound discretion of the trial judge. Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 330, 91 S. Ct. 795, 802, 28 L. Ed. 2d 77 (1971). Trial judges are ". . . somewhat like quarterbacks in that they have a broad range of options for their game plan". Heyl & Patterson International v. F.D. Rich Housing, 663 F.2d 419, 426 (3rd Cir.1981), cert. denied, 455 U.S. 1018, 102 S. Ct. 1714, 72 L. Ed. 2d 136 (1982). Leave to amend is to be liberally granted. If the underlying facts or circumstances relied upon by a party may conceivably provide a basis for relief, they ought to be afforded the opportunity to test the claim on its merits. Foman v. Davis, 371 U.S. 178, 182, 83 S. Ct. 227, 230, 9 L. Ed. 2d 222 (1962). The liberal policy favoring amendment is not without its limits, however. Leave to amend may be denied for any of several reasons. Undue prejudice is the foremost reason why leave to amend should not be granted. It is "the touchstone for the denial of leave to amend". Cornell and Co., Inc. v. OSHRC, 573 F.2d 820, 823 (3rd Cir.1978). A party opposing leave to amend for this reason has a heavier burden than merely claiming prejudice. It must demonstrate that it would be unfairly disadvantaged or deprived of the opportunity to present evidence which it would have offered had the amendment been made in a timely manner. Deakyne v. Commissioners of Lewes, 416 F.2d 290, 300 n. 19 (3rd Cir.1969). 509 Leave to amend also may be denied upon a showing of bad faith, dilatory motive, undue or unexplained delay, or repeated failure to cure deficiency in amendments previously allowed or futility of amendment. Foman, 371 U.S. at 182, 83 S.Ct. at 230. The trustee never formally requested leave to amend the complaint as outlined above. Rather, he merely informed the court and defendants at the beginning of trial what he "really" was claiming in Counts IV and VI. While we do not wish to encourage this practice, it is clear that leave to amend may be granted even though trial has begun and no formal motion to do so was ever made. Heyl & Patterson, 663 F.2d at 425-26. As has been indicated, defendant objected to the above amendments only on grounds of prejudice. Their claim of prejudice is not persuasive. Although they claimed that they would be prejudiced, defendants did not demonstrate in any manner, let alone in a clear and persuasive fashion, what prejudice they would suffer. All of the defendants were present in the courtroom. Moreover, they did not indicate to the court that additional time would be needed to conduct further discovery. When they were asked by the court whether additional time would be needed to prepare a defense to the amended claims, defendants merely indicated that they wished to take the matter under advisement. At no time subsequent thereto did defendants ask for a continuance; rather, they elected to proceed with the trial and to defend on the merits against the amended claims. The trustee's motion to amend Counts IV and VI of the complaint therefore will be granted. II. Count I The trustee seeks in Count I to avoid certain transfers totaling $12,168.01 to Billie Gailey, the wife of Richard Gailey, on the ground that they were preferential pursuant to 11 U.S.C. § 547(b). All of the transfers which he seeks to avoid took place between February and June of 1984. At the time the transfers took place, 11 U.S.C. § 547(b) provided as follows: . . . the trustee may avoid any transfer of property of the debtor (1) to or for the benefit of a creditor; (2) for or on account of an antecedent debt owed by the debtor before such transfer was made; (3) made while the debtor was insolvent; (4) made (A) on or within 90 days before the date of the filing of the petition; or (B) between 90 days and one year before the date of the filing of the petition, if such creditor, at the time of such transfer (i) was an insider; and (ii) had reasonable cause to believe the debtor was insolvent at the time of such transfer; and (5) that enables such creditor to receive more than such creditor would receive if (A) the case were a case under chapter 7 of this title; (B) the transfer had not been made; and (C) such creditor received payment of such debt to the extent provided by the provisions of this title. On July 10, 1984, approximately one month after the last of the transfers at issue had taken place, Congress amended § 547(b) by deleting subsection (4)(B)(ii). A party seeking to avoid a transfer to an insider as being preferential no longer was required to prove that the insider transferee had reasonable cause to believe, at the time of a challenged transfer, that the debtor was insolvent. This amendment became effective with respect to all cases filed ninety (90) days after July 10, 1984. This adversary action was commenced on October 9, 1987. Thus, the amended version of § 547(b), minus subsection (4)(B)(ii), was in effect at the time this adversary action was brought by the trustee. 510 Billie Gailey, against whom Count I has been brought, maintains that the pre-amendment version of § 547(b) i.e., the version containing (4)(B)(ii) applies to Count I. The primary issue presented in Count I is whether the amended version of § 547(b) applies retroactively to the transfers at issue in Count I. If it does apply retroactively, then, since the trustee has established all of the elements necessary for recovery under the amended version of § 547(b), he is entitled to recover from Billie Gailey the value of those transfers. The only defense presented to Count I by Billie Gailey was that she had no reason to believe that debtor was insolvent at the time of the transfers. Retroactive application of a statute is not favored. Appalachian Power Co. v. Train, 620 F.2d 1040, 1047 (4th Cir.1980). Statutes which are to be applied retroactively traditionally have been subjected to stricter scrutiny than have prospective ones. Daughters of Miriam Center for the Aged v. Mathews, 590 F.2d 1250, 1259 (3rd Cir.1978). The presumption against retroactive application is designed to protect reasonable reliance on prior settled law while permitting the new law full prospective effect. N.L.R.B. v. St. Luke's Hospital Center, 551 F.2d 476, 484 (2nd Cir.1976). In general, a statute may be applied only prospectively. As is the case with virtually every legal principle, however, there are exceptions to this generalization. For instance, a statute may be applied retroactively when Congress has clearly indicted that it is to be so applied. U.S. v. Rewald, 835 F.2d 215, 216 (9th Cir.1987). In addition, it may be applied retroactively when the change in the statute is merely remedial in nature or relates only to modes of procedure which neither create nor impair any substantive rights. French v. Grove Mfg. Co., 656 F.2d 295, 298 (8th Cir.1981). The terms "substantive" and "procedural" are not susceptible of uniform definition which applies invariably in every instance. Each term implicates different variables depending upon the specific problem to which it is applied. Samuelson v. Susen, 576 F.2d 546, 552 (3rd Cir. 1978). A statute is "substantive" in this context if it defines and regulates rights. It is "procedural" if it neither impairs nor enlarges such rights but merely prescribes a method for enforcing them or for obtaining redress for a grievance. U.S. v. Kairys, 782 F.2d 1374, 1381 (7th Cir.), cert. denied, 476 U.S. 1153, 106 S. Ct. 2258, 90 L. Ed. 2d 703 (1986). The circumstances presented compel the conclusion that the amended version of § 547(b), minus subsection (4)(B)(ii) of the previous version, applies to Count I of this case. The amendment is not substantive but rather is merely procedural or remedial. It neither creates a substantive right in favor of the trustee which he did not previously have nor impairs any right which defendant had under the previous version. Section 547(b), under either version, entitles the trustee to avoid certain transfers to a creditor which are "preferential". The amendment in question is merely procedural. It affects only the method by which the trustee must prove entitlement to relief by eliminating the reason-to-believe requirement contained in the previous version. It therefore follows that the amended version of § 547(b) applies to this case even though it affects the legal status of transactions which antedate the effective date of the amendment by some four (4) months or more. In an effort to be complete the Court feels compelled to advise that the trustee is entitled to relief on Count I even if the amended version of § 547(b) does not apply to this case. As has been noted, Billie Gailey's defense to Count I was predicated almost entirely on the contention that she had no reason to believe that Gailey, Inc. was insolvent at the time of the transfers at issue. The facts presented in this case compel a contrary conclusion. "Insolvency", as it applies to Gailey, Inc., means that the financial 511 condition of Gailey, Inc. was such that the sum of its debts, exclusive of property exempted or fraudulently transferred, was greater than the value of all its property, at a fair valuation. See 11 U.S.C. § 101(31)(A). Billie Gailey was the wife of Richard Gailey, the sole shareholder, President, and director of Gailey, Inc. at the time of the challenged transfers to her by Gailey, Inc. In addition, Billie Gailey is a school teacher and impressed the court with her intelligence when she testified. The circumstances surrounding the transfers provided Billie Gailey with ample cause to reasonably believe that Gailey, Inc. was insolvent at the time of the transfers to her. Her husband repeatedly came to her asking to borrow money to meet payroll and other expenses of Gailey, Inc. The transfers to her by Gailey Inc. were in repayment of money Billie Gailey had loaned to Gailey, Inc. for these purposes. Even if Billie Gailey did not in fact infer from all of this that Gailey, Inc. was insolvent, she had ample basis to so infer and ought to have done so. Neither actual knowledge nor actual belief is required. See In re Gruber Bottling Works, Inc., 16 B.R. 348, 352 (Bankr.E.D.Pa.1982). The relevant test is whether the facts respecting Gailey, Inc.'s financial condition that were available to Billie Gailey were such than an ordinary prudent person would be put on notice as to Gailey, Inc.'s financial condition. See Matter of Montanino, 15 B.R. 307, 311 (Bankr.D.N.J.1981). It therefore follows since all of the elements of either version of § 547(b) have been established by the trustee that the trustee is entitled pursuant to 11 U.S.C. § 550 to recover $12,168.81, which is the total value of the transfers at issue in Count I. III. Counts II and III Gailey, Inc. was incorporated in 1980. The purpose of Gailey, Inc. was the removal of asbestos and mechanical insulation on contract jobs that required union labor. Richard Gailey was the controlling shareholder, President, and director of Gailey, Inc. from its inception. Universal Labs, Inc. was incorporated by Richard Gailey in March of 1984. The purpose of Universal Labs was to analyze asbestos samples and air samples and to perform general laboratory work. Richard Gailey was the sole shareholder of Universal Labs, Inc. As President and director of Gailey, Inc., Richard Gailey directed Gailey, Inc. to pay certain debts of Universal Labs. Subsequent thereto, $14,500.00 was provided by Gailey, Inc. to Universal Labs to pay for the latter's start-up expenses and costs. Gailey, Inc. filed a voluntary petition pursuant to chapter 11 of the Bankruptcy Code on January 28, 1985. The case was converted to a chapter 7 proceeding on September 30, 1985. Joseph J. Bernstein was appointed chapter 7 trustee on October 10, 1985. The present adversary action was commenced on October 9, 1987. Counts II and III state alternative claims against Richard Gailey. Count II alleges that Richard Gailey usurped a corporate business opportunity belonging to Gailey, Inc. when he incorporated Universal Labs. Count III alleges that the transfer that Richard Gailey directed Gailey, Inc. to make to Universal Labs was fraudulent under the Bankruptcy Code (11 U.S.C. § 548(a)). Richard Gailey, by virtue of his position as President and director of Gailey, Inc., stood in a fiduciary relationship to Gailey, Inc. As a consequence, he was required to discharge the duties of his position in good faith. See 15 P.S. § 1408 (Purdon's 1967). In general, officers and directors of a corporation are required to devote themselves to the affairs of the corporation with a view to promoting its interests rather than their own. They may not utilize their position in the corporation to obtain any personal profit or advantage beyond that enjoyed by its shareholders. Bird Coal and Iron Co. v. Humes, 157 Pa. 278, 512 27 A. 750, 752 (1893); Porter v. Healy, 244 Pa. 427, 91 A. 428, 431 (1914). An officer or director is required to provide the corporation his undivided loyalty. If a business opportunity which lies within the scope of the corporation's business activities and which is of potential advantage to it is presented, an officer or director is not permitted to avail himself of that opportunity and to seize it for himself. Bailey v. Jacobs, 325 Pa. 187, 189 A. 320, 324 (1937). This principle applies to close corporations. Seaboard Industries, Inc. v. Monaco, 442 Pa. 256, 276 A.2d 305, 309 (1971). There is no "bright line test" for determining when a particular business opportunity is a corporate opportunity. It is a question of fact to be determined from the totality of the circumstances present at the time when it arose. Borden v. Sinskey, 530 F.2d 478, 490 (3rd Cir.1976). As is the case with virtually every legal principle, there are exceptions to this one. An officer may take personal advantage of a corporate business opportunity if the shareholders consent after full disclosure and it is not detrimental to creditors of the corporation. Hill v. Hill, 279 Pa.Super. 154, 420 A.2d 1078, 1081 (1980). Also, an officer or director may seize a corporate business opportunity if the corporation is incapable of taking advantage of the opportunity for itself. Robinson v. Brier, 412 Pa. 255, 194 A.2d 204, 207 (1963). The totality of the circumstances presented in this case compel the conclusion that Richard Gailey utilized debtor's assets to pay his personal debts. In addition, he usurped a business opportunity belonging to Gailey, Inc. when he incorporated Universal Labs and placed ownership thereof in his name as opposed to that of debtor. As has been indicated, the corporate purposes of Gailey, Inc. and Universal Labs, although generally interrelated, were somewhat different. Gailey, Inc. was in the business of removing asbestos and mechanical insulation on jobs that required union labor. Universal Labs was in the business of analyzing asbestos and air samples and of providing general laboratory work. This admitted difference does not, however, compel the conclusion that Richard Gailey did not usurp a business opportunity belonging to Gailey, Inc. when he incorporated Universal Labs. There was nothing to indicate that Gailey, Inc. was incapable of expanding the scope of its activities so as to include analyzing asbestos and air samples. This could have been done as easily as forming a separate corporation to perform such functions. Moreover, Richard Gailey's decision to incorporate Universal Labs to perform these functions instead of enlarging the scope of Gailey, Inc.'s activities was never formally approved by the shareholders of Gailey, Inc. His dominion over the affairs of Gailey, Inc. was so absolute that Richard Gailey readily accepted the benefits of the corporate fiction while refusing to comply with its requirements. Additionally, his decision to incorporate Universal Labs was detrimental to Gailey, Inc. and its creditors. It was detrimental to Gailey, Inc. in that it expended its own funds on behalf of Universal Labs without receiving any obvious benefit in return. The decision was detrimental to Gailey, Inc.'s creditors for much the same reason. If an officer or director has usurped a corporate business opportunity, the aggrieved corporation may recover all damages suffered by it as a result thereof. CST, Inc. v. Mark, 360 Pa.Super. 303, 520 A.2d 469, 472 (1987). Debtor sustained proven damages in the amount of $14,500.00 when it paid Universal's start-up costs and expenses. The trustee therefore is entitled to recover this amount from Richard Gailey pursuant to Count II.[1] 513 IV. Count IV In addition to spending $14,500.00 in helping Universal Labs get started (see Count III), Gailey, Inc. also spent a total of $15,039.48 of its own funds between April 5, 1984 and January 10, 1985 on behalf of Universal Labs. Of that amount, $3,314.07 was for payroll, $350.00 for incorporation expenses, $200.00 in telephone charges, and $987.41 for expenses incurred by Universal Labs in conducting seminars. The precise nature of the remaining $10,188.00 in expenditures by Gailey, Inc. on behalf of Universal Labs cannot be determined. 11 U.S.C. § 548(a) provides in pertinent part as follows: The trustee may avoid any transfer of an interest of the debtor in property . . . that was made . . . on or within one year before the date of the filing of the petition, if the debtor voluntarily or involuntarily (1) made such a transfer . . . with actual intent to hinder, delay, or defraud any entity to which the debtor was or became, on or after the date that such transfer was made . . ., indebted; or (2)(A) received less than a reasonably equivalent value in exchange for such transfer . . .; and (B)(i) was insolvent on the date that such transfer was made . . ., or became insolvent as a result of such transfer . . . ; The trustee alleges in Count IV that the above transfers are avoidable as fraudulent pursuant to § 548(a)(2)(A)-(B)(i). According to the trustee, the transfers are fraudulent because Gailey, Inc. received less than reasonably equivalent value in exchange for them. The manifest purpose of § 548(a)(2)(A)-(B)(i) is to establish a test for constructive, as opposed to actual, fraud. It is a test of law, as distinguished from fraud in fact. If the conditions necessary for this provision are met, a conclusive presumption of fraud arises. See 4 Collier on Bankruptcy ¶ 548.03 at 548-50 (15th ed. 1989). The trustee has the burden of proving each of the following: (1) a transfer occurred; (2) the transfer was of an interest of the debtor in property; (3) the transfer occurred within one (1) year of the filing of the bankruptcy petition; (4) debtor received less than reasonably equivalent value in exchange for the transfer; and (5) debtor was insolvent at the time of the transfer or became insolvent as a result thereof. In re DeVito, 111 B.R. 529, 531 (Bankr.W. D.Pa.1990). There is no dispute concerning elements (1), (2), (3), and (5). The above payments constituted transfers of an interest of Gailey, Inc. in property, which transfers took place within one (1) year of the filing of the bankruptcy petition on January 28, 1985 and at a time when Gailey, Inc. was insolvent. The sole dispute relates to (4). Universal Labs contends that Gailey, Inc. did receive reasonably equivalent value in exchange for the above transfers. Specifically, Universal Labs maintains that Gailey, Inc. was awarded a contract worth some $83,000.00 for asbestos removal as a result of efforts by Universal. This, Universal argues, was more than "reasonably equivalent value in exchange for" the above payments by Gailey, Inc. on behalf of Universal Labs. Gailey, Inc. was awarded a contract worth $83,000.00 for asbestos removal at the Albert Einstein Medical Center in Philadelphia, Pennsylvania. That the contract was awarded to Gailey, Inc. due to the efforts of Universal Labs, rather than its own efforts, is highly doubtful. More importantly, even assuming that Universal Labs did play some role in debtor's being awarded the contract, the contract was not received in exchange for the above payments. No quid pro quo was involved in this matter. In fact, Debtor provided services to the medical center and in exchange thereof Debtor was paid a fee. 514 The trustee will be awarded $15,039.48, the value of the above transfers, on his claim against Universal Labs in Count IV. V. Count V As previously stated, this case was converted to a chapter 7 proceeding on September 30, 1985. The chapter 7 trustee was appointed on October 10, 1985. Gailey, Inc. made payments to various payees totaling $30,897.03 after conversion and without the knowledge or approval of either the trustee or this court. The trustee has brought a claim in Count V against Richard Gailey for unauthorized post-conversion disbursement of funds belonging to debtor. According to the trustee, Richard Gailey is liable to the trustee pursuant to 11 U.S.C. § 542(a) for the amount of the unauthorized disbursements. 11 U.S.C. § 542(a) provides in relevant part as follows: Except as provided in subsection (c) or (d) of this section, an entity, other than a custodian, in possession, custody, or control, during the case, of property that the trustee may use, sell, or lease under section 363 of this title . . . shall deliver to the trustee, and account for, such property or the value of such property, unless such property is of inconsequential value or benefit to the estate. Neither Richard Gailey nor Gailey, Inc. was in possession of the funds at issue here when this adversary action was brought. The funds had already been disbursed. Consequently, no action for turnover of the funds could have been brought against Richard Gailey. Yaquinto v. Greer, 81 B.R. 870, 878 (N.D.Tex.1988); In re DeBerry, 59 B.R. 891, 895 (Bankr.E.D. N.Y.1986). Actual or constructive possession by a defendant is required as a predicate to a turnover action. DeBerry, 59 B.R. at 895. The trustee, however, is not seeking a turnover of property from Richard Gailey but instead is seeking to recover the value of these disbursements as damages. Count V in effect is an action against Richard Gailey for tortious misappropriation of estate property. The trustee is entitled to recover the value of estate property from any person or entity who has wrongfully transferred such property after the filing of a bankruptcy petition, absent a showing by the transferor that the transfer was made in good faith and without notice or actual knowledge of the bankruptcy case. In re Robertson, 105 B.R. 440, 456-58 (Bankr.N. D.Ill.1989). Richard Gailey was the sole shareholder, President, and director of Gailey, Inc. from its inception. In his own words, he was "the chief business gatherer, chief estimator, and chief operating officer" of Gailey, Inc. In short, Richard Gailey had absolute control over the affairs of Gailey, Inc. Any disbursements by Gailey, Inc. were made only at the behest of Richard Gailey and, practically speaking, were made by him. Any distinction between Richard Gailey and Gailey, Inc. in this regard would be chimerical. Furthermore, Richard Gailey unquestionably knew of debtor's bankruptcy filing prior to the disbursements at issue here. It was he who signed the schedules affixed to debtor's bankruptcy petition. It follows from the foregoing that the trustee is entitled in Count V to recover from Richard Gailey $30,987.03, which is the value of the unauthorized post-conversion disbursements for which he was responsible. VI. Count VI The trustee alleges in Count VI that defendants Billie Gailey and Richard Gailey illegally diverted, for their own personal use, several thousands of dollars of debtor's funds. According to the trustee, the transfers were fraudulent pursuant to § 548(a)(2)(A)-(B)(i) of the Code. The trustee seeks to recover two (2) distinct sets of transfers on behalf of Billie Gailey. Initially, he seeks to recover payments made to the Pittsburgh Teachers 515 Credit Union for an automobile loan in the name of Billie Gailey (Ex. 14). In addition, the trustee seeks to recover the value of checks made payable to "cash" and endorsed by Billie Gailey (Ex. 15). The trustee also seeks to recover two distinct sets of transfers to Richard Gailey. He seeks to recover the value of checks made payable to "cash" and endorsed by Richard Gailey (Ex. 16), as well as the value of checks made payable to Richard Gailey and endorsed by him (Ex.17). Analysis of the trustee's claim in Count VI will be facilitated if each of these categories is considered separately. A) Payments to Pittsburgh Teachers Credit Union (Ex. 14) The trustee seeks to recover a total of $1,540.00 in such payments. As had been indicated, the trustee has the burden of proving each of the following elements: (1) a transfer occurred; (2) the transfer was of an interest of the debtor in property; (3) the transfer occurred within one (1) year before the filing of the bankruptcy petition; (4) debtor received less than a reasonably equivalent value in exchange for the transfer; and (5) debtor was insolvent at the time of the transfer or became insolvent as a result thereof. In re DeVito, 111 B.R. at 531. With regard to these payments, elements (1), (2), (4), and (5) are satisfied for each payment. Each payment constituted a transfer of an interest of Gailey, Inc. in property within one (1) year of the filing of the bankruptcy petition and at a time when Gailey, Inc. was insolvent. Element (3) is not satisfied, however, with respect to the following payments: Amount of Date of Check Check Number Check April 8, 1985 Mellon # 510 $154.00 June 18, 1985 Mellon # 540 308.00 _______ $462.00 ======= These two transfers were not made within one (1) year prior to the filing of the bankruptcy petition on January 28, 1985, but instead were made after it was filed. Consequently, they are not avoidable pursuant to § 548(a). The remaining payments to Pittsburgh Teachers Credit Union totalling $1,078.00 were made within one (1) year prior to January 28, 1985 and therefore may be avoided by the trustee pursuant to § 548(a). B) Checks Payable To "Cash" and Endorsed by Billie Gailey (Ex. 15) Billie Gailey endorsed a total of $2,197.43 in checks made payable to "cash". All of the elements required for a fraudulent transfer are met with respect to each of these checks. Consequently, the trustee is entitled to avoid and recover the full amount of these checks. Altogether, the trustee is entitled to recover from Billie Gailey in Count VI a total of $3,275.45 ($1,078.00 + $2,197.43 = $3,275.43). C) Checks Made Payable to "Cash" and Endorsed by Richard Gailey (Ex. 16) Richard Gailey endorsed a total of $16,776.63 in checks which were made payable to "cash". Of the checks in question, the following checks totalling $3,000.00 were issued post-petition and therefore do not satisfy element (3): Amount of Date of Check Check Number Check 07/19/85 PNB # 1006 $1,000.00 07/19/85 PNB # 1007 500.00 03/13/85 Mellon # 1030 100.00 04/15/85 Mellon # 515 200.00 04/09/85 Mellon # 511 250.00 03/08/85 Mellon # 499 150.00 03/04/85 Mellon # 490 100.00 02/04/85 Mellon # 476 200.00 06/26/85 Mellon # 1054 250.00 02/26/85 Mellon # 494 250.00 _________ $3,000.00 ========= Certain other payments were for legitimate business and travel expenses incurred by Richard Gailey, who traveled extensively 516 on behalf of Gailey, Inc., and therefore do not satisfy element (4). Gailey, Inc. received "reasonably equivalent value" in exchange for the following payments: Amount of Date of Check Check Number Check 09/28/84 Mellon # 239 $ 500.00 09/20/84 Mellon # 210 600.00 09/17/84 Mellon # 156 200.00 06/26/84 UNB # 1442 300.00 06/25/84 UNB # 1439 100.00 06/08/84 UNB # 1408 250.00 03/02/84 UNB # 1226 1,086.90 02/27/84 UNB # 1216 328.24 01/14/85 Mellon # 472 100.00 01/07/85 Mellon # 456 100.00 12/28/84 Mellon # 436 300.00 11/01/84 Mellon # 354 100.00 10/23/84 Mellon # 344 250.00 10/09/84 Mellon # 294 250.00 12/17/84 Mellon # 393 250.00 06/15/84 UNB # 1425 300.00 _________ $4,665.14 ========= The remaining checks totalling $6,914.06 satisfy all of the elements required for a fraudulent transfer. The trustee therefore may avoid and recover from Richard Gailey that amount for checks made payable to "cash" and endorsed by him. D) Checks Payable to Richard Gailey and Endorsed by Him (Ex. 17) Richard Gailey endorsed and cashed a total of $2,501.16 in checks made payable to him. The following check was for legitimate travel expenses incurred by Richard Gailey on behalf of Gailey, Inc. and therefore does not satisfy element (4): Amount of Date of Check Check Number Check 01/08/85 Mellon # 461 $250.00 In addition, the following checks totalling $1,000.00 were issued postpetition and therefore do not satisfy element (3): Amount of Date of Check Check Number Check 05/15/85 Mellon # 522 $ 150.00 02/08/85 Mellon # 478 500.00 05/20/85 Mellon # 528 250.00 07/30/85 Mellon # 1060 100.00 _________ $1,000.00 ========= The remaining checks totaling $1,251.16 satisfy all of the elements required for a fraudulent transfer. The trustee therefore may avoid and recover from Richard Gailey for the remaining checks made payable to and endorsed by him. Altogether, the trustee is entitled to recover from Richard Gailey in Count VI a total of $8,165.22 ($6,914.06 + $1,251.16 = $8,165.22). VII. Summary The trustee's motion to amend Counts IV and VI of the complaint will be granted. In addition, the trustee is entitled to recover the following from the various defendants: Billie Gailey: Count I: $12,168.81 Count VI: 3,275.45 __________ $15,444.26 ========== Richard Gailey: Count II: $14,500.00 Count V: 30,897.03 Count VI: 8,165.22 __________ $53,562.25 ========== Universal Labs, Inc. $15,039.48 ========== An appropriate Order will be issued. NOTES [1] It will not be necessary to consider Count III in light of the fact that it was intended as an alternative to Count II, upon which the trustee has prevailed.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527097/	570 A.2d 1148 (1990) Martha P. LANKFORD, Plaintiff Below, Appellant, v. Sterling H. RICHTER, Agnes E. Gawronski, and State Farm Mutual Automobile Insurance Company, Defendants Below, Appellees. Supreme Court of Delaware. Submitted: January 16, 1990. Decided: February 6, 1990. Rehearing Denied February 28, 1990. Bayard J. Snyder (argued) of Phillips & Snyder, P.A., Wilmington for appellant. Joanne B. Wills (argued) of Morris, James, Hitchens & Williams, Wilmington, for appellee Sterling H. Richter. Colin M. Shalk (argued) of Casarino, Christman & Shalk, Wilmington, for appellee State Farm Mut. Auto. Ins. Co. Before HORSEY, WALSH and HOLLAND, JJ. HORSEY, Justice: On May 13, 1982, the Governor signed into law a bill passed by the General Assembly, providing: An insurer shall be required during the pendency of any claim received pursuant to a casualty insurance policy to give prompt and timely written notice to claimant informing him of the applicable 1149 state statute of limitations regarding action for his damages. 63 Del.Laws, c. 236; 18 Del.C. § 3914. The Act's heading stated that it was intended "to require insurers to inform their claimant, in writing, of the applicable statute of limitations period." The law did not become effective until one year after its enactment, May 13, 1983. Five months later, on October 12, 1983, the plaintiff, Martha P. Lankford, was injured in Delaware in a multiple vehicle "chain" collision on a rainy day. The following day, Lankford reported the accident and her injury to her insurance carrier, State Farm Mutual Automobile Insurance Company ("State Farm"). Two days later, Lankford completed and returned State Farm's application for benefits. In addition to personal injury protection benefits not in dispute, she sought uninsured motorist coverage benefits. In a letter response to Lankford, State Farm denied Lankford's claim for uninsured motorist benefits asserting as a ground for denial her contributory negligence.[1] State Farm's letter failed to inform Lankford of the applicable statute of limitations period controlling her claim for uninsured motorist coverage benefits, contrary to section 3914. Nor did State Farm thereafter, in later correspondence with Lankford, comply with section 3914. On October 8, 1985 Lankford filed a personal injury negligence suit in Superior Court against both Richter and Gawronski. In 1987, Superior Court entered a default judgment against Gawronski, subject to an inquisition for damages. The following day Lankford amended her complaint to assert against State Farm a claim for recovery of uninsured motorist benefits. Two years later Superior Court dismissed Lankford's claim and granted State Farm summary judgment. The court ruled that Lankford's claim against her carrier for uninsured motorist benefits was time barred under 10 Del.C. § 8106 and Allstate Insurance Co. v. Spinelli, Del.Supr., 443 A.2d 1286 (1982). Lankford's then attorney did not oppose the motion. However, neither the trial judge nor the parties or counsel considered section 3914 and its tolling effect upon section 8106 as applied by Spinelli. Section 3914 was enacted eight months after this Court's issuance of Spinelli. Lankford then proceeded to trial against Richter on both liability and damages and against Gawronski on damages alone. At the close of the evidence, the court denied Lankford's motion for a directed verdict against defendant Richter and in favor of Lankford. The jury returned a verdict in favor of the defendant Richter. Lankford appeals the Superior Court's: (1) grant of summary judgment in favor of State Farm; and (2) denial of plaintiff's motion for directed verdict. I. We agree with Lankford that the trial court erred as a matter of law in granting State Farm summary judgment. Section 3914 must be construed as intended to preclude an insurer from invoking the three-year time limitation of Spinelli where the insurer fails to comply with the timely notice mandate of section 3914. State Farm implicitly concedes its failure to comply with section 3914, but seeks to avoid the statute's application on grounds of waiver. State Farm argues that because Lankford did not oppose State Farm's motion for summary judgment, Supreme Court Rule 8 bars her reliance on appeal on section 3914, in the absence of "interests of justice." We conclude that the error of the court below in failing to apply section 3914 constitutes plain and fundamental error. Section 3914 must be recognized as an expression of legislative will to toll otherwise applicable time limitations upon an insured's 1150 claims for damages made upon a casualty insurer. State Farm's failure to comply with section 3914 bars State Farm from raising the limitation ruling of Spinelli as a defense to Lankford's claim for uninsured motorist benefits. Superior Court erred as a matter of law in granting summary judgment for State Farm. Therefore, we must reverse and remand to Superior Court with direction to withdraw the judgment for State Farm and to apply section 3914 to the controlling facts should State Farm renew its motion for summary judgment. II. Plaintiff next contends that the court erred in refusing to grant plaintiff's motion for directed verdict on the question of Richter's negligence. Plaintiff argues that Richter's negligence should be inferred as a result of his violation of the motor vehicle statute. We disagree. The ultimate issue presented to the jury was one of proximate cause, with evidence of emergency and unavoidable accident. Such questions of fact are quite properly left to the jury to decide. See generally Eustice v. Rupert, Del.Supr., 460 A.2d 507 (1983); Caine v. New Castle County, Del.Supr., 379 A.2d 1112 (1977) (issues of negligence are not generally susceptible to summary judgment). Moreover, the record contains sufficient evidence to support a finding that defendant Richter was not negligent. Therefore, the court did not err in refusing to grant plaintiff's motion for directed verdict and we affirm the lower court's ruling. * * * Affirmed in part; Reversed in part; and Remanded. NOTES [1] The police had determined Agnes Gawronski to have been solely responsible for the five-car collision. Gawronski, the operator of the lead car, had slammed on her brakes without warning after her estranged husband had forced the car's transmission into neutral. Lankford, driving the fifth car behind Gawronski, ran into the back of a van in front of her. Immediately thereafter Lankford's vehicle was struck from the rear by defendant Richter's car.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527169/	119 B.R. 382 (1990) In re Thomas NASHAWATY, Debtor. Thomas NASHAWATY, Plaintiff, v. COMMONWEALTH OF MASSACHUSETTS, Defendant. Bankruptcy No. 90-11534-JNG, Adv. No. 90-1189-JNG. United States Bankruptcy Court, D. Massachusetts. September 28, 1990. 383 Nancy McCarty Wasserman, Hanover, Mass., for plaintiff. Neal R. Steingold, Asst. Atty. Gen., Com. of Mass., Boston, Mass., for defendant. MEMORANDUM JAMES N. GABRIEL, Chief Judge. I. Facts The above-captioned adversary proceeding was commenced on June 4, 1990. Two motions relative to the adversary proceeding are now before the Court: the Commonwealth's motion to dismiss, which the Court will treat as a motion for summary judgment, and the Debtor's motion for summary judgment. Both motions were heard on July 25, 1990. Prior to the commencement of this bankruptcy case on March 30, 1990, Thomas Nashawaty ("Nashawaty" or the "Debtor") was an officer of Marshfield Concrete Form Corp., a corporation that is now dissolved. In January of 1990, the Commonwealth of Massachusetts, through its Department of Employment and Training, applied to the Boston Municipal Court for a criminal complaint. The Commonwealth charged Nashawaty, who was the treasurer of Marshfield Concrete Form Corp., with failure to pay statutorily imposed employee contributions for eight quarters beginning in January of 1984 and ending in March of 1986 in the sum of $14,777.82 plus interest, pursuant to Mass.Gen.Laws Ann. ch. 151A, § 47 (West 1982 & Supp.1990). Section 47 provides in relevant part: Any employing unit, or any officer or agent of an employing unit, who fails or refuses to pay any such benefit, contribution, payment in lieu of contribution or interest charge . . . shall be punished by a fine of not less than one hundred nor more than one thousand dollars, or by imprisonment for not more than six months or both; and each such failure or refusal to pay . . . shall constitute a separate and distinct offense. * * * * * If such employing unit is a corporation or the employer of such officer or agent is a corporation, the president, secretary and the treasurer, or officers exercising corresponding functions, shall each be subject to the aforesaid penalties for any violation of any provision of this section, of which they, respectively, had knowledge, or, in the proper exercise of their duties ought to have had knowledge. * * * * * * Any person found guilty of violating any provision of this chapter, in addition to any other punishment, may be ordered to make restitution to the division of employment security in an amount not to exceed the amount specified in the complaint 384 of the Commonwealth plus any interest or penalties which have accrued under this chapter since filing of the complaint. . . . Mass.Gen.Laws Ann. ch. 151A, § 47 (West 1982 & Supp.1990). In February of 1990, the Boston Municipal Court issued a criminal complaint. The criminal matter was pending when Nashawaty filed his Chapter 7 petition. Through his complaint, Nashawaty seeks to enjoin the criminal prosecution. The Debtor alleges: 1) that a co-defendant in the criminal matter paid $7,000 to the Commonwealth, thereby reducing the amount owed pursuant to the criminal complaint to $7,777.82; 2) that the contributions required under chapter 151A are not "withholding" taxes; 3) that the taxes upon which the criminal complaint is based are over three years old and are, therefore, dischargeable pursuant to 11 U.S.C. § 727; and 4) that the Commonwealth "is attempting to collect under the guise of restitution via criminal complaint taxes alleged due and owing . . . that are dischargeable." II. Discussion Section 727 of the Bankruptcy Code provides that the Court shall grant an individual debtor a discharge from all debts that arose before the date of the order for relief, except as provided in section 523. 11 U.S.C. § 727. Section 523, in pertinent part, provides that a discharge under section 727 does not discharge an individual debtor from 1) any debt for a tax of a kind specified in section 507(a)(7), whether or not a claim for such tax was filed or allowed, 11 U.S.C. § 523(a)(1)(A), or 2) a debt that is for: a fine, penalty, or forfeiture payable to and for the benefit of a governmental unit, and is not compensation for actual pecuniary loss, other than a tax penalty- (A) relating to a tax of a kind not specified in paragraph (1) of this subsection; or (B) imposed with respect to a transaction or event that occurred before three years before the date of the filing of the petition. 11 U.S.C. § 523(a)(7). Section 507(a)(7)(D) grants a seventh priority to: an employment tax on a wage, salary, or commission of a kind specified in paragraph (3) of this subsection earned from the debtor before the date of the filing of the petition, whether or not actually paid before such date, for which a return is last due, under applicable law or under any extension, after three years before the date of the filing of the petition. 11 U.S.C. § 507(a)(7)(D). Based upon this legislative scheme, the Debtor argues that the taxes that are the subject of the criminal complaint are dischargeable because they are over three years old. Assuming without deciding that the Debtor is correct, the issue of whether or not the Commonwealth should be enjoined from seeking criminal penalties with respect to dischargeable debts still remains open.[1] Section 362(b) of the Bankruptcy Code provides that the filing of a petition does not operate as a stay "of the commencement or continuation of a criminal action or proceeding against the debtor. . . ." 11 U.S.C. § 362(b)(1). As the Supreme Court noted in Pennsylvania Department of Public Welfare v. Davenport, ___ U.S. ___, 110 S. Ct. 2126, 109 L. Ed. 2d 588 (1990), "[s]ection 362(b)(1) does not . . . explicitly exempt governmental efforts to collect restitution obligations from a debtor." Id. at ___, 110 S.Ct. at 2132. Nevertheless, the court stated: It is not an irrational or inconsistent policy choice to permit prosecution of criminal offenses during the pendency of a bankruptcy action and at the same time to preclude probation officials from enforcing restitution orders while a debtor seeks relief under Chapter 13. Congress could well have concluded that maintaining criminal prosecutions during bankruptcy 385 proceedings is essential to the functioning of government but that, in the context of Chapter 13, a debtor's interest in full and complete release of his obligations outweighs society's interest in collecting or enforcing a restitution obligation outside the agreement reached in the Chapter 13 plan. Id. at ___, 110 S.Ct. at 2132. Thus, the Court held that restitution obligations are debts within the meaning of 11 U.S.C. § 101(11) of the Bankruptcy Code, and those debts are dischargeable under Chapter 13. The Supreme Court in Davenport was careful to reaffirm its decision in Kelly v. Robinson, 479 U.S. 36, 107 S. Ct. 353, 93 L. Ed. 2d 216 (1986), in which it held that all penal sanctions including restitution obligations imposed upon a criminal defendant as a condition to probation in a state criminal proceeding were not subject to discharge in Chapter 7 proceedings. The Court recognized the policy decision that permits the dischargeability of debts in Chapter 13 that are not dischargeable in Chapter 7. It stated: "[a]mong those exceptions that Congress chose not to extend to Chapter 13 proceedings is § 523(a)(7)'s exceptions for debts arising `from a fine, penalty, or forfeiture.'" Id. See 11 U.S.C. § 523(a)(7). Thus, the issue in this case appears to be whether or not the Commonwealth can be enjoined from proceeding with its criminal complaint even if the obligation underlying the complaint is dischargeable. Neither Kelly nor Davenport, the two cases relied upon by the Commonwealth, directly answer that question, although they provide guidance. However, United States v. Carson, 669 F.2d 216 (5th Cir.1982), and United States v. Alexander, 743 F.2d 472 (7th Cir.1984), hold that a discharge of a debt in bankruptcy does not prevent the imposition of a restitution order upon the debtor's subsequent conviction of a crime involving that debt. See also In re Davis, 691 F.2d 176 (3rd Cir.1982), and Barnette v. Evans, 673 F.2d 1250 (11th Cir.1982) (Bankruptcy courts cannot enjoin criminal prosecution that might result in a restitution order). Cf. Younger v. Harris, 401 U.S. 37, 91 S. Ct. 746, 27 L. Ed. 2d 669 (1971), (A federal court should not enjoin a pending state criminal prosecution except under extraordinary circumstances where there is great and irreparable harm to federally protected rights.). In view of the fact that restitution orders are not dischargeable in Chapter 7 pursuant to section 523(a)(7), Kelly v. Robinson, 479 U.S. 36, 107 S. Ct. 353, 93 L. Ed. 2d 216 (1986), that the automatic stay does not apply to criminal proceedings, that the state statute permits the imposition of a fine or jail sentence, as well as a restitution order, and in view of this case law cited, the Court hereby denies the plaintiff's motion for summary judgment and allows the Commonwealth's motion to dismiss. NOTES [1] It would appear to the Court that but for Mass.Gen.Laws Ann. ch. 151A, the Debtor, as opposed to Marshfield Concrete Form Corp., would not be personally liable for the nonpayment of employment taxes by the corporation.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527168/	428 S.W.2d 303 (1968) In re James Eddie Lee HOUSTON. Supreme Court of Tennessee. May 17, 1968. 304 Walter L. Bailey, Jr., Memphis, for plaintiff in error. Arthur J. Shea, Asst. City Atty., Memphis, for the City. OPINION BURNETT, Chief Justice. The sole question involved in this case is whether or not, a minor, seventeen years of age, may appeal to the Circuit Court of Shelby County from a judgment of the Juvenile Court of that county holding the plaintiff in error, having been charged with three counts of assault with intent to commit murder and disorderly conduct, should be remanded to the Criminal Court of Shelby County, Tennessee, to be tried as an adult in compliance with T.C.A. § 37-264. The trial judge held against the plaintiff in error and in favor of the City and dismissed the appeal because he was of the opinion that the order of a Juvenile Court waiving its rights to hear this case and remanding the juvenile to the Criminal Court was not a final order and was thus not appealable. To this order of the Circuit Court, denying the right of an appeal, the juvenile excepted, prayed an appeal and assigned error to the order. The Legislature of Tennessee by Chapter 58 of the Public Acts of 1911 passed an act to "define and regulate the treatment and control of * * delinquent children". This act was repealed and superseded by Chapter 177 of the Public Acts of 1955, and is now codified in the Supplement to the Code under Title 37, "Juveniles", beginning at T.C.A. § 37-242 et seq. The act in question now governs how a juvenile is dealt with in this State, and particularly one who is charged with a crime. Among other provisions in this act is T.C.A. § 37-264, which in part says: "Child held for prosecution and sentencing as adult Authority of court. (1) The juvenile court after full investigation and hearing may order a child held for prosecution and sentencing as an adult in the court which would have jurisdiction if the child were an adult when: "(a) A child sixteen (16) years of age or over is alleged to have committed an act which would have been a felony if committed by an adult, and a finding is made by the juvenile court that the child is not feeble-minded or insane, is not reasonably susceptible to the corrective treatment in any available institution or facility within the state designed for the care and treatment of children or that the safety of the community requires the child to continue under restraint for a period extending beyond his twenty-first birthday." In this case the Juvenile Court had a hearing, and, pursuant to the statute quoted above, waived jurisdiction and remanded the plaintiff in error to the Criminal Court of Shelby County to be tried as an adult. As said in the outset an appeal was prayed to the Circuit Court pursuant to T.C.A. § 37-273, which provides: "Juvenile Court as Court of Record Appeal and review Remand. The juvenile 305 court shall be a court of record. When a juvenile court shall make any disposition of a child, either party dissatisfied with the judgment or order may appeal to the circuit court which shall hear the testimony of witnesses and try the case de novo. Said appeal shall be perfected within five (5) days thereafter, excluding Sundays. In its order the circuit court shall remand the case to the juvenile court for enforcement of the judgment entered by the circuit court. "When an appeal is perfected the juvenile court shall cause the child and the record in the case, including a written finding of fact upon which the judgment of the juvenile court was based to be taken forthwith before the circuit judge whose duty it shall be, either in term time or in vacation time to set the case for an early hearing. Pending the hearing the circuit court shall have authority", etc. to keep in force the order of the juvenile court. As said above, the trial judge herein felt under this act when the juvenile was sent pursuant to the statute (T.C.A. § 37-264) to the Criminal Court that this was not a final order in the case and thus there was no appeal from such an order. This Court under the 1911 act, which has been superseded by the present law, held that the determination of a Juvenile Court and its finding that an infant is incorrigible is a determination solely for the Juvenile Court and its finding is binding upon the Criminal Court and subject to review only by the Circuit Court on certiorari. Wiggins v. State, 154 Tenn. 83, 289 S.W. 498. The 1911 act though did not contain any provision for an appeal, and this being true this Court held that a case could only get into a court of record from the Juvenile Court by way of certiorari. In 1956 this question came before this Court in Norrod v. State, 201 Tenn. 577, 300 S.W.2d 926, wherein this Court speaking by the late Mr. Justice Tomlinson said: "By Chapter 177 of the Acts of 1955, Section 37-273, Code Supplement, appeal from the judgment of a Juvenile Court is to the Circuit Court. That was the law prior thereto. Code Section 37-235, and Doster v. State, 195 Tenn. 535, 260 S.W.2d 279. The only difference was in the manner and time in getting in Circuit Court. Hence, this Court does not have jurisdiction in the present status of this case. It must, therefore, dismiss the appeal in error, being without an alternative. State v. Bockman, 139 Tenn. 422, 427-428, 201 S.W. 741." The cases referred to in the quotation last above have reference to different parts of the 1911 juvenile act. In our investigation of the questions here involved we have found a very enlightening and well written article which covers the statute here in question in full and various other juvenile statutes and cases over the United States. The title to this article is "Problem of Age and Jurisdiction in the Juvenile Court", 19 Vanderbilt Law Review, page 833. The reading of this article is rather illuminating on questions here involved and others pertaining to the disposition of juveniles in related cases, and many questions not now before this Court are interestingly discussed in this article. The question of waiver of jurisdiction by the Juvenile Court to the Criminal Court is discussed at some length and the author says: "The legal standard to be satisfied before there can be waiver and transfer under section 37-264 is different from the standard imposed by section 37-265. Under section 37-264, only `incorrigible' children can be waived and transferred. `Incorrigible' was also the standard required by the acts of 1911 and 1955. Apparently, however, the word `incorrigible' was never defined in cases construing these acts. The 1959 amendments eliminated the word `incorrigible' from the statute and instead used `is not reasonably susceptible to * * corrective treatment'. [This is the language 306 that is used in section 37-264 as subsequently amended by the 1965 Legislature.] The author continues thus: "This latter phrase appears to comply with the accepted definitions of incorrigible. In contrast, section 37-265 requires a finding of probable cause that the child has committed certain felonies before the juvenile court is deprived of jurisdiction. But neither section requires the finding of guilt." Then the author goes on and discusses the question of whether or not the Criminal Court can refuse the waiver after the child has been sent to that court by the Juvenile Court, and he says this: "Apparently the criminal court is bound by the juvenile court's decision since the Tennessee Supreme Court held under the 1911 Act that the criminal court was so bound. (See Wiggins v. State, supra). Finally, if the juvenile court waives its jurisdiction and remands, is the criminal court required to report its disposition of the child to the juvenile court? The Tennessee statutes do not require the criminal court to report and apparently they do not. However, the Commissioner of Correction is required to report to the committing court at least once a year on the progress of any child committed to the department of correction. "The child, however, does have a statutory remedy to challenge the waiver. Section 37-273 provides that `any disposition' of a child by the juvenile court may be appealed by `either party' to the circuit court which shall hear the testimony of the witnesses and try the case de novo. This is a notable departure from the statutory certiorari of the 1911 Act. Section 37-273 by implication also requires the juvenile judge to make a written finding of fact upon which his judgment was based. However, the finding of fact is apparently limited declaring the child `incorrigible' or finding `probable cause'." Thus we have this writer's interpretation of the language of the Code to the effect that unquestionably from the order of the Juvenile Court finding the child incorrigible, or the jurisdiction of the Juvenile Court waived over the child and the child transferred to the Criminal Court, the juvenile does have the right to an appeal. We think this language of the writer makes sense and we adopt it as the view of this Court when a Juvenile Court makes this determination under T.C.A. § 37-264 that the Juvenile Court's jurisdiction should be waived and the child transferred to the Criminal Court and a final order of the Juvenile Court is handed down to this effect, that from this final order the child has an appeal to the Circuit Court where the question shall be heard de novo and a determination made by the Circuit Judge and his findings on the question are to be made by him so that if the case is further appealed the question is of very little doubt. The case would go from the trial court to the Court of Appeals where the hearing would be de novo with a presumption of the correctness of the trial court's finding. We hold that this order of the Juvenile Court after this hearing and its waiver to the Criminal Court was a final order as far as the Juvenile Court is concerned. The Supreme Court of Oregon in the Matter of Little, etc., as reported in 241 Or. 557, 407 P.2d 627, certiorari denied by the Supreme Court of the United States, 385 U.S. 902, 87 S. Ct. 208, 17 L. Ed. 2d 133, is absolutely on all fours with the question here presented. That court said this: "On January 16, 1965, the juvenile court, following a three-day hearing held pursuant to ORS 419.533 remanded the defendant to the circuit court. The defendant appealed from the remand. The state moved to dismiss the appeal. The 307 order of the remand, being a final order as far as the juvenile court is concerned, is appealable. ORS 419.561. We turn to the merit." As far as we can find there has only been one case appealed since the present statute went into effect, that is, Lokey v. Griffin, 45 Tenn. App. 236, 322 S.W.2d 239. There were a number of questions involved in this reported case and some of them relate to the questions here involved. That court says that after reading T.C.A. § 37-273 it "was of the opinion that upon an appeal from the action of the Juvenile Court the Circuit Court was required to make an independent adjudication of the custody or disposition of said children and that it appeared to this court that His Honor the Trial Judge had failed to do so * * ." In other words, that court held that it was the duty of the Circuit Judge to make a finding in the case. We denied certiorari in this case, Lokey v. Griffin, supra, because we felt that the conclusions reached and the reasoning for them were correct. That court among other things said, insofar as it affects related questions now before us, that: "The effect of this act of the Legislature is to vest in the State of Tennessee as parens patriae a right to the custody of said children superior to the right of either parent. * * "Under the provisions of Section 37-273 any order of the Juvenile Court making disposition of a child is subject to a review by an appeal to the Circuit Court where a trial is to be had de novo. This was done in the present case." Lastly, we come to Kent v. United States, 383 U.S. 541, 86 S. Ct. 1045, 16 L. Ed. 2d 84, wherein among other things it was held that the Juvenile Court was not authorized to waive jurisdiction over a minor without a hearing and the minor was entitled to effective assistance of counsel and after the hearing and the waiver of jurisdiction of the child from the Juvenile Court to the Criminal Court or the Circuit Court in that instance that the child must have a statement of reasons for it. This decision was not given retroactive effect. Many things are said in relation to a similar act with that involved in the present case, and we quote at length from this opinion because we feel that it is absolutely applicable to our determination of these questions when a juvenile is involved. That court said very aptly that whether or not a Juvenile Court should waive its jurisdiction over a child was not that the court had a license for an arbitrary procedure in doing so but that the court should have considerable latitude to determine the question of whether or not the child should be thus treated. The court further said: "We do not consider whether, on the merits, Kent should have been transferred; but there is no place in our system of law for reaching a result of such tremendous consequences without ceremony without hearing, without effective assistance of counsel, without a statement of reasons * * * "The theory of the District's Juvenile Court Act, like that of other jurisdictions, is rooted in social welfare philosophy rather than in corpus juris. Its proceedings are designated as civil rather than criminal. The Juvenile Court is theoretically engaged in determining the needs of the child and of society rather than adjudicating criminal conduct. The objectives are to provide measures of guidance and rehabilitation for the child and protection for society, not to fix criminal responsibility, guilt and punishment. The State is parens patriae rather than prosecuting attorney and judge. But the admonition to function in a `parental' relationship is not an invitation to procedural arbitrariness * * * "It is clear beyond dispute that the waiver of jurisdiction is a `critically important' action determining vitally important statutory rights of the juvenile. 308 The Court of Appeals for the District of Columbia has so held. See Black v. United States, supra [122 U.S.App. D.C. 393, 355 F.2d 104]; Watkins v. United States, 119 U.S.App.D.C. 409, 343 F.2d 278 (1964). The statutory scheme makes this plain. The Juvenile Court is vested with `original and exclusive jurisdiction' of the child. This jurisdiction confers special rights and immunities. He is, as specified by the statute, shielded from publicity. He may be confined, but with rare exceptions he may not be jailed along with adults. He may be detained, but only until he is 21 years of age. The court is admonished by the statute to give preference to retaining the child in the custody of his parents `unless his welfare and the safety and protection of the public can be adequately safeguarded without * * removal.' The child is protected against consequences of adult conviction such as the loss of civil rights, the use of adjudication against him in subsequent proceedings, and disqualification for public employment." It is further said: "The net, therefore, is that petitioner then a boy of 16 was by statute entitled to certain procedures and benefits as a consequence of his statutory right to the `exclusive' jurisdiction of a Juvenile Court. In these circumstances, considering particularly that decision as to waiver of jurisdiction and transfer the matter to the District Court was potentially as important to petitioner as the difference between five years' confinement and a death sentence, we conclude that, as a condition to a valid waiver order, petitioner was entitled to a hearing, including access by his counsel to the social records and probation or similar reports which presumably are considered by the court, and to a statement of reasons for the Juvenile Court's decision. We believe that this result is required by the statute read in the context of the constitutional principles relating to due process and the assistance of counsel." We have quoted these things as excellent guidelines for trial courts to follow in the adjudication of juvenile rights. The adjudication of waiver, that is a transfer from the Juvenile Court to the Criminal Court, is indeed a very serious proposition because it contemplates criminal sanctions. After having given the matter full consideration and making an independent investigation along with the excellent briefs filed herein, we are of the opinion that the juvenile under such conditions is entitled to an appeal and is entitled to have his appeal heard de novo to determine the questions here involved. The case is reversed and remanded to the Circuit Court for a hearing in line with what is said herein.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527181/	221 F. Supp. 1003 (1963) UNITED STATES of America ex rel. Anthony PERPIGLIA v. Alfred T. RUNDLE, Warden State Correctional Institution, Philadelphia, Pennsylvania. Misc. No. 2495. United States District Court E. D. Pennsylvania. September 25, 1963. 1004 1005 Paul Leo McSorley and John F. X. Purcell, Philadelphia, Pa., for petitioner[] Gordon Gelfond, Asst. Dist. Atty., for Commonwealth of Pennsylvania. FREEDMAN, District Judge. This is a habeas corpus proceeding in which petitioner attacks his pleas of guilty and the sentence imposed thereon in a State court. I Petitioner was represented by counsel when he pleaded guilty on July 30, 1947, before Judge Harry S. McDevitt in the Court of Quarter Sessions of the Peace of Philadelphia County to five bills of indictment, charging burglary, larceny, robbery, receiving stolen goods and aggravated assault and battery with intent to kill. On September 4, 1947, he was sentenced by Judge McDevitt to imprisonment for terms aggregating 50 to 100 years. After serving nine years in the Eastern State Penitentiary petitioner obtained a commutation of his sentence by the Governor and was released on December 14, 1956.[1] Less than six months later petitioner was arrested for similar offenses committed in the short period of his freedom. He was convicted of these offenses by a jury after a plea of not guilty and on June 11, 1958, he was sentenced by Judge Eugene V. Alessandroni to imprisonment for a term of 10 to 20 years on the charge of attempted burglary and a term of 3½ to 7 years on the charge of assault and battery with intent to kill, the sentences to run consecutively from the expiration of the earlier, commuted sentences. The Pennsylvania Board of Parole thereupon ordered him recommitted for violation of parole and he is now confined pursuant to the order of recommitment. The maximum term of imprisonment on the sentences imposed by Judge McDevitt will not expire until January 14, 2049. On their expiration petitioner will be required to serve the sentences imposed by Judge Alessandroni, which total a minimum of 13½ years and a maximum of 27 years. The convictions before Judge Alessandroni were attacked by a petition for a writ of error coram nobis filed by the defendant in 1959. A hearing on the writ of error coram nobis apparently was held in November 1959, but no decision has yet been rendered.[2] In 1960 petitioner challenged the sentences imposed by Judge McDevitt by a petition for habeas corpus in the State courts. The Court of Quarter Sessions, apparently without a hearing, dismissed the petition. Commonwealth ex rel. Perpiglia v. Banmiller, 25 Dall. & C.2d 318 (1961). The Superior Court of Pennsylvania affirmed in a per curiam opinion. Commonwealth ex rel. Perpiglia v. Banmiller, 1006 196 Pa.Super. 311, 175 A.2d 334 (1961). The Supreme Court of Pennsylvania refused an allocator, 197 Pa.Super. xxxi, and certiorari was denied by the Supreme Court of the United States. Perpiglia v. Banmiller, 371 U.S. 894, 83 S. Ct. 193, 9 L. Ed. 2d 126 (1926). Petitioner has plainly exhausted his available State court remedies. II Petitioner's basic claim is that his pleas of guilty and his confessions which preceded them were coerced by the police and that his conviction therefore was obtained in violation of the Due Process Clause of the Fourteenth Amendment. The Commonwealth would have us disregard the circumstances surrounding the confessions and pleas because of the general principle that a plea of guilty made with the advice of counsel bars a subsequent claim on habeas corpus that the evidence against the defendant was illegally obtained. See United States v. Gallagher, 183 F.2d 342, 344 (3d Cir. 1950), cert. den. 340 U.S. 913, 71 S. Ct. 283, 95 L. Ed. 659 (1951); Broadus v. Lowry, 245 F.2d 304 (6th Cir. 1957), cert. den. 355 U.S. 858, 78 S. Ct. 88, 2 L. Ed. 2d 65. A plea of guilty forecloses a defense, but it does not seal off subsequent inquiry whether the plea itself was freely and voluntarily entered. Waley v. Johnston, 316 U.S. 101, 62 S. Ct. 964, 86 L. Ed. 1302 (1942). The question in such a case is not the guilt or innocence of the defendant, but rather the voluntariness of his plea. Kercheval v. United States, 274 U.S. 220, 224, 47 S. Ct. 582, 71 L. Ed. 1009 (1927). On this issue the details of his detention and confession are relevant. United States v. Morin, 265 F.2d 241, 245 (3d Cir. 1949). See also Com. of Pa. ex rel. Herman v. Claudy, 350 U.S. 116, 118, 122, 76 S. Ct. 223, 100 L. Ed. 126 (1956). Even the explicit avowal by a defendant in open court that his plea of guilty was not coerced does not foreclose inquiry as to its voluntariness, although it is, of course, evidential on the issue. United States ex rel. McGrath v. La Vallee, 319 F.2d 308 (2d Cir. 1963); United States v. Tateo, 214 F. Supp. 560, 564 (S.D.N.Y.1963). We must, therefore, make a broad inquiry into the "totality of the circumstances" (See Fikes v. Alabama, 352 U.S. 191, 197, 77 S. Ct. 281, 1 L. Ed. 2d 246 (1957); Blackburn v. Alabama, 361 U.S. 199, 206, 80 S. Ct. 274, 4 L. Ed. 2d 242 (1960)) preceding the petitioner's guilty plea. And in so doing we must not permit the probable truth or falsity of his confessions to cloud the inquiry whether the law enforcement officials of the State by their conduct brought about confessions which were not freely self-determined. Rogers v. Richmond, 365 U.S. 534, 543-544, 81 S. Ct. 735, 5 L. Ed. 2d 760 (1961). III Some time in April or May of 1947[3] petitioner, who was then 20 years of age, was sentenced by Judge Curtis Bok in the Court of Quarter Sessions of Philadelphia County to the Pennsylvania Industrial School at Camp Hill for an indefinite period after a plea of guilty to a charge of attempted burglary. On June 19, 1947, while he was so confined, Detectives Driscoll and Cammittee of the Philadelphia police obtained custody of him on the authority of a writ of habeas corpus issued earlier that day by Judge McDevitt. The writ commanded the Superintendent of the Pennsylvania Industrial School to produce the body of Perpiglia in the Court of Quarter Sessions, Room 453, City Hall, Philadelphia, on the following day, June 20th. Detective Driscoll signed a receipt for the body of the petitioner in which it is recited that his delivery had been required by a writ of habeas corpus ad testificandum, and that he was to be safely kept and returned to the Pennsylvania Industrial School "in due season". (Petitioner's Exhibit 3.) Detectives Driscoll and Cammittee did not bring the prisoner before the Court 1007 of Quarter Sessions on June 20th, nor was he produced before any other tribunal for the purpose of testifying. Instead, when they arrived in Philadelphia with their prisoner on June 19, 1947, the two detectives lodged him in the cellblock of the Central Police Station in City Hall. For the next seven or eight days he remained there without being brought before a judge or given a hearing before a magistrate and without any charges being preferred against him. In the cellblock were confined many other suspects who were undergoing questioning by the detectives. Petitioner was subjected daily and at all hours to questioning regarding his participation in a great number of robberies and burglaries of which he was suspected. Frequently the detectives confronted him with implicating statements of other suspects and urged him to confess. The office of Detective Driscoll, who apparently was in charge of the investigation under Superintendent Richardson, adjoined the cellblock. The inmates therefore were peculiarly subject to his immediate control. He and his associates had complete freedom of entry at any time during the day or night. The cellblock itself was intended for the briefest custody. It lacked most of the bare amenities of a prison. There were no beds and the prisoners slept either on cots or on the floor. There were no recreational facilities, no adequate opportunity for exercise, and sanitation facilities were meagre. After seven or eight days petitioner, who had been kept from communicating with his family and was without counsel, signed a confession admitting his participation in a robbery. He was then promptly brought before a magistrate in Central Police Court in City Hall. The magistrate, after hearing testimony of Detective Driscoll regarding the robbery and considering the statement signed by the petitioner, held him without bail and committed him to the Philadelphia County Prison to await the action of the Grand Jury. Petitioner, however, was never transferred to the County Prison to which he was committed. Instead, the police continued to keep him as their prisoner in the Central Police Station, where he remained until his sentence on September 4, 1947, with one interruption on July 30, 1947, when he was arraigned. After the hearing before the magistrate petitioner's mother was permitted to visit him. He urged her to retain counsel for him, and she ultimately obtained the services of Martin G. Stein, Esquire, a Philadelphia lawyer who is now deceased. On July 30, 1947, petitioner was arraigned along with 20 other defendants before Judge McDevitt on many bills of indictment. The transcript of the proceeding notes Mr. Stein's presence on behalf of the petitioner, although the petitioner testified that he did not see him there. The transcript does not show the entry of pleas at that time, but it is agreed on all sides that it was at this hearing that petitioner pleaded guilty to the five bills of indictment on which he was subsequently sentenced.[4] After the entry of his pleas on July 30, 1947, petitioner was again returned to confinement by the Philadelphia police in the Central Police Station in City Hall. His questioning continued there from that time until September 4, 1947, when he and many other defendants were brought before Judge McDevitt for sentencing. Much has been said before me regarding the relatively brief discussion which preceded the sentencing of petitioner on September 4, 1947. The transcript of that date (pp. 41-43) shows that many defendants were being sentenced 1008 after brief statements by them or their counsel. When petitioner's case was called the following occurred: "MR. STEIN: This defendant has been charged with robbery and burglary. He pleaded guilty to all the charges, 26 altogether. They were all committed this is the peculiar part of it in a period of five months, from October, 1946, to the early part of April, 1947. There is very little can be said for him because he has squandered his ill-gotten gain, and no one profited from it, not even himself. He has been previously arrested. "BY MR. STEIN: (Addressing the defendant) "Q How old are you? "A 20. "Q You were arrested before this? "A Yes, sir. "Q When? "THE COURT: 1944, when he was a juvenile, assault and battery, threat to do bodily harm. "1944, larceny of an automobile, operating without the owner's consent. Sent to the Municipal Court and sent home. That is why he is here today. "1947, burglary. Some he pleaded guilty to. "1947, pleaded guilty, sent to White Hill. Burglary. "1947, violation of the Firearm Act. "1944, burglary, larceny of an automobile. Municipal Court and sent home. "1944, burglary, and sent to the County Prison. "1947, larceny of an automobile. "1944, larceny of an automobile, again the Municipal Court. "MR. STEIN: When he was in White Hill all these other charges were discovered. He is now under sentence to White Hill. "SUPERINTENDENT RICHARDSON: This man here is one of the worst criminals we have had to contend with since we had Stinger. He is so mean he even cheated his own crowd. They got $2200. and he told his associates he only got $600. He is the fellow that always had a gun in his possession, and broke up the gun and got rid of it because he thought they would be the evidence would be discovered from previous shootings that took place. This fellow didn't give us any cooperation at all. The only thing he would admit, when he was boxed with the rest of the defendants he admitted his part. He hasn't even scratched the surface on what he done. "THE COURT: You say the worst since Stinger? "SUPERINTENDENT RICHARDSON: Yes, sir. He is a cold-blooded criminal at the age of 20. "THE COURT: Fifty to one hundred in the Penitentiary." The formal sentence was divided into five sentences of 10 to 20 years each, to run consecutively. IV Petitioner claims that while he was detained in the custody of the police he was repeatedly subjected to beatings and threats of additional violence if he did not confess. He claims that the police told him that Judge McDevitt would follow whatever recommendations Superintendent Richardson would make as to sentence and that he was urged to plead guilty in order not to offend the police and through them, the Judge. There was indeed opportunity for abuse of power in the unlimited control which the detectives exercised over the petitioner, unchecked as it was by any fear of judicial supervision or interference. In these circumstances the police must have been under a strong temptation to express their frustration when petitioner refused to confess, and violence 1009 of some kind as the spontaneous result of defying them would not have been too remote a possibility. I find, however, that petitioner has not met the burden of proof of his claim of physical violence. He testified to acts of violence, but I do not feel justified in relying on his testimony in this regard. It was too vague for one who had suffered the beatings he claimed and I do not accept it or the inadequate efforts at corroboration by his mother and his witness Schiavo, especially over the positive denials by Detective Driscoll.[5] V The finding that there was no physical violence does not end our inquiry. For the Supreme Court has made it clear that "coercion can be mental as well as physical, and that the blood of the accused is not the only hallmark of an unconstitutional inquisition * * [and] that the efficiency of the rack and the thumbscrew can be matched, given the proper subject, by more sophisticated modes of `persuasion.' A prolonged interrogation of an accused who is ignorant of his rights and who has been cut off from the moral support of friends and relatives is not infrequently an effective technique of terror." Blackburn v. Alabama, 361 U.S. 199, 206, 80 S. Ct. 274, 279, 4 L. Ed. 2d 242 (1960). See also Reck v. Pate, 367 U.S. 433, 440, 81 S. Ct. 1541, 6 L. Ed. 2d 948 (1961); Spano v. New York, 360 U.S. 315, 323-324, 79 S. Ct. 1202, 3 L. Ed. 2d 1265 (1959). The first confession which the petitioner made seven or eight days after the police took him into their custody was the product of coercion. He had every right to believe that the police had the power and authority of the Judge behind them, for it was the Judge's signature on the writ of habeas corpus which had placed him in their hands. Their power over the prisoner was so great that they were free to deny him the most elementary rights unless he first acknowledged his guilt. During this time he was without benefit of counsel; and only after he had confessed was he permitted to communicate with his mother and, through her, to secure the assistance of counsel. The power of the police was made clear to him by their failure to schedule a hearing before a magistrate until after he had confessed. Their continued power is shown by their retention of custody over him after the magistrate had committed him to the County Prison. I reject the explanation by Detective Driscoll that the prisoner preferred the police cellblock to the County Prison because it was more convenient for visitors. It is unlikely that they disregarded the commitment out of sensitivity to a supposed preference of the prisoner. In any event, it was their duty to obey the magistrate's order of commitment. Their continued detention of him shows that their domination was unchanged after the magistrate's hearing. The custody of the petitioner by the police continued throughout a 77-day period. Even after he had pleaded guilty he continued to be their prisoner rather than a citizen awaiting sentence. It must have appeared to the petitioner that he was alone, powerless, friendless and unaided. He had no rights except those which the police were willing to grant. In the circumstances, physical coercion must have hung over the prisoner as an ever present, even if unspoken, threat. The circumstances, even without physical violence, offend against the most elementary conceptions of the rule of law and the freedom of the individual. They present an ugly parallel to the subjection of the individual to the power of the State in totalitarian regimes. I find that the confessions secured by the police both before and after the magistrate's hearing were the product of coercion. It was in the shadow of this background of effective police coercion that the pleas of guilty were made. Such 1010 a plea, secured by coercion, even though the defendant is represented by counsel, is subject to attack on habeas corpus. Waley v. Johnston, 316 U.S. 101, 62 S. Ct. 964, 86 L. Ed. 1302 (1942). It is the duty of the court in every case to exercise care that a plea of guilty is voluntarily made and if it is later shown to have been unfairly obtained, or given through ignorance, fear or inadvertence, it will be set aside. The language of Mr. Justice Butler in Kercheval v. United States, 274 U.S. 220, 223-224, 47 S. Ct. 582, 71 L. Ed. 1009 (1927), is now a classic statement of the principle: "Out of just consideration for persons accused of crime, courts are careful that a plea of guilty shall not be accepted unless made voluntarily after proper advice and with full understanding of the consequences. When one so pleads he may be held bound. * * But, on timely application, the court will vacate a plea of guilty shown to have been unfairly obtained or given through ignorance, fear or inadvertence."[6] Here the arraignment Judge was under a special obligation to inquire affirmatively into the voluntariness of the plea, since he himself had set in motion the events which produced the coerced confessions. It does not matter whether Judge McDevitt actually was aware of what transpired between the police and the petitioner regarding his confessions or their threats that they had it in their power to have a severe sentence imposed if he did not cooperate with them. Viewing the circumstances, as one must, from the humble perspective of the defendant, who had been taken into custody by the authority of the Judge and then coerced into confessing, it would require a disregard of everyday reality to believe that he made his plea of guilty voluntarily when he tendered it to the same Judge, who thereupon accepted it without question. Affirmative inquiry by the Judge in an unclouded atmosphere, free from any prior linkage with the police, might well have revealed the lack of freedom which surrounded the plea of guilty. A formal impartiality was not enough, in these circumstances, to undo the impressions made on the prisoner by what had gone before. I find that the petitioner and his counsel were driven to the pleas of guilty by the totality of the circumstances from the time he was taken into custody on the writ of habeas corpus until he appeared before Judge McDevitt and entered his pleas of guilty. He was coerced by the pressure of the police and by their assumption of authority over him which justified the belief by him and his counsel that he had no alternative but to plead guilty. It is lamentable that this train of abuses was begun by a writ of habeas corpus issued under the authority of the early Act of February 18, 1785, 2 Smith's Laws 275, § 1, 12 P.S. §§ 1871-1873.[7] An Act which, as its title indicates,[8] was intended to prevent wrongful imprisonment and to secure the personal liberty of individuals[9] was instead employed as a weapon to secure the illegal confinement of a 1011 suspect. The Act was perverted into a warrant for inquisitorial practices, despite its purpose, recited in its preamble, to redress wrongful restraints.[10] Such abuse of the great writ for the protection of liberty was, according to the candid testimony of Dectective Driscoll, a widespread practice at the time. This indicates the climate which surrounded petitioner and in which his counsel was called upon to act on his behalf. The Commonwealth contends that petitioner was sufficiently protected by the presence of counsel. Petitioner answers this by the claim that Mr. Stein was so inadequate in representing him that for all practical purposes he was no better off than he would have been without counsel. Even if the recently announced principle of Gideon v. Wainwright, 372 U.S. 335, 83 S. Ct. 792, 9 L. Ed. 2d 799 (1963), is applicable to this proceeding, which occurred in a State court 16 years ago,[11] the record does not justify a finding that Mr. Stein's representation of petitioner was so inadequate that he was in effect denied the assistance of counsel. Mr. Stein was brought into the case only after the police no longer feared a lawyer's presence. They had by that time extracted confessions from petitioner and felt free to bring him before a magistrate. Even after Mr. Stein visited the petitioner in the police cellblock the police continued to keep him in confinement and at their beck and call for interrogation. They obtained additional confessions from him in this later period as a result of repeated questioning and confrontation with other suspects. Faced with his client's numerous confessions and acknowledgments that he had participated in a series of crimes, some of which he was unable to recall, Mr. Stein was placed in an extremely difficult position. If he had sought the petitioner's transfer from the custody of the police to the County Prison he undoubtedly would have offended them. If he had sought petitioner's release from detention he would have succeeded at best in having him returned to the Pennsylvania Industrial School. In either case, since the petitioner had been delivered to the police by the authority of Judge McDevitt, Mr. Stein had every right to believe that the same authority would have been asserted once again. Moreover, he would have run the risk of offending the Judge by his very success. Indeed, in these circumstances a plea of not guilty might well have seemed an act of defiance of the police, likely to offend the Judge as an arbitrary impediment to a swift sentence where guilt had already been acknowledged. 1012 It would be unfair to Mr. Stein not to recall that at the time he represented the petitioner the rights of an accused were more summarily dealt with than they are today. Mr. Stein should not be declared professionally incompetent because he did not contend against the conduct of the police and the Judge with the freedom which only in recent years has come to be generally acceptable. He was acting at a time when it was widely held that the ascertainment of the guilt of the prisoner was more important than the means by which it had been achieved. I find that Mr. Stein was not inadequate in his representation of petitioner or in his advice that he plead guilty. I find, however, that notwithstanding the assistance of counsel, petitioner's pleas of guilty were the direct product of coercion by the police, initiated by an abuse of process sanctioned by the Judge who ultimately sentenced him. The pleas are therefore invalid under the Due Process Clause of the Fourteenth Amendment. VI Since I find the pleas of guilty invalid because of coercion, I shall deal only briefly with the claims petitioner makes regarding the duration of the sentence.[12] The sentence was severe, even though for a man so young the petitioner had already committed a good many acts of armed violence, such as burglary and robbery.[13] Indeed, it appears that the sentencing Judge himself did not intend that the petitioner would serve out even the minimum term. Mr. Stein's affidavit states that he called upon the Judge immediately after the sentence and was assured that he would facilitate the granting of parole after petitioner had served six or seven years. Whatever may be thought of such a practice, it cannot serve to make the sentence invalid when it was entered. Even in the light of the Judge's intention that petitioner's imprisonment would end in six or seven years, the sentences totalling 50 to 100 years are not subject to modification or invalidation on habeas corpus because they may appear to me unduly harsh. It is not my function, nor is it within my power, to review the appropriateness of the punishment to fit the crime or the criminal. The question is being debated even now whether appellate review should be provided to remedy widespread disparities in sentence. Such a remedy, however, does not now exist in Pennsylvania or in the Federal courts, and it certainly is not available on habeas corpus. "The sentence being within the limits set by the statute, its severity would not be grounds 1013 for relief here even on direct review of the conviction, much less on review of the state court's denial of habeas corpus." Townsend v. Burke, 334 U.S. 736, 741, 68 S. Ct. 1252, 1255, 92 L. Ed. 1690 (1948). Related to the criticism of the length of the sentence is the petitioner's claim that the Judge in narrating his earlier criminal record inadvertently included one of the offenses for which he was then being sentenced. (See Transcript of September 4, 1947, p. 42.) The Judge's error does not have the full significance of the action of the sentencing judge in Townsend v. Burke, 334 U.S. 736, 68 S. Ct. 1252, 92 L. Ed. 1690 (1948). There the judge taunted and mocked the defendant's claim of innocence of prior offenses, when in fact the defendant spoke the truth and had actually been acquitted. The defendant did not have the benefit of counsel nor was he advised of his right to counsel. He had pleaded guilty and stood alone before the judge for sentence. The Supreme Court set aside the sentence on habeas corpus.[14] In the present case, the Judge's reference to the current offense as part of the past criminal record occurred in the presence of defendant's counsel; the defendant had pleaded guilty to the offense which was mentioned as an arrest; and the record does not reveal unjudicial conduct in dealing with the criminal record which was a prominent aspect of the Townsend proceedings. In any event, it is unnecessary to determine whether the circumstances here bring the case within the principle of the Townsend case, since the sentence must be set aside because it was imposed on an invalid plea of guilty. ORDER And now, September 25, 1963, the petition of Anthony Perpiglia for a writ of habeas corpus is granted. Issuance of the writ will be stayed for 60 days, within which time the Commonwealth of Pennsylvania may either seek review of this decision or determine to proceed against the petitioner by rearraignment on the bills of indictment so that he may plead guilty or not guilty, after which the indictments may be proceeded with in accordance with law. NOTES [] Mr. McSorley was appointed by the Court from the Federal Defense Panel to represent petitioner, and Mr. Purcell assisted him. They have the thanks of the Court for their volunteer services. [1] The commutation by the Governor, dated November 13, 1956, commuted the minimum sentence to 9 years and 4 months, expiring on November 17, 1956, but apparently the prisoner was not released until December 14, 1956. [2] See Commonwealth's Exhibit 3; N.T. 45, 103, 240-244. [3] The petition fixes the date as April 4, 1947; Rundle's answer, ¶ 2, specifies May 20, 1947, and the Exhibits give various dates. [4] The transcript of September 4th (p. 46) shows (in another case) that pleas of guilty had been taken by Judge McDevitt on July 30th. While the record is not clear, it seems that there were 38 bills of indictment against petitioner, and that although he was later sentenced on five, he pleaded guilty to many more. It is admitted that he pleaded not guilty to one indictment. [5] Detective Cammittee was unavailable as a witness and so, by reason of illness, was Superintendent Richardson. [6] See Machibroda v. United States, 368 U.S. 487, 493, 82 S. Ct. 510, 513, 7 L. Ed. 2d 473 (1962); Waley v. Johnston, 316 U.S. 101, 62 S. Ct. 964, 86 L. Ed. 1302 (1942); United States ex rel. McGrath v. La Vallee, 319 F.2d 308, 311 (2d Cir. 1962); United States v. Morin, 265 F.2d 241, 245 (3d Cir. 1959); United States ex rel. Jackson v. Rundle, 219 F. Supp. 538 (E.D.Pa.1963). [7] The statutory legend on the writ, "By Act of Assembly one thousand seven hundred and eighty-five", its terms, and its signature by the Judge make it clear that it was issued under the Act of 1785. We need not, therefore, concern ourselves with the fullest reaches of the common law writ of habeas corpus as distinguished from the statutory writ under the Act of 1785. See e. g. 3 Blackstone's Commentaries * 129-35; Williamson v. Lewis, 39 Pa. 9 (1861); Commonwealth ex rel. Levine v. Fair, 394 Pa. 262, 278 (1958); Commonwealth v. Gibbons, 9 Pa.Super. 527 (1899). [8] The Act is entitled "An ACT for the better securing personal liberty, and preventing wrongful imprisonments." [9] The Act provides "that if any person shall be or stand committed or detained for any criminal or supposed criminal matter * * , it shall and may be lawful to and for the person so committed or detained, or any one on his or her behalf, to appeal or complain to any Judge * ". The Judge is authorized to award and grant the writ "directed to the person * * in whose custody the prisoner is detained, returnable immediately before the said Judge * * ." The officer, sheriff, gaoler, keeper or other person to whom the writ is directed is required to "make return of such writ, and bring or cause to be brought the body of the prisoner unto or before the Judge * , before whom the said writ is made returnable, and, in case of his absence, before any other of the Judges * * aforesaid, and shall then likewise specifically and fully certify the true cause or causes of the commitment and detainer of the said prisoner * * : And thereupon the Judge * * before whom the prisoner shall be so brought, shall within two days discharge the prisoner from imprisonment, taking his or her appearance at the next court of Oyer and Terminer, General Gaol Delivery, or General Quarter Sessions * * * unless it shall appear to the said Judge * * , that the party so committed is detained upon legal process, order or warrant", etc. [10] The preamble reads: "WHEREAS personal liberty is a principal blessing derived from free constitutions of government, and certain methods of proceeding should be prescribed, so that all wrongful restraints thereof may be easily and speedily redressed: Be it therefore enacted" , etc. [11] See United States ex rel. Craig v. Myers, 220 F. Supp. 762 (E.D.Pa.1963). [12] The Commonwealth concedes that the sentence on Bill No. 9, September Sessions 1947, was illegal because it exceeded the statutory maximum. It would undoubtedly be corrected on application to the State court. [13] As late as his 1956 petition for commutation (Commonwealth's Exhibit 1), in which complaint is made of the validity of the pleas of guilty and the sentence as well as the inadequacy of his former counsel, he states: "In the Fall of 1946, at the age of 17, I became involved with a group of young men and men who, without any definite planning, from time to time set out in small groups and broke into stores or warehouses which seemed likely to contain money. There was no organization, and the persons who went along were simply those who by chance happened to be on the corner and went along. Some of the group scarcely knew others in the group. From the Fall of 1946 to April of 1947, a long series of burglaries resulted. * " (¶ 15(a)). "Looking back it seems incredible to me that with my fine parents I allowed myself to be led into such juvenile misdemeanors. Before I knew it I was looked upon as incorrigible. The offenses in which I took part from the Fall of 1946 until the Spring of 1947, constitute an almost continuous `spree' in which there seems to have been completely absent any sense of moral obligation to the community, really, an absence of any common sense at all. When I was arrested and sent to White Hill, I had made up my mind that I was fortunate in having that `spree' cut short and resolved never to get in trouble." (¶ 17). [14] Mr. Justice Jackson there said that the judge's conduct savored of "foul play or of carelessness". "[O]n this record we conclude that, while disadvantaged by lack of counsel, this prisoner was sentenced on the basis of assumptions concerning his criminal record which were materially untrue. Such a result, whether caused by carelessness or design, is inconsistent with due process of law, and such a conviction cannot stand. * * "It is not the duration or severity of this sentence that renders it constitutionally invalid; it is the careless or designed pronouncement of sentence on a foundation so extensively and materially false, which the prisoner had no opportunity to correct by the services which counsel would provide, that renders the proceedings lacking in due process. "Nor do we mean that mere error in resolving a question of fact on a plea of guilty by an uncounseled defendant in a non-capital case would necessarily indicate a want of due process of law. Fair prosecutors and conscientious judges sometimes are misinformed or draw inferences from conflicting evidence with which we would not agree. But even an erroneous judgment, based on a scrupulous and diligent search for truth, may be due process of law. "In this case, counsel might not have changed the sentence, but he could have taken steps to see that the conviction and sentence were not predicated on misinformation or misreading of court records, a requirement of fair play which absence of counsel withheld from this prisoner." (334 U.S. pp. 740-741, 68 S.Ct. pp. 1252, 1255, 92 L. Ed. 1690).	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527187/	82 Md. App. 166 (1990) 570 A.2d 866 JOHN F. FOWLER, ET AL. v. WILLIAM FITZGERALD, ET AL. Nos. 598-600, September Term, 1989. Court of Special Appeals of Maryland. March 6, 1990. Edward H. Myer, III (Barbour, Zverina & Myer, P.A., on the brief), La Plata, for appellants. David F. Jenny (Christy Holt Chesser, on the brief), Leonardtown, for appellees. Argued before MOYLAN and WILNER, JJ., and JAMES S. GETTY (retired Judge, Specially Assigned). WILNER, Judge. The principal dispute in this case involves an issue that has plagued the Court of Appeals and its Standing Committee on Rules of Practice and Procedure for more than a decade: what, if any, limits there should be on fees paid to an auctioneer who, on behalf of a trustee or sheriff, conducts a forced sale of real property. The underlying facts here are not in dispute. In 1987, three judgments were entered against Claude and Delores Goldsmith in the Circuit Court for St. Mary's County. One, in the amount of $51,980, was in favor of John Fowler and Fred Pumphrey; the second, in the amount of $11,250, was in favor of John and Tracy Fowler; and the third, also in the amount of $11,250, was in favor of Emmet and Virginia Potter. On November 10, 1987, the sheriff levied execution on certain real property owned by the Goldsmiths. That property lots 140, 141, and 142 Shenandoah Drive was already subject to two mortgage liens. Before any sale of the property could take place, the Goldsmiths filed a petition in bankruptcy, thereby staying further proceedings. In September, 1988, the Bankruptcy Court approved a stipulation of settlement allowing the sheriff's sale to proceed, subject to the following conditions: (1) The judgment creditors would bid at least $105,000 for the property, including the two mortgage liens; (2) The Goldsmiths would receive $9,309 out of the proceeds of sale as their claimed exemption of equity "after payment of or credit to purchaser for the first and second liens on the subject properties but prior to any distribution of proceeds to [the judgment creditors]"; (3) The judgment creditors would reduce their claims to $45,000, in the aggregate; and (4) Any funds received at the sheriff's sale in excess of the two liens, the debtors' exemption, and the judgment creditors' liens in the amount of $45,000 would be paid to the bankruptcy estate. With the bankruptcy stay lifted, the execution sale took place on November 3, 1988. Although a deputy sheriff was in attendance, in accordance with a general policy of the sheriff an auctioneer, William J. Fitzgerald, actually conducted the sale. Prior to the sale, counsel for the judgment creditors announced that the property was subject to the two mortgage liens which, at the time, had an aggregate balance of $83,768. According to the sheriff, 10 people appeared at the sale, three of whom submitted bids. The high bid was $27,000, which came from John and Tracy Fowler. In due course, the sheriff filed his report of sale and proposed distribution. The Report of Sale showed the high bid to be "$27,000 over and above the first and second mortgages totaling $83,768.54 effective total sale price $110,768.54." The proposed distribution showed a total sales price of $110,768. From that, the sheriff deducted a Sheriff's fee of $250, an auctioneer's fee of $4,430, and advertising expenses of $88, leaving $106,000 for distribution. Pursuant to the stipulation filed in the bankruptcy proceeding, the first $83,768 would go to the two mortgage lienholders, the Goldsmiths would get the next $9,309, and the balance of $12,923 would be applied against the $45,000 claim of the judgment creditors. It is evident from these documents, and was confirmed at oral argument, that the Fowlers, as successful bidders, did not in fact assume the mortgage debt but took the property subject to it. On December 16, 1988, John Fowler filed a petition to establish a different distribution. He proposed to show the gross sales price as $27,000, to credit against that price the $88 advertising cost, a $210 sheriff's fee, and the $9,309 due to the Goldsmiths, and to have the balance of $17,393 credited against the judgments. Aside from a $40 difference in the sheriff's fee, the only significant difference between Fowler's proposal and the sheriff's was the auctioneer's fee, which Fowler proposed to eliminate entirely. At a hearing held on the petition, Fowler asserted that (1) if an auctioneer's fee was proper at all, it should not come out of the funds received by the sheriff, for then the creditors rather than the debtors would be paying it, and (2) given the actual work done by the auctioneer, the fee was far too high. The evidence offered and taken at the hearing concerned the second complaint. Mr. Fitzgerald testified to the services he performed: "Well, I stood in front of the courthouse steps. I mingled around the crowd who was there and were the serious bidders and who was not serious bidders. I proceeded to read the announcement in the local newspaper that showed the sale was going to take place, and the legal description, and the balance of the ad. And, I conducted the sale of the property on the courthouse steps." There was no indication that Mr. Fitzgerald did any other work in connection with the sale. There is nothing to suggest that he searched out any potential bidders. He said that he spent "probably half an hour to an hour" on the matter that day. As noted, only three people entered bids. The fee of $4,430 derived from the sheriff's policy of paying auctioneers 4% of the gross sales price received in sales of real property. That policy was established in 1987 by a sergeant in the sheriff's office, who was instructed by the sheriff to "set up a policy for auctioneers for the judicial system." The sergeant contacted three auctioneers in the county, all of whom agreed to serve as auctioneers in sheriff's sales. He recounted: "I asked them what the fee for auctioneers was, and all three agreed this was the fees they were receiving, and we accepted those fees, four percent real estate and ten percent on personal property." No one other than the three auctioneers was consulted. Effective September, 1987, the sergeant continued, the sheriff's policy was to employ an auctioneer for every sheriff's sale and to pay the agreed-upon scale. That is what the sheriff agreed to pay Mr. Fitzgerald. Mr. Fowler offered evidence from a Michael Whitson, who described himself as a title abstractor who also worked as an auctioneer. Whitson opined that a reasonable fee for the work performed by Mr. Fitzgerald would be between $75 and $250. This was based on about 12 auctions he had conducted in St. Mary's County and on his review of courthouse records of other sales. Because Mr. Whitson had never conducted a sheriff's sale, however his auctioneering experience being solely with foreclosure sales the court struck his opinion testimony and ultimately entered an order ratifying the sheriff's report. The $250 sheriff's fee was approved based on a finding that the total sales price was $110,768, rather than $27,000, and the auctioneer's fee was approved based on the sheriff's practice of paying 4% of the total sales price. In this appeal, Mr. Fowler continues to challenge both fees. I. Sheriff's Fee Whether the sheriff's fee should be $250 or $210 depends entirely on whether the sales price is to be regarded as $110,768 or only $27,000. Md.Cts. & Jud.Proc.Code Ann. § 7-402 sets the fees collectible by a sheriff. Subsection (a)(6) allows the following fee for the sale of real property under execution or attachment: "One and one-half percent of the first $5,000; one percent of the second $5,000; and one-half of one percent of any amount in excess of $10,000. The sheriff shall collect a minimum of $1.50 and a maximum of $250 under the provisions of this paragraph." If the sales price upon which these percentages are based is $27,000, as contended by Fowler, the fee would indeed be $210; if the base price is $110,768, the maximum fee would be applicable. In Buckeye Development Corp. v. Brown & Shilling, 243 Md. 224, 220 A.2d 922 (1966), the Court had before it a number of challenges to a sheriff's sale of real property which, like the property here, was subject to two mortgage liens. The two liens totaled about $369,000. The sheriff accepted a bid of $15,750, from which he deducted in his Report a $415 auctioneer's fee and a $284 sheriff's fee. The debtor (Buckeye) challenged the acceptance of the $15,750 bid; it did not complain about the two fees deducted by the sheriff. Nonetheless, though agreeing with Buckeye's position as to the acceptance of the bid and remanding for a resale, the Court chose to comment on those two fees as well, finding both inappropriate. We shall discuss the matter of the auctioneer's fee later. As to the sheriff's fee, the Court noted the statute now codified as Cts. & Jud.Proc. art. § 7-402(a)(6), supra, and held, at 233: "Applying the rates set forth in the statute, the sheriff would appear to be entitled to $153.75. How a charge of nearly twice as much can be justified we are unable to say but counsel may wish to look into the matter if the property is resold." The $153.75 approved by the Court necessarily ignored the $369,000 of mortgage liens on the property; it was based solely on the $15,750 bid over those liens. Appellees here ask that we disregard this aspect of Buckeye because, as we shall see, the Legislature subsequently annulled the Court's holding as to the auctioneer's fee. That does not, however, serve to annul the holding as to the sheriff's fee, which apparently remains intact. There was no discussion in Buckeye as to why the mortgage liens should not be considered in determining the amount of the sheriff's fee. It does not appear from the Opinion that those liens were actually assumed by the buyer, and it may be that the Court believed, in that circumstance, that only the debtor's equity was sold and that the effective price for it was only the cash bid. Cf. Far. & Plan. Bank v. Martin, 7 Md. 342, 345 (1855). It may also be that the real concern of the Court was that the actual fee exceeded even the maximum allowed by the statute, which could explain the Court's statement that the sheriff "would appear to be entitled to $153.75," rather than a flat holding that that was the limit of his entitlement. Buckeye, supra 243 Md. at 233, 220 A.2d 922. Whatever may have impelled the Court to its conclusion, however, we are not free to disregard it. Solely on the basis of Buckeye, therefore, we conclude that the trial court erred in allowing the sheriff anything more than $210. II. Auctioneer's Fee As we indicated, in addition to the sheriff's fee, the Buckeye Court sua sponte addressed as well the auctioneer's fee of $415. It said as to that: "Whatever the practice may be in the several counties, we know of no statute or decision of this Court which permits the sheriff to employ an auctioneer and charge the cost thereof to the debtor. Nor are we aware of any reason why the sheriff, or one of his deputies, cannot conduct the auction at an execution sale.... It has been held that the sheriff cannot employ an auctioneer at the expense of the debtor without his consent.... This would seem to be the proper rule to be followed. The debtor might very well conclude it would be worth the cost of employing a professional auctioneer to have the bidders stimulated to a higher pitch of enthusiasm, but it seems to us an exorbitant price to pay for a service which can be performed equally as well, in most cases, by the sheriff or one of his deputies, and especially so when the charges of the sheriff are taken into account." Id. In 1970, the General Assembly nullified this aspect of Buckeye by enacting a law, now codified in Md.Cts. & Jud.Proc.Code Ann. § 11-503, providing, with an exception for Harford County not relevant here, that "if a sheriff is required to sell real or personal property as part of his official duties, he may employ an auctioneer of his choice and charge the costs of the sale to the debtor." The authority to employ an auctioneer and charge his or her fee against the debtor is now clear. Unfortunately, although the Code controls the fees that may be charged by the sheriff, it says nothing about the fees that can be charged by the auctioneer. There is a similar gap in the Md.Rules. A forced sale of real property can occur in three principal settings: through foreclosure of a mortgage or deed of trust; through a "judicial sale"; and through a sheriff's sale pursuant to a writ of execution or garnishment.[1] The legal bases for these respective proceedings are quite different, and so are some of the procedures attending them. In the case of a judicial sale, such as a tax sale or a sale in lieu of partition, and in the case of a foreclosure sale conducted pursuant to a power contained in the mortgage, the court itself is regarded as the vendor, and the trustee conducting the sale is considered to be the court's agent. See McCann v. McGinnis, 257 Md. 499, 263 A.2d 536 (1970); McCartney v. Frost, 282 Md. 631, 386 A.2d 784 (1978). That is the historical, and practical, reason why the trustee must report to the court and the court must, in the end, ratify the sale. The procedures governing foreclosure sales are set forth in Ch. 1100, Subt. W of the Md.Rules; those governing judicial sales appear in Subt. BR of that Chapter. A sheriff's sale, under traditional common law theory, arises in a different legal setting. As noted in Rorer, Judicial and Execution Sales § 46 (1873), quoted with approval in McCartney v. Frost, supra, 282 Md. 631 at 636, 386 A.2d 784. "`In making ordinary execution sales, simply by virtue of his office, the sheriff or marshal acts as the ministerial officer of the law, not as the organ of the court. He is not its instrument or agent, as in judicial sales, and the court is not the vendor. His authority to sell rests on the law and on the writ, and does not, as in judicial sales, emanate from the court. The functions of the court terminate at the rendition of the judgment, except where confirmation of the sale is the practice. The court does not direct what shall be levied or sold, or how the sale shall be made. The law is the officer's only guide.'" See also Andrews v. Scotton, 2 Bland. 636, 637 (1826), adding the notion, stemming from this theory, that while a judicial sale "is in no case binding and conclusive, until it has been expressly approved and ratified by the Court," if the sheriff "conforms to the established regulations applicable to all cases, (and he can sell in no other manner,) [a sheriff's] sale is final and valid as soon as it is made." As we shall see, that notion has been changed by the adoption, in 1984, of Md. Rule 2-644, which sets forth the procedures governing sheriff's sales. Although the bases of and procedures governing foreclosure, judicial, and sheriff's sales are different, there is at least one common denominator, and that is Md.Rule BR6, which dictates the procedure to be followed after a judicial sale. Rule BR6 requires the person making the sale to file a report of it with the court. In the case of real property, after appropriate public notice and consideration of any exceptions that may be filed, the court will ratify the sale if satisfied that it was fairly and properly made. Section b 5 of the Rule provides that, upon final ratification of the report, "the papers in the proceeding may pursuant to Rule 2-543 be referred to the auditor to state an account." The Rule is silent as to what occurs if the court chooses not to refer the papers to an auditor. Rule 2-543 deals with court auditors. It authorizes a court to refer to an auditor an action "in which it is necessary to examine, state, or settle accounts." It states the powers of an auditor, provides for a hearing before the auditor, and requires the auditor to file an account or report to the court. After considering the report and any timely exceptions that may be filed, the court then determines whether to ratify the report. The Subt. BR Rules, as we said, apply only to a "judicial sale." That term is defined in Rule BR1 as encompassing a sale of property subject to ratification by a court but excluding a foreclosure sale under the Subt. W Rules and "a sale under a writ of levy or garnishment." Rule BR 6 (and through it, Rule 2-543) is made applicable to those excluded proceedings, however, through special provisions in Rules W 74 and 2-644. Rule W 74 e, dealing with foreclosure proceedings, provides that "[t]he procedure following a sale made pursuant to this Subtitle shall be as provided in Rule BR 5 (Real Property Recording) and Rule BR 6 (Procedure Following Sale) of Subtitle BR (Sales Judicial), except that an audit is mandatory." Similarly, but with one important difference, Rule 2-644(d), dealing with sheriff's sales, provides that "[t]he procedure following the sale of an interest in real property shall be as prescribed by Rule BR 6, except that the provision of Rule BR 6 b 5 for referral to an auditor does not apply." To some extent, these procedural constructs preserve the traditional differences between sheriffs' sales on the one hand and judicial and foreclosure sales on the other. The exemption of sheriffs' sales from referral to a court auditor presumably arises from a recognition that the sheriff is not subject to the same degree of control by the court as a trustee. But by subjecting the sheriff to Rule BR 6 generally, the Court of Appeals necessarily determined that his independence from the court was by no means complete. In contrast to the principle stated by Chancellor Bland, the sale is not final and complete when made. Just like foreclosure and judicial sales, it too must be ratified by the court, and the court can examine its fairness. See McCartney v. Frost, supra, 282 Md. 631, 386 A.2d 784. Though setting out the general procedure to be followed in making and reporting these three kinds of forced sales, none of these Rules attempts, directly, to control the fees that may be charged by those persons conducting or superintending the sale. In cases of foreclosure and judicial sales, three categories of people have sought such fees: trustees named or appointed to conduct the sale, auctioneers employed to actually conduct it, and attorneys who provide some legal advice or service to the trustee. In the case of sheriff's sales, there are two categories of fee-seekers: the sheriff and the auctioneer, if one is employed. It is not uncommon, then, in any of these kinds of sales, for one party or another (usually the debtor or property owner) to complain about both the amount and the aggregation of fees charged as expenses of the sale. Traditionally, control over these fees, if there is any, has been left to local custom and practice. A clear underpinning of this, however, which both antedates the Maryland Rules and is implicit in them, is that, except as otherwise provided by supervening statute, the court has the authority to control both the amount and the aggregation of these fees. Nearly a century ago, it was pointed out that "[n]o trustee can be allowed to dispose of the proceeds without the express sanction of the court; if he pays away the proceeds of sale before ratification of the auditor's account he does so at his own risk." Miller, Equity Procedure as Established in the Courts of Maryland § 515 (1897). That express sanction is ordinarily given through the court's ratification or amendment of the auditor's account. In the case of a sheriff's sale, as we noted, the provision of Rule BR 6 authorizing referral to an auditor is not applicable. But control by the court is nonetheless implicit in Rule 2-644(f), which states: "The sheriff may withdraw from the proceeds of the sale all appropriate unpaid sheriff's expenses and fees incident to the enforcement proceedings. Unless otherwise ordered by the court, the sheriff shall distribute the balance of the proceeds of the sale, first to the judgment creditor in satisfaction of the amount owed under the judgment plus costs of the enforcement proceedings advanced by the creditor, and then, to the judgment debtor." (Emphasis added.) In the absence of any uniform State-wide rule governing these fees, some of the judicial circuits adopted local rules which, unfortunately, varied in both scope and content. All of these local rules provided for the compensation that may be allowed to a trustee who conducted a foreclosure or judicial sale; routinely, it was based on the proceeds obtained, subject to increase or decrease by the court in exceptional circumstances and, in some instances, to any provision in the underlying instrument. The provision for attorney's fees was more limited. All of the rules allowed for such fees where the instrument under which the sale is made provided for them; in most of the circuits, the rule permitted the court to charge such fees against the estate or the trustee's compensation, or to divide the fees between them as justice required. Whether, and to what extent, these local rules are still in effect is not entirely clear. Only three circuits the First, Second, and Third appear to have adopted local rules making specific provision for auctioneer's fees, although the continuing validity and effect of those rules seem in particular to be in some doubt. It does seem evident that those circuits, and others, allow such fees by custom or some form of administrative order. In Baltimore City, auctioneers' fees are governed by local ordinance. Balto. City Code, art. 2, § 11 allows a commission, in a court-ordered sale of real property, of $3,250 on the first $100,000 and 2 1/2% on the balance. First Circuit Rule BR 1 e provides that auctioneers (and appraisers) "shall be paid such fees and commissions as the Court may allow in the particular case." The judges in that circuit, we are informed, regard that Rule as remaining in effect. Second Circuit Rule BR 8 f established a minimum fee for the sale of real estate of $25 and a maximum fee of $200. That maximum, however, was subject to increase by the court "for good cause shown." The rule further provided that: "For these fees, [the auctioneer] shall not be required to perform any service prior to the actual sale to attract bidders but only to conduct the bidding at the sale and announce the names of purchasers, and file with the Court a written memorandum of the sale, signed by him, showing the name of the purchaser and the sale price." We are informed that the Rule, as a Rule, has been discarded but that the judges continue to adhere to its content as a matter of judicial policy. The Third Circuit Rule, which appears to have been the most liberal of the local rules, allowed, through a sliding percentage formula, $355 on the first $20,000 of proceeds and 1% of the balance over $20,000. As with the Second Circuit, that Rule appears to have been discarded as a Rule, but, by some administrative order or policy, the judges continue to follow it. We are unable to find any local rule in the Seventh Judicial Circuit or in St. Mary's County in particular governing auctioneer's fees. As we indicated, the sheriff, through one of his deputies, simply made an agreement with three auctioneers, without formal court approval, as to a set percentage fee he would pay in all cases, regardless of the nature of the sale, the amount received, or the work actually done by the auctioneer. In 1977, the Court of Appeals' Rules Committee filed its 58th Report recommending the abolition of a host of local circuit rules in favor of new additions to the Md. Rules. Included within that Report was a proposed Md. Rule BR 7, providing a uniform basis for the compensation of trustees conducting judicial sales. Section b of that proposed Rule entitled the trustee to receive from the proceeds of sale the reasonable expenses incurred in connection with the sale upon ratification of the auditor's account except "that an auctioneer's fee shall be paid by the Trustee out of his commission." This reflected the initial thinking of the Committee that the trustee was the one responsible for conducting the sale, that his compensation was in large part for that service, and that if he chose to employ an auctioneer for that purpose, the expense should be borne by him rather than the estate. Many comments were received with respect to the 58th Report, including a number that were critical of the proposal to have auctioneers' fees taken from the trustee's commissions. After reviewing these comments, the Committee reconsidered its position and, at its meeting in April, 1977, decided to recommend to the Court the deletion of that language. The Court held the 58th Report for three years. In October, 1980, it deleted from proposed Rule BR 7 the quoted language dealing with auctioneer's fees, adopted the Rule as amended, and then immediately suspended the Rule and left the various local rules in effect "pending further study." In an effort to obtain a consensus on these matters, the Rules Committee sought the assistance of the Maryland State Bar Association and the Auctioneers Association of Maryland. In June, 1984, the Rules Committee considered a draft of proposed Md. Rules BR 7 and 8 (at the time tentatively numbered Rules 2-797 and 2-798) that had been developed through the combined efforts of the Real Property Section of the State Bar Association, the Auctioneers Association, and the Property Subcommittee of the Rules Committee. After a great deal of debate, much of it centering on what fees should be allowed an auctioneer conducting a forced sale, whether any part of such fee should be charged against the estate rather than taken from the trustee's compensation, and whether, given the variation in local practices, it was feasible to have a uniform rule,[2] the matter was continued until the Committee's September meeting when it was again discussed at some length. See Rules Committee minutes of June 22 and September 14, 1984. The end product of the Rules Committee's deliberations appeared as proposed Rules BR 7 and 8, included in the Committee's 92nd Report to the Court, filed in August, 1985. Proposed Rule BR 8 dealt specifically with auctioneer's fees. For sales of real estate, it provided essentially that, unless the auctioneer's compensation was fixed in the instrument authorizing the sale, the auctioneer would be entitled to $150 if he "attends and calls the sale but performs no other substantial services." If he also performed "other substantial services," he would be entitled, through a sliding percentage scale, to $860 on the first $46,000 of proceeds and 2% on the balance. The proposed Rule also provided that the court could increase or decrease the compensation "upon a determination that the amount would be manifestly excessive or inadequate in the particular case." Although the Auctioneers Association supported proposed Rule BR 8, that proposal and the companion proposal for trustees' compensation met with an even worse fate than the 1977 proposal. After two public hearings and an interim re-referral to the Rules Committee for clarification on certain points, the Court rejected the two proposals, preferring, at least for the time, to allow the matter to remain controlled by local rule. As we have seen, the matter is not in fact controlled by local rule in St. Mary's County, for there appears to be no local rule. Indeed, there is some question, which we need not decide here, whether, in light of Md. Rule 1-102, local rules governing the compensation of auctioneers are even permissible.[3] We draw from this long and tiresome history two principal conclusions. The first is that, although the Rules Committee, despite some diligent effort, has been unable to fashion a uniform Statewide rule governing auctioneers' fees that is acceptable to the Court of Appeals, the need to provide some kind and degree of court supervision over these fees has been clearly recognized. To the extent that a circuit court exercises supervision over forced sales of property, it does so as part of its equity jurisdiction, and it is inconsistent with fundamental equity principles for the court to allow the proceeds of sale to be siphoned off by unnecessary or unreasonably high fees and expenses. The second conclusion we draw is that, while the court's control over sheriffs' sales is not as pervasive perhaps as over foreclosure and judicial sales, it does have some control over them. Aside from the requirement that the sale be reported to and ratified by the court, as we indicated earlier Rule 2-644 allows the sheriff to withdraw from the proceeds "all appropriate unpaid sheriff's expenses and fees incident to the enforcement proceedings" and directs that "[u]nless otherwise ordered by the court" the sheriff shall distribute the balance of the proceeds. (Emphasis added.) This, if nothing else, establishes the court's control over the sheriff's fees and expenses. It also necessarily implies that the court, and not the sheriff, determines whether those fees and expenses are appropriate. The amalgam of these conclusions leads us to the third, and dispositive, one that the court erred in allowing a $4,430 auctioneer's fee in this instance. Given the limited amount of work done by Mr. Fitzgerald and the fact that only $27,000 was received above the existing liens, such a fee is simply unreasonable. The court may not defer to a policy established by the sheriff based on a fixed percentage of the sales price when that policy results in a fee that is unwarranted in the particular circumstances. It must, in each case, examine the work done and the contribution actually made by the auctioneer in light of the price received and approve a fee that fairly compensates, but does not overcompensate, the auctioneer for his or her services. We shall vacate the order distributing the proceeds of sale and remand the case to the circuit court for recalculation of the sheriff's fee in accordance with Part I of this Opinion and for further consideration of the auctioneer's fee. The court will have to determine an appropriate fee for the minimal amount of work done by Mr. Fitzgerald and enter a revised order. In doing so, the court must at least consider the testimony offered by Mr. Whitson, which we think it erroneously struck. Although foreclosure and sheriffs' sales may be different for some purposes, we fail to see, and the record does not disclose, how the work of an auctioneer in calling the sale is any different or why any different level of compensation should be allowed. Whatever fee is approved should be allowed as a cost of the sale. Such treatment does indeed charge the fee to the debtor as the statute requires. ORDER VACATED; CASE REMANDED TO CIRCUIT COURT FOR ST. MARY'S COUNTY FOR FURTHER PROCEEDINGS; APPELLEE TO PAY THE COSTS. NOTES [1] Property may also be sold to satisfy a vendor's lien, but the procedures attendant to that are the same as for a foreclosure. See Md. Real Prop.Code Ann. §§ 7-202 and 7-105. [2] The problem with fashioning a uniform State-wide rule was well-articulated by Committee member Alexander G. Jones, Esq., who, according to the Minutes of that meeting, "expressed the opinion that the many variables in local practices around the State are so numerous as to render unfeasible, if not impossible, the task of establishing a single uniform lump sum compensation that is fair and reasonable for the services rendered. For example, in some rural areas an advertisement in the local paper is sufficient to notify the whole community of the sale and there is no need for the special services of an auctioneer to drum up potential purchasers. In a large metropolitan area, on the other hand, the pre-sale attendance of an auctioneer may ordinarily be essential to solicit attendance at the sale of an adequate number of interested bidders." Similar comments had been expressed earlier by an organization known as the Savings and Loan Lawyers of Maryland, Inc. In a letter to the Committee in response to the 58th Report, Richard B. Bland, Esq., on behalf of that organization, noted that in Baltimore City, the auctioneer "prepares the required legal advertisement, posts the property with signs and even prepares other advertising to attract buyers including direct mailings to potential buyers," whereas in other parts of the State, "these services are performed by the trustee or the attorney for the trustee, and the auctioneer merely attends the sale, auctions the property and forwards to the trustee his certificate." [3] Md. Rule 1-102, which took effect July 1, 1984, provides that: "Unless inconsistent with these rules, circuit and local rules regulating (1) court libraries, (2) memorial proceedings, (3) auditors, (4) compensation of trustees in judicial sales, and (5) appointment of bail bond commissioners and licensing and regulation of bail bondsmen, are not repealed. No circuit and local rules, other than ones regulating the matters and subjects listed in this Rule, shall be adopted." (Emphasis added.) Compensation of auctioneers, especially in sheriff's or foreclosure sales, would not appear to be within any of the excluded categories. Whether the last sentence of the Rule was intended actually to repeal other existing local rules or simply preclude future adoption of them is not entirely clear from the text.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527185/	221 F. Supp. 243 (1963) Mrs. Valerie Jean GARDNER, as Administratrix of the Estate of Robert Edward Gardner, Jr., Deceased, Libelant, v. NATIONAL BULK CARRIERS, INC., in personam, and the S.S. BULKCRUDE, in rem, Respondents. No. 8022. United States District Court E. D. Virginia, Norfolk Division. August 30, 1963. As Amended September 11, 1963. 244 Sidney H. Kelsey, Norfolk, Va., for libelant. Roy L. Sykes (Jett, Sykes & Berkley), Norfolk, Va., for respondents. WALTER E. HOFFMAN, Chief Judge. Remanded to this court for a determination of damages occasioned by the death of Robert Edward Gardner, Jr. when he fell or threw himself off the SS BULKCRUDE on the night of December 8, 1958, while the vessel was proceeding south off the Florida Keys, several interesting contentions are advanced by the respective parties. The deceased seaman was survived by his widow, Valerie Jean Gardner, age 34 at the time of his death.[1] The decedent was 33 years of age.[2] Robert Edward Gardner, III was 4 years old when his father died.[3] Lou Ann Gardner was born on October 16, 1958, and was, therefore, less than two months old when her father was reported missing off the vessel. Gardner joined the BULKCRUDE on May 21, 1958, and until he died on or about December 8, 1958, he earned $4275.75 while a member of the crew of that vessel. From January 1, 1958, through April 20, 1958, Gardner worked ashore for Commercial Testing and Engineering Company with gross earnings of $932.85. Thus, his gross earnings for 11 months and 8 days of 1958 aggregated $5208.60. Gardner provided generously for his wife and children during 1958. Until he joined the vessel on May 21, 1958, he lived at home. His gross earnings for three months and 20 days averaged approximately $250.00 per month. His gross earnings while aboard the vessel averaged approximately $650.00 per month. While employed on the BULKCRUDE, Gardner forwarded to his wife by allotment checks and money orders the total sum of $2740.41. Mrs. Gardner testified that she also received cash aggregating $345.00, making a total contribution in the sum of $3085.41 during a period of about 6½ months, or approximately $475.00 per month. The deceased was an A/B seaman with some reasonable prospects for advancement. Of course, it is a recognized fact that seamen are rarely, if ever, employed on a 12 month basis. The very nature of the shipping industry is such that the vessels are required to lay up for repairs, etc., and in addition, seamen are frequently discharged following a voyage. True, as to a tanker such as the BULKCRUDE, the employment is more dependable than on other types of vessels carrying a different cargo. There is evidence to the effect that Gardner had an annual income of approximately $6,000.00 for several years prior to his death, except during 1957 when he was employed ashore from July 245 through December 31, 1957, during which period he received the total sum of $2256.25. The foregoing is compatible with his average monthly income while aboard the BULCRUDE, taking into consideration the intermediate months he was not employed on the vessel. With some prospects of advancement, but giving due allowance to the uncertainties facing every seaman, the court finds that the decedent, had he lived, would have received an average of $6,500.00 per annum gross earnings for his working life expectancy. What percentage of the gross earnings would constitute a pecuniary loss to the widow and two children? In this connection the respondents urge that the social security payments now being received by Mrs. Gardner for the benefit of herself and two minor children should be considered by the court in determining the "pecuniary loss" occasioned by Gardner's death.[4] Conceding that the shipowner made a substantial contribution to the general fund provided by the Social Security Act, we think it clear that the payments now being made under the Act cannot be considered in ascertaining the "pecuniary loss" to the widow and children. United States v. Harue Hayashi, 9 Cir., 282 F.2d 599, 84 A.L.R. 2d 754; United States v. Price, 4 Cir., 288 F.2d 448; Gypsum Carriers, Inc. v. Handelsman, 9 Cir., 307 F.2d 525; A. H. Bull S. S. Co. v. Ligon, 5 Cir., 285 F.2d 936, 88 A.L.R. 2d 479. We see a marked distinction between the situation here presented and the admissibility in evidence of an injured employee's pension rights in determining his probable loss of future earnings. Cf. Murray v. New York, New Haven & Hartford Railroad Co., 2 Cir., 255 F.2d 42. As a practical matter the overall tax picture plays no part in this case. We cannot accept O'Connor v. United States, 2 Cir., 269 F.2d 578, 584, as authority for the proposition that, under the Jones Act, the tax problem should be applied to mitigate damages, as O'Connor was decided under Oklahoma law which holds that damages are based upon "take-home pay." The Second Circuit distinguishes O'Connor in McWeeney v. New York, New Haven & Hartford R. R. Co., 2 Cir., 282 F.2d 34, cert. den. 364 U.S 870, 81 S. Ct. 115, 5 L. Ed. 2d 93. We agree with respondents' argument that some portion of the annual contribution made by Gardner should be allocated to his personal expenditures which would not now be incurred since he is dead. O'Connor v. United States, supra. We are asked to attribute one-fourth of the annual contribution to his personal living expenses. For a seaman who spends the greater portion of a year away from his family, we think that this is too great a percentage even though there were four persons in the family before his death. A more appropriate percentage would be approximately one-sixth of the annual contribution. The percentage of Gardner's contributions for his wife and children while aboard the BULKCRUDE furnishes a guide for us to arrive at a determination of pecuniary loss. Since Gardner forwarded, or caused to be sent, the sum of $3085.41 from his gross earnings of $4275.75, we note that he contributed 72% of his gross earnings for the benefit of his wife, two children, and personal living expenses. While living at home his gross earnings during 1958 were considerably less; the amount allocable to his personal living expenses would undoubtedly be proportionately higher; but it is also likely that even a higher percentage of his gross earnings was devoted to the use of the wife and children. Accepting his gross annual earnings at $6500.00, the court finds that 70% of this amount, or $4550.00 per year, constitutes the amount that Gardner would 246 contribute to his family and for his "at home" personal expenses. Deducting approximately one-sixth of this annual contribution for Gardner's personal living expenses, we find the pecuniary loss of the beneficiaries from decedent's earnings to be $3800.00 per annum. Having arrived at the conclusion that the aggregate loss to the three beneficiaries is $3800.00 per annum, we must determine what portion of said sum is allocable to the widow, son and daughter respectively. Cognizant of the fact that the widow will be required to maintain the major portion of the expenses, we think it appropriate to allocate to each child 10% of the aforesaid annual sum of $3800.00. Thus, the widow would suffer a pecuniary loss of $3040.00 per annum for the working life expectancy of the deceased, i. e., for a period of 32 years, it being assumed that his working expectancy would terminate at age 65. The son, age 4 at the time of his father's death, has no right to recover for any pecuniary loss beyond the time he attains the age of 21. The daughter, only a few weeks old at the time of her father's death, has a right to claim a pecuniary loss for 21 years. The beneficiaries will receive their pecuniary loss in advance of what they would have received if Gardner had lived. Thus, while the widow could have reasonably expected $3040.00 per annum for a period of 32 yearsa total figure of $97,280.00 if paid over the entire period the discounted value computed at 3½% (19.069) amounts to $57,969.76. The discounted value of the pecuniary loss to the son for a period of 17 years is $4807.38. The discounted value of the pecuniary loss to the daughter for a period of 21 years is $5585.24. In addition to the pecuniary loss, libelant seeks a recovery for (1) conscious pain and suffering prior to death, (2) loss to the children of the father's nurture, guidance and training, and (3) pre-judgment interest from the date of death. As to any recovery for conscious pain and suffering prior to death, we adhere to the principles previously stated by this court in Whitaker v. Blidberg-Rothchild Co., D.C., 195 F. Supp. 420, affirmed without discussing point, 4 Cir., 296 F.2d 554. For all we know, Gardner may have been dead when he hit the water. Assuming that he was alive, we do not know how and when he died. He was last seen a few minutes following the evening meal and was not thereafter discovered as missing until nearly midnight. Libelant argues that Gardner met his death either by drowning, being cut by the ship's propellers, or by a shark or other man-killing fish. Even if we accept this argument, it would still constitute rank speculation to base an award for conscious pain and suffering. As was said in Davis v. Parkhill-Goodloe Co., 5 Cir., 302 F.2d 489, 495: "But there are so many unknowns in this unexplained slipping or falling of Davis into the water, that we should only say that substantial evidence will be required to sustain a finding of consciousness upon which to rest the permissible assumption of pain." This claim is disallowed. While it is true that the loss to the children of the father's nurture, guidance and training is likewise somewhat speculative, we think that it is recoverable under the term "pecuniary loss" as stated in Michigan C. R. Co. v. Vreeland, 227 U.S. 59, 71, 33 S. Ct. 192, 196, 57 L. Ed. 417, where it is said: "Nevertheless, the word [pecuniary] as judicially adopted is not so narrow as to exclude damages for the loss of services of the husband, wife, or child, and, when the beneficiary is a child, for the loss of that care, counsel, training and education which it might, under the evidence, have reasonably received from the parent, and which can only be supplied by the service of another for compensation." The evidence with respect to the value of the father's nurture, guidance and training, with particular reference to what can only be supplied by the service 247 of another for compensation, is admittedly vague. But the very age of the children compels a commen sense approach to the problem. While the continued absence from home in his duties as a seaman tends to reduce the value of the father's nurture, guidance and training, we think that each child should receive $200.00 per year during the minority of said child, i. e., discounted in the same manner as the pecuniary loss from decedent's earnings. The discounted value of $200.00 per annum for a period of 17 years, computed at 3½%, is $2530.20, which amount is allowed to the son as a loss of the father's nurture, guidance and training. For a period of 21 years, computed on the same basis, the like loss to the daughter is $2939.60. As to libelant's right to recover pre-judgment interest, we conclude that this is discretionary in admiralty. Sabine Towing Co. v. Brennan, 5 Cir., 85 F.2d 478. While we find it difficult to point to any rational reasoning why the rights of parties should differ where a Jones Act proceeding is filed as a civil action, we can only state that Congress, in its wisdom, has seen fit to disallow pre-judgment interest in civil actions, 28 U.S.C.A. § 1961. Admittedly, there is a conflict of authority on the question. In Moore-McCormack Lines, Inc. v. Richardson, 2 Cir., 295 F.2d 583, and the Petition of Midwest Towing Company, E.D.Ill., 203 F. Supp. 727, the admiralty courts recognized that pre-judgment interest constituted a part of the loss and drew an analogy to the necessity of discounting sums paid now on account of future losses, thereby declaring that it was inequitable not to make appropriate compensation for the delay in discharging the obligation, even though the fault rested with the normal process of litigation and not with the parties. In Sabine Towing Co. v. Brennan, supra, the admiralty court modified the judgment to provide for interest from the date of the decree, rather than for interest from the date of the commissioner's report. Other courts have declined to allow pre-judgment interest in admiralty under the analogy of the rule in civil cases. Petition of Petroleum Tankers Corporation, S.D.N.Y., 204 F. Supp. 727. It is clear that pre-judgment interest has been refused in Jones Act cases on the civil side of the court. Briggs v. Pennsylvania R. Co., 2 Cir., 164 F.2d 21, 1 A.L. R.2d 475, affirmed, 334 U.S. 304, 68 S. Ct. 1039, 92 L. Ed. 1403; Casey v. American Export Lines, 2 Cir., 173 F.2d 324; Moore-McCormack Lines, Inc. v. Amirault, 1 Cir., 202 F.2d 893; Duvernay v. Alcoa Steamship Co., D.C., 217 F. Supp. 698. And in Pope & Talbot, Inc. v. Hawn, 346 U.S. 406, 74 S. Ct. 202, 98 L. Ed. 143, it is said: "* * * [T]he substantial rights of an injured person are not to be determined differently whether his case is labeled `law side' or `admiralty side' on a district court's docket." In the absence of a controlling decision from the Fourth Circuit or the United States Supreme Court, and without an express statute prohibiting prejudgment interest in admiralty, we conclude that, while the matter is discretionary, moratory interest on a death claim under the Jones Act is sufficiently liquidated to allow same. Unlike the personal injury claim, the basis for the proper determination of damages is essentially fixed upon death. Factors involving earnings, the extent of the dependency, the expectancy of life, the discounted value of the dollar, and other items tending to establish the total award are not changed by subsequent developments. We are not concerned with the extent of disability and the possibilities of recovery as in personal injury cases. The loss is fixed even though not determined by judicial process. As was said in Moore-McCormack Lines, Inc. v. Richardson, 2 Cir., 295 F.2d 583, 594: "But whether an action has been deliberately prolonged or not, the defendants who are ultimately directed to pay have had the use of the money declared to be due. If it be only fair to discount sums paid now on account of future loss which would not *248 be due until some years in the future, see Chesapeake & Ohio R. R. Co. v. Kelly, 1918, 241 U.S. 485, 36 S. Ct. 630, 60 L. Ed. 1117; O'Connor v. United States, 2 Cir., 1959, 269 F.2d 578, 585, it is, by the same token, inequitable not to make appropriate compensation for delay in discharging the obligation." In adopting the reasoning in the foregoing case, the court is aware of the fact that damages were there sought under the Death on the High Seas Act, 46 U.S.C.A. § 761, et seq. Not overlooked is footnote 13 which reads: "We do not reach the question, unresolved in this circuit, as to whether interest qua damages may be given upon any portion of the recovery in a Jones Act suit brought in admiralty." We hold, therefore, that interest shall run from December 9, 1958, until paid, since the beneficiaries are still alive and their status has not changed. Summarizing the comments hereinabove mentioned, a decree shall be presented granting judgment in favor of the libelant in the total sum of $73,832.18, with interest at 3½% per annum[5] from December 9, 1958, until the date of the entry of the final decree herein, and 6% on the aggregate sum thereafter until paid. The aforesaid sum of $73,832.18, together with proportionate interest, shall be paid, after first deducting reasonable attorney's fees and non-recoverable costs, as follows: To Valerie Jean $57,969.76 plus Gardner interest To Guardian of Robert Edward 7,337.58 plus Gardner, III interest To Guardian of Lou 8,524.84 plus Ann Gardner interest Proctor for libelant will prepare and present, after submission to proctor for respondents for inspection and endorsement, an appropriate decree in accordance with this memorandum which is adopted pursuant to Admiralty Rule 46½. Taxable court costs shall be assessed against respondents. NOTES [1] Valerie Jean Gardner was born December 29, 1924. She was 21 days short of being 34 when her husband died. [2] Gardner was born on December 16, 1925. He was 8 days short of 33 when he died. [3] The boy was born on October 26, 1954. [4] The widow receives $254.00 per month, or $3048.00 per annum, until the oldest child reaches the age of 18, at which time the monthly payments drop to $190.00 until the youngest child reaches 18. Thereafter, the social security payments stop until Mrs. Gardner attains the age of 62 when she will then receive $104.00 per month. [5] Following the reasoning in Moore-McCormack Lines, Inc. v. Richardson, 2 Cir., 295 F.2d 583, 595: "Since the allowance for loss of future benefits to the dependents of the four deceased men are discounted at 4% it would seem appropriate for the district judge also to compute interest at a 4% rate on the allowances for pecuniary losses sustained prior to decree."	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527216/	239 N.J. Super. 33 (1990) 570 A.2d 1003 STATE OF NEW JERSEY, PLAINTIFF-APPELLANT, v. MARILYN BODTMANN, DEFENDANT-RESPONDENT. Superior Court of New Jersey, Appellate Division. Argued October 30, 1989. Decided February 22, 1990. Before Judges PETRELLA, O'BRIEN and HAVEY. Susan W. Sciacca, Special Deputy Attorney General, Acting Assistant Prosecutor, argued the cause for appellant (John G. 34 Holl, Assistant Attorney General In Charge, Acting Bergen County Prosecutor, attorney; Susan W. Sciacca, of counsel and on the letter brief). Richard D. Kraus argued the cause for respondent (Barrett & Kraus, attorneys; Richard D. Kraus, on the brief). The opinion of the court was delivered by O'BRIEN, J.A.D. In this driving while intoxicated (DWI) case, by leave granted, the State appeals from an order suppressing the results of a blood test performed on defendant and the hospital records relating thereto. We reverse and remand. At approximately 5:50 p.m. on December 11, 1988, Patrolman George Hall was assigned to investigate a serious automobile accident on Kinderkamack Road, immediately north of Soldier Hill Road in Oradell. The three vehicles involved were heavily damaged and four persons were injured, two of whom, including defendant, were transported to Pascack Valley Hospital in Westwood. As a result of his investigation, Officer Hall ascertained that defendant was driving northbound on Kinderkamack Road when she drifted across the center line and sideswiped a southbound vehicle, after which she continued driving north in the southbound lane colliding head-on with a second southbound vehicle. Some time after her arrival at the hospital, defendant's blood was drawn and tested for alcoholic content. On December 12, 1988, Officer Hall was instructed by Captain Spraengel to return a telephone call to Lois Dickey, the emergency room nursing supervisor at Pascack Valley Hospital. During the ensuing conversation at about 1:40 p.m., Nurse Dickey informed Officer Hall that a routine blood test had been performed on defendant on December 11, 1988, which revealed her blood alcohol content as .24%. According to Officer Hall, Nurse Dickey "further advised that upon admission for treatment in the Emergency Room, on December 11, 1988, Ms. 35 Bodtmann at first denied consuming any alcoholic beverages. However, when Ms. Bodtmann was advised of her blood alcohol reading, she admitted to having consumed Screwdrivers." Upon receipt of this information, Officer Hall applied to the Westwood Municipal Court for a subpoena duces tecum, pursuant to the procedure recommended by the Supreme Court in State v. Dyal, 97 N.J. 229, 240, 478 A.2d 390 (1984). In support of his application, Officer Hall filed his affidavit setting forth his training and experience, the information obtained from Nurse Dickey, and the results of his investigation at the scene as to defendant's driving and concluded: Concerning the aforementioned circumstances related to this accident, this writer believes that the consumption of alcohol by Ms. Bodtmann might have been a contributing factor in this accident, therefore I request the issuance of a subpoena by the Westwood Municipal Court to be served on Pascack Valley Hospital for the medical records of Marilyn M. Bodtmann. The subpoena is to include information pertaining to the taking of any blood and urine samples from Ms. Bodtmann upon her arrival at the hospital on December 11, 1988 some time after 5:50 p.m. The Westwood Municipal Court judge issued the requested subpoena on December 13, 1988. On January 24, 1989, defendant moved[1] to suppress the results of the blood test and all verbal or written statements made or furnished by defendant to doctors and staff at the hospital on the ground of a violation of the patient and physician privilege, N.J.S.A. 2A:84A-22.1 et seq. Defendant's motion was originally heard on March 14, 1989. At that time, the parties stipulated that the municipal court judge had issued the subpoena on the basis of Officer Hall's affidavit and that defendant had operated her vehicle which was involved in the accident on the night in question. 36 At the request of the motion judge, Nurse Dickey was called to testify. According to the nurse, she was not present in the emergency room when defendant arrived from the scene of the accident. Her first knowledge of defendant came from a report she received the following morning in the nursing office as the supervisor for emergency services.[2] Defendant had been released before Nurse Dickey received any information. Some time that morning, according to Nurse Dickey, she received a message that the Oradell police had called asking about a blood alcohol test. When she returned that call she asked to speak to the officer "who had been involved in the accident" since she had not been given a name. As a result, Officer Hall called her. She said she had asked him whether they had done a breathalyzer at the scene, and then confirmed to him that a blood alcohol had been done at the hospital. However, she pointed out that it had been done for medical diagnostic purposes and not for legal purposes. She said Officer Hall told her the police could subpoena the records. Nurse Dickey conceded that she told the officer the result of the blood alcohol test, but, since it was done for diagnostic purposes, it had not been sent to the police laboratory. According to her testimony, Officer Hall seemed surprised that there had been a positive finding. In response to his suggestion that he would subpoena the results, she told him there was written on the blood slip "For medical purposes only not for legal purposes." The matter was again heard on April 11, 1989 concerning the aspect of the motion seeking to suppress statements allegedly made by defendant about her drinking, which were reported to Officer Hall. Thereafter, the motion judge entered the order under review, which suppressed the results of the blood test and the hospital records relating thereto, but denied defendant's 37 motion to suppress any verbal or written statements made by her to the doctors and staff, without prejudice to defendant's right to object to the admission of those statements at the municipal court trial. On the State's motion, we granted leave to appeal on May 24, 1989, heard oral argument on October 30, 1989, and we now reverse and remand. The order of the motion judge was based upon her written opinion of April 13, 1989, which was supplemented by letter of May 12, 1989, pursuant to R. 2:5-6(c). In her opinion, the motion judge recognized that in order to obtain the subpoena duces tecum for the hospital records containing blood alcohol test results, in spite of the patient's interest in confidentiality, the Dyal court required: ... investigating police to establish a reasonable basis to believe that the operator was intoxicated, a showing that may be established by objective facts known at the time of the event or discovered within a reasonable time thereafter. [97 N.J. at 240, 478 A.2d 390.] The motion judge stated the question to be: ... whether probable cause existed for the issuance of the subpoena where the primary basis for the police officer's belief that defendant was operating her vehicle while intoxicated was derived from information provided by medical personnel at the treating hospital allegedly in violation of defendant's statutory patient-physician privilege pursuant to N.J.S.A. 2A:84A-22.2. Since she concluded that the affidavit of Officer Hall did not contain sufficient objective facts to establish probable cause as to defendant's intoxication, but was based upon the information obtained from Nurse Dickey in violation of the patient/physician privilege, the motion judge suppressed the results of the blood alcohol test and the hospital records relating thereto. In reaching this result, it is evident that the motion judge read the Dyal requirement to mean that the police must have "probable cause" as required for the issuance of a search warrant under both the Federal and State Constitutions.[3] Citing State v. Novembrino, 105 N.J. 95, 519 A.2d 820 (1987), the 38 motion judge said: "The necessity of finding probable cause for the issuance of a warrant is of constitutional dimension." She concluded: If this court were to sanction police reliance on what are clearly privileged communications as the sole basis for establishing probable cause for the issuance of a Dyal subpoena, the result is easy to predict: a complete breakdown in police investigative procedures and effort in prosecuting drunk driving cases. If all that is required is a telephone call to or from the local treating hospital to obtain evidence of intoxication to support the issuance of a subpoena, what will be left of the cherished `right of the people to be secure in their persons, houses, papers and effects'? N.J.Const. (1947) Art. I, par. 7. This court believes that our Constitution demands more. We believe the trial court erred in requiring the investigating police to establish probable cause for the issuance of the subpoena. The error is understandable. The Supreme Court selected a "subpoena duces tecum" as the vehicle to obtain the records. Normally, a subpoena duces tecum is issued by the clerk of the court or an attorney under R. 1:9-1, and is attacked by a motion to quash, R. 1:9-2. The method established to attack the issuance of the subpoena duces tecum is by a motion to suppress with a "cf." to R. 3:5-7(a).[4] The Dyal Court said further: Given the protection accorded blood test results by the statutory privilege, we believe that a subpoena for records of those tests should be treated as the functional equivalent of a search warrant. [97 N.J. at 241, 478 A.2d at 396.] Once more this statement has a "cf." to State v. Hall, 93 N.J. 552, 557-559, 461 A.2d 1155, cert. den. 464 U.S. 1008, 104 S.Ct. 526, 78 L.Ed.2d 709 (1983), noting that the Hall court approved investigative detention upon a showing of "a reasonable and well-grounded basis to believe" that the suspect may have committed a crime. The Hall court found that an application to detain a suspect for the purpose of conducting a lineup must be considered as 39 "the functional equivalent of an application for [] issuance ... of a search warrant," id. at 557-558, 461 A.2d 1155, finding that the constitutional interests upon which investigatory detentions and conventional searches and seizures may intrude, are similar. However, the Hall court then addressed the question of whether constitutional rights against unreasonable searches and seizures are adequately protected by investigatory detentions "that are judicially authorized upon less than probable cause," id. at 560, 461 A.2d 1155, observing that our courts had approved comparable investigatory detentions on less than probable cause, citing In Re Fingerprinting of M.B., 125 N.J. Super. 115, 122, 309 A.2d 3 (App.Div. 1973), and other cases. Finally, the Hall Court concluded that an evidential finding of probable cause to believe that a particular individual has committed a crime is not an absolute prerequisite for judicial authorization of an investigatory detention. 93 N.J. at 561, 562, 461 A.2d 1155.[5] We believe the Dyal court also intended that a subpoena duces tecum for the records of a blood alcohol test may be issued on less than probable cause since the Dyal court requires the investigating police to establish a "reasonable basis to believe that the operator was intoxicated."[6] This appears to 40 be even less than the "reasonable and well grounded basis to believe" requirement in Hall by the absence of the words "well grounded." Our conclusion that less than probable cause is required for the issuance of a Dyal subpoena is fortified by the settled law that a driver arrested with probable cause to believe he or she is intoxicated has no constitutional right to prevent the involuntary taking of a blood sample, provided the sample is taken in a medically acceptable manner, at a hospital or other suitable health care facility. Schmerber v. California, 384 U.S. 757, 771-772, 86 S.Ct. 1826, 1836, 16 L.Ed.2d 908, 920 (1966). If the Dyal court had intended to require the police to establish probable cause to believe a driver is intoxicated in order to obtain a subpoena duces tecum for test results, it would have said so. Thus, the motion judge imposed a greater burden upon the police by requiring them to have "probable cause," rather than "a reasonable basis to believe" as required by State v. Dyal. For that reason, the order suppressing the hospital records containing the test results is reversed and the matter is remanded for reconsideration. The procedural posture in this case is different than in State v. Dyal, where the results of the blood test had been received into evidence. In this interlocutory appeal, the charges against defendant are pending untried in the municipal court. The State suggests that the subpoena duces tecum for the hospital records, including the blood alcohol test results, is for investigatory purposes, such as the investigatory detention in State v. Hall. While the State's brief is not particularly clear on this point, it concludes with the sentence, "Investigations must not be thwarted simply because the information could not be admitted 41 in its original privileged form at a subsequent trial." Thus, the State seems to agree that the test results would be inadmissible at defendant's trial as a violation of the patient/physician privilege, but that such inadmissible evidence may be used to support the issuance of the subpoena duces tecum. The State has not explained what investigative purpose will be served by its obtaining the hospital records containing the blood alcohol test results if those results are not admissible into evidence at a subsequent trial. If the purpose of the record is simply to encourage a thorough investigation because of knowledge of the blood alcohol reading, the police were already aware of that reading from Nurse Dickey. The motion judge reads State v. Dyal to cloak a violation of the patient/physician privilege in the mantle of a violation of defendant's constitutional right to be free of unreasonable searches and seizures. However, evidence seized pursuant to a defective search warrant or without a search warrant, is inadmissible under the exclusionary rule because of the violation of defendant's constitutional rights. However, the statutory patient/physician privilege is not one of constitutional dimension. We read State v. Dyal as an effort to accommodate the patient/physician privilege and the strong public policy of this State to rid the highways of drunken drivers. 97 N.J. at 237, 478 A.2d 390. In reciting the evolution of the privilege, the Court notes that it is purely legislative and has never been adopted by the Court. Id. at 235, 478 A.2d 390. Apparently, legislative proposals to eliminate the privilege with respect to drunken driving prosecutions have not been adopted. It is not clear whether or not the Dyal court adopted the use of the subpoena duces tecum approach for the police to obtain blood test results to be used for investigative purposes only, such as investigative detentions in State v. Hall, as the State appears to argue. In support of its position the State cites cases such as United States v. Lefkowitz, 618 F.2d 1313 (9th Cir.1980), cert. den. 449 U.S. 824, 101 S.Ct. 86, 66 L.Ed.2d 27 42 (1980), where an estranged wife had revealed her husband's scheme to falsify accounting records, and the Court rejected defendant husband's motion to suppress based on a violation of the marital privilege since the wife had not "testified" against her husband, but simply provided information to support a search warrant. See also State v. Farber, 314 N.W.2d 365 (Iowa 1982). In a patient/physician setting, the State cites Bryson v. State, 711 P.2d 932 (Okl.Cir.1985), cert. den. 476 U.S. 1121, 106 S.Ct. 1986, 90 L.Ed.2d 668 (1986). There, a rape victim escaped her assailant by biting his penis. In an effort to identify and apprehend the rapist, a police detective organized a volunteer effort to contact local physicians to see if any men had received treatment for an injured penis. The effort proved successful when a doctor came forward to report that a man had sought treatment for such an injury which he claimed to have received during oral sex with his girlfriend. Following up on this information, the police obtained a description, arrested the defendant Bryson, and photographed his injury. He was subsequently identified by the victim. Bryson protested the use of the information provided by his doctor, contending that it was obtained in violation of the patient/physician privilege and tainted all that the police subsequently learned. The Oklahoma Court of Criminal Appeals refused to extend the privilege in the manner urged by the defendant, noting that the privilege was testimonial and that the doctor had not testified. The court said: ... It is not a privilege enacted to protect an accused from police investigation, and certainly was not designed to preclude police from obtaining voluntary information from physicians. The State has an interest in the protection of its citizens from violent acts, and to insure the swift apprehension of criminals who commit such acts. Applying this statute in the broad manner urged by appellant would serve as a cloak for crime. [Id. 711 P.2d at 934.] In her supplemental letter opinion the trial judge notes that these arguments, which she labels the "testimonial/documentary dichotomy," had not been presented to her. However, she notes that the patient/physician privilege is broader than the 43 spousal privilege which is purely testimonial in nature. She concluded that: ... Although not all wrongfully acquired records justify suppression of the evidence procured pursuant to a search warrant (or its functional equivalent, the subpoena duces tecum), the familiar doctrine of the `fruit of the poisonous tree' directs us to the appropriate disposition of the only issue in this case. This court has determined that the police cannot rely on the `tainted evidence' as the sole justification for obtaining records which are no more than the identical `objectionable facts' themselves. It is questionable that the violation of the patient/physician privilege is a poisonous tree in a constitutional sense so as to bar the admission of evidence obtained by the investigating police as a result of receiving the blood alcohol results in violation of the patient/physician privilege. In any event, since this "testimonial/documentary dichotomy" was neither briefed nor argued before the trial judge, we will not decide it, but it may be presented to the motion judge on the remand herein ordered. We refer to it simply as support for our understanding that the State is contending that the Dyal procedure is limited to the police obtaining the test results for investigatory purposes.[7] 44 While the Supreme Court in Dyal may have only intended the issuance of a subpoena duces tecum to obtain the results of a blood alcohol test, made pursuant to a patient/physician relationship, to be available to the police for investigatory purposes, as apparently argued by the State, the opinion can be read to mean that evidence obtained pursuant to such a subpoena, without establishing a reasonable basis to believe the driver was intoxicated, may be suppressed and not available for use at the subsequent trial, in the same manner as evidence seized pursuant to an unlawful search. We recognize that obtaining blood to be tested for alcoholic content invades an individual's privacy and may intrude upon the same constitutional interests as a search and seizure. See State v. Hall, 93 N.J. at 558, 461 A.2d 1155.[8] However, as the Dyal court recognized, a driver arrested with probable cause to believe he is intoxicated has no constitutional right to prevent the involuntary taking of a blood sample. See State in the Interest of M.P.C., 165 N.J. Super. 131, 135, 397 A.2d 1092 45 (App.Div. 1979). Furthermore, when police accompany a motor vehicle operator to a hospital where they have probable cause to believe he is intoxicated and a blood test is taken for diagnoses, the Dyal court held "no useful purpose would be served by requiring the police to obtain a second test for investigative purposes." 97 N.J. at 239, 478 A.2d 390.[9] The Dyal opinion can certainly be read to suggest that granting a defendant's motion to suppress the subpoena duces tecum means that the test results may not be offered in evidence by the State at any subsequent trial. Although the Supreme Court may not have intended that result, since the inadmissibility of the evidence is as a result of a statutory privilege and not because of a violation of defendant's constitutional right to be free of unreasonable searches and seizures, both the motion judge here and our colleagues in deciding State v. Figueroa, 212 N.J. Super. 343, 515 A.2d 242 (App.Div. 1986), appear to read Dyal to mean that. In Figueroa, a blood alcohol reading had been admitted into evidence at the trial which had occurred before the Supreme Court's decision in the Dyal case. Judge Fritz observed that the Dyal court "dissects, examines, diagnoses and prescribes respecting the tension existing between the competing policies dealing with the drunken driver on one hand and the physician-patient privilege on the other." 212 N.J. Super. at 347, 515 A.2d 242. In Figueroa, the matter was remanded to the trial judge for a factual determination as to the evidence available to the police officer at the time of the accident or within a reasonable time thereafter, to determine whether a subpoena for the record of the blood test would have issued. If the trial judge answered the question in the affirmative, the judgment would stand. On the contrary, if 46 the trial judge answered in the negative, the judgment would be set aside and a new trial ordered. Id. at 348, 515 A.2d 242. On the remand in this case, the question of the effect of the grant of a motion to suppress blood alcohol test results obtained pursuant to the subpoena duces tecum on the admission of those test results at the subsequent trial will be briefed by the parties and decided by the motion judge. If it is concluded that the effect is to suppress the test results from use at a subsequent trial, then a plenary hearing shall be conducted to ascertain "all the objective facts known at the time of the event or discovered within a reasonable time thereafter," at the time the subpoena duces tecum was issued.[10] We recognize that the parties stipulated that the motion was to be limited to an evaluation of the sufficiency of the information contained in the supporting affidavit of Patrolman Hall, since it was also stipulated that the subpoena duces tecum was issued by the municipal court judge solely on the basis of that affidavit.[11] However, the parties apparently have different concepts 47 of the result of the order suppressing the test results. The court is not bound by a stipulation as to a matter of law which is contrary to controlling law on the subject. State v. Elysee, 159 N.J. Super. 380, 384, 388 A.2d 254 (App.Div. 1978). Accordingly, at the remand hearing, all of the facts and circumstances shall be fully developed, if it is determined by the motion judge that granting the motion to suppress will result in suppression of the blood alcohol test results at the subsequent trial. By way of example of the facts and circumstances to be developed, we believe testimony should be presented from Officer Hall as to the events at the scene of the accident. This may, of course, include statements that may have been taken from occupants of the other vehicles or other witnesses who may also be called to testify. Obviously, Officer Hall learned about defendant's erratic driving from others since it does not appear that he observed defendant driving the vehicle. We are not told whether any of the other drivers spoke with defendant and what observations they may have made of her, nor what observations hospital personnel may have made of her as in State v. Phillips, supra. The motion judge found it significant that the affidavit of Patrolman Hall omits any reference to his observations of defendant at the scene. She said: ... [S]pecifically, there is no statement that defendant exhibited an odor of alcohol and no statement setting forth incriminating facts regarding defendant's coordination, balance or speech. The judge further observed that defendant was not arrested at the scene, nor did police accompany her to the hospital, and no summons was issued for DWI until after the police learned the results of the test. We first note that the Dyal court said: 48 As a practical matter, the encounter between a patrolman and a drunken driver often arises in the context of an emergency. The officer may be alone, an accident may have occurred, people may be injured, and the public safety may be imperiled. [97 N.J. at 239, 478 A.2d 390.] In some cases, the concerns of the moment may prevent investigating police from gathering facts needed to establish probable cause. Consequently, law enforcement officers may be unable to accompany a motor vehicle operator to a hospital for the purpose of obtaining a blood test. As here, the public interest may require investigating officers to perform other duties at the scene of an accident. [97 N.J. at 240, 478 A.2d 390.] That language could well describe the circumstances that occurred in this case. Yet, the officer's affidavit does not expand upon his activities at the scene nor the extent of the injuries to defendant. In his affidavit Patrolman Hall claimed that the call from Nurse Dickey imparting the information as to the results of the blood alcohol test was unsolicited, whereas Nurse Dickey testified that she spoke to Officer Hall in response to an inquiry from the Police Department as to whether a blood alcohol test had been taken and, if so, the results. The motion judge made no finding of fact on this issue, although, in her written opinion, she seems to have accepted Nurse Dickey's version. The judge suggested that perhaps Captain Spraengel should be called to resolve this issue, but then did not pursue it. It would appear that if Nurse Dickey's version is correct and the police did seek the blood alcohol result, this inquiry may have been prompted by some circumstances suggesting that defendant was driving while intoxicated.[12] This question should be pursued. Although the motion judge states that she called Nurse Dickey as the court's witness to determine whether the patient/physician privilege had been intentionally breached, she made no specific finding on this issue except by implication. Since Nurse Dickey was not present when the blood was drawn, she had no knowledge with respect to the circumstances surrounding 49 the alleged confidential communication. She testified that, "It's my understanding that it was written right on the blood slip, for medical purposes, only, not for legal purposes." The blood slip was not produced before the motion judge nor before us, nor was any witness produced with competent knowledge of the circumstances surrounding the taking of the blood. N.J.S.A. 2A:84A-22.2 provides in pertinent part that the privilege is only effective if "the judge finds that, (a) the communication was a confidential communication between patient and physician, and (b) the patient or the physician reasonably believed the communication to be necessary or helpful to enable the physician to make a diagnosis of the condition of the patient or to prescribe or render treatment therefor." The motion judge called Nurse Dickey to determine if the privilege had been intentionally violated without inquiring as to its existence. In Dyal there was evidence that a hospital employee had explained to defendant that a blood test should be made in the event he needed a transfusion and, based upon that information, defendant allowed a blood sample to be taken. Here, no evidence was presented as to the circumstances surrounding the taking of defendant's blood. In a footnote to her opinion, the motion judge said, "There is no dispute that defendant was a patient and that the communications contained in the affidavit were confidential within the statutory definition of these terms, State v. Phillips, 213 N.J. Super. 534, 541-542, 517 A.2d 1204 (1986)."[13] We recognize the time involved in such a full-scale presentation upon an application for a Dyal subpoena duces tecum. We also recognize that the question before the Law Division motion *50 judge was limited to an evaluation of what was before the municipal court judge when he issued the subpoena, which had been stipulated to be Patrolman Hall's affidavit. However, we conclude that, because of the apparent misunderstanding of the Dyal case and the probability that a suppression order has the drastic effect of precluding the admission of the test results at the subsequent trial, the matter should be remanded, not simply to ascertain what was before the municipal court judge when he issued the subpoena,[14] but what objective facts were actually known to the police at the time of the event, or discovered within a reasonable time thereafter, apart from the test results given to them by Nurse Dickey, if that is found to be a violation of the patient/physician privilege. We remand to the Law Division rather than the municipal court so that a factual record may be made. Reversed and remanded to the Law Division judge for a plenary hearing, at which the State has the burden of establishing the reasonable basis to believe that defendant was intoxicated, upon objective facts known at the time of the event or discovered within a reasonable time thereafter, and without reference to the test results as disclosed to the police by Nurse Dickey, unless the judge concludes that the test results were not a confidential communication within the patient/physician privilege, or that the communication was not an intentional breach of the duty of nondisclosure by a physician or his agent or servant. We do not retain jurisdiction. NOTES [1] Summonses were issued to defendant on December 15, 1988, charging her with driving while intoxicated (N.J.S.A. 39:4-50) and reckless driving (N.J.S.A. 39:4-96). While it does not appear when defendant's initial pleas were entered to these charges, her motion to suppress made on January 24 was certainly within 30 days as required by State v. Dyal, supra, 97 N.J. at 241, 478 A.2d 390; cf. R. 3:5-7(a). [2] In the course of recounting what had been told to her, Nurse Dickey testified that the Division of Youth & Family Services had been called. The significance of this fact is not apparent from the record. [3] Fourth Amendment to the United States Constitution, and Article I, par. 7 of the New Jersey Constitution. [4] "Cf." is an explanatory signal that means that the cited authority supports a proposition different from that in the text, but is sufficiently analogous to lend support. [5] We may have inadvertently contributed to the problem when we characterized the hearing before the municipal court, seeking the issuance of a subpoena duces tecum, as a "probable cause" hearing in State v. Phillips, 213 N.J. Super. 534, 544, 517 A.2d 1204 (App.Div. 1986). In that case, the officer who took the defendant to the hospital did not smell alcohol on defendant's breath and did not think he was intoxicated. We are not told what evidence supported the issuance of the subpoena duces tecum, but the Law Division denied defendant's motion to suppress and we denied leave to appeal on that issue. Leave to appeal was granted to the State from an order of the Law Division sustaining the exclusion of certain testimony from medical personnel on the basis of the physician/patient privilege, which we reversed and remanded to the municipal court for further proceedings. [6] We note, however, that the implied consent to a breath sample in N.J.S.A. 39:4-50.2 is triggered when a police officer "... has reasonable grounds to believe ...," but that section later refers to the person "arrested" which suggests probable cause. The Legislature made this clear when it provided that "... the arresting officer had probable cause to believe" when itemizing the elements the municipal court judge is required to determine by a preponderance of the evidence in order for a conviction to issue for refusing to submit to a chemical test of a person's breath. See N.J.S.A. 39:4-50.4a. [7] For the first time at oral argument before us, the State suggested that the patient/physician privilege does not apply to DWI cases. State v. Dyal, supra, reviewed the issue in the setting of a criminal trial where the defendant was charged with death by auto, N.J.S.A. 2C:11-5. While the decision implies that the patient/physician privilege contained in N.J.S.A. 2A:84A-22.2 applies to DWI cases (N.J.S.A. 39:4-50), the State points out that the language of the statute begins: Except as otherwise provided in this act, a person, whether or not a party, has a privilege in a civil action or in a prosecution for a crime or violation of the disorderly persons law or for an act of juvenile delinquency to refuse to disclose.... The statute does not specifically refer to a motor vehicle violation or DWI which fall into "the somewhat amorphous category of a quasi-criminal proceeding." State v. Emery, 27 N.J. 348, 353, 142 A.2d 874 (1958); see also State v. Dively, 92 N.J. 573, 586, 458 A.2d 502 (1983), where the Court decided that motor vehicle violations are within the category of "offenses" subject to the Double Jeopardy Clause. The State argues that DWI does not technically come within any of the legal proceedings listed in N.J.S.A. 2A:84A-22.2. The Dyal Court recognized that to the extent the patient/physician privilege is honored, it may undermine the search for the truth in the administration of justice and, therefore, as it precludes the admission of relevant evidence, it is to be restrictively construed. 97 N.J. at 237, 478 A.2d 390. Thus, if the statute is to be construed strictly, it does not by its language apply to a prosecution for a violation of the motor vehicle laws which, although quasi-criminal, are not prosecutions for a crime. See State v. Macuk, 57 N.J. 1, 9-10, 268 A.2d 1 (1970). However, this argument was also not addressed to the motion judge and therefore will not be decided by us. See State v. Mahoney, 226 N.J. Super. 617, 626, 545 A.2d 235 (App.Div. 1988). The issue may however be raised before the motion judge upon the remand herein ordered. [8] There is no requirement in this State for consent to the taking of physical examples such as fingerprints, photographs, bodily examinations for identifying characteristics, drunkometer tests and blood tests. They are beyond the privilege of self-incrimination because nontestimonial in character. State v. Blair, 45 N.J. 43, 211 A.2d 196 (1965). Nontestimonial evidence is not subject to objection on either Fourth Amendment search and seizure grounds or Fifth Amendment self-incrimination basis." State v. Burns, 159 N.J. Super. 539, 543-544, 388 A.2d 987 (App.Div. 1978). [9] The Court disapproved State v. Amaniera, 132 N.J. Super. 597, 334 A.2d 398 (Middlesex County Ct. 1974), which applied the patient/physician privilege to preclude disclosure of results of a blood test, although police were at the hospital at the time the blood sample was taken and were prevented from obtaining another sample only because defendant was receiving medical attention. [10] If it is decided that granting the motion to suppress at this stage is not a ruling upon the admissibility of the test results at a subsequent trial, the decision then would be tantamount to quashing the subpoena. In such event, the State would have the right to make application for a new subpoena duces tecum supported by a more comprehensive affidavit of all of the objective facts known at the time of the event or discovered within a reasonable time thereafter, sufficient to establish a reasonable basis to believe that the operator was intoxicated. [11] In that context, Patrolman Hall's affidavit may well have presented sufficient information to establish a reasonable basis to believe that defendant was intoxicated, apart from the information obtained from Nurse Dickey as to the blood alcohol reading. The affidavit reveals the erratic driving by defendant resulting in the two collisions, as well as the statement by defendant acknowledging she had been drinking screwdrivers. However, that admission was only made after defendant was informed of the results of her blood alcohol test and may have been part of the confidential communication within the patient/physician privilege for the purpose of obtaining appropriate treatment. This, of course, is impossible to determine in the absence of a plenary hearing. Additionally, Nurse Dickey testified that in her conversation with Officer Hall, "I believe I asked him whether they had done a breathalyzer at the scene and then confirmed that we had done a blood alcohol," before disclosing the reading. Nurse Dickey's inquiry about a breathalyzer may support an inference of a substantial reading. [12] However, at oral argument before us, the assistant prosecutor insisted that Officer Hall had no such personal suspicion, presumably placing Officer Hall in the same position as Officer Horenko in the Dyal case. [13] If defendant was not a "patient" as defined in N.J.S.A. 2A:84A-22.1(a), or the taking of the blood in a hospital emergency room setting was not a confidential communication as defined in the statute, the privilege does not exist and Dyal does not come into play. See State v. M.P.C., supra, 165 N.J. Super. at 137, 397 A.2d 1092, and State v. Burns, supra, concerning taking blood samples without consent. Of course, in these cases there was probable cause. [14] The municipal court judge may also have understood the Dyal opinion to mean that issuance of the subpoena duces tecum was only for investigative purposes.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527234/	391 Pa. Superior Ct. 79 (1990) 570 A.2d 522 In re P.A.B.; M.E.B.; M.A.B. Appeal of G.B. and P.B., Appellants. Supreme Court of Pennsylvania. Argued September 28, 1989. Filed January 24, 1990. Reargument Denied March 8, 1990. 80 Ralph D. Oyler, Gettysburg, for appellants. Chester G. Schultz, Gettysburg, for Children & Youth Services, participating party. Before CIRILLO, President Judge, and BECK and JOHNSON, JJ. JOHNSON, Judge: This is an appeal from an order terminating the parental rights of appellants father G.B. and mother P.B. (Parents). We are asked to apply the Grounds for Involuntary Termination provision of the Adoption Act specifically, 23 Pa. C.S. § 2511 (a)(5) to loving parents who have an irremediable incapacity. In doing so we must examine how the parental incapacity impacts upon both the physical and emotional dimensions to the children's needs and welfare. In this case we must take into account the existing parent-child bond, an undisputed fact of record. We conclude that a proper application of the statute mandates against termination; maintaining the natural parent-child relationship best serves the children's needs and welfare. Therefore we reverse the order terminating the Parents' rights. The Parents are married and have three children. P.A.B. (Patrick), born September 22, 1977 is diagnosed as moderately mentally retarded; M.E.B. (Mark), born April 18, 1980 suffers from developmental disabilities; and M.A.B. (Melissa), born May 1, 1982 has heart disease that requires medication. Although no evidence was presented at the hearing on the subject, counsel for the Parents as well as 81 for Children and Youth Services (CYS) aver that the Parents are mentally incapacitated. The trial court incorporated this averment into its findings: "The parents are of limited intelligence, limited parenting skills and limited ability to understand the obligations and duties of parenthood." Finding of Fact Number 4. The Parents needed assistance in caring for their children, which was provided by various social service agencies. However, in March of 1984, CYS decided that these efforts were insufficient, and Patrick and Melissa were removed from the Parents' custody, were adjudicated dependent and were placed in foster homes. In July of 1983 Mark was removed and was adjudicated dependent, at which time he was placed in foster care. He was returned to the custody of his parents in October of 1983, but CYS resumed custody in March of 1984. Mark is now in a specialized group home. Since the childrens' removal, the Parents have put forth considerable effort to maintain association with the children, including meeting a bi-monthly visitation schedule despite the hardships attendant to living in a rural area without private transportation. According to CYS, these visits are conducted outside the Parents' home due to the need to supervise the visits; CYS claims that the Parents cannot control the children without assistance. In addition, both parents have been attending parenting classes and have been striving to do their best to understand parental duties and how to perform them. On February 17, 1988 CYS filed separate petitions to terminate the Parents' parental rights in each child. The petitions did not designate a particular section or sections of the Adoption Act under which termination would be appropriate. However, the petitions included language from 23 Pa.C.S. §§ 2511(a)(2) and (a)(5). These sections provide: (a) General rule. The rights of a parent in regard to a child may be terminated after a petition filed on any of the following grounds: 82 . . . . (2) The repeated and continued incapacity, abuse, neglect or refusal of the parent has caused the child to be without essential parental care, control or subsistence necessary for his physical or mental well-being and the conditions and causes of the incapacity, abuse, neglect or refusal cannot or will not be remedied by the parent. . . . . (5) The child has been removed from the care of the parent by the court or under a voluntary agreement with an agency for a period of at least six months, the conditions which led to the removal or placement of the child continue to exist, the parent cannot or will not remedy those conditions within a reasonable period of time, the services or assistance reasonably available to the parent are not likely to remedy the conditions which led to the removal or placement of the child within a reasonable period of time and termination of the parental rights would best serve the needs and welfare of the child. 23 Pa.C.S. § 2511 (emphasis added). Counsel were appointed to represent the children as well as to represent the Parents in the termination proceedings. Following hearings, which took place on April 19, 21 and 22, 1988, the court entered Findings of Fact. Along with these findings of fact the court raised sua sponte whether the statutory language of section 2511 may be applied to the Parents, who have no control over their deficiencies, or whether policy considerations and/or constitutional considerations require a different result. The court asked counsel to brief and argue this constitutional question, which they did. Subsequently, the court entered Conclusions of Law and a Decree Nisi on July 25, 1988 finding that the requisites of Pa.C.S. § 2511(a)(5) had been met. The court also concluded, based upon the supreme court's decision in In re William L., 477 Pa. 322, 383 A.2d 1228 (1978), cert. denied 83 sub nom Beatty v. Lycoming County Children's Services, 439 U.S. 880, 99 S.Ct. 216, 58 L.Ed.2d 192 (1978), that the statutory language on its face does not trigger an unconstitutional termination of rights. The Parents filed exceptions in which they challenged the trial court's factual findings as well as whether CYS demonstrated by clear and convincing evidence that the elements necessary to terminate parental rights were present. On October 28, 1988 the Parents filed supplemental exceptions, in which they disputed specific findings of fact. On April 10, 1989, the court dismissed the exceptions and rendered absolute the decree terminating the Parents' parental rights. The Parents now appeal, raising the following issues: 1. Does 23 Pa.C.S. § 2511(a)(5) violate the equal protection clause of the 14th Amendment to the United States Constitution? 2. Has Pennsylvania chosen the least restrictive means of promoting its interest in protecting minor children? 3. Does 23 Pa.C.S. § 2511(a)(5) violate the due process clause of the 14th Amendment to the United States Constitution? 4. Does public policy mediate against the termination of parental rights in the absence of a finding of fault? 5. Was the evidence adduced at the hearing in the case sub judice sufficient to support the termination of the Parents' parental rights? In reviewing an order involuntarily terminating parental rights: [T]he scope of appellate review is limited to the determination of whether the decree of termination is supported by competent evidence. (citation omitted). If the decree is adequately supported by competent evidence, and the chancellor's findings are not predicated upon capricious disbelief of competent and credible evidence, the adjudication of the Orphan's Court terminating parental rights will not be disturbed on appeal. (citation omitted). It is 84 established that, in a proceeding to involuntarily terminate parental rights, the burden of proof is upon the party seeking termination to establish by "clear and convincing evidence" the existence of grounds for doing so. Santosky v. Kramer, 455 U.S. 745, 102 S.Ct. 1388, 71 L.Ed.2d 599 (1982) (citation omitted). In re Adoption of J.J., 511 Pa. 590, 593-594, 515 A.2d 883, 885-886 (1986), quoting Matter of Adoption of G.T.M., 506 Pa. 44, 46, 483 A.2d 1355, 1356 (1984). Unless the Orphans' Court abused its discretion or committed an error of law, its findings are entitled to the same weight given a jury verdict. In re Adoption of J.J., 511 Pa. at 594, 515 A.2d at 886. With this standard in mind we will address the Parents' appeal. The Parents mount a facial constitutional challenge to 23 Pa.C.S. § 2511(a)(5). The Parents argue that the statute denies them due process by allowing termination when the unsatisfactory conditions are not a result of any fault on their part. They also submit that they are denied equal protection because the statute impermissibly treats the class of mentally incapacitated people such as themselves differently from others. The substance of their challenge is that mentally impaired parents, by nature, are not capable of improving and so are not capable of remedying adverse conditions resulting from their impairment. Thus, once children have been removed from the home for at least six months, they argue that 2511(a)(5) operates automatically to terminate parental rights of mentally impaired parents: the conditions that led to the removal will always continue to exist, and no amount of agency assistance will remedy the conditions at all, let alone within a reasonable period of time. The crux of this case is whether the status of having a permanent mental disability is alone sufficient to satisfy 2511(a)(5). This is primarily an issue of statutory interpretation. When a case raises both constitutional and nonconstitutional issues, and if the case can properly be decided on nonconstitutional grounds, we should not reach the constitutional 85 issue. Ballou v. State Ethics Commission, 496 Pa. 127, 436 A.2d 186 (1981). Further, in ascertaining legislative intent, we are to presume that the General Assembly, in creating legislation, does not intend to violate either the state or federal constitutions. 1 Pa.C.S. § 1922(3). Thus, we do not address the equal protection issue raised here; a resolution of how the statute is to be applied properly resolves the case. A decision that termination would best serve the needs and welfare of the children is required by 2511(a)(5). This determination is not a mere formality flowing from the existence of the preceding four elements enumerated in the statute, 1) removal from parental care for at least six months, 2) continued existence of conditions that led to the removal, 3) a finding that the parents cannot or will not remedy these conditions within a reasonable period of time, and 4) a finding that services available are not likely to bring about the remedy of the conditions. In this case the court found that the status of mental incapacity was sufficient to satisfy section 2511(a)(5). The court found that the children had been placed outside the home for at least six months and that, because the parents were mentally impaired, the conditions leading to the removal would not change, regardless of assistance available. Based solely upon these determinations, the court concluded that "[t]ermination of parental rights will best serve the needs and welfare of the child." Completed Adjudication and Decree Absolute, April 10, 1989. The trial court's opinion implied that satisfaction of these four requisites required the conclusion that termination would best serve the childrens' needs and welfare. The trial court did not consider needs and welfare as a discrete consideration. Therefore, the court committed an error of law in misapplying the statute. If the language of the statute creates ambiguity in how it is to be applied to mentally impaired parents, then it is up to the legislature to clarify its application. Our responsibility as an appellate court is to consider the consequences, both 86 legal and practical, of our interpretation. 1 Pa.C.S. § 1921(c)(6). Our underlying concern as we consider this case should be whether an application of 2511(a)(5) that permits termination of the rights of parents who love their children simply because the parents are retarded is consistent with the legislative intent. We conclude that the language of the statute does not require this interpretation. Moreover, in this case, the facts do not warrant this result. Needs and welfare denotes certain minimum requirements to which all children are entitled, including adequate housing, clothing, food and love. In re Coast, 385 Pa.Super. 450, 466-67, 561 A.2d 762, 770 (1989) (en banc). Thus, needs and welfare has both a tangible dimension, food, clothing and shelter, and an intangible dimension, parental love. The bond with parents is unique and irreplaceable, making preservation of family ties prima facie in the best interests of the child. Conversely, where preserving family unity in form when no parent-child relationship exists will in fact cast the child into an unstable and unhappy environment, a consideration of the child's needs and welfare may warrant termination. See William L., In re Angry, 361 Pa.Super. 180, 522 A.2d 73 (1987). If, as here, ties with natural parents are present and are an active force in the child's life, then needs and welfare becomes a concept that argues against termination rather than fosters it. See Coast, supra, (Beck, J. concurring). It follows that in a termination proceeding under 2511(a)(5), a court, in considering what situation would best serve the child's needs and welfare, must examine the status of the natural parental bond to consider whether terminating the natural parents' rights would destroy something in existence that is necessary and beneficial. Hence, the party seeking termination, the one that bears the burden, Santosky v. Kramer, supra, must prove that the family ties either do not exist or no longer help but rather hinder the children. See In re Angry, 361 Pa.Super. at 182-85, 522 A.2d at 75. That the child has already been removed from the home, as is always the case in a termination 87 proceeding instituted under 2511(a)(5), does not in itself mean that a beneficial parent-child bond does not exist. This fact alone cannot be dispositive of whether termination best serves the child's needs and welfare. Thus, to apply the statute correctly, there must be an inquiry into the status of the bond, regardless of whether the parents have a physical or mental incapacity. Our supreme court resolved the due process issue in In re William L., supra, where a retarded and pregnant mother voluntarily gave up her three older sons for placement and where CYS sought termination. The court held that parental incapacity due to retardation is a permissible constitutional basis upon which to base termination of incapacitated parents' rights. Significantly, however, the court's ensuing analysis demonstrated that a necessary underpinning to this holding is a proper consideration of all factors bearing upon the child's needs and welfare in light of the facts of record. First, William L. establishes that while the state can generally not enter into the private realm of family life and that parental rights must be accorded significant protection, the state as parens patriae has an affirmative duty to protect minor children. Thus, the restraint on state interference in family matters does not reach so far as to compel the courts to protect parental rights at the expense of ignoring the rights and needs of children. William L., 477 Pa. at 337, 383 A.2d at 1236. Where the parents do not, for whatever reason, provide for the needs of their children: [t]he interest of the parent in keeping the child conflicts with the interest of the child in its essential physical and emotional needs and the Legislature has constitutionally mandated that the interests of the weaker party, the child, should prevail. William L., 477 Pa. at 339, 383 A.2d at 1236. The William L. court rejected appellant's assumption that the purpose of the termination statute was to punish an ineffective or negligent parent and that therefore a finding of parental fault was constitutionally necessary before termination. Rather, the court pointed out, inquiry should center upon 88 the welfare of the child rather than the fault of the parent. 23 Pa.C.S. § 2511, Comment 1970. Next, having decided that the statute was facially constitutional, the William L. court took great care in applying the statute to the facts. The court considered whether the retardation prevented the mother from properly caring for her sons and by reviewing the evidence concluded that it did. However, it did not accept this conclusion as alone sufficient to meet the terms of the statute. The court found it necessary to carry its analysis one step further to discover whether, as a result of the parent's inability to provide care: [T]he parent-child relationship is substantially "weakened by long separation" and cannot be re-established. William L., 477 Pa. at 350, 383 A.2d at 1242. Recognizing that the parent-child relationship is necessary to the child, and that an existing parent-child relationship with a natural parent should not be disturbed, the court determined that an irredeemable breakdown of this relationship would justify termination so that the child could form a new bond with an adoptive parent; the child should not be left in limbo with no parental bond at all: In such circumstances, the issue is not whether the state should intrude to disrupt an on-going family relationship, but whether the state should seek to preserve in law a relationship which no longer exists in fact, with the result that the child is consigned indefinitely to the limbo of foster care or the impersonal care of institutions. William L., 477 Pa. at 348-349, 383 A.2d at 1241. The court concluded that the record supported the finding that a parental relationship no longer existed and that whatever relationship had been had greatly deteriorated. All three sons testified that they did not want to live with their mother. Each child was in a pre-adoptive home. Given that there was no relationship with the natural mother, the William L. court affirmed the trial court's conclusion that the children required a parental bond and that termination would further this goal by paving the way for 89 adoption. Similarly, in In re D.L.R., 495 Pa. 55, 432 A.2d 196 (1981), the supreme court, relying upon William L., summarily affirmed termination of a retarded mother's parental rights giving as the reason that the record supported the trial court's determination. Even if the issue before the court was, as was expressed in the dissent, whether mental incapacity alone may justify a termination, the court's reliance upon William L. suggests that the supreme court affirmed a determination resulting from a properly thorough analysis and not a conclusion that the mere existence of mental incapacity is sufficient to terminate parental rights. The present case is distinguishable from William L. upon the facts as well as in the way that the court applied the statute. In the present case the trial court accepted the attorneys' stipulations that the Parents were retarded. Assuming this, the testimony given by social workers regarding the Parents' inability to care for their children without aid is irrelevant to the nature and strength of the parent-child bonds. However, the record does establish that a parental bond exists, and the trial court itself so concluded. The court found that "The parents have consistently displayed a loving and caring attitude toward the children and have inquired as to their welfare, taken presents and have consistently exhibited the care and love of parents." Findings of Fact, Number 11. This finding was supported by uncontested evidence. The Parents raised the three children for six, four and two years respectively, until CYS found it necessary to remove them from the home. Since removal, the Parents have maintained a visitation schedule and have participated in parenting classes. While CYS presented extensive testimony that the Parents had difficulty with such functions as shopping, dressing the children, administering medication and controlling the childrens' behavior, none of this testimony negated the existence and quality of the emotional parent-child bond. Several of the social workers testified that the Parents obviously loved their children. 90 On the other hand, in William L., the court had before it expert testimony of a psychiatric examination as well as testimony that even visitation had an adverse effect upon the child. None of this was present in the record in the Parents' case. Significantly, there is not one shred of evidence that the Parents' presence had any detrimental effect upon the children. The worst that was testified to was that the children did not obey the Parents during visits. This could be expected where the parents see their children only once every two weeks. We must also remember that these children have special needs to which any parent would have difficulty ministering. When analyzing a parent's performance, we measure the performance in light of what we would expect an individual to do in circumstances similar to those in which the parent finds himself. In re Adoption of B.D.S., 494 Pa. 171, 431 A.2d 203 (1981). Cases which at first appear to decide the role of a mental handicap of parents in termination proceedings are, upon closer inspection, inapposite. In In Adoption of J.J., the appellant father was schizophrenic. While the court held that a mental impairment resulting in incapacity may be grounds for termination, the court based its decision upon additional facts, that the father had originally denied paternity, had taken little interest in visiting the child, was unemployed and used drugs. We also affirmed termination of parental rights in In re Angry, supra, where the child was born in a mental ward from which the father tried to kidnap him, and CYS gained immediate custody. In neither of these cases was there an existing parent-child bond. In contrast, termination would be detrimental to the present children's needs and welfare not only because it would sever an important existing parent-child bond, but also because nothing will take the place of this bond. Generally, CYS attempts to plan toward stabilization of a child's situation, and, toward this end, adoption may best serve a child's needs and welfare in a given case. See In re Damon B., 338 Pa.Super. 597, 488 A.2d 53 (1985). Termination of parental rights is usually a step toward adoption, 91 although an adoption need not be imminent before an agency may bring a termination petition. In re Burns, 474 Pa. 615, 379 A.2d 535 (1977). In this case, the record only suggests in one statement in testimony that there may be a possibility that Melissa's foster parents will adopt her. No alternative permanent situations are on the horizon for Patrick and Mark. Thus, termination would cut off a natural and beneficial parent-child bond and would not facilitate putting another in its place. Termination would stabilize nothing. We conclude that nothing in the record in this case indicates that a change in the children's situations would serve their needs and welfare. A determination that the Parents' incapacity results in an inability to care for the children and that the condition cannot improve over time is alone insufficient to warrant termination under 2511(a)(5). In considering how termination affects the children's needs and welfare, a court must consider the role of the parental bond in the children's lives. Here, significantly, the court acknowledged but did not consider the children's relationship with the Parents. No precedent prevents the children from living outside the parental home while at the same time maintaining a relationship with the Parents, and no one advocates returning the children to the Parents' custody. The children's family would be extended by a disposition of non-termination, and their experience enriched. The children benefit from the relationship with the Parents that they now have. To terminate the Parents' rights would sever the relationship and injure the children. From the undisputed facts of record and from the trial court's own findings of fact, we apply § 2511(a)(5) and conclude that maintaining the status quo best serves the children's needs and welfare. The order terminating the Parents' parental rights is reversed.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/734136/	105 F.3d 927 UNITED STATES of America, Plaintiff-Appellee,v.Leola M. MARSH, Claimant-Appellant,andReal Property in Mecklenburg County, North Carolina, knownas Leola's Plaza, Located at 1501 West Boulevard,and Safety Deposit Box 148, WilkinsonBoulevard, Office Of FirstCitizens Bank, Defendant. No. 94-2232. United States Court of Appeals,Fourth Circuit. Argued July 10, 1996.Decided Jan. 31, 1997. ARGUED: C. Murphy Archibald, Charlotte, North Carolina, for Appellant. B. Frederic Williams, Jr., Assistant United States Attorney, Charlotte, North Carolina, for Appellee. ON BRIEF: Mark T. Calloway, United States Attorney, Charlotte, North Carolina, for Appellee. Before RUSSELL, WIDENER, and HALL, Circuit Judges. Affirmed in part, vacated in part, and remanded by published opinion. Judge WIDENER wrote the opinion, in which Judge RUSSELL joined. Judge HALL wrote a separate opinion concurring in part and dissenting in part. OPINION WIDENER, Circuit Judge: 1 Leola Marsh appeals from a final order of the United States District Court for the Western District of North Carolina entering judgment of civil forfeiture of real property in favor of the United States and denying her motion for reconsideration. She argues that the government's failure to provide her with notice and a hearing before it seized the property violated her due process rights. Additionally, Mrs. Marsh argues that there was not probable cause for the initial seizure, and she raises other objections. For the reasons below we affirm in large part, but vacate in part, and remand for further proceedings consistent with this opinion. I. 2 The procedural history of this case is long and involved. The history and voluminous evidence is well summarized in the magistrate judge's memorandum and recommendation as adopted and published by the district court in United States v. Real Property in Mecklenburg County, N.C., Known as Leola's Plaza, 814 F.Supp. 468, 470-484 (W.D.N.C.1993). Accordingly, we relate only the essential chronology of this litigation. 3 On August 31, 1989 the United States Attorney for the Western District of North Carolina filed for and obtained a warrant of arrest in rem for Leola's Plaza. Pursuant to 21 U.S.C. § 881(a)(6) and (a)(7) the warrant was based on probable cause stated in the complaint that the property was acquired with the proceeds of drug trafficking by one Leroy Ragin, Mrs. Marsh's nephew. 4 The warrant of arrest in rem was based on the sworn statements of IRS and FBI agents. The government seized the property on September 1, 1989. The government gave notice to potential claimants, both personally and through newspaper publication, and recorded a lis pendens as required by 21 U.S.C. § 881(d), 18 U.S.C. § 981(d), the relevant procedural laws at 19 U.S.C. §§ 1602 et seq., and the Supplemental Rules for Certain Admiralty and Maritime claims. 5 Leola's Plaza is a strip mall in Charlotte, worth about $300,000, titled to the appellant Leola Marsh, and was built in 1986. At the time the government initiated the forfeiture proceedings, Mrs. Marsh operated her own business as a beautician in one of the seven units of the mall. Mrs. Marsh's tax returns show that her adjusted gross income in 1986 and for the preceding five years was a total of $16,215, for an average of $2,703. Interrogatories, however, revealed that from 1977 to 1991 she spent $1,500 per month on "basic living expenses," with no indication of any supplementary nontaxable income. Ragin is currently serving a twenty-eight year prison term for money laundering and operating a continuing criminal enterprise in Charlotte, North Carolina. 6 On August 26, 1991 the United States filed a motion for summary judgment supported by a 97-page memorandum and two volumes of affidavits, documents, and exhibits. In particular, the evidence included: documents bearing Ragin's signature for construction contracts for Leola's Plaza and invoices showing $99,000 in payments for the construction; an appraisal for the U.S. Marshal showing normal cost of construction would be $268,569; IRS affidavits and bank records showing a source of funds for the plaza's construction was a corporation owned by Ragin; affidavits by a contractor that the construction site for Leola's Plaza at times looked like an armed camp. 7 Many of these documents resulted from the extensive discovery engaged in by both parties. From September of 1989 until the summary judgment hearing the magistrate judge heard several motions by both sides regarding the extent and pace of discovery. Both sides took depositions and posed interrogatories, and at least six hearings were held on such issues between October 18, 1989 and November 1991. Additionally, the attorneys engaged in status conferences with the magistrate judge in order to balance the need for discovery with concerns regarding the then ongoing criminal trial of Ragin. 8 Mrs. Marsh filed a response to the summary judgment motion, unaccompanied by evidence, on October 31, 1991. On November 7, 1991 the government filed its reply arguing that Mrs. Marsh's response was inadequate under the standards for summary judgment. On the eve of the November 12, 1991 summary judgment hearing, as the district court related, "Marsh filed a quantity of documents without explaining how they relate[d] to any issue" of the summary judgment motion. The district court and the government became aware of these documents at the hearing. 9 The magistrate judge recommended summary judgment for the government and filed his memorandum and recommendation on February 14, 1992. Mrs. Marsh filed her objections to the recommendation on February 25, 1992, which she supplemented with documentary exhibits on March 31, 1992. The government replied on April 10, 1992, noting that the documents were not in the summary judgment record. On January 15, 1993 the district court rejected the objections and confirmed the memorandum and recommendation of the magistrate judge, thereby dismissing both Mrs. Marsh's claim and counterclaims, and forfeiting the defendant property. 10 Mrs. Marsh noted her first appeal on February 18, 1993. Acting on the judgment of the district court, the marshal's service attempted to collect rent from Mrs. Marsh at the fair market rate of $900 per month. Mrs. Marsh was only able to pay $200, the government says, and the marshal refrained from selling the property, but collected rent from the tenants in the plaza. On March 16, 1993, Mrs. Marsh moved for a stay of the decision, which the district court denied on March 18, 1993. On March 25, Mrs. Marsh filed a motion to stay the judgment which this court denied on April 16, 1993. On November 23, 1993 this court decided that the district court in affirming the magistrate judge's recommendation had failed to state whether it had conducted a de novo review of the report. Accordingly, we remanded the case requiring either confirmation that the proper review had been performed, or the performance of such review. 11 On remand, the court referred the matter to a magistrate judge by a May 31, 1994 order. That same order found that the property had been seized in 1989 contrary to the December 13, 1993 decision of United States v. James Daniel Good Real Property, 510 U.S. 43, 114 S.Ct. 492, 126 L.Ed.2d 490 (1993), which required notice and the opportunity for a pre-seizure hearing for real estate. On June 1, 1994 the government filed a motion and proposed order pertaining to the seized property which the government states was standard in the district for seizure cases following Good. In its motion to conform the warrant of arrest in rem to the Good decision the government stated that it had not done so earlier, as it had in other cases involving Good violations, because "a judgment had been entered after Mrs. Marsh had a full opportunity for a hearing." The magistrate judge signed the order, and it was filed June 2, 1994. One month later on July 1, 1994 Mrs. Marsh requested that the magistrate judge recuse himself due to his earlier involvement in the U.S. Attorney's Office in the case against Ragin. On July 12, 1994 the magistrate judge recused himself from the matter. 12 On August 10, 1994 the original district court judge, in response to this court's mandate, confirmed that he had done a de novo review of the magistrate judge's memorandum and recommendation. Accordingly, the district court on August 19, 1994 entered judgment incorporating by reference the original grant of summary judgment by the district court. Mrs. Marsh filed Rule 59 and 60 motions for relief of judgment and reconsideration on August 29, 1994 and the government responded September 13. On September 16 Mrs. Marsh replied, and on February 3 the district court denied the motions for reconsideration. Mrs. Marsh appealed pro se on March 3, 1995, and we ordered that Mrs. Marsh secure counsel to formally brief and argue her appeal. II. 13 On December 13, 1993 United States v. James Daniel Good Real Property, 510 U.S. 43, 59, 114 S.Ct. 492, 503-504, 126 L.Ed.2d 490 (1993), established that in civil forfeiture proceedings, unless the Government establishes there were exigent circumstances, Fifth Amendment Due Process concerns require the government to provide both pre-seizure notice and a meaningful opportunity to be heard. The Court noted that: 14 [f]airness can rarely be obtained by secret one-sided determination of facts decisive of rights.... No better instrument has been devised for arriving at truth than to give a person in jeopardy of serious loss notice of the case against him and opportunity to meet it. 15 Good, 510 U.S. at 55, 114 S.Ct. at 502 (quoting Joint Anti-Fascist Refugee Comm. v. McGrath, 341 U.S. 123, 170-172, 71 S.Ct. 624, 647-649, 95 L.Ed. 817 (1951) (Frankfurter, J., concurring) (footnotes in original omitted)). Good underscored that not only is seizure unnecessary to obtain jurisdiction in rem over a res (Good, 510 U.S. at 57-58, 114 S.Ct. at 502-503 (citing Rule E(4)(b), Supplemental Rules for Certain Admiralty and Maritime Claims)), but that seizure is not required to achieve the goals of § 881(a)(7) of preventing sale, destruction, or further use of the property for illegal purposes prior to the actual forfeiture. Good, 510 U.S. at 58, 114 S.Ct. at 503. Absent exigent circumstances, the filing of a lis pendens (see 28 U.S.C. § 1964) or the use of a restraining order will normally suffice to protect these legitimate interests of the Government. Good, 510 U.S. at 58, 114 S.Ct. at 503. 16 Here the September 1, 1989 seizure of Leola's Plaza predated the Good decision. Hence, the government acted in compliance with the then existing law by seizing the rents and property only after obtaining a warrant of arrest in rem based on an ex parte showing of probable cause before a neutral magistrate judge. See Calero-Toledo v. Pearson Yacht Leasing Co., 416 U.S. 663, 94 S.Ct. 2080, 40 L.Ed.2d 452 (1974). 17 There can be no doubt that the change in the law brought about by Good applies here, given that this civil matter was winding its way through direct appeal at the time of the Good decision. See Harper v. Virginia Dep't of Taxation, 509 U.S. 86, 96-97, 113 S.Ct. 2510, 2517-2518, 125 L.Ed.2d 74 (1993) (new rule of law applies to pending civil cases on direct appeal). Other circuits have given effect to Good under almost identical circumstances. See, e.g., United States v. All Assets and Equipment of West Side Building Corp., 58 F.3d 1181, 1191 (7th Cir.1995); United States v. Real Property Located at 20832 Big Rock Drive, 51 F.3d 1402, 1405-6 (9th Cir.1995); United States v. Certain Real Property Located at 16510 Ashton, 47 F.3d 1465, 1470 (6th Cir.1995). III. 18 The circuits are not in agreement as to the appropriate remedy where an individual did not receive both notice and a hearing before the seizure as required by Good. See United States v. All Assets and Equipment of West Side Building Corp., 58 F.3d 1181, 1193 (7th Cir.1995). Mrs. Marsh urges that we follow the Eighth and Eleventh Circuits' rule that a Good violation requires the dismissal of the forfeiture action. United States v. 2751 Peyton Woods Trail, 66 F.3d 1164 (11th Cir.1995); United States v. One Parcel of Real Property, Located at 9638 Chicago Heights, 27 F.3d 327, 330 (8th Cir.1994). We note, however, that both of these courts permit a new action if timely. 19 We find the view of the Seventh, Ninth, and Tenth Circuits more persuasive. Under their approach, a Good-violative seizure does not immunize the property from forfeiture. See United States v. All Assets and Equipment of West Side Building Corp., 58 F.3d 1181, 1193 (7th Cir.1995); United States v. Real Property Located at 20832 Big Rock Dr., 51 F.3d 1402, 1405 (9th Cir.1995); United States v. 51 Pieces of Real Property Roswell N.M., 17 F.3d 1306 (10th Cir.1994). 20 But the due process violation is not without remedy. The circuits not dismissing the action have tailored the remedy in a fashion commensurate with the violation of the rights of the claimant: the government must account for the profits or rent which it denied the claimant during the period of illegal seizure. We adopt this remedy. See, e.g., United States v. 51 Pieces of Real Property Roswell N.M., 17 F.3d 1306 (10th Cir.1994). 21 In such an instance, as here, at the time Mrs. Marsh received an adversarial hearing on the forfeiture, she had received all the process she was due. Cf. Parratt v. Taylor, 451 U.S. 527, 543-44, 101 S.Ct. 1908, 1916-1917, 68 L.Ed.2d 420 (1981) (a claimant raising a federal due process claim who could have received redress through state remedies had received all process he was due). 22 Here, the initial seizure in violation of Good occurred on September 1, 1989 when the government obtained both the warrant for arrest in rem of the real property, and an order requiring the tenants at the plaza to pay their rents to the marshal. On November 12, 1991, after extensive discovery and litigation in which Mrs. Marsh was represented by counsel, the magistrate judge held a hearing on the summary judgment motion. Even if the litigation up to that date may, at some point, have met the due process requirement of Good, there can be no doubt that the November 12, 1991 summary judgment hearing before the magistrate judge met Good 's adversarial hearing requirement. 23 In seeking to limit the period in which the government illegally collected the rent, the government refers to an October 1989 hearing before the magistrate judge at which "[Mrs.] Marsh declined an opportunity for a hearing on probable cause." 24 A review of the record, however, does not support the statement that Mrs. Marsh declined an opportunity for a hearing on probable cause. A motion filed by the government on November 21, 1989 indicates that the United States did not request prompt action on a motion it had filed to dismiss the counterclaims of Mrs. Marsh, and the fact that the United States did not request prompt action on the motion was there indicated by the government to be "pursuant to an understanding between the United States and claimant Leola Marsh." A letter dated November 21, 1989 from Mrs. Marsh's attorney to the magistrate judge similarly indicated that it was his understanding that all motions filed would be held in abeyance pending efforts to resolve the matter informally. This is hardly a denial by Mrs. Marsh of an offered opportunity for a due process hearing. 25 Thus the government must account for the seizure of all rents derived from the shopping mall collected by marshal for the period beginning with the seizure on September 1, 1989 until the date of the summary judgment hearing on November 12, 1991 when Mrs. Marsh received all the process she was due. Cf. Cox v. Northern Virginia Transp. Comm., 551 F.2d 555, 558-559 (4th Cir.1976) (period of accounting for due process violation for wrongful discharge terminated on the date of a district court hearing in which plaintiff had ample opportunity to obtain the process she was due). IV. 26 Mrs. Marsh's remaining arguments may be briefly disposed of. 27 We affirm the forfeiture of the property for the reasons expressed by the district court in its adoption of the report and recommendation of the magistrate judge found in United States v. Real Property in Mecklenburg County, N.C., Known as Leola's Plaza, 814 F.Supp. 468 (W.D.N.C.1993). There was overwhelming evidence that probable cause existed to seize the property because it was purchased with proceeds of drug dealing and involved in money laundering. The district court was correct in its finding that Mrs. Marsh did not produce evidence to prove a defense. 28 Mrs. Marsh did not raise the question of an excessive fine until she filed a motion for reconsideration after the district court's judgment was entered. Even if the motion had been timely filed, it was without merit. As before stated, the proof is overwhelming that the property was purchased as a laundering device for illegal drug money. 29 The suggestion of the government in its brief that exigent circumstances existed so as to justify the seizure of the property without a hearing is without merit. The fact that Mrs. Marsh had borrowed money on the property and that Ragin may have been aware of the investigation do not suffice. 30 We express no opinion on Mrs. Marsh's argument in her brief that a claim of First Citizens Bank is invalid. First Citizens Bank is not a party to this proceeding, and we decline to answer a question with respect to its claim in a proceeding to which it is not a party. Undoubtedly, Mrs. Marsh and the bank will find a way to present their differences to an appropriate court. 31 On remand, the district court should take appropriate action which is not inconsistent with this opinion. 32 The judgment of the district court is accordingly 33 AFFIRMED IN PART, VACATED IN PART, AND REMANDED. 34 K.K. HALL, Circuit Judge, concurring in part and dissenting in part: 35 First of all, if the issue be reached, I agree with the manner in which the majority has applied James Daniel Good here. An illegal initial seizure of property no more shields it from subsequent forfeiture than an illegal arrest immunizes a person from subsequent indictment or conviction. 36 I disagree, however, that we ought to apply James Daniel Good in this case at all. Unlike the claimant there, Mrs. Marsh raised no due process claim or defense in her answer or any prejudgment motion. On August 29, 1994, five years after the seizure, in a motion to reconsider the second entry of final judgment, Marsh first challenged the seizure's legality. I believe that this inordinate postdeprivation delay constituted a waiver of Marsh's predeprivation due process rights. 37 It is no answer to assert that James Daniel Good engendered the due process issue, thus possibly excusing the delay. The Supreme Court resolves the great legal issues of our day; it does not create them. The claimant in James Daniel Good had no trouble articulating the winning due process argument. Indeed, notwithstanding whether a given court would have agreed with that argument then, its simple premise--a man ought to be able to defend his home before losing it--struck such basic due process themes as to be almost self-evident. Just weeks after the seizure of Leola's Plaza, the Second Circuit adopted a predeprivation process rule very much like that later fashioned by James Daniel Good, United States v. Premises and Real Property at 4492 Livonia Road, 889 F.2d 1258, 1264 (2nd Cir.1989), and one of our First Circuit colleagues had previously argued, albeit unsuccessfully, for a similar result. Application of Kingsley, 802 F.2d 571, 582-583 (1st Cir.1986) (Torruella, J., dissenting). 38 I am all for the majority's return-of-rents remedy where a citizen has stood on his rights and seen them trampled. I fear, though, that extending such relief to one who did not timely seek it is neither fair to the public nor feasible in practice. Citizens waive clearly established rights every day. How do we distinguish the long-ago forfeiture defendant who would have appeared and contested the seizure at a predeprivation hearing from the one who, knowing it futile, would have waived it? My guess is that we cannot. 39 The errors of the past, however regrettable, cannot always, and should not sometimes, be repaired. This is one of those times. I would affirm the judgment of the district court, and I respectfully dissent to the extent the majority has vacated it.	01-03-2023	04-17-2012
https://www.courtlistener.com/api/rest/v3/opinions/1527236/	428 S.W.2d 316 (1968) James S. HOGAN, as Next Friend for Ernest Lamar Murphy, Petitioner, v. A. M. TURLAND, Respondent. No. B-543. Supreme Court of Texas. May 22, 1968. Mitchell, Gilbert & McLean, Arthur Mitchell, Austin, for petitioner. Neil E. Clinkenbeard, Killeen, for respondent. HAMILTON, Justice. This is an appeal from a judgment of the court of civil appeals dismissing an appeal from the county court refusing to issue a writ of mandamus to the justice of the peace to compel him to accept notice of appeal and an appeal bond in a misdemeanor conviction. The court of civil appeals held that it had no jurisdiction of the appeal. 419 S.W.2d 383. The facts of the case as stated in the opinion of the court of civil appeals are as follows: "Ernest Lamar Murphy, an eighteen-year-old boy, was arrested by city police in Killeen, without a warrant and without complaint, while playing a pin ball machine in the Yellow Cab Cafe. later that day, in a proceeding before A. M. Turland, Justice of the Peace of Precinct No. 4 in Bell County, the boy was fined $15 and was afterwards released from jail when a friend paid the amount of the fine by leaving the money with a police officer. "After the boy's mother and stepfather learned of the incident, the mother sought to appeal from the conviction by timely tendering notice of appeal and a bond to the justice of the peace, who refused to accept the papers. James S. Hogan, the boy's stepfather, acting as next friend, applied to the County Court for mandamus to compel the justice of the peace to receive the appeal; documents and to forward to County Court the record necessary to effect an appeal. William C. Black, County Judge, denied the application for mandamus." As stated by the court of civil appeals this case turns on whether or not this mandamus proceeding is a civil action or a criminal action, because its jurisdiction is limited by the Constitution to "all civil cases." Tex.Const. Art. V, § 6, Vernon's Ann.St. That court based its decision on its conclusions that this mandamus proceeding is not clearly a civil action, citing Gibbs v. *317 Melton, 354 S.W.2d 426, 428-429 (Tex.Civ. App., 1962, no writ history). The court of civil appeals in that case does hold that it had no jurisdiction in an appeal from an order of the district court granting a writ of mandamus ordering a justice of the peace to transfer a criminal case from a precinct, in which a complaint was filed, to another precinct in the same county where the alleged violation occurred. The court reasoned that since it should be called upon to interpret and pass upon the validity of article 60A, of the Code of Criminal Procedure in determining the case on appeal, it had no jurisdiction, holding that the proceeding was not a civil action in the meaning of the Constitution. The court of civil appeals in the instant case discussed two cases by the Fort Worth Court of Civil Appeals holding to the contrary; i.e., Castledine v. Mitchell, 336 S.W.2d 287 (Tex.Civ.App.1960, no writ history); Berume v. Hughes, 275 S.W. 268 (Tex.Civ. App.1925, no writ history). Both cases were appeals from a mandamus action filed in the county court following conviction for a misdemeanor in an inferior court. In each case the court held that the writ of mandamus was a civil remedy and that the court had jurisdiction. However, in the case before us the court of civil appeals concluded that it should follow Gibbs v. Melton, supra, rather than the Fort Worth Court, and refused to assume jurisdiction of the cause. We have concluded that a mandamus proceeding is a civil rather than criminal action. We approve, therefore, the holdings of the two cases decided by the Fort Worth Court of Civil Appeals, and disapprove that by the Dallas Court of Civil Appeals on the question of jurisdiction. The civil nature of the action is demonstrated by the fact that it is not brought by nor in the name of the state, and the officer against whom the writ is requested is not alleged to have committed a crime nor violated any penal statute. The complaint is that the officer simply refuses to perform his legal duty. Our holding is in accord with the weight of authorities. See City of Austin v. Cahill, 99 Tex. 172, 88 S.W. 542 (1905); Shirey v. City Board of Educ. of Fort Payne, 266 Ala. 185, 94 So.2d 758 (1957); Thomas v. State Bd. of Elections, 256 N.C. 401, 124 S.E.2d 164 (1962); 34 Am.Jur. Mandamus § 6 (1941); 55 C.J.S. Mandams § 2b (1938). Further, the court of criminal appeals has indicated that it will not take jurisdiction of an appeal from an order denying a writ of mandamus. Murphy v. Sumners, 54 Tex.Cr.R. 369, 112 S.W. 1070 (1908); See also, Eaves v. Landis, 96 Tex.Cr.R. 555, 258 S.W. 1056 (1924). We hold that the court of civil appeals does have jurisdiction of this case. We, therefore, reverse the judgment of that court dismissing the appeal and order the appeal reinstated.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527255/	570 A.2d 786 (1990) George C. LEGRAND, Appellant, v. UNITED STATES, Appellee. Nos. 87-924, 87-1440. District of Columbia Court of Appeals. Argued January 10, 1989. Decided February 23, 1990. 787 Stuart Fisk Johnson, appointed by the court, for appellant. Roberto Iraola, Asst. U.S. Atty., with whom Jay B. Stephens, U.S. Atty., and Helen M. Bollwerk, and Michael W. Farrell, Asst. U.S. Attys., Washington, D.C., at the time the brief was filed, were on the brief, for appellee. Before ROGERS, Chief Judge, and BELSON and SCHWELB, Associate Judges. SCHWELB, Associate Judge: The troubling question presented by this case is whether Appellant George C. Legrand 788 was sufficiently apprised of the consequences of his 1976 plea of not guilty by reason of insanity (NGI) where, as a result of that plea and the subsequent adjudication based on it, he has been deprived of his liberty for a period substantially in excess of the maximum term of incarceration for the underlying offense. The case is further complicated by the unavailability of a transcript of the original proceeding and the obvious difficulties in reconstructing what occurred on the basis of the recollections of the participants a decade after the fact. We hold that although the original trial judge's explanation of the consequences of the plea, as reconstructed, was not sufficiently thorough, Legrand has not sustained his burden of demonstrating manifest injustice, because his attorney had fully consulted with him with respect to the alternatives available to him and the considerations and risks incident to each. Accordingly, we affirm the denial of Legrand's motions to withdraw his plea and to vacate the NGI adjudication. I On June 30, 1976, Legrand was indicted on a charge of assault with a dangerous weapon.[1] On October 14, 1976, in a non-jury trial before Judge Tim Murphy on stipulated facts, Legrand entered a plea of not guilty by reason of insanity and was so adjudicated in accordance with his plea. Legrand was committed to the custody of St. Elizabeths Hospital (the Hospital) for an indeterminate period of confinement pursuant to § 24-301(d)(1). On December 3, 1976, at a "Bolton"[2] hearing convened pursuant to § 24-301(d)(2), Legrand failed to establish that, if released, he would not pose a danger to himself or others, and the court ordered that he remain committed. Although the maximum penalty which could have been imposed for the underlying offense was imprisonment for no less than forty months and no more than ten years, §§ 22-502, 24-203(a), Legrand remains under commitment thirteen years after his trial. On June 11, 1985, after a number of unsuccessful earlier attempts to secure his conditional release from the Hospital, Legrand filed a motion requesting the court to allow him to withdraw his plea of NGI, to vacate his commitment pursuant to that plea, and to order his unconditional release pursuant to § 24-301(k). The gravamen of his submission was that the proceedings before Judge Murphy had been fatally flawed because neither his former counsel, nor the prosecutor, nor the court advised him, nor did he learn from other sources before or at the hearing held on October 14, 1976, that one of the consequences of his insanity acquittal is that he legally could then be made to remain committed to Saint Elizabeths Hospital, on its criminal side, for the rest of his life, or certainly for a period of years in excess of the maximum term of incarceration allowed by statute for the criminal offense for which he had been indicted. Some seven years before Legrand filed this motion, the court reporter who had apparently been assigned to the bench trial had left the Superior Court. Her notes were nowhere to be found, and the proceedings had not been tape-recorded. In July 1986, a hearing was held before Judge Luke C. Moore[3] for the purpose of reconstructing the 1976 proceedings before Judge Murphy and resolving the issues raised by Legrand's motion. Judge Moore heard testimony from all of the principal participants at the 1976 bench trial, including Legrand, Judge Murphy, Judge Herbert Dixon (who had been Legrand's court-appointed counsel at the time of the bench trial, which took place before Judge Dixon was named to the bench), the prosecutor, the psychiatric expert and the courtroom clerk. Judge Moore thereafter made comprehensive 789 findings as to what had occurred in the stipulated bench trial before Judge Murphy, settled and approved a Statement of Proceedings and Evidence with respect thereto, and denied all of Legrand's motions on the merits.[4] With respect to the feasibility of reconstructing what had occurred at the bench trial, Judge Moore noted that since the Court was not the presiding judge at the trial in October 1976, and further, since the memories of the principal participating actors were diminished by the passage of time, the Court's task in reconstructing the statement was rendered somewhat more challenging but not insurmountable. He concluded that, notwithstanding the principal actors' "paucity of recollection of specific details," their testimony concerning their general practices and procedures in stipulated NGI cases enabled him (Judge Moore) to accomplish his task in accordance with the requisite standards, as prescribed in Cole v. United States, 478 A.2d 277 (D.C.1984) and Cobb v. Standard Drug Co., 453 A.2d 110 (D.C.1982). The judge also found that Legrand's "understandable lack of recall" of some significant details of the proceedings, together with contradictions in some of his testimony and his bias, reflected negatively on Legrand's credibility. With respect to the issue of what Judge Murphy had told Legrand during the 1976 hearing as to his potential loss of liberty, Judge Moore found that Judge Murphy explained to the defendant/acquittee, if the doctor's testimony "was right" as to Mr. Legrand's mental illness, that, as a practical matter, Mr. Legrand would be found not guilty by reason of insanity. Further, the Court found that Judge Murphy explained that defendant/acquittee would be sent to St. Elizabeths Hospital for 50 days, and that it would be up to the doctors at the hospital to decide whether Mr. Legrand stayed, after that, for a long or short time. In making this finding, the Court rejected the defendant/acquittee's selective memory concerning [these] matters, given his understandable inability, after so long a time, to recall other significant events[5] that transpired at the proceeding. In contrast to defendant/acquittee's sometimes equivocal and contradicted testimony at the hearing, Judge Murphy's testimony was firm as to his unvaried pattern and practice in a large volume of NGI proceedings and his adherence to that practice with the defendant/acquittee at the trial concerning this matter. (Emphasis added). With respect to Legrand's allegations that Judge Dixon had failed to advise him properly of his rights,[6] Judge Moore agreed with a finding by Judge Murphy that Judge Dixon was a "first rate lawyer" and "very meticulous." Noting that Judge Dixon, although unable to recollect all that transpired at the trial, "had a vivid recall of 790 his representation of Mr. Legrand," Judge Moore found that "counsel was studiously alert in defending Mr. Legrand's rights," and that Legrand had "failed to meet the standard enunciated in Strickland v. Washington, 466 U.S. 668[, 104 S.Ct. 2052, 80 L.Ed.2d 674] (1984)." Judge Moore also found that "[Legrand's] contention nine years after his NGI trial amounts to post-trial second guessing." In conclusion, the judge held that after examining the stipulated NGI proceeding in totality, the preparation and the handling of Mr. Legrand's defense by counsel, the Court [concludes] that the trial was fundamentally just, and no miscarriage of justice was evident. II On appeal, Legrand makes three principal contentions.[7] First, he alleges that he was denied the effective assistance of counsel in the trial court because Judge Dixon misled him as to how long he would be confined if he was adjudicated not guilty by reason of insanity. Second, he claims that he was denied his appellate rights because he was not provided with a transcript of the proceedings before Judge Murphy. Finally, he contends that even if this court accepts the Statement of Proceedings and Evidence as sufficient, Judge Moore's findings reveal that he was not adequately advised of the consequences of his NGI plea, a fundamental defect which, according to Legrand, resulted in a complete miscarriage of justice. We deal with each contention in turn. A. Ineffective assistance of counsel. Legrand's contention that his counsel was ineffective need not detain us long. In Strickland, supra, the Supreme Court held that, in order to establish a claim of ineffective assistance, a defendant must show first, that counsel's representation fell below an objective standard of reasonableness, and second, that there is a reasonable probability that, but for counsel's unprofessional errors, the result of the proceeding would have been different. 466 U.S. at 687-96, 104 S.Ct. at 2064-69. Judge Moore's findings foreclose any notion that Judge Dixon's representation of Legrand was inadequate. These findings are supported by the evidence and are not clearly erroneous, and we therefore have no occasion to reach the question of prejudice. B. The lack of a transcript. Superior Court Criminal Rule 36-I requires that all proceedings shall be simultaneously recorded verbatim by a court reporter or, in certain circumstances, by an electronic sound recording device. The reasons for this requirement are obvious; an appellate court should know what occurred at trial, rather than having to make do with the participants' best recollection. In the present case, an attempt to reconstruct what transpired at a relatively routine stipulated trial ten years earlier, when the participants had no reason to expect that anybody would ever again ask them to remember it, was necessarily hazardous. Indeed, the recollections of two of the principal witnesses on whom Judge Moore relied most heavilyJudge Murphy and Judge Dixondiffer in some significant particulars.[8] That the witnesses were compelled to resort to their recollections of what they usually did to determine what they probably did on this occasion, and to assume that they did not vary their usual practice in Legrand's case, is an additional limitation on the accuracy of the product. 791 In United States v. Workcuff, 137 U.S. App.D.C. 263, 422 F.2d 700 (1970) (per curiam), the court observed that "[r]ecollections and notes of trial counsel and of others are apt to be faulty and incomplete. Frequently, issues simply cannot even be seenlet alone assessedwithout reading an accurate transcript." Id. at 265, 422 F.2d at 702 (quoting Boskey, The Right to Counsel in Appellate Proceedings, 95 MINN.L.REV. 783, 793 (1961)). The court further stated that these problems are exacerbated when appellate counsel was not trial counsel, and that without a transcript the opportunity of appellate counsel to discover "plain errors or defects" is illusory. Id. In Cole v. United States, supra, relying on Workcuff and other authorities, this court reversed the defendant's conviction of carrying a pistol without a license because no transcript of her trial was available, even though, according to the Statement of Proceedings and Evidence to which both counsel had agreed, "appellant admitted that she brought a pistol with her from Maryland ... and pointed it at her husband." 478 A.2d at 280. This court declined, in Cole, to adopt a rule that would render every failure to provide a complete transcript reversible error, but nevertheless made it clear that a meaningful assurance of accuracy would be required before a reconstructed Statement of Proceedings and Evidence would be deemed an adequate substitute for a transcript upon direct appeal. It is therefore questionable whether the Statement of Proceedings and Evidence in the present case would be sufficient, under Cole, to support affirmance of Legrand's NGI adjudication if this were a timely direct appeal from Judge Murphy's order. What is before us, however, is not a direct appeal from that order. Rather, we have a collateral attack on the NGI adjudication which Legrand did not initiate until nine years after the fact.[9] If there had been a timely appeal, the transcript would probably still have been available. Moreover, if the judgment had been reversed following such an appeal, and if a new trial had been ordered, the government might still have been in a position to present its evidence. Whether the government could now reassemble its proof of an assault that allegedly occurred in May 1976 is surely dubious to say the least. By waiting so long to launch his collateral attack, Legrand has almost certainly made it exceedingly difficult and perhaps impossible for the government to retry him.[10] This court has recognized that a substantially greater showing of injustice is necessary to obtain relief in a collateral proceeding than on direct appeal. Gaston v. United States, 535 A.2d 893, 896 (D.C. 1988). This proposition holds true for issues regarding transcripts. Although the State must furnish an indigent defendant with a free trial transcript for purposes of direct appeal, see Griffin v. Illinois, 351 U.S. 12, 76 S.Ct. 585, 100 L.Ed. 891 (1956), its obligation to do so for purposes of a collateral proceeding is far less absolute. See United States v. MacCollom, 426 U.S. 317, 324-28, 96 S.Ct. 2086, 2091-92, 48 L.Ed.2d 666 (1976) (plurality opinion); id. at 329-30, 96 S.Ct. at 2093 (Blackmun, J., concurring in the judgment). Indeed, a defendant is entitled to a copy of a trial transcript for purposes of a collateral attack on his conviction only upon a showing of particularized need. Lewis v. United States, 605 F.2d 379, 380 (8th Cir.1979) (per curiam); Morin v. United States, 522 792 F.2d 8, 9 (4th Cir.1975) (per curiam).[11]See also Jenkins v. United States, 548 A.2d 102, 104 (D.C.1988) (no constitutional right to appointment of counsel to pursue post-conviction relief). Judge Moore made painstaking efforts in this case to reconstruct the stipulated bench trial. He concluded that the final product was sufficiently reliable to serve as a substitute for a full transcript. The proceedings before Judge Murphy in this case were briefmuch less complex, for example, than those in Cole. The portion of the proceedings which is most important for present purposes involves the judge's explanation to Legrand of the potential consequences of an NGI plea. Even that is not easy to reconstruct, but it does not present the difficulties inherent in attempting to recreate an entire jury trial from the recollections of the participants. Moreover, this case turns in large part on the advice which Legrand received from Judge Dixon,[12] and a transcript would probably have provided no information at all on that subject. To prevail in a collateral attack on the adjudication, as Legrand acknowledges, he must demonstrate a "fundamental defect which inherently results in a complete miscarriage of justice." Hill v. United States, 368 U.S. 424, 428, 82 S.Ct. 468, 471, 7 L.Ed.2d 417 (1962). Under all of the circumstances, we conclude that Legrand has not carried this heavy burden with respect to the lack of availability of a trial transcript. C. The judge's advice to Legrand. (1) Sufficiency. To agree to a finding of not guilty by reason of insanity is not a trivial thing. This case graphically illustrates how serious the consequences of such a decision may be. If Legrand had been convicted of the charge against him, and if he had received the maximum sentence of forty months to ten years, he would have been eligible for parole in 1979. It is now 1990, and he still has not regained his freedom. Under these circumstances, it is imperative for the judge who accepts a plea of not guilty by reason of insanity to ensure that the defendant understands fully and in some detail exactly what can happen to him, and for how long, if the plea is accepted and he is adjudicated accordingly. Many defendants who enter such pleas may well have a limited ability to comprehend the proceedings. This makes the task of the trial judge even more difficult. Nevertheless, since the defendant may lose his liberty for a very long time,[13] thoroughness and meticulousness are essential if the uninformed relinquishment of constitutionally protected liberty interests is to be avoided. Superior Court Criminal Rule 11, which prescribes procedures for guilty pleas, does not apply directly to this case, but is instructive by analogy. Rule 11(c)(1) provides that before accepting a plea of guilty or nolo contendere, the judge must address the defendant personally in open court, inform him, among other things, of the maximum possible penalty provided by law, and determine that he understands it. This advice must be given even in misdemeanor cases, in which any potential loss of liberty is of relatively short duration. Legrand has been denied his liberty for 793 thirteen years, and the end may not yet be in sight. In Gaston v. United States, supra, this court reversed a conviction of a defendant who had entered a plea of guilty because she "was not advised of the most basic information, the amount of time she would have to serve under the mandatory minimum and the maximum possible sentence." 535 A.2d at 896. The court described the direct consequences of a plea, including its effect on the defendant's punishment, as one of the "core concerns" which the trial judge must address when conducting a Rule 11 inquiry. Id. at 895. We think that Rule 11 analysis should apply by analogy in cases such as the present one, in which the defendant admits his factual guilt and asserts a defense of insanity. In United States v. Brown, 138 U.S.App.D.C. 398, 428 F.2d 1100 (1970) (per curiam), on which Legrand relies, Brown's counsel stipulated at trial that his client had committed all of the acts charged in the indictment, reserving for the trial court's determination only the question whether Brown was insane, as his counsel had contended. Brown then attacked his conviction on the ground that the trial court should not have accepted his stipulation without first addressing him personally, as required by Fed.R.Crim.P. 11. The court observed that, by its terms, Fed.R.Crim.P. 11[14] was inapplicable to stipulations, but nevertheless reversed Brown's conviction. The court concluded that [t]he considerations which support the requirement of Rule 11 that the trial judge address the defendant personally are present in the limited circumstances of this case, those limited circumstances being the mental condition of the defendant and the stipulation of counsel admitting all of the acts charged. We therefore hold that, in the limited circumstances of this case, the trial judge here should have addressed the defendant personally before accepting the stipulation. Id. at 400, 428 F.2d at 1102. If the judge is required to address the defendant personally in an NGI case, and to assure himself that the defendant understands what rights he is giving up by a critical stipulation, then it follows that the judge must also satisfy himself in such a proceeding that the defendant meaningfully comprehends what may happen to him if he pleads not guilty by reason of insanity. As the court aptly explained in People v. Vanley, 41 Cal.App.3d 846, 856, 116 Cal. Rptr. 446, 453 (1974), in holding that Vanley was entitled to a detailed explanation of the consequences of an NGI plea: As a matter of common sense, any defendant who pleads guilty to a crime knows that some punishment will follow; similarly, a person charged with a prior conviction most likely knows that the purpose of the charge is to enhance punishment in some fashion. By contrast, a person who pleads not guilty by reason of insanity may figure that the plea is simply another way to "beat the rap." We can hardly impute to the average defendant enough legal sophistication to realize that the very evidence which establishes the truth of the plea, can also confine him in a state hospital for a minimum period of 90 days (Pen.Code, § 1026(a)) and that he can remain involuntarily committed at such hospital for the rest of his life.... See also People v. Lomboy, 116 Cal.App.3d 67, 69, 171 Cal.Rptr. 812, 813 (1981) (where defendant seeks to enter NGI plea, "advisement of the disparity ... of possible custodial consequences is essential to insure a defendant knows the true potential of such plea even though she may be generally aware `some' institutionalization is possible"); State v. Shegrud, 131 Wis.2d 133, 135, 389 N.W.2d 7, 9 (1986), cert. denied, 479 U.S. 1037, 107 S.Ct. 891, 93 L.Ed.2d 843 (1987).[15] 794 In the present case, Judge Moore found that Judge Murphy advised Legrand that it would be up to the doctors at the Hospital to decide when he would be released, and that release could come in a short time or a long time. We do not think this advice sufficient; indeed, it was incorrect.[16] Legrand was entitled to be told that he would be eligible for release only if the court,[17] after receiving the views of the hospital authorities, found that he was no longer a danger to himself or others. He should also have been advised, in some readily understandable way, that if the court continued to consider him a danger to himself or others, then he would remain confined indefinitely. A passing reference to a "short time or a long time" did not in our view sufficiently apprise Legrand of what was at stake. (2) Manifest injustice. As previously noted in our discussion of the lack of a transcript, Legrand acknowledges that he must demonstrate "a fundamental defect [in the proceedings] which inherently results in a complete miscarriage of justice."[18] This burden is properly a heavy one, both in the interest of finality and because, in this case, it may be impossible as a practical matter for the government to reprosecute.[19] In Hicks v. United States, 362 A.2d 111 (D.C.1976) (per curiam), the trial judge had failed to advise the defendant, who had entered a plea of guilty to prison breach, that any incarceration for that offense would have to be consecutive to the sentence then being served. See D.C.Code § 22-2601 (1989). In a collateral attack on his conviction, Hicks contended that as a result of this omission, he had not been adequately advised of the consequences of his plea. This court held that, although the trial judge should have advised Hicks of the requirement that the prison breach sentence be consecutive to the one he was serving at the time of his escape, failure to do so did not result in "manifest injustice" because the sentence imposed was not substantially in excess of what Hicks could 795 have expected.[20] In Smith v. United States, 116 U.S.App. D.C. 404, 324 F.2d 436 (1963), the defendant sought to withdraw his plea of guilty to a narcotics offense on the ground that neither the judge[21] nor counsel nor anyone else had advised him that he would not be eligible for parole or probation. The court affirmed the trial judge's denial of the motion, stating that [t]he rule is that manifest injustice does not result from the plea of guilty following erroneous advice of counsel as to the penalty which could be imposed. Id. at 408, 324 F.2d at 440. Hicks and Smith are both readily distinguishable from the present case. The difference between the sentence Hicks knew he could receive and the one he actually did receive is not nearly as great as the contrast between "a short time or a long time" and Legrand's potential confinement for life. Smith dealt with improper advice of counsel rather than by the judge, which present different issues, although the resulting injusticean uninformed waiver of rightsappears to be the same, irrespective of who has misled or failed adequately to advise the defendant. Nevertheless, Hicks and Smith suggest that a plea will not be readily set aside on collateral attack in a case of this kind unless the circumstances are so extreme that they result in a complete miscarriage of justice. In the present case, Judge Dixon testified that he discussed Legrand's options with him in some detail. He advised Legrand that if Legrand was confident that he could follow the regimen prescribed by the doctors and make a speedy recovery, it would be advisable to plead not guilty by reason of insanity, but that otherwise, the best course of action might be to go to trial. On cross-examination, Judge Dixon testified that he recollected that he "would have" told Legrand that, if he took the NGI alternative, he could be confined for a period longer than the maximum penalty for this offense. Judge Moore, who heard the witnesses, concluded that Judge Dixon was "studiously alert" in defending Legrand's rights, and that "the decision to raise an NGI defense was a reasoned and informed defense strategy." These findings are not clearly erroneous[22] and are binding on us. Judge Moore's findings as to Judge Dixon's advice place the somewhat constricted explanation of the consequences of an NGI adjudication which Legrand received at the bench trial in a somewhat different light. If Legrand discussed the legal situation with Judge Dixon thoroughly, as Judge Moore found that he did, then Judge Murphy's advice that he could be confined for "a long time" would simply reaffirm to Legrand what he had heard from his own counsel. In any event, given that finding, the incompleteness of the trial judge's advice does not rise to the level of manifest injustice, because Legrand was not significantly prejudiced by it. Cf. Henderson v. Morgan, 426 U.S. 637, 646-47, 96 S.Ct. 2253, 2258, 49 L.Ed.2d 108 (1976) (suggesting, for purposes of collateral attack on guilty plea, that requirement that defendant 796 be informed of critical elements of offense may be satisfied by "representation by defense counsel that the nature of the offense has been explained to the accused"). It therefore does not warrant the setting aside of the plea or commitment on collateral attack. Accordingly, the judgment appealed from must be and it is hereby Affirmed. NOTES [1] See D.C.Code § 22-502 (1989). Unless otherwise noted, all references to statutory sections are to the District of Columbia Code. [2] Bolton v. Harris, 130 U.S.App.D.C. 1, 395 F.2d 642 (1968). [3] At the time of the hearing, Judge Murphy had left the bench and accepted an assignment with the Department of Justice. He has since resumed his duties as a senior judge. [4] After receiving submissions from the parties, Judge Moore initially settled and approved a Statement of Proceedings and Evidence in April 1987. He denied Legrand's motions on the merits later in the same year. Legrand then filed this appeal and, after considering the briefs and hearing oral argument, this court remanded the record to Judge Moore for more detailed findings (which the judge had indicated earlier that he was proposing to make). On July 14, 1989, Judge Moore issued two comprehensive memorandum opinions which explicated in some detail his rulings with respect to the Statement of Proceedings and Evidence and with respect to Legrand's substantive motions. [5] For example, Legrand testified that he believed that the same prosecutor represented the government at the 1976 trial and the 1987 proceedings. In fact, the 1976 prosecutor was black, the 1987 prosecutor was white. [6] Legrand testified that Judge Dixon "advised me that I would do only 50 days, and that was the day of the not guilty by reason of insanity.... He said weI would come back to court in 50 days and have a hearing and be released is what he told me." It is evident from Judge Moore's decision that he did not credit the assertion that Judge Dixon in effect guaranteed Legrand's release after 50 days when the offense with which he was charged carried a maximum penalty of ten years. The allegation that Judge Dixon did so is the crux of Legrand's complaint with his attorney. [7] We have also considered Legrand's other claims which are not specifically discussed in this opinion, e.g. that Judge Moore's findings were clearly erroneous, and that reversal is required under this court's supervisory power, and we find them to be without merit. [8] Judge Dixon testified that it was Judge Murphy's practice to advise a defendant that his release would depend on his ability to show the court that he was no longer a danger to himself or others, and also that he could remain confined for a longer period than the maximum penalty prescribed for the offense. Judge Murphy testified that he would advise the defendant that he could be confined for a long time or for a short time, and that the doctors would decide. Judge Moore's findings were consistent with Judge Murphy's testimony. [9] Legrand first made the allegation that he had been misled by his counsel in a letter to the court in 1982. This was six years after his stipulated trial. [10] As this court recently stated in Ramsey v. United States, 569 A.2d 142, 148, (D.C.1990), quoting Desmond v. United States, 333 F.2d 378, 381 (1st Cir.1964), "it will not do for a prisoner to wait [to file a collateral claim] until government witnesses have become unavailable, as by death, serious illness or absence from the country, or until the memory of available government witnesses has faded." We held in Ramsey that such delay will not justify the denial of a motion pursuant to § 23-110 without an evidentiary hearing; in the present case, however, Judge Moore held an evidentiary hearing. [11] We cite the MacCollom line of authority not for the proposition that Legrand has not shown need, but rather to confirm that the defendant's rights in collateral proceedings differ from those which he enjoys on direct appeal even with respect to the availability of a free transcript. [12] Indeed, we conclude at pp. 795-796, infra, that Judge Moore's findings as to the discussions between Legrand and Judge Dixon are decisive with respect to the disposition of this case. [13] See Jones v. United States, 463 U.S. 354, 369, 103 S.Ct. 3043, 3052, 77 L.Ed.2d 694 (1983), holding that a defendant acquitted by reason of insanity may constitutionally be confined in a mental institution until he is no longer a danger to himself or others, even if the confinement is for a period longer than he could have been incarcerated if he had been convicted. Cf. Humphrey v. Cady, 405 U.S. 504, 510-11, 92 S.Ct. 1048, 1052-53, 31 L.Ed.2d 394 (1972). [14] The federal rule is identical to ours in the respects relevant here. [15] In the somewhat comparable context of determining the proper course of action where the trial judge has reason to question a defendant's sanity, this court has likewise stressed the judge's duty to conduct an inquiry designed to assure that the defendant has been fully informed of the alternatives available, comprehends the consequences of failing to assert the insanity defense, and freely chooses to raise or waive it. Frendak v. United States, 408 A.2d 364, 380 (D.C.1979); see also Briggs v. United States, 525 A.2d 583, 591 (D.C.1987). [16] Judge Murphy testified that his Rule 11 inquiries, on which his NGI procedures were based, were very quick. In United States v. Morrison, Crim. No. 81133-75 (Super.Ct.D.C. 1986), appeal pending, No. 86-990, in which the sufficiency of Judge Murphy's advice to another defendant entering a plea of NGI was at issue, in collateral proceedings, the transcript revealed that Judge Murphy had told the defendant: You go to the hospital for 50 days. You come back and they recommend whether you stay there, be released, be an out-patient or in-patient. They come up with a recommendation. You might be there a long time, a short time. I don't know how long, that might be decided in a couple months. Judge Burgess concluded that Judge Murphy had omitted some elements of the advice which Morrison should have received but that, under all of the circumstances, Morrison was not entitled to relief. [17] Under the provisions of § 24-301(e), an insanity acquittee is entitled to apply to the court for unconditional release if the superintendent of the hospital finds him eligible therefor, but his release will not be authorized if the government objects thereto unless the acquittee proves to the satisfaction of the court that he will not in the reasonable future be dangerous to himself or others. This means, for practical purposes, that in most instances Legrand would need the agreement not only of the court but also of the doctors before he could be released. Section 24-301(g) recognizes, however, that an acquittee is entitled to establish his eligibility for release by seeking a writ of habeas corpus. The decision as to whether a petition for such a writ should be granted must, of course, be made by the court, rather than by the superintendent. The ultimate decision as to the acquittee's release is thus entrusted to the judge. [18] Legrand correctly identifies this standard as applicable to proceedings in the nature of habeas corpus. He further notes, also correctly, that if the instant motion is viewed as analogous to a motion to withdraw a plea of guilty, he must establish that the relief sought is needed in order to correct a "manifest injustice." Super. Ct.Crim.R. 32(e). [19] We are constrained to note, however, that even if the government could not retry the case, Legrand has already been confined for a far longer period than he would have been imprisoned if convicted. His confinement at the Hospital has not, of course, been "punishment," but he has been denied his liberty all the same. If Legrand remains a danger to himself or others, civil commitment is available. [20] The court said: At the time he entered his plea, appellant conceded through his attorney that he understood the maximum penalty he faced was five years. The penalty he in fact received was one to three years consecutive to the prior sentence, so that the total time of imprisonment appellant must serve (adding the sentence imposed for prison breach to the remainder of appellant's sentence for assault) does not substantially exceed the maximum appellant was aware he might be required to serve. Under these circumstances, the trial court did not err in failing to find manifest injustice sufficient to warrant vacating the judgment and permitting the withdrawal of the plea. 362 A.2d at 114 (footnote omitted). [21] At the time of his plea, Rule 11 of the Federal Rules of Criminal Procedure did not require that the court advise the defendant as to maximum or mandatory minimum penalties. [22] In his brief on appeal, Legrand discusses a number of alleged inconsistencies in Judge Dixon's account, and speculates that as a new judge, Judge Dixon may have been reluctant to criticize Judge Murphy. We cannot, however, second-guess Judge Moore on issues as to the credibility of witnesses who testified before him.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527183/	82 Md. App. 210 (1990) 570 A.2d 887 MERVIL LEON PRICE, JR. v. STATE OF MARYLAND. No. 1022, September Term, 1989. Court of Special Appeals of Maryland. March 6, 1990. Certiorari Denied June 29, 1990. Michael R. Malloy, Asst. Public Defender (Alan H. Murrell, Public Defender, on the brief), Baltimore, for appellant. Gwynn X. Kinsey, Jr., Asst. Atty. Gen. (J. Joseph Curran, Jr., Atty. Gen. and Ann N. Bosse, Asst. Atty. Gen., Baltimore, and Kenneth M. Long, Jr., State's Atty. for Washington County, Hagerstown, on the brief), for appellee. Argued before WILNER, BISHOP and BLOOM, JJ. BISHOP, Judge. Mervil Leon Price, Jr., appellant, was charged by criminal information with two counts of murder and two counts of assault with the intent to murder. Appellant entered pleas of not guilty and not criminally responsible and was tried by a jury on February 14, 15 and 16, 1989 in the Circuit Court for Washington County (Judge F.C. Wright, III). On February 15, 1989 the court granted the State's motion to bifurcate the case on the issues of guilt and criminal responsibility. On February 16, 1989 the jury found appellant guilty of two counts of second degree murder. After a hearing before the jury on February 23 and 24, 1989 the jury found appellant criminally responsible. Appellant was sentenced to two consecutive thirty (30) year terms of imprisonment. ISSUES Appellant asks: I. Whether the trial court erred by instructing the jury that they could not consider a verdict of manslaughter on the homicide of Sherri Unger; II. Whether the trial court erroneously overruled appellant's objection to bifurcation of the guilt and criminal responsibility phases of the trial; III. Whether the admission of photographs of the homicide victims was an abuse of the trial court's discretion; and IV. Whether the trial court abused its discretion by ordering appellant to hold the rifle identified as the murder weapon. FACTS It was undisputed that appellant shot both his wife, Betty Jean Price (B.J.), and his fifteen (15) year old stepdaughter, Sherri Unger (Sherri), each in the head with a .22 caliber rifle. The State's first witness, Dr. Julia Goodin of the Medical Examiner's office, testified that the victims died from gunshot wounds to the head and that B.J. had a blood alcohol content of.14 at the time of her death. Next the State called James Hahn, the son of B.J., who testified that on the evening of their deaths, his mother and sister called him asking to be picked up from their house because his mother and appellant were fighting. Hahn advised them to call a cab because he only had a motorcycle at that time. Hahn testified that he could tell that his mother had been drinking. Appellant's son, Martin Price, was called as a State's witness and testified that on the night of July 28, 1988 appellant visited him and confessed to shooting B.J. and Sherri. Afterwards, Martin drove appellant to the nearest police station. The State called six more witnesses and then the court adjourned for the day. On the second day of trial the State made a motion to bifurcate the proceedings. The court granted the motion and ordered a continuance of the issue of criminal responsibility. The State then called its last witness and rested its case. Appellant's motion for acquittal was denied. Appellant then called Teresa Hibbard, his daughter, who testified that just prior to the shooting, she had spoken with B.J. and Sherri on the telephone. They wanted to leave appellant's house and Hibbard advised them to take a cab. Hibbard testified that she could tell something was going on and that she tried to calm Sherri and B.J. In addition, she testified that B.J. and Sherri refused to allow her to speak to appellant and that she could tell that B.J. had been drinking. Appellant testified that B.J. had a "drinking" problem and that she became nasty when she drank; she occasionally ran off for a period of a few days. Appellant then testified that he arrived home from work on July 28 at approximately 5:45 p.m. After he took a nap, he was confronted by a drunken B.J. who accused him of touching Sherri's breasts and other inappropriate conduct. Believing B.J. was preparing to leave him, appellant went upstairs where he heard her speaking on the telephone. Appellant confronted Sherri and B.J. in Sherri's bedroom. B.J. responded by "cursing and hollering" and then she struck appellant with her hands and a telephone. Defending himself, appellant struck B.J. once in the face and broke her nose. Appellant testified that at this point, he began to enter a dream-like state. He said that at that point he was not mad. He could hear Sherri yelling at him in the background when he went to get the gun. While still in a dream-like state, appellant returned to the bedroom with a .22 caliber rifle. He testified that he remembered holding the gun but that he did not remember firing the fatal shots. At the time of the shooting appellant was still in the dream-like state and did not feel anger or fear for his life. When appellant realized what had happened he fled the scene, going first to his son's house. His son then took him to the police station where he first realized he had broken his arm. Dr. Richard Epstein, a private psychiatrist, testified as an expert that appellant was in a disassociative state at the time of the shooting, and unable to comprehend what was going on about him. This disassociation was a symptom of the post-traumatic stress disorder suffered by appellant as a result of physical and emotional abuse he suffered as a child. The defense then rested its case. Dr. Lawrence Raifman, a psychologist from Clifton T. Perkins State Hospital, as State's rebuttal witness, testified that appellant and his wife, B.J., had a chaotic relationship and that Sherri took advantage of that chaos to manipulate appellant and B.J. He opined that appellant did not suffer a reaction resulting from post-traumatic stress, and that at the time of the shooting, appellant had the capacity to form the requisite willful state of mind. At the close of all the evidence the trial judge denied appellant's request to instruct the jury on manslaughter with regard to the charge involving Sherri. Appellant, however, was permitted to argue to the jury that Sherri was indeed the victim of manslaughter. The State, in closing, reminded the jury that the court determined there was no legal basis to convict appellant for manslaughter in the death of Sherri. Appellant was subsequently convicted of two counts of second degree murder. DISCUSSION I. Manslaughter Instruction Appellant argues that Maryland Rule 4-325(c) requires the court to instruct the jury on applicable law upon the request of any party. As long as some evidence is present all lesser included offenses of murder must be included in the instruction to the jury. Appellant posits that there was evidence that Sherri Unger provoked appellant and, therefore, a manslaughter instruction should have been given with reference to her death. The State responds that the trial court properly refused to instruct the jury that Sherri's death may have been the result of manslaughter because there was no prima facie showing of hot-blooded provocation with reference to her. The trial court found that while a jury might find appellant's shooting of his wife to be a hot-blooded reaction to a violent fight, "... obviously its not a reaction of any kind to anything Sherri did." Therefore, the trial court decided that a manslaughter instruction would be inapplicable to Sherri because "Sherri was not an instigator. And for manslaughter the victim has to be the instigator." The judge instructed the jury on manslaughter and added: The only act you can find to be adequate provocation under the evidence in this case is a battery by Betty Jean Price upon the defendant Mervil Price. Third, the defendant was still enraged when he killed. That is his actual rage had not been cooled by the time of the killings. Fourth, there was not enough time between the provocation and the killing for a reasonable person's rage to cool. And lastly, the victim was the person who provoked the rage. Now there's no evidence in this case that Sherri Lynn Unger provoked any rage. Therefore I'll instruct you that there is not sufficient evidence legally to consider manslaughter as it applies to the killing and death of Sherri Lynn Unger. You may however consider manslaughter as an option in the killing of Betty Jean Price.... In Hook v. State, 315 Md. 25, 41, 553 A.2d 233 (1989) the Court held that in a murder case, "at the request of the defendant, the court shall instruct the jury regarding a lesser included offense when the evidence warrants such an instruction, that is, when the offense is fairly supported by the evidence." There must have been evidence adduced that would support the instruction of manslaughter. Appellant argued there was evidence of a hot-blooded provocation warranting the instruction. We held that: "[T]here may be a homicide which would otherwise be murder which is reduced to manslaughter by circumstances of alleviation or mitigation. Such a case is where the circumstances surrounding the homicide establish that it was provoked. For the `Rule of Provocation' to be invoked there are four requirements: (1) There must have been adequate provocation; (2) The killing must have been in the heat of passion; (3) It must have been a sudden heat of passion that is, the killing must have followed the provocation before there had been a reasonable opportunity for the passion to cool; (4) There must have been a causal connection between the provocation, the passion, and the fatal act." Cunningham v. State, 58 Md. App. 249, 258, 473 A.2d 40 (1984), quoting from Whitehead v. State, 9 Md. App. 7, 10-11, 262 A.2d 316 (1970). The evidence adduced in this case must be measured against these requirements. As we stated in Cunningham "[t]he appellant failed to establish a prima facie case of hot-blooded provocation with respect to at least two of the necessary four elements." The first requisite is that there be adequate provocation. In Scott v. State, 64 Md. App. 311, 323, 494 A.2d 992 (1985) we held that where the evidence showed that the defendant bumped into the victim, and then they argued, there was not adequate provocation for the subsequent shooting. In the case sub judice the evidence showed that no physical contact occurred between the victim, Sherri Unger, and appellant. Appellant testified that Sherri "hollered" at him. This was not adequate provocation for hot-blooded provocation to mitigate murder to manslaughter.[1] In addition, there must be a showing that the shooting was committed in the heat of passion. In Cunningham we held that: As we observed in this regard in Bartram v. State, supra, at 33 Md. App. [115] 175, 364 A.2d 1119 [1976], "The blood, however, must indeed be hot and, generally speaking, only the hot-blooded killer can attest to that." The appellant here took the stand in his own defense and testified unequivocally that he shot the victim not in hot-blooded rage, but because he feared that if he did not kill in self-defense, he would be killed or grievously wounded himself. His abject failure to provide evidence of hot-blooded motivation, as to which he was the best if not exclusive source, is as fatal here as was a similar failure to provide such indispensable evidence in Bartram v. State: "In the circumstances of this case, only the appellant could have injected evidence as to an intentional but hot-blooded killing. She, however, stoutly maintained that the killing was suicidal." 33 Md. App. at 175, 364 A.2d 1119. Cunningham v. State, supra 58 Md. App. at 259-60, 473 A.2d 40; see also Tripp v. State, 36 Md. App. 459, 469, 374 A.2d 384 (1977). The same deficiency in the evidence is present here. Appellant, the "best if not exclusive source" of his own state of mind, testified as follows: Q. Well up to this point now when she came at your swinging, what ... what were your feelings? What were your emotions? A. I don't know. When I went upstairs I wasn't mad. I mean we hollered downstairs a couple of times, you know. I mean I got tired of hearing her and I'd holler at her and I'd tell her to get sober or go get another bottle or something, you know. But she had been upstairs for a little while and the phone's ringing. And then like I said she come down to the landing or the foyer and then walked back up. Q. Well at the point that you went upstairs you say you weren't mad. Now when she jumped up off the bed and started to swing were you mad then? A. I don't know. I don't know if mad is the ... more defensive I think. I don't know that you know anger and whatever goes together but I don't really .. . I was ... I was telling her to stop it when she hit me with the phone. And ... Q. Were you in fear of your life at that point? A. I ah ... I don't think I was afraid of my life. * * * * * * Q. And at the time that you were in this other state of mind were there any emotions? Did you feel anger? Did you feel rage? Did you feel anything? A. No.... Therefore, appellant testified unequivocally that he was not angry or mad at either victim. We hold that appellant did not make a prima facie showing of the second of four elements of hot-blooded provocation. "Failure to prove any one of the necessary four elements is fatal to establishing a theory of hot-blooded provocation." Scott v. State, supra 64 Md. App. at 323, 494 A.2d 992; Cunningham v. State, supra 58 Md. App. at 258, 473 A.2d 40. "Where the facts do not support a theory of manslaughter, no instruction need be given." Blackwell v. State, 278 Md. 466, 476-478, 365 A.2d 545 (1976), cert. denied, 431 U.S. 918, 97 S. Ct. 2183, 53 L. Ed. 2d 229 (1977); Cunningham v. State, supra 58 Md. App. at 260, 473 A.2d 40; Tripp v. State, supra 36 Md. App. at 463, 477-78, 374 A.2d 384. We hold that the trial court did not err when it refused to instruct the jury on the elements of manslaughter in the shooting of Sherri Unger. II. Bifurcation of Trial Appellant argues that, traditionally, bifurcation of the insanity phase from the guilt or innocence phase was impermissible. Despite the recently enacted Md. Health General Code Ann. § 12-109(b) requirement that the defendant meet the burden of proving insanity, appellant contends that the traditional rule is preferable.[2] In addition, appellant avers that because the State was not diligent in its efforts to secure evidence the trial court should have denied the State's motion to bifurcate. The State responds that the trial court has the discretion to permit bifurcation of the trial in appropriate circumstances and that the trial court properly exercised its discretion in a case such as this, where the lateness of the not criminally responsible plea was a factor. In Treece v. State, 313 Md. 665, 685, 547 A.2d 1054 (1988) the Court held that: ... [W]e are led to the conclusion that, at least under some circumstances, it would be the better practice to bifurcate a trial in which criminal responsibility is an issue, with the decision on guilt or innocence to be made first, and then, if the verdict is guilty, the decision on criminal responsibility. Some jurisdictions follow this sort of procedure. Should a trial court adopt this approach, the guilt/innocence phase of the proceedings would be much simplified. The merits of the criminal case would be separated from the often unrelated issue of criminal responsibility. (Citations omitted.) The Court noted that previous decisions held bifurcation is not permissible in Maryland when the issue of criminal responsibility is raised. These previous decisions were distinguished on the basis that they all antedate the major revisions of statutory law accomplished by Ch. 501, Acts of 1984, adopting the present provisions of Title 12, Health-General Article: These major changes in the law, shifting the burden of proof on the issue of criminal responsibility and increasing the chances of lengthy indefinite confinement for a defendant found not criminally responsible, emphasize the desirability of a bifurcated proceeding in appropriate circumstances. Moreover, they render distinguishable the earlier decisions on bifurcation. Under the present statutes, bifurcation is not precluded. Bifurcation raises a number of procedural issues, however, and it is desirable, for the long term, that there be uniform State-wide standards to govern the process. Accordingly, we shall refer the bifurcation issue to our Standing Committee on Rules of Practice and Procedure for a prompt report. Treece v. State, supra 313 Md. at 686-87, 547 A.2d 1054. Judge Wright was correct sub judice when he held: I think that bifurcation can be done. I don't think that the law and the history of the Court of Appeals' decisions would provide the same foundation now that it did then, pre '84, so I think that these issues can be bifurcated. The question is whether they should be bifurcated because of the reasons that the State has presented. The standard by which the judge must make the determination was not articulated by the Court of Appeals until October, 1989, more than a year after the appellant's trial. In McCloud v. State, 317 Md. 360, 364, 564 A.2d 72 (1989) the Court held: Because of the potential factual severability of these issues (as well as their legal severability), we concluded in Treece that under the present statutory provisions a trial court has discretion, in appropriate circumstances, to order bifurcated proceedings in a criminal case in which the issue of criminal responsibility is raised. (Emphasis supplied.) The trial court sub judice, navigating in uncharted waters, anticipated and applied the correct standard in its determination: Well the continuance if you will, or by way of bifurcation seems to me to be in the discretion of the trial court and I would only do so if I felt there was good cause shown in the interest of fairness. And I think that the situation here does cry out for a continuance of the issue of criminal responsibility and bifurcation. And I will therefore bifurcate the issue of criminal responsibility from the guilt or innocence determination and schedule that issue to be heard by continuing the case after the jury has returned a verdict on the merits. We hold that this determination was not an abuse of discretion. In addition, the trial court's denial of appellant's subsequent motion for mistrial was a proper exercise of discretion. The trial court considered the fact that appellant did not make his "not criminally responsible" plea until four months after being charged. The day after appellant's plea was entered the circuit court ordered that he be examined at the Clifton T. Perkins Hospital. The reports generated were not available to the prosecution until February 15, 1988, the second day of trial. In the interest of justice and so that the jury would be adequately informed to decide the issue, the judge properly bifurcated the trial.[3] III. Admissibility of Photographs Appellant argues that the admissibility of photographs is determined by balancing their probative value against the potential for improper prejudice to the defendant and that the photographs in this case had no probative value because the identities of the deceased and the causes for their deaths was not disputed. Appellant argues, therefore, that the photographs of the victims only inflamed and prejudiced the jury. The State responds that the trial court did not abuse its discretion by admitting the photographs into evidence. The photographs showed the nature and location of the victim's wounds and the positions of the bodies at the scene. In Johnson v. State, 303 Md. 487, 502, 495 A.2d 1 (1985), cert. denied, 474 U.S. 1093, 106 S. Ct. 868, 88 L. Ed. 2d 907 (1986) the Court was faced with the admissibility of certain photographs consisting of one color photograph of the victim at the scene of the crime and five black and white photographs contained in the autopsy. The Court stated: We have consistently held that whether or not a photograph is of practical value in a case and admissible at trial is a matter best left to the sound discretion of the trial judge. Bowers v. State, 298 Md. 115, 135-36, 468 A.2d 101, 111-12 (1983), quoting Cook v. State, 225 Md. 603, 608, 171 A.2d 460, 463 (1961), cert. denied, 368 U.S. 970, 82 S. Ct. 445, 7 L. Ed. 2d 398 (1962). A court's determination in this area will not be disturbed unless plainly arbitrary. Id. Under this standard, we have permitted the reception into evidence of photographs depicting the condition of the victim and the location of injuries upon the deceased, Clarke v. State, 238 Md. 11, 21-22, 207 A.2d 456, 461-62 (1965); the position of the victim's body at the murder site, Brice v. State, 264 Md. 352, 368-69, 286 A.2d 132, 140 (1972); and the wounds of the victim, Madison v. State, 200 Md. 1, 7-8, 87 A.2d 593, 595 (1952). On certain occasions, photographs have also been admitted to allow the jury to visualize the atrociousness of the crime a circumstance of much import where the fact finder must determine the degree of murder. Id. There the Court affirmed the trial judge's ruling to admit the photographs. In Johnson the Court noted that it has held consistently that the photographs of the deceased are admissible even where the location of injuries was previously described and conceded by defendant. Johnson, supra, 303 Md. at 503, 495 A.2d 1. As recently as November 29, 1989 the Court held that nine color photographs four showed the scene and full body of the victim from different angles, four were close-ups of the victim's head injuries from different angles, and the last showed injuries on the victim's hand and arms caused by being bound with bedroom curtains were admissible despite the defendant's argument that they were irrelevant to the only issue to be decided, that of criminal agency. Bedford v. State, 317 Md. 659, 566 A.2d 111 (1989). Under these circumstances and based on our inspection of them, we hold that the trial court did not abuse its discretion by admitting the black and white photographs from the autopsy report and the three color photographs of the victims at the crime scene. Johnson v. State, supra, and the cases cited therein. IV. In Court Demonstration Finally, appellant argues that the trial court erred by ordering him to hold the gun as he did during the shooting despite appellant's objection. Appellant argues the demonstration was unnecessary because appellant had already testified how he held the gun, therefore, unfair prejudice resulted. The State responds that the gun demonstration ordered by the trial court was probative of the appellant's ability to recall the shooting, therefore, it was properly admitted. A trial judge is "vested with wide discretion in the area of permitting or denying demonstrations" and his decision should not be disturbed on appeal unless abuse is apparent. Brooks v. State, 24 Md. App. 334, 346, 330 A.2d 670, cert. denied, 275 Md. 746 (1975); see also Morris v. State, 59 Md. App. 659, 671, 477 A.2d 1206 (1984). Of critical importance to the case against appellant was his state of mind at the time of the shooting. Throughout the trial appellant averred that he entered a dream-like state before getting the gun. While in this state he could not remember what specifically happened until he had emptied the rifle. The ability of appellant to remember exactly how he held the rifle is probative of the possible inference that appellant was indeed capable of recalling, in detail, the circumstances of the shootings. The trial judge did not abuse his discretion in ordering appellant to demonstrate how he held the rifle. JUDGMENT AFFIRMED; COSTS TO BE PAID BY APPELLANT. NOTES [1] During oral argument appellant cited the cases of People v. Spurlin, 156 Cal. App. 3d 119, 126, 202 Cal. Rptr. 663 (1984) and State v. Russo, 1 Boyce 538, 77 A. 743, 747 (Del. 1910). These cases are inapposite since we find no evidence that Sherri aided or abetted her mother's attack on appellant. [2] During oral argument, appellant cites to Comment, Bifurcation in Insanity Trials: A Change in Maryland's Criminal Procedure, 48 MD.L. REV. 1045, 1054 (1989) to bolster his argument that the appellant should retain the exclusive option to request bifurcation because the decision to plead not criminally responsible is predominantly a matter of trial strategy. The viewpoint expressed in the Comment is unpersuasive. [3] In Treece v. State, supra 313 Md. at 687, 547 A.2d 1054, the Court noted the desirability, "in appropriate circumstances," of bifurcating trial of the issues of guilt/innocence and criminal responsibility when the latter is at issue. The bifurcation issue was referred to the Standing Committee on Rules of Practice and Procedure for "a prompt report." The Rules Committee proposed, and on June 28, 1989 the Court adopted new Rule 4-314, effective July 1, 1989, four and one-half months after the trial sub judice. Rule 4-314(a)(1) provides that the defendant or the State may move for bifurcated trial if the defendant has pleaded both not guilty and not criminally responsible. In addition, Rule 4-314(a)(3)(B) provides "[t]he court may grant a motion made by the State if it finds and states on the record (i) a compelling reason to bifurcate the trial and (ii) that the defendant will not be substantially prejudiced by the bifurcation." Although Rule 4-314 does not apply to the earlier trial of appellant, it's remarkable that the trial judge's decision would have been in nearly complete compliance with the requirements of that Rule.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527258/	428 S.W.2d 317 (1968) Robert Earl BEASLEY, Appellant, v. The STATE of Texas, Appellee. No. 41250. Court of Criminal Appeals of Texas. May 8, 1968. 318 Donald D. Koons, Dallas, for appellant. Henry Wade, Dist. Atty., Alvin Walvoord, Jr., John H. Stauffer, Malcolm Dade and Kerry P. FitzGerald, Asst. Dist. Attys., Dallas, and Leon B. Douglas, State's Atty., Austin, for the State. OPINION DICE, Judge. The offense is robbery; the punishment, twenty-one years. It was shown by the state's testimony that, on the date alleged, the injured party, who was a cab driver, took three women to an apartment in the city of Dallas. As he was leaving the apartment, he was assaulted and robbed of approximately $82 by a man. The robbery was committed around 5:30 p.m. At approximately 9 p.m. on the same day, appellant was arrested a block away from the scene of the robbery while engaged in a fight with one of the women who had been taken to the apartment. Following his arrest appellant was taken to jail, where he was positively identified by the injured party in a police lineup as the person who had robbed him. In his first ground of error, appellant insists that the court erred in limiting his examination of the arresting officer in an effort to show the nature and extent of his injuries received in the fight with the woman. The record reflects that the trial judge failed to see any relevancy to the proffered testimony and, upon sustaining the state's objection, stated to appellant's counsel: " * * I will let you lay a predicate and let you go into it, but I think you should show the relevancy between that (the injuries) and the allegations contained in the Indictment." The jury was excused and appellant offered no showing of relevancy. We perceive no error. Appellant was permitted to show that he was injured in the fight with the woman. She did not testify as a witness in the case. The nature and extent of his injuries were not relevant to any issue in the case. The ground of error in overruled. 319 In his second ground of error, appellant insists that the trial court erred in permitting a witness to bolster the testimony of a state's witness with reference to appellant's identification at the lineup. The record reflects that the injured party, Milton Bryson, testified on direct examination that at the lineup he identified appellant as the robber, who he thought "was second from the front." Appellant was also identified at the lineup by the state's witness Jo Barton. Appellant called as a witness Lt. Archer, who conducted the lineup, and elicited testimony from him to the effect that appellant was in position number four in the lineup and not position number two. On cross-examination of the officer by state's counsel, the following transpired: "Q Uh-huh, the Defendant here, is he the one that was selected from the show up? A Yes, sir, he was. "MR. KOONS: Well's object to that. "THE COURT: Sustain it. "MR. KOONS: Bolstering, Your Honor, and move for a mistrial. "THE COURT: Sustain it; disregard it, Lady and Gentlemen. Consider it for no purpose. Overrule your Motion for a mistrial." If there was any error in the officer's testimony, such was cured by the court's action in sustaining the objection and instructing the jury not to consider it for any purpose. However, we agree with the state that the testimony was admissible in view of appellant's attempted impeachment of the injured party's testimony relative to his identification of appellant at the lineup. Such fact distinguishes the case from Lyons v. State, Tex. Cr.App., 388 S.W.2d 950, where testimony was admitted which bolstered the unimpeached testimony of a witness that she had identified the accused at a lineup. Thurman v. State, 162 Tex.Cr.R. 477, 286 S.W.2d 941, and Wadley v. State, 165 Tex.Cr.R. 273, 306 S.W.2d 373, cited by appellant, are not here applicable, because in those cases the state was permitted to bolster the credibility of its witnesses by showing their good reputation, which had not been attacked. The ground of error is overruled. In his third and last ground of error, appellant insists that the court erred in prohibiting him from inquiring into the reputation of the state's witness Jo Barton and that thereafter the prosecutor was allowed to argue to the jury that the morality of the witness had not been attacked. After the court sustained the state's objection to the inquiry, no showing was made by appellant as to what the answer of the witness would have been. In the absence of such showing, the court's action presents nothing for review. East v. State, Tex.Cr.App., 420 S.W.2d 414. Appellant's objection to the argument implying that the witness Jo Barton's morality had not been attacked was by the court sustained, and no request was made by appellant for an instruction to disregard or for a mistrial. Later in the argument, counsel for the state in discussing the testimony of the witnesses in the case, including the injured party and the appellant posed the question if there was any evidence in the case about morality "of either one of those people," and appellant's objection to the argument was overruled. From such argument it is not clear that counsel was referring to the witness Jo Barton, as may be inferred from the remark made by appellant's counsel when, in noting his exception to the court's ruling, he stated: " * * Your Honor, he's talking, I think, about the girls again." We perceive no error. The ground of error is overruled. This case was tried before the late A. D. Jim Bowie. The record reflects his ability and fairness as a judge. Although his *320 tenure was cut short by an untimely death, he will long be remembered by the bench and bar as one of the outstanding attorneys and trial judges of this state. The judgment is affirmed.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1528142/	306 S.W.2d 128 (1957) Jimmy N. SHAVER, Appellant, v. The STATE of Texas, Appellee. No. 28560. Court of Criminal Appeals of Texas. January 9, 1957. Rehearing Denied June 5, 1957. Writ of Certiorari Denied October 28, 1957. 129 Jarrard Secrest, John T. Cox, Temple, for appellant. Hubert W. Green, Jr., Criminal Dist. Atty., San Antonio, Raymond Thornton, Dist. Atty., Belton, Richard J. Woods, First Asst. Criminal Dist. Atty., San Antonio, and Leon B. Douglas, State's Atty., Austin, for the State. Writ of Certiorari Denied October 28, 1957. See 78 S. Ct. 98. WOODLEY, Judge. The offense is murder; the punishment, death. The indictment, returned in the Criminal District Court of Bexar County, alleged that appellant voluntarily and with malice aforethought, killed and murdered Chere Jo Horton by striking and beating her with his hands and fists, and in separate count alleged such murder in some way or manner and by some means, instrument and weapon to the grand jurors unknown. Venue being changed to McCulloch County, appellant was tried, convicted and assessed the death penalty. On appeal from such conviction, the judgment was reversed. Shaver v. State, Tex.Cr.App., 280 S.W.2d 740. Venue was thereafter changed to Bell County and this appeal is from a conviction in the District Court of that County. Again his punishment was assessed by a jury at death. The record shows without question that appellant took the three year old girl from a beer tavern where she was playing with her brother, while her parents were patronizing the tavern, and left her dead and abused body in the brush near a gravel pit. It is also shown beyond question that he was alone with the child and inflicted the injuries to the child, which the autopsy revealed consisted of a fractured skull; hemorrhage of the brain; fractured jaw and laceration and tear of the vagina. There was proper and sufficient proof that the injuries mentioned caused the death of the child and to sustain the allegation of the indictment as to the means used in inflicting the injuries. The sole defense, as on the former trial, was that of insanity which, together with temporary insanity produced by the voluntary recent use of intoxicating liquor, was fully explained and charged upon by the trial judge, and to which charge no objections were leveled. The issue of insanity was settled by the jury's verdict and there is no issue raised as to the sufficiency of the evidence to sustain their finding. Eminent and able counsel appointed by the court to represent appellant upon trial in Bell County present two grounds upon which they seek reversal. First appellant complains of the overruling of his motion for mistrial based upon the fact that the Sheriff of Bell County was permitted to assist the district attorney in the selection of the jurors. The motion for mistrial was made after the selection of the jury had been completed, but the record shows that at an earlier time appellant's counsel had complained to the trial judge about the procedure. As presented in appellant's brief, a main complaint is that the sheriff, during the greater time consumed in selecting the jury, was seated at counsel table on the side of the State. We find no error in the action of the sheriff in giving the district attorney the benefit of his judgment as to prospective jurors and the exercise of the State's peremptory challenges. We have held that the sheriff is not disqualified from summoning jurors because he conceived it his duty to work for the State, and the jurors summoned by him are not disqualified to serve. Bennett v. State, 95 Tex. Crim. 70, 252 S.W. 790. 130 Appellant is correct in his contention that the trial judge should not permit the sheriff to sit with counsel for the State and take part in the interrogation of the veniremen on voir dire. The record, however, does not show that appellant's counsel complained or objected because the sheriff was seated at counsel table, or made any request of the trial court to have the sheriff remove himself to another place in the courtroom. On the other hand, the record relied upon by appellant to raise this point shows that no such request was made and further shows that the sheriff, except for a brief time, sat immediately back of counsel for the State and conferred with them after each venireman had been examined, but took no part in the interrogation. If appellant's counsel thought that the sheriff's position in the courtroom during the examination of prospective jurors was prejudicial, it was incumbent upon him to call the court's attention to that fact and request the court to have him sit elsewhere. The trial judge is vested with wide discretion as to the conduct of the trial in matters such as the seating arrangement, and it rests upon the appellant, in order to complain upon appeal in regard to such, to show an abuse of such discretion. Clowers v. State, 146 Tex. Crim. 1, 171 S.W.2d 143, 145. The second ground for reversal relates to the court's charge, wherein the jury was instructed to the effect that if appellant killed the deceased through mistake or accident while intending to commit the offense of rape upon her, he should be found guilty of murder with malice. There was no objection to the charge because of this instruction and the error is claimed as fundamental. We overrule the contention. The charge in question is in all material respects the same as the charge which this Court approved in Cook v. State, 152 Tex. Cr.R. 51, 211 S.W.2d 224. If the court was in error in authorizing a conviction of murder with malice if appellant's intent was to rape the child rather than to kill her, under the record before us, the error was not such as would authorize us to reverse the conviction, especially in the absence of an objection. The evidence sustains the conviction and supports the jury's verdict assessing the supreme penalty and we find no error calling for reversal. The judgment is affirmed. On Appellant's Motion for Rehearing DAVIDSON, Judge. In overruling appellant's contention that prejudicial error was reflected in the action of the sheriff in giving the prosecuting attorney advice and the benefit of his judgment as to prospective jurors, we did not intend to lay down any fixed rule upon the subject. What we held was that under the facts here presented no error was reflected. In his charge, the trial court applied the provisions of Art. 42, P.C., and instructed the jury to the effect that if they found that appellant killed the deceased by accident or mistake while attempting to rape her he would be guilty of murder with malice. On the original submission of this case, appellant insisted, and again presses upon us, that if the charge was to be given he was entitled to have the law of murder without malice applied to that state of facts. We again call attention to the fact that there was no exception reserved to the charge as to this matter. For that reason, the claimed error of omission in the charge is not before us for consideration. In view of the fact that this is a death penalty case where the state's case depended, as the trial court told the jury, *131 "upon circumstantial evidence alone for a conviction," we have again reviewed this entire record and remain convinced that a correction conclusion was reached originally. Appellant's motion for rehearing is overruled.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1919386/	660 So.2d 163 (1995) STATE of Louisiana, DEPARTMENT OF SOCIAL SERVICES, Plaintiff-Appellant, v. William THOMAS, Defendant-Appellee. No. 27248-CA. Court of Appeal of Louisiana, Second Circuit. August 23, 1995. 164 Richard Ieyoub, State Attorney General, Baton Rouge, Don Burkett, District Attorney, Edward Chevallier, Assistant District Attorney, Mansfield, for appellant. Elvin Fontenot, Jr., Leesville, for appellee. Before HIGHTOWER, BROWN and STEWART, JJ. HIGHTOWER, Judge. In this paternity action, the State of Louisiana appeals a finding that it failed to prove defendant, William Thomas, to be the natural father of a fifteen-year-old girl. We reverse and remand. BACKGROUND On May 27, 1978, Geraldine T. Singleton gave birth to a daughter, Adrienne L. Taylor. Over fifteen years later, seeking to establish both filiation and an obligation to support the minor child under LSA-R.S. 46:236, et seq., the state filed a petition alleging William R. Thomas to be the biological father. Defendant's answer denied the claim, but subsequent DNA testing revealed his probability of paternity at 99.994% and calculated the paternity index at 16,500 to 1.[1] Predictably, the child's mother and alleged father offered conflicting testimony regarding their relationship. Not oddly too, Singleton's two sisters testified for the state, while Thomas's father took the witness stand on his son's behalf. In oral reasons rendered immediately at the conclusion of the trial, the 165 district judge acknowledged the strong scientific evidence and that "the sisters' very truthful testimony" placed the mother and defendant together on occasions. Even so, relying on his own out-of-court familiarity with the parties and their families, the judge reasoned: It goes beyond logic to imagine for sixteen (16) years until this date, or at least until this proceeding was begun, that a grandchild, a niece, a nephew, would be denied that status if it in fact was true. Consequently, in his view, he had "no recourse" other than to find that the state failed to carry its burden of proof. After formal dismissal of all demands, this appeal ensued. DISCUSSION When the alleged parent is alive, the burden of proving paternity is by a preponderance of the evidence. LSA-C.C. Art. 209(A); State v. Givens, 616 So.2d 259 (La. App. 2d Cir.1993); State in Interest of Lawrence v. Harrell, 582 So.2d 940 (La.App. 2d Cir.1991); State v. Stringer, 567 So.2d 758 (La.App. 2d Cir.1990). Simply stated, it must be shown that paternity by the defendant is more probable than not. Litton v. Litton, 624 So.2d 472 (La.App. 2d Cir.1993), writ denied, 93-2657 (La. 01/07/94), 631 So.2d 456. Proof of paternity is a factual question, and a trial court's determination of the issue should not be disturbed, absent manifest error. State v. Givens, supra; State, in Interest of Ezell v. Evans, 600 So.2d 90 (La.App. 2d Cir.1992); State v. Stringer, supra. Although alone insufficient to prove paternity, scientific testing provides persuasive and objective evidence that can well help establish proof by a preponderance. LeBlanc v. LeBlanc, 497 So.2d 1361 (La.1986); Litton, supra; State v. Givens, supra; State, in Interest of Ezell, supra; State v. Stringer, supra. The purpose of blood analysis is either to exclude an accused male from the possibility of paternity, or, if not excluded, to calculate the odds that he would have passed the disclosed genetic markers to a particular child. Litton, supra; State v. Givens, supra; State v. Stringer, supra. In the present case, the paternity index and probability of paternity are extremely high.[2] Cf. Litton, supra (viewing a paternity index of 1,359 to 1 as very strong evidence). Nevertheless, cognizant that such scientific results must be supported by other competent evidence linking the mother and the alleged father, we turn to the trial testimony. Singleton testified that she and Thomas had sexual intercourse at the time of conception, and that they had been dating for several years before then. Furthermore, she unequivocally stated that she did not go out, or have sex, with any other men during the period in question. For a good while, the families of the pair had been closely associated through their church. In fact, Singleton's cousin dated and eventually married Thomas's sister. Besides that, all four of these young adults had been friends while attending college together in Texas. Frequently on weekends, Thomas would come from his home in Leesville to visit Singleton, who lived in Mansfield. He would either drive his own car or travel with his father, the minister of a nearby church. The mother's testimony indicated that she and Thomas generally engaged in sexual relations three to four times per month, but due to "a few problems" such activities temporarily ceased for a month or two before the crucial liaison. Generally, the lovemaking transpired when the couple went somewhere alone in an automobile. Singleton additionally testified that she discussed her pregnancy with Thomas upon traveling to Leesville by bus around March of 1978, and that he later admitted paternity to her family and his sister. When asked why she waited so long to make a claim, the mother responded that her sister had been helping her with finances. She further stated that, despite having named defendant as the father several years 166 earlier when she received food stamps, the case "never did get off the ground."[3] On the other hand, after first testifying he simply could not remember ever having sexual relations with Singleton during the indicated multi-year period, defendant soon categorically denied any such activity, or that he even dated the child's mother. Similarly, he disclaimed having acknowledged paternity. Although he knew Singleton, Thomas said their relationship had been "like family" and had resulted from the closeness of their families within the same church. As part of his denials, Thomas said he did not remember going to Mansfield during the time of the child's conception, inasmuch as he had just started working then and had no transportation. Neither could he recall traveling there with his father for church services. After indicating that he learned of Singleton's pregnancy through "second-hand" information, he stated her paternity claim first came to his attention when he received a request to appear in May, in 1979 or 1980.[4] At that time, after denying the allegation, he "never heard anything else." Similarly, in another matter, he began paying support only after "going to court" concerning a child his former wife conceived shortly before their brief marriage. Both of Singleton's sisters, Darlene Turner and Carolyn Rushing, testified that the mother and Thomas dated prior to the child's birth. Turner indicated that her younger sibling went to Leesville to see defendant almost every Friday evening, and that the alleged father would visit Mansfield "all the time." Also, according to Turner, their family had strict rules about the girls seeing more than one boyfriend at a time. She further related that, when Thomas attended family gatherings, he and her sister would go off alone upon announcing plans to go riding or for food. Rushing testified that, on more than ten occasions, she and her boyfriend transported Singleton to and from Leesville for weekend visits. Defendant would always exit the house where they went, but she never saw his father there. The Reverend George Thomas, defendant's father, appeared as the only witness for his son. Not only did he know the mother, but also her family frequently visited the various churches under his pastorship. Although his son lived with him in Leesville in 1977, the elder Thomas could neither recall Singleton coming there to visit nor the accused father going to see her. He did remember, however, defendant going with him to church in Mansfield on weekends. Moreover, the minister acknowledged that his son and Singleton "visited" when their families got together. So too, when twice asked whether anyone told him his son fathered the child, he responded, "No, not directly." Finally, he agreed it could be "very possible" that the young couple had sexual relations. Our courts, of course, have recognized both the obvious weakness in declaring the intimacies of others and the general lack of personal knowledge associated with such evidence. See Litton, supra; Bailey v. Douglas, 478 So.2d 172 (La.App. 3d Cir. 1985), writ denied, 479 So.2d 365 (La.1985). Excluding the participants themselves, witnesses to sexual relationships will be rare. Equally true, in contested paternity matters, the mother and alleged father commonly give conflicting accounts about their encounters at the time of conception. Thus, while the jurisprudence recognizes the insufficiency of scientific testing alone, a trial court still must appreciate the importance such persuasive, objective evidence can have in establishing proof of paternity by a preponderance. In the case sub judice, we conclude that the trial court manifestly erred in deciding that the state failed to establish paternity. The previously mentioned strong scientific evidence is abundantly buttressed by the testimony of the mother and her two sisters. Beyond his own self-serving statements, defendant 167 presented little in contravention. Even his father admitted the inherent weakness in his son's case. Although recognizing the significance of the high paternity index and acknowledging the credibility of the state's witnesses, the district judge improperly relied upon his own personal knowledge of the families, outside the record. Considered as a whole, the record before us exhibits "an extreme unlikelihood," State v. Smith, 605 So.2d 222, 225 (La.App. 2d Cir.1992), that Singleton falsely accused Thomas of being the father of her child. In short, the lower court's judgment is supported by neither the evidence nor the jurisprudence. Cf. Litton, supra; State v. Givens, supra; State, in the Interest of Ezell, supra; State, in the Interest of Lawrence, supra. CONCLUSION For the foregoing reasons, the judgment of the trial judge is reversed, and it is hereby decreed that defendant, William R. Thomas, be recognized as the natural father of Adrienne L. Taylor. The case is remanded to the district court for further proceedings. All costs are assessed to defendant. REVERSED AND REMANDED. NOTES [1] The probability of paternity indicates that 99.994% of all North American black men are excluded from being the child's father, while Thomas is within the 0.006% who are not eliminated. The paternity index shows that defendant is 16,500 times more likely to be the parent than a randomly selected, unrelated male of the North American black population. [2] As a matter of fact, the index in the present case is more than double the highest number we could find in the Louisiana jurisprudence. Cf. State in the Interest of Lawrence, supra (reversing a rejection of the state's claim where the index had been 6,318 to 1); State v. Smith, 605 So.2d 222 (La.App. 2d Cir.1992) (affirming a paternity finding with an index of 3,474 to 1). [3] An employee from the state enforcement services office confirmed that their computer records contain a closed food stamp case for Singleton. [4] State welfare authorities presumably sought defendant's appearance soon after Singleton submitted her application for food stamps and listed him as the father. Thomas, however, only generically referred to the requesting entity as "they."	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1528165/	306 S.W.2d 718 (1957) Joe L. ANGLE, Jr., Appellant, v. The STATE of Texas, Appellee. No. 28873. Court of Criminal Appeals of Texas. June 19, 1957. 719 Thomas M. Ryan, Houston (Dixie, Ryan & Schulman, Houston, of counsel), for appellant. Dan Walton, Dist. Atty., Eugene Brady and Thomas D. White, Asst. Dist. Attys., Houston, and Leon Douglas, State's Atty., Austin, for the State. MORRISON, Presiding Judge. The offense is consenting to accept a bribe, as denounced by Article 159, V.A.P. C.; the punishment, two years. Our original opinion is withdrawn. When this case was first submitted, we declined to pass upon certain questions because the certificate attached to the statement of facts did not certify that it contained all the evidence adduced upon trial. It is now shown that it was the intention of the attorneys for the State and the defendant, by signing the certificate attached to the statement of facts herein, to agree to it as a complete statement of facts, and the affidavits of said attorneys are to the effect that there were no additional facts elicited upon the trial on the merits which are not incorporated therein. It is also made to appear that the form of certificate is the same as that used in many appeals to this Court, by reason of which fact appellant should not be charged with lack of diligence. While there are cases which would appear to support a contrary holding, we have decided that the additional evidence that has come into the record by way of affidavits of the attorneys who approved the statement of facts is available and that under the present record the statement of facts may be considered. In Berrian v. State, 87 Tex. Crim. 284, 221 S.W. 282, the statement of facts, though not approved, was considered upon the statement of the trial judge and the affidavits of counsel for appellant that the trial judge believed that he had signed and filed the statement of facts and his failure to do so was by inadvertence and oversight. In Curry v. State, 156 Tex. Crim. 379, 242 S.W.2d 421, the statement of facts was not considered because not filed within the time allowed by law. On rehearing, it was considered, a showing having been made that it had been in the hands of the clerk before the expiration of the time allowed and the clerk had corrected his certificate. It was pointed out that "we are not empowered to hear evidence in such matters, unless there is an admission of such facts as will justify the conclusion. The clerk of the district court has power to change his file mark if he has made a mistake, or a certificate from him that he had received the instrument within the proper time and had erroneously thereafter placed on it a different file date would be considered as an admission by the State. In such event, we would be justified in receiving the statement of facts." Whether by reason of an admission by the State or the correction of the certificate to the agreement intended by counsel, we need not decide. In fairness to appellant, the statement of facts will be considered. It was established that on or about the date charged in the indictment the city of Houston was engaged in a large scale purchase 720 and condemnation of property for street right-of-way purposes and that the appellant was Superintendent of the Land Acquisition Division of the Treasury Department of said city and that one Nesbit was a subordinate appraiser under the appellant. The accomplice witness Joe Sam testified that, as a representative of his father's estate, he held extensive real estate holdings in the city of Houston, among them being lots 18 and 19 in block 14 of the Forbush Addition to said city; that the appellant, whom he had known for some time, showed him what purported to be an appraisal of said lots which indicated their value to be something in excess of $14,000; and that he voiced his protest that such valuation was inadequate. Sam stated that the appellant made the suggestion that the price could be increased if Sam would share with him equally any advance in the price which he might be able to effect and that he agreed to such arrangement. Sam testified further that the city of Houston paid $19,694.52 for such lots sometime after he made this agreement with the appellant and, pursuant thereto, he handed the appellant a check in the sum of $2,475, which represented one-half of the approximately $5,000 increase which the appellant had been able to add to the price of the lots in question over and above the original valuation which had been shown to him. Sam admitted that he had often asked the appellant's advice on real estate values but denied that he had ever agreed to pay or had paid the appellant for such advice and denied that the $2,475 check or any other check which he had given the appellant was in payment for such counsel. Sam further testified that he had sold several other tracts of land to the city of Houston and that on each occasion he had likewise compensated the appellant for his services in securing an increased valuation on said tracts. It was shown that sometime after the appellant's conversation with Sam the City Council received in the regular order of procedure a valuation of the lots in question, signed by Nesbit and approved by the appellant, showing their value to be $19,694.52 and that the Council authorized such sum to be paid. It was established by the bank records that the $2,475 check mentioned above was endorsed by the appellant and Nesbit, was deposited to Nesbit's credit at the bank, and that Nesbit then drew a check on his account in the sum of $1,237.50 and deposited such sum to the appellant's account. The checks and bank records were introduced in evidence. The appellant did not testify in his own behalf but offered certain witnesses who testified that only one valuation on the lots in question had ever appeared in the records of the city, that the price paid by the city was in line with the prices paid for other lots in the same addition, and that Nesbit and the appellant had spoken of doing outside appraisal work for Sam. The facts will be more fully discussed in connection with the contentions advanced by the appellant's eminent attorney in brief and argument. Appellant moved to quash the indictment and for an instructed verdict on the grounds that the office which the indictment alleged the appellant held was not such an office as is named in the bribery statutes. Article 160, V.A.P.C., which enumerates the executive, legislative and judicial officers who come within the purview of the bribery statutes concludes with this phrase, "and all other city, county and State officials." We quote the pertinent portion of the indictment: "was then and there the duly appointed, qualified and acting Acting Superintendent of Land Acquisition Division of the Treasury Department of the City of Houston." The appellant takes the position that he was named in such indictment as the "Acting Superintendent" and that there is no such office. 721 The State's position is that the double use of the word "acting" is a typographical error which would not vitiate the indictment. Ordinance No. 60 of the city of Houston, which was introduced in evidence, creates the position of "Superintendent of Land Acquisition Division of the Treasury Department." Ordinance No. 7740 lists the officers and employees of the Treasury Department as follows: "Director of Treasury, Tax Assessor & Collector, Superintendent of Land Acquisition Division, Assistant Superintendent of Land Acquisition Division * ." This is followed by a list of more than one hundred employees in said department, such as accountants, clerks, draftsmen, etc. The court in his charge required the jury to find before they might convict that the appellant was the duly appointed, qualified and acting Superintendent of the Land Acquisition Division of the Treasury Department of the city and that he was an "executive officer of said city." The record reflects that more than a year prior to the date charged in the indictment the appellant had been promoted from Assistant Superintendent of the Land Acquisition Department to "Superintendent" of such department upon the recommendation of his superior, the Director of the Treasury, and that such promotion was certified by the Director of Civil Service and Personnel Officer of the city. The evidence establishes that the appellant as "Superintendent of the Land Acquisition Division" had fourteen employees, such as "right-of-way agents" and "secretarial help," under his supervision, and that his duties were that of "Superintending Head of the Appraisers and the Negotiators employed by the city in the Land Acquisition Division" and, as such, "made the assignment within his division to the people who would make the appraisal of the property" and who were accountable to him, which appraisal when made would be transmitted to the City Council for action and that the Mayor and the City Council relied upon such appraisals. We have no difficulty in concluding that the "Superintendent of the Land Acquisition Division of the Treasury Department" was a city official within the meaning of Article 160, supra, and appellant's contention in this regard is overruled. The cases relied upon by the appellant relate to employees whose duties involved far less discretion or responsibility than those imposed upon the appellant and therefore are not controlling in the case at bar. The fact that the appellant was able to do what he did as shown by this record is highly persuasive that he was an officer with considerable authority. Appellant's contention is that there was no such office as "Acting Superintendent," and we must determine whether or not a fatal variance exists between the indictment and the proof. We are at a loss to determine how the addition of the unnecessary word "acting" in the indictment could have in any way misled the accused in preparing his defense. If he was "Acting Superintendent" or "Superintendent," then he was acting in the capacity of Superintendent. In any event, his acts were those of Superintendent of the Land Acquisition Division, and he was so informed in the indictment. Appellant next contends that the State failed to corroborate the testimony of the accomplice witness Sam. Independent of the testimony of Sam, we have these facts: 1. The appellant and his subordinate Nesbit submitted to the City Council an appraisal of certain lots belonging to Sam. Shortly thereafter, the Council approved such appraisal and ordered payment to be made in the exact amount as recommended by the appellant and Nesbit. Within a short while thereafter, Sam executed a check in the sum of $2,475 payable to the appellant, and that check was endorsed by the appellant 722 and Nesbit, and the proceeds divided among themselves. 2. On several other occasions when Sam sold property to the city of Houston, appraiser Nesbit was always assigned to place a value upon the Sam property, even though there were several other appraisers acting under the appellant's supervision. 3. On another occasion, when the city purchased property from Sam, checks were issued by him to both the appellant and Nesbit in the sum of $3,650 each. In this connection, we wish to observe that the evidence as to the other sales by Sam to the city was first introduced by the appellant. The court in his charge instructed the jury that the witness Sam was an accomplice and told them that they must find corroboration of his testimony from other testimony in the case. We find the above evidence to be sufficient to meet the requirements of the court's charge. The checks bearing the appellant's endorsement take this case out of the rule expressed in Devine v. State, 156 Tex. Crim. 530, 244 S.W.2d 232, and the other cases relied upon by the appellant. Appellant next complains of the court's charge: 1. Because it failed to instruct the jury that the evidence which corroborates that given by the accomplice must be incriminating in nature. The charge as given is substantially the same as was approved by this Court in Henderson v. State, 97 Tex. Cr.R. 247, 260 S.W. 868, and Quinn v. State, 136 Tex. Crim. 131, 123 S.W.2d 890, and sufficiently charges the jury on the question of accomplice testimony. 2. Because it improperly limited the proof of other offenses. The court's charge must be judged as a whole. The jury were told explicitly that the State relied for a conviction upon a transaction which occurred on May 1, 1954, relating to lots 18 and 19 in block 14 of the Forbush Addition and a check in the sum of $2,475, and that they were not to consider any evidence as to any other transaction except as it might aid them in passing upon the appellant's guilt or innocence of the May 1st transaction. This was a clear and proper limitation. 3. Because the above instruction was upon the weight of the evidence in that it singled out and gave undue emphasis to the date of May 1st on which the accomplice had testified the appellant consented to accept the bribe. Reliance is had upon Walker v. State, 146 Tex. Crim. 321, 174 S.W.2d 974. It would appear from the opinion in the Walker case that it presents the converse of the situation before us here. In that case, the court's charge gave undue emphasis to the ancillary offenses, admitted on the question of intent, while the charge in this case centered the jury's attention on the offense upon which the State had elected to rely. 4. Because the court gave an incorrect definition of "executive officer," that portion of the charge read as follows: "By the term `executive officer' as used herein is meant one who holds by election or appointment a public office. "`Public office' is the right, authority and duty created and conferred by law by which, for a given period either fixed by law or enduring at the pleasure of the creating power, an individual is invested with some portion of the sovereign functions of the government to be exercised by him for the benefit of the public." In Kimbrough v. Barnett, 93 Tex. 301, 55 S.W. 120, the Supreme Court of this State approved the above definition of public office. Appellant contends that the court erred in permitting the witness Hofheinz, former Mayor of the city, to explain and amplify Section 5(a) of Ordinance 60, which provides, in part, as follows: "The Land Acquisition Division and the officers and employees 723 of the Treasury Department assigned to it, shall handle appraisals and negotiations incidental to the acquisition of rights of way * *." As we understand the Mayor's testimony, he merely explained how the appellant performed the duties imposed upon him by the above ordinance and how he was able, under the terms thereof, to do what he did in the case at bar. There was nothing in his testimony, as we see it, that was repugnant to the ordinance. Appellant next complains that he was not permitted to interrogate one Tom Tolburt to determine if he had spoken to the accomplice witness about the case during the trial. The bill nor the record reflect what Tolburt's testimony would have been if the court had permitted him to be interrogated. In the absence of such a showing, no error is shown. Appellant complains that he was not furnished the testimony of the witness Sam given before the grand jury. This complaint arises out of a rather peculiar set of circumstances. While the witness Sam was being cross-examined, appellant's counsel asked him if he had not told the grand jury certain things about the appellant which were inconsistent with his testimony on this trial. The witness declined to answer on the grounds that the proceedings before the grand jury were secret. Appellant did not call upon the court to require the witness to answer but, instead, asked the court to require the district attorney to turn over to him the record of the testimony of the witness before the grand jury. We have been cited no authority and know of none that supports the appellant's contention that he should have been furnished with the transcript of the witness's testimony before the grand jury to use in his cross-examination of the witness, especially in view of the fact that the witness had neither affirmed or denied what his testimony before the grand jury had been. Biscoe v. State, 86 Tex. Crim. 249, 216 S.W. 174, supports the appellant's contention that the claim of secrecy made by the witness was without merit, but it is not authority on the question presented by this bill. Appellant's last contention relates to the admissibility of the evidence concerning Nesbit and his connection with the offense on trial and other ancillary offenses. The evidence before us, as we see it, amply established that Nesbit was acting with the appellant and sharing with him the fruits of his wrongdoing. If this be true, then the acts of the appellant's co-conspirator which took place during the existence of the conspiracy were admissible. As pointed out earlier, the appellant introduced certain evidence concerning other sales made by Sam to the city which showed on its face that Nesbit had been the appraiser. Finding no reversible error, the judgment of the trial court is affirmed.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527425/	221 F. Supp. 48 (1963) Marvin CHERNER et al. v. TRANSITRON ELECTRONIC CORPORATION, et al. Civ. A. No. 61-857-W. United States District Court D. Massachusetts. January 24, 1963. Supplemental Memorandum January 28, 1963. 49 James D. St. Clair, Hale & Dorr, Boston, Mass., Louis Loss, Cambridge, Mass., Jacob Green, Boston, Mass., Marvin Cherner, Birmingham, Ala., for plaintiffs. Harold M. Willcox, and Robert E. Sullivan, Herrick, Smith, Donald, Farley & Ketchum, Brooks Potter, and James C. Heigham, Choate, Hall & Stewart, Boston, Mass., for defendants. Milton Pollack, New York City, William Berger and Lawrence Milberg, New York City, for intervenors. WYZANSKI, District Judge. On December 26, 1962 this Court entered an order directed to all persons who prior to February 21, 1962 had purchased shares of Transitron Electronic Corporation to show cause why this Court should not approve an Agreement of Compromise and Settlement between plaintiffs and defendants in the following five lawsuits: 1. United States District Court for the District of Massachusetts, Cherner, et al. v. Transitron Electronic Corporation, et al., 201 F. Supp. 934; 2. United States District Court for the District of Massachusetts, C.A. No. 62-247-J-W, Financial Industrial Fund, Inc. v. Transitron Electronic Corporation, et al.; 3. Superior Court, New Castle County, State of Delaware, C.A. No. 398, Diversified Growth Stock Fund, Inc. v. Transitron Electronic Corporation, et al.; 4. Superior Court, New Castle County, State of Delaware, C.A. No. 406; One William Street Fund, Inc. v. Transitron Electronic Corporation, et al.; 5. Superior Court, New Castle County, State of Delaware, C.A. No. 407, Wellington Fund, Inc. and Wellington Equity Fund, Inc. v. Transitron Electronic Corporation, et al. This Court has jurisdiction of only the first two of the five cases just cited. Moreover, only the first of these cases, the Cherner case, purports to be in any aspect a class suit; and, therefore, it is only in connection with the Cherner case that this Court is called upon to consider whether to give approval to the proposed compromise. F.R.Civ.Proc., Rule 23(c). In Cherner the action was initially filed on November 8, 1961, and an amended complaint was filed as a matter of course on November 20, 1961. The amended complaint pleaded in the alternative under §§ 11 and 12(2) of the Securities Act of 1933, 15 U.S.C. § 77k, 77l(2), the § 12(2) claim being limited to the defendant Merrill Lynch, Pierce, Fenner & Smith, Inc. Because the complaint pleaded in the alternative under both sections, and each section was the subject of both an individual count and a class action under Rule 23(a) (3), there were four counts altogether. But the amended complaint rested entirely on a single substantive allegation: that the prospectuses which were the basic parts of two registration statements of the defendant Transitron, which became effective, respectively, on December 9, 1959, and November 17, 1960, in order to authorize secondary distributions, respectively, of 1,000,000 shares at $36 and 1,250,000 at $35 by the defendants David and Leo Bakalar (or members of their immediate families or family trusts), were materially false in stating that Transitron "holds no patent licenses from others requiring the payment of royalties and knows of no patent rights of other which might interfere with the conduct of its business." After considerable discussions which counsel for Diversified Growth Stock Fund, Inc. had initiated with Cherner's counsel with a view to the possibility of intervening in the class action, in April 1962 that company and three other investment companies which had purchased a total of 250,000 shares filed three separate actions in the Delaware Superior Court. Those actions were similar to this action, except that (1) they were apparently based on § 11 alone, (2) they 50 did not seek to hold Merrill Lynch, the principal underwriter, and (3) they alleged, in addition to the patent matter, certain misstatements and omissions with respect to valuation of inventory and non-disclosure of prior deterioration in prices. On March 30, 1962, Cherner's counsel had initiated a separate action in this Court on behalf of FIF (Civil No. 62-247) by filing a complaint which is identical with the amended complaint in this action except that it contained no class action counts and it demanded damages and rescission in respect of FIF's purchase of 50,000 shares from the defendant Merrill Lynch on November 18, 1960, at $35 per share. On April 16 the FIF complaint was amended as of course in order to add a third count which was directed to all the defendants other than Merrill Lynch, and which, on information and belief, alleged misstatements with respect to inventories, sales, prices and profits (hereinafter termed "the accounting allegations" for short) substantially along the lines of the similar allegations contained in the several Delaware complaints. However, since the complaint herein had already been once amended, a further amendment of this complaint along the same lines required an order of the Court, and a motion for such an order was denied on April 30, 1962, with leave to renew the motion after the Court's ruling on the defendants' pending motion for summary judgment on the patent question. On August 6 the Court denied the defendants' motion for summary judgment, as well as their motion to strike the plaintiffs' jury claim. On September 25 the Court again denied the motion to amend the complaint, without prejudice to its later renewal. On the same day, in the FIF action, the Court denied the defendants' motion for partial summary judgment with respect to the third count (the one with the accounting allegations which had been added by amendment), as well as the motion which had been made in the alternative either to strike the third count or to suppress discovery concerning that count, although the Court sustained Transitron's written objections to FIF's interrogatories on Transitron's representation that it would submit much of the requested information in a different form (FIF reserving the right to resubmit interrogatories if it were not satisfied with the data submitted). And an October 19 the Court ordered in the present action that all issues as to whether there were misstatements or omissions in the registration statements with respect to the patent question be severed for separate trial prior to the resolution of any other issues. At various times the Court has permitted 22 persons to intervene with claims in respect of 4,660 shares, and there are five pending motions to intervene on the part of purchasers of an additional 6,650 shares. On December 26, the Court entered its Conditional Judgment and Order to Show Cause on an Agreement of Compromise and Settlement made by all the parties on both sides of the actions above mentioned the present action and the FIF action in this Court together with the three actions pending in Delaware. The agreement provided (¶¶ 1-2) that counsel for the plaintiffs in the Delaware actions should be deemed to have appeared herein, and that the pending motion further to amend the complaint herein to add the accounting allegations should be allowed by consent (subject to its vacation in the event that the judgment of the Court approving the settlement should become ineffective). The Court accordingly allowed the amendment on the same day, December 26. The first issue which faces this Court is whether Cherner is a class action which cannot be compromised without this Court's approval. Cherner has alleged that he represents "All persons who have bought any shares of common stock of Transitron since December 8, 1959, either from any of the underwriters or dealers who participated in either 51 of the distributions covered by the two registration statements herein referred to or in the open market, * ." (Count 2) and " * * all persons to whom defendant [Merrill Lynch] has sold any shares of Transitron since December 8, 1959, by the use of any means or instruments of transportation or communication in interstate commerce or of the mails, by means of either of the prospectuses herein referred to (the said persons not knowing of the alleged untruths or omissions) * * " (Count 4) Since the complaint was filed many persons have sought, and been granted, intervention on the theory that in each of the two classes alleged there are common questions of law and of fact affecting the several rights of numerous persons, and that, to some extent, common relief is sought. Thus, the Cherner case involves a class of plaintiffs including, at the least, all those who have voluntarily come in as interveners. Oppenheimer v. F. J. Young & Co., Inc., 2nd Cir., 144 F.2d 387, 390. See 3 Moore's Federal Practice § 23.11, p. 3465. Without at this point considering how much larger class may be involved, the presence of this small class makes it necessary for this Court to decide whether to approve the merits of the proposed compromise. In considering the merits of the proposed compromise the Court has before it extensive briefs, transcripts of court hearings, and pre-trial discovery in both the Cherner and the FIF cases, as well as affidavits and other material presented in hearings on the show cause order. This Court is mindful that the proposed settlement has the unanimous endorsement of all counsel and all parties who participated in any stage of the proceedings in this Court between the time the Cherner complaint was filed on November 8, 1961 and the time when this Court, on December 26, 1962 issued its order to show cause. Such unanimity has particular significance because the lawyers who evolved the compromise have special experience in litigation of this type and rightly enjoy high reputations for technical competence, financial judgment, and ethical standards. Moreover, plaintiffs' counsel, who, unlike defendants' counsel, are called upon to act for absent persons, have shown a full awareness that their obligation is to act in a fiduciary, non-partisan role toward all members of the classes of persons whom they represent. They did not advocate any compromise until they had engaged in an extensive discovery of the facts, and an elaborate analysis of all relevant legal considerations. Furthermore, in bargaining power those who actively sought recovery were fully equal to those who resisted it. Among the active plaintiffs in the five related suits brought against Transitron were five investment trusts, each of which had a sufficiently large interest at stake, and each of which had sufficient funds of its own, to make a reliable appraisal of what would be a fair figure at which claims against Transitron should be settled. Those who now are critical of some details of the settlement have had little first hand evidence on which to come to reliable conclusions as to the difficulty in proving the facts alleged in the complaint, or as to the possible defenses, or indeed any other phase of Transitron's alleged liability. A mere comparison of the text of the objections made orally and in writing with the text of the comprehensive and careful calculations in the memorandum filed in support of the compromise by Messrs. Green, Loss, St. Clair, and Cherner is illuminating. No one who reads that memorandum can doubt that it would be difficult to match the thoroughness, thoughtfulness, and disinterested judgment there revealed. This Court does not deem it appropriate to comment on every aspect of the proposed settlement. To do so might give the erroneous impression that this Court itself had first hand knowledge of all the facts. And it would wrongly lead 52 some persons to assume that it had negotiated the settlement or laid down its outlines. The task of this Court is primarily to see (1) whether the amount proposed to be paid by defendants bears a reasonable relation to the amount which might be recovered, discounted by the difficulties of proof, by the available total and partial defenses, and by the uncertainties and delays of trial, (2) whether the formula for distributing any amount paid by defendants is fair, and (3) whether in the proposed agreement there are any inequitable provisions. It is in this case extremely difficult even to guess what would be the maximum liability of defendants. And it is at least equally difficult not to be arbitrary in making discounts from that maximum. Taking the difficulties into account, this Court regards the method of approach adopted by plaintiffs' memorandum as sound as, and perhaps sounder than, any other approach. Moreover, most of the detailed analysis seems to this Court sound. But, to show that plaintiffs have not failed in their duty as representatives of possible claimants it may be useful to note certain specific points, especially such as tend to indicate that plaintiffs' counsel may have made a very favorable bargain. 1. With respect to what is called "The Patent Count", (Memo., pp. 5-6), this Court believes that Cherner is, if anything, too sanguine. So far as it has heard the evidence, this Court would not have made a finding that there was an affirmative misstatement in Transitron's statement that it "knows of no patent rights of other which might interfere with the conduct of its business." However, this Court agrees that the failure to refer to the Western Electric situation was a highly relevant omission. Whether the omission was "material" within the meaning of §§ 11(a) and 12(2) is certainly not clear. This Court shares the view expressed in the memorandum, at page 6, that there is no better than a "50-50 or 60-40 chance" that Cherner would prevail on this issue. 2. With respect to "The Accounting Allegations", from what this Court has heard it seems more than possible that at the close of all the evidence in a plenary trial plaintiffs might not prevail. Defendants relied upon Arthur Andersen & Co., accountants of high professional standing, and so far as now appears, defendants gave all the relevant facts to the accountants, and those accountants applied standard accounting practices which have not been criticised by the well known accounting firm of Peat, Marwick, Mitchell, & Co., who were retained by Cherner. 3. The memorandum's discussion of the "measure of damages" (pp. 8-10) reveals the scrupulous regard of the proponents of the compromise for every relevant legal consideration, for economic factors, and for nonpartisan protection of all interested parties. The final formula seems clearly fair in its general characteristics, even if in some aspects there are arbitrary elements. Arbitrary elements would exist in any formula for allocating damages among such a large body of diverse claimants. And if no formula were used, but each claimant had to establish every aspect of his individual status, there would be more money paid out to lawyers, but there surely would not be more money paid to many, if any, shareholders. 4. "The $300,000 payment to the Investment Companies", (Memo., pp. 15-16) raises what are, for this Court, the most troublesome problems. This Court rejects so much of the rationale advanced in the memorandum as relies upon the argument that "The Delaware plaintiffs were adamant in their refusal to join in this settlement without the additional payment" (p. 16). It may very well be that if the $300,000 is not paid to them, some of the investment companies will not seek participation in any settlement in this Court. They may take the position that they are not bound by any decree of this Court and that they are free to continue their Delaware litigation. But any potential 53 claimant could make the same contention. Yet probably no one would say that a compromise was fair and deserved judicial approval if it provided one rate of dividend to those who agreeably acquiesced in the settlement and a higher rate to those who threatened to sue. In principle the proposed compromise at bar has the same vice. In their capacity as fiduciaries for all potential claimants, Cherner's counsel should not accept, and this Court cannot rightly approve, this principle of discrimination even if defendants say that they will not make any settlement without a specific assent to the settlement by the investment trusts, and even if such investment trusts will not give their assent unless they get preferred treatment. 5. But while this Court is not prepared to approve the present proposed arrangements with the investment trusts, it will approve a settlement under which defendants pay into court $5,300,000, and this Court makes allowances, up to a maximum of $300,000, to reimburse the investment trusts for their expenses of litigation and attorneys' fees. In short, this Court is prepared to make what, on evidence submitted in open court, it finds to be just compensation to the Delaware plaintiffs for "having conducted separate proceedings, having carried separate management [of litigation] burdens and having incurred separate expenses and obligations to counsel." (Memo., p. 15). 6. The proposed settlement contemplates the entry by this Court of a judgment which will bind with respect to "any claim embraced in the pleadings herein" persons who do not become parties. Plaintiff and defendants think that such a provision will be valid. (Memo., p. 14). They base their conclusion upon Weeks v. Bareco Oil Co., 125 F.2d 84, 91 (7th Cir. 1941); Union Carbide & Carbon Corp. v. Nisley, 300 F.2d 561, 587-590 (10th Cir. 1962) semble; 2 Barron & Holtzoff, Federal Practice and Procedure (1961), § 572; see also Chafee, Some Problems of Equity (1950) 250-258; Kalven and Rosenfield, The Contemporary Function of the Class Suit, 8 U.Chi.L.Rev. 684 (1941); Note, Binding Effect of Class Actions, 67 Harv.L.Rev. 1059 (1954). But they recognize that there is very respectable authority to the contrary. Oppenheimer v. F. J. Young & Co., Inc., 144 F.2d 387, 390 (2d Cir. 1944); see also Zachman v. Erwin, 186 F. Supp. 681, 689 (S.D.Tex.1960); Newberg v. American Dryer Corp., 195 F. Supp. 345, 348 (E.D.Pa.1961); 3 Moore's Federal Practice, § 23.11, especially at 3465 et seq. If Cherner and defendants have faith in such a bar order, their faith is not so clearly misplaced that this Court should decline to approve a settlement which incorporates the bar order. This Court is not prepared to rule that the views of the Seventh and Tenth Circuit Courts of Appeal are plainly wrong. Moreover, this Court sees force in the contention that "the binding force of a particular action cannot be determined accurately by the court which hears the class suit, for that court is ill-equipped to test the adequacy of the representation of absent class members, the sufficiency of notice given, or even the general fairness of the proceeding. Since these questions can best be answered realistically with respect to a particular person, the ultimate effect of the class action judgment will be determined when it is introduced in a subsequent action to bind persons not parties to the original action." See Note 67 Harv.L.Rev. 1059, 1060 (1954). Furthermore, the bar order, unlike the proposed payment of $300,000, creates no possible discrimination. Anyone who wishes may stay out of the settlement of this case, and, on his own, sue defendants to establish their liability and his damage. In that proceeding he may contend that this Court was without jurisdiction to bar his claim. But a dissenter asks too much if he wants this Court to refuse to insert in its judgment a bar order for which there is strong judicial precedent and which defendants have explicitly stated is an indispensable condition of their paying any money at all. Inasmuch as the vast majority of shareholders 54 who have expressed their views want to share in a compromise at or near the 5 million dollar figure, it would be most unjust to deny them the opportunity to get any money because of objections of other stockholders whose fundamental contention is that they not only will not be, but indeed cannot be, adversely affected by anything that this Court does in this case. In conclusion, this Court will approve the agreement of compromise and settlement as submitted if, but only if, it is modified along the lines set forth in paragraph 5 above. To refuse to grant approval would be to run a substantial risk that all the claimants will get nothing, and to go counter to the overwhelming weight of the expressed opinion of interested and informed parties. SUPPLEMENTAL MEMORANDUM On January 28, 1963, while sitting at a trial, this Court received the attached letter[] dated January 28, 1963. It is a matter of complete indifference to the Court whether or not the parties to Cherner v. Transitron Electronic Corporation, et al., D.C., 201 F. Supp. 934 agree upon a settlement which conforms to this Court's opinion of January 24, 1963. Nor does this Court see any reason to reconsider or amend its opinion, or to hold a private conference designed to commit the Court in respect to any future action. But the Court deems it appropriate to place on the record certain matters which at various stages were drawn to the Court's attention in chambers and which ought to be available to any person interested in his litigation and, indeed, to the general public. 1. Defendant Transitron and the other defendants consistently have stated to Cherner's counsel and to this Court that they would not have entered into settlement negotiations unless among those expressly participating in the settlement were the four investment trusts which were plaintiffs in Delaware. Counsel for those investment trusts were involved not merely in settlement negotiations but in presenting to this Court in chambers the proposed settlement so that this Court could issue its orders to show cause. It was from that presentation that this Court drew its impression, stated in the opinion of January 24, 1963, that "in bargaining power those who actively sought recovery were fully equal to those who resisted it." 2. At no time in the presence of the Court did Cherner's counsel suggest that the amount of 5 million dollars approved by them as a fair settlement should be increased to $5,300,000. If defendants do ultimately pay into Court $5,300,000, the course of proceedings in and out of Court will make it evident that (1) the $5,000,000 would not have been paid into Court had it not been for the participation of Cherner's counsel, F.I.F.'s counsel, and the Delaware plaintiffs' counsel, and (2) the additional $300,000 would not have been paid into Court had it not been for (a) the initial demand of counsel for all the investment trusts that $300,000 extra be paid to the investment trusts and (b) the insistence of the Court that that $300,000 be added to the $5,000,000 paid into Court. 3. Beyond indicating in its opinion of January 28, 1963 that $300,000 would be the maximum amount payable to the investment trusts for their contribution to the settlement, this Court has never directly or indirectly, up to this time, given any indication what allowances it would make for expenses, attorneys' fees, or contributions. It would be a grave error to assume that the Court has acquiesced in any allowances to anyone or everyone "which will materially deplete the dividend eventually payable to" shareholders. And no one has authority from this Court for "negotiating a formula" which seeks to pre-empt or govern the judicial authority to make appropriate allowances. Unless within a reasonable time there is filed in this Court a compromise settlement conforming to this Court's opinion 55 of January 24, 1963, and to this memorandum, the case will proceed to trial. APPENDIX MILTON POLLACK 111 Broadway New York 6, N. Y. January 28, 1963 Hon. Charles E. Wyzanski, Jr. United States District Court Federal Building Boston, Massachusetts Dear Judge Wyzanski: I am taking the liberty of writing this letter to suggest that a conference be called for the purpose of attempting to solve problems which affect my clients and which have arisen out of the changes required by Your Honor's Opinion of January 24 to be made to the Agreement of Compromise and Settlement. Essentially the problem faced by my clients is that the attitude of the Cherner plaintiffs, as expressed to me, makes it impossible for me to advise my clients where they stand. In brief, the Cherner plaintiffs say that the reimbursement to be made to the Delaware plaintiffs for their part in the cases and in the settlement should be limited to a proportion of their recovery out of the settlement fund, thus denying any recognition of the part which the Delaware funds played in creating the fund. At the same time the Cherner plaintiffs state their intention of asking for reimbursement to their counsel in an amount which will materially deplete the dividend eventually payable to my clients. Counsel for the parties have not succeeded in negotiating a formula sufficiently definite in effect for me to take to my clients for a surrender of their existing rights. I wish to be able to recommend to my clients that they accept a settlement modified along the lines specified in Your Honor's Opinion so that the settlement can go forward. I hope that a discussion among all parties, with Your Honor's good offices as mediator, would break what appears to be an impasse. I stand ready to come to Boston as Your Honor's convenience may permit, although necessarily subject to Court engagements that I cannot avoid. Respectfully yours, s/Milton Pollack/seh seh cc: James D. St. Clair, Esquire NOTES [*] See Appendix.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527285/	221 F. Supp. 677 (1963) David Allen KAHN et al., Plaintiffs, v. CHRYSLER CORPORATION, Defendant. Civ. A. No. 14553. United States District Court S. D. Texas, Houston Division. September 17, 1963. Leonard C. Kahn, Houston, Tex., for plaintiffs. Baker, Botts, Shepherd & Coates, Ralph S. Carrigan, Houston, Tex., for defendant. INGRAHAM, District Judge. The case is before the court on defendant's motion for summary judgment. Suit was originally brought against Chrysler Corporation by David Allen Kahn, a minor, acting by and through his father and next friend, Leonard C. Kahn. Jurisdiction is founded on diversity of citizenship, the plaintiff being a citizen and resident of Texas, and the defendant being a foreign corporation licensed to do business in Texas. The facts as follow are undisputed. On September 25, 1960, plaintiff, David Kahn, a minor of seven years age, was operating his bicycle on a street in Houston. While so doing, he drove the bike into the rear of a 1957 Dodge vehicle, manufactured and designed by the defendant. The child was thrown upon the vehicle, his right front temple region striking the left rear fin of the vehicle, and causing substantial injury to the minor. It is alleged, and this is the basis of the suit, that those injuries were proximately caused by the negligence of defendant, Chrysler Corporation, in creating and designing the vehicle "in such a manner that the fins of said vehicle were elongated and protruded past the remainder of the vehicle and made of sharp metal capable of cutting." It is 678 further alleged that the defendant knew, or reasonably should have known, that the fins of the 1957 vehicle would be capable of causing such injuries as those which occurred to the minor plaintiff. Defendant moves for summary judgment under Rule 56, Federal Rules of Civil Procedure, the relevant parts of which are set out.[1] It is clear that the court must first determine whether there is a genuine issue as to any material fact. Only after it has been affirmatively established by the movant that no such issue exists is the question reached of whether judgment should be granted as a matter of law. Plaintiff opposes the motion for summary judgment on the grounds that the question of whether or not the defendant was negligent in the manufacture and design of the vehicle is a sufficient disputed fact to defeat the motion. In short, there is no dispute over what occurred, but only over the legal significance of the occurrence. This is a diversity case, and as such the court must look to the substantive law of the state in which it sits. Erie R. R. Co. v. Tompkins, 304 U.S. 64, 58 S. Ct. 817, 82 L. Ed. 1188 (1938). Almost universally, whether or not certain actions constitute negligence is a fact question for the jury. Once the constituent elements are outlined, the factfinder is left the determination of this ultimate issue. However, it is also elementary law that if an act or omission be negligent it is because there has been some breach of duty, and if there is no duty, there can be no negligence. See, e. g., Stevens Funeral Home v. Busby, 336 S.W.2d 812 (Tex.Civ.App.1960); Toombs v. Wimberley, 320 S.W.2d 881 (Tex.Civ.App.1959). This threshold question of the existence of a duty is the first problem which must be resolved. However, who is to determine if a duty exists? Is this a matter of law or a disputed fact question itself? Certainly there is disagreement in the instant case over whether or not the defendant had a duty to so design his vehicles that an accident like that under consideration could not happen. The very essence of plaintiff's complaint is that the defendant owed to the plaintiff a duty to manufacture an automobile with which it was safe to collide. But this is not sufficient to constitute a disputed fact issue, for this is a question of law to be determined by the court. Whether or not a legal duty exists on a given state of facts and circumstances so as to give rise to actionable negligence on breach thereof, as well as the nature and extent of the duty, if any, is always essentially a question of law. City of Austin v. Schmedes, 270 S.W.2d 442 (Tex.Civ.App.1954); City of Bryan v. Jenkins, 247 S.W.2d 925 (Tex.Civ.App. 1952). This brings us to the final question was there a duty in the instant case? If so, then there is the factual dispute over whether or not it was breached. On the other hand, if no duty exists, then the motion for summary judgment should be granted. There is no Texas case dealing explicitly with this problem. Muncy v. General Motors Corp., 357 S.W.2d 430 (Tex.Civ.App.1962), is perhaps the closest a Texas court has come to considering a manufacturer's duty in designing an automobile. That case was a personal injury action arising from an accident occurring when an automobile jumped the curb and pinned the plaintiff against a building while a passenger was attempting to leave the vehicle on the 679 driver's side. Suit was filed against General Motors, and one of the grounds urged by plaintiff was that GMC was negligent for designing and constructing an automobile so that its key could be removed from the ignition without stopping the motor and while remaining in drive gear. The court rejected this argument, relying on the statement of manufacturer's liability in the Restatement of the Law of Torts, Sec. 395.[2] The court held that there was no showing that the car in question was dangerous if used properly and in the manner and for the purpose for which it was intended. Unquestionably there are numerous distinctions between the GMC case and the one presently under consideration. The significance is the scope of the duty which is implicit in the court's holding. That is, the duty of care is apparently felt to be concomitant with normal use and for the ordinary purpose of the vehicle. A case extremely similar factually to the instant case arose in California, and the court dismissed the suit due to the absence of a duty owing to the plaintiff. This dismissal was upheld by the California Court of Appeals in Hatch v. Ford Motor Co., 163 Cal. App. 2d 393, 329 P.2d 605 (1958). In that case, an automobile manufactured and assembled by Ford Motor Company was parked at the edge of a public street. The automobile had a pointed radiator ornament which protruded beyond the front part of the auto to which it was attached. The plaintiff, a minor of six years age, was proceeding on foot along the street, and collided with the front of the vehicle, with the result that the ornament pierced his left eyeball, causing the loss of that eye. Plaintiffs urged two causes of action, one being based on violation of a state statute, and the other being the same theory of recovery as is expressed in the instant case. The court rejected both theories, and its language as to the latter is particularly relevant here: "The facts here do not present the question as to whether defendant owed to the public a duty to so design its automobile as to lessen [the] severity of injuries that might be caused by it if it were negligently operated on the highways of this State but only the question as to whether it owed to the public, including the plaintiff, the duty above stated, i. e., to so design the vehicles sold by it as to prevent the type of injury sustained by the plaintiff when said automobile was at rest, properly parked upon the highway. Counsel for the plaintiff have not cited us to any authorities which uphold their contention that the defendant owed any such duty and our own research has not disclosed any." This court is in accord with the views of the California court, and feels that the Texas courts would hold likewise. This case would seem almost a fortiori when juxtaposed with the GMC case discussed earlier. Chrysler Corporation should not be required to anticipate all the possible ways in which a person may injure himself by falling against an automobile, nor should they have a duty to protect against such possible injuries. The duty of the automobile manufacturer extends to the ordinary use of the vehicle, and may even be such as to cover certain situations when the automobile is being negligently used. But the manufacturer has no obligation to so design his automobile that it will be safe for a child to ride his bicycle into it while the car is parked. Defendant's motion for summary judgment will be granted. The clerk will notify counsel to draft and submit judgment accordingly. NOTES [1] "(b) A party against whom a claim, counterclaim, or cross-claim is asserted or a declaratory judgment is sought may, at any time, move with or without supporting affidavits for a summary judgment in his favor as to all or any part thereof. "(c) * * * The judgment sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. * * *" [2] "A manufacturer who fails to exercise reasonable care in the manufacture of a chattel which, unless carefully made, he should recognize as involving an unreasonable risk of causing substantial bodily harm to those who lawfully use it for a purpose for which it is manufactured and to those whom the supplier should expect to be in the vicinity of its portable use, is subject to liability for bodily harm caused to them by its lawful use in a manner and for a purpose for which it is manufactured."	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527315/	131 Pa. Commw. 244 (1989) 570 A.2d 96 ACME CORRUGATED BOX COMPANY, INC., Petitioner, v. COMMONWEALTH of Pennsylvania, UNEMPLOYMENT COMPENSATION BOARD OF REVIEW, Respondent. Commonwealth Court of Pennsylvania. Argued June 8, 1989. Decided September 8, 1989. Reargument Granted November 21, 1989. 246 Louis J. Capozzi, Jr., Fox, Rothschild, O'Brien & Frankel, Philadelphia, for petitioner. No appearance for respondent. Margaret A. Browning, Spear, Wilderman, Sigmond, Borish & Endy, Philadelphia, for intervenors, George Horvath, et al. Before DOYLE and PALLADINO, JJ., and NARICK, Senior Judge. PALLADINO, Judge. Acme Corrugated Box Company (Acme) appeals an order of the Unemployment Compensation Board of Review affirming a referee's decision granting benefits to George Horvath (Claimant). Claimant worked for Acme as a press operator and was a member of the United Paper Workers Union, Local No. 375 (Union). In January 1985, Acme and the Union were engaged in labor negotiations to replace an existing contract which was to expire on January 31, 1985. The contract expired on January 31, 1985, but the employees continued to work until February 5, 1985. On February 6, 1985, the Union began to picket. Acme contends that the Union went out on strike and therefore, Claimant is not entitled to unemployment compensation benefits. Claimant asserts that the work stoppage was either the result of a lockout or that Acme's 247 subsequent conduct converted the strike into a lockout. Therefore, the sole issue on appeal[1] is whether Claimant's unemployment was the result of a lockout or a strike. We note that this issue is a mixed question of law and fact subject to our review. Grandinetti v. Unemployment Compensation Board of Review, 87 Pa.Commonwealth Ct. 133, 486 A.2d 1040 (1985). Under Section 402(d) of the Unemployment Compensation Law,[2] an employee is ineligible for unemployment benefits for any week in which the cause of his unemployment is due to a labor dispute other than a lockout. The test to determine if the work stoppage is caused by a strike or a lockout was set forth in Vrotney Unemployment Compensation Case, 400 Pa. 440, 444-45, 163 A.2d 91, 93-94 (1960): Have the employees offered to continue working for a reasonable time under the pre-existing terms and conditions of employment so as to avert a work stoppage pending the final settlement of the contract negotiations; and has the employer agreed to permit work to continue for a reasonable time under the preexisting terms and conditions of employment pending further negotiations? If the employer refuses to so extend the expiring contract and maintain the status quo, then the resulting work stoppage constitutes a "lockout" and the disqualification for unemployment compensation benefits in the case of a "stoppage of work because of a labor dispute" does not apply. This test was further explained in Philco Corp. v. Unemployment Compensation Board of Review, 430 Pa. 101, 103, 242 A.2d 454, 455 (1968): "[L]ogically the test of whether a work stoppage resulted from a strike or a 248 lockout requires us to determine which side, union or management, first refused to continue operations under the status quo after the contract had technically expired but while negotiations were continuing." Claimant has the burden of proving that the work stoppage was caused by a lockout and not a strike. AVCO Corp. v. Unemployment Compensation Board of Review, 105 Pa.Commonwealth Ct. 316, 524 A.2d 531 (1987). Claimant relies on the following findings of the Board in its argument that Acme first refused to continue on the status quo: 4. As the contract expiration date approached, the Union verbally offered on several occasions to continue working under the terms of the old contract after its expiration, in the event a new contract was not achieved. 5. These offers by the Union to extend the expiring agreement and to work thereunder were rejected by the employer. 6. The contract expired on January 31, 1985 and the Union membership voted to reject the employer's final offer, which included the modifications. 7. The Union, nevertheless, continued to work without a contract for the period February 1, 1985 through February 5, 1985. 8. During this period, the employer implemented its last offer and pursuant to that action made no contributions to the Union health and welfare plan or to the Union pension plan. Although Acme, prior to the expiration of the contract, had refused the Union's offers to operate under the status quo, it did continue to make work available after the expiration of the contract. The fact that an employer rejects union offers to continue to operate under the status quo does not automatically indicate that work is not available under the terms of the prior contract after its expiration. See Batkowski v. Unemployment Compensation Board of Review, 89 Pa.Commonwealth Ct. 51, 491 A.2d 953 (1985). "[I]n determining the workers' right to unemployment 249 benefits, entitlement must turn on the actual conduct of the respective sides and not upon the rhetoric of negotiations." Borello v. Unemployment Compensation Board of Review, 490 Pa. 607, 614, 417 A.2d 205, 209 (1980). Consequently, we must look at Acme's conduct subsequent to the expiration of the contract to determine if it continued to make work available under the status quo. Initially we note that Acme's final offer, which is contained in the record in Claimant's Exhibit No. 5, contains provisions for contributions to the Union health and welfare plan and the Union pension plan. Therefore, the failure to make payments to these plans is not evidence that Acme implemented its final offer. Furthermore, there is no support in the record that Acme either implemented terms of its final offer or altered the conditions of employment prior to the work stoppage. We conclude that the Board's finding of fact No. 8, that Acme implemented its final offer, is not supported by substantial evidence. Claimant contends that Acme's failure to make payments to the Union health and welfare plan, and Union pension plan for the period from February 1 to February 5, 1985 as required by the expired contract, suggests that Acme did not operate under the status quo after the expiration of the contract. As a result of this, Claimant contends that Acme was the first to refuse to maintain the status quo and the work stoppage was therefore a lockout. Under the terms of the expired contract, Acme was required to make payments to the pension, and health and welfare plans between the fifteenth and the twentieth day of the month after they had accumulated. Therefore, these payments were due to be paid to the plans between March 15 and March 20, 1985. There is no indication in the record that, prior to the work stoppage, Acme had not intended to make the contributions when they were due. Under these circumstances, Acme's failure to contribute to these plans, over a month after the initial work stoppage, has no bearing on whether the work stoppage was initially a strike or a *250 lockout. Therefore, we conclude that the initial work stoppage was the result of a strike and not a lockout. However, our analysis does not stop here. We must consider the cause of the unemployment on a week by week basis. High v. Unemployment Compensation Board of Review, 505 Pa. 379, 479 A.2d 967 (1984). Claimant contends that even if the initial labor stoppage was the result of a strike, it was transformed into a lockout when Employer hired replacement employees on terms which were different from those under the prior labor agreement. Shortly after the picketing began, Acme began hiring permanent replacement employees. Several of the Union members crossed the picket line and returned to work. These employees, as well as the replacement employees, worked under terms and conditions of employment which were different from those under the expired labor agreement. However, it was not until March 27, 1985, that the Union indicated a willingness to return to work under the terms of the expired agreement. As a result, the work stoppage at least until that time was the result of a strike. Claimant contends further that Acme's failure to permit the Union members to return to work after the Union's offer to return to work transformed the strike into a lockout. We disagree. Acme refused this offer because all of its positions were filled. An employer does not transform a strike into a lockout where union member's jobs are no longer available because they have been filled by permanent replacements. Schreiber v. Unemployment Compensation Board of Review, 187 Pa.Superior Ct. 135, 144 A.2d 448 (1958). We conclude that Claimant's unemployment was the result of a strike rather than a lockout. Accordingly, the order of the Board is reversed. ORDER AND NOW, September 8, 1989, the order of the Unemployment Compensation Board of Review is reversed. NOTES [1] Our scope of review is limited to a determination of whether errors of law have been committed, constitutional rights were violated or findings of fact are supported by substantial evidence. AVCO Corp. v. Unemployment Compensation Board of Review, 105 Pa.Commonwealth Ct. 316, 524 A.2d 531 (1987). [2] Act of December 5, 1936, Second Ex.Sess., P.L. (1937) 2897, as amended, 43 P.S. § 802(d).	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527331/	428 S.W.2d 650 (1968) E.L. (Ed) RAINS, Appellant, v. Ora Frances Higgins RAINS, Appellee. Court of Appeals Tennessee, Middle Section. February 23, 1968. Certiorari Denied May 20, 1968. 652 R.E. Bonner, Jr., McMinnville, for appellant. Haston & Haston, McMinnville, for appellee. Certiorari Denied by Supreme Court May 20, 1968. OPINION TODD, J. In this divorce case the defendant, E.L. (Ed) Rains, has appealed from a decree which sustained the bill of the complainant, Ora Frances Higgins Rains, dismissed the cross bill of the defendant, and granted to complainant an absolute divorce and sole title to all property formerly held jointly by the parties. The first assignment of error is as follows: "The Court erred in granting the Appellee a divorce and divesting title to the real estate owned by the parties, as tenants by the entireties, as the Court of General Sessions of Warren County, Tennessee has no jurisdiction to hear and determine divorce cases and to divest title to real estate, the value of which exceeds the jurisdictional limitation of the Justice of the Peace Courts." It is insisted by defendant that the trial court had and has no jurisdiction of this or any divorce case because Chapter 54 of the Private Acts of the 1949 General Assembly, which undertook to confer such jurisdiction, is unconstitutional on a number of grounds which will be discussed in order. 1. It is insisted that the subject Act violates the Tennessee Constitution, Section 17, Article 2 of which contains the following: "No bill shall become a law which embraces more than one subject, that subject to be expressed in the title. All acts which repeal, revive or amend former laws, shall recite in their caption, or otherwise, the title or substance of the law repealed, revived or amended." At least three other Private Acts, enacted prior to 1949, affected the General Sessions Court of Warren County. Chapter 91, Private Acts of 1941, created the General Sessions Court of Warren County, transferred to it all of the judicial powers of the Justices of the Peace, and provided for the compensation and selection of the General Sessions Judge. Chapter 253 of the Private Acts of 1943 authorized Justices of the Peace of Warren County to issue "all warrants and other papers". Chapter 372 of the Private Acts of 1943 provided that the County Judge and General Sessions Judge of Warren County might sit for each other by interchange. Chapter 54 of the Private Acts of 1949 undertook to confer divorce jurisdiction 653 upon the General Sessions Court of Warren County. Pertinent portions thereof are as follows: "AN ACT to amend House Bill No. 239, Chapter No. 91, of the Private Acts of 1941, entitled: "AN ACT to create and establish a Court in and for Warren County, Tennessee, which shall be designated as Court of General Sessions of Warren County, Tennessee, to prescribe the jurisdiction thereof, to limit the jurisdiction of Justices of the Peace of Warren County, Tennessee, and to repeal all laws in conflict with this Act which apply to Warren County, Tennessee", by enlarging the jurisdiction of said Court by making same a Court of Record so as to give said Court concurrent jurisdiction with Chancery and Circuit Courts to hear and determine divorce cases, providing for appeal therefrom in such cases, fixing rules governing the procedure of said Court, empowering the Judge of said Court to make other rules and regulations governing the procedure and practice of the Court as a Court of Record; fixing the qualifications and salary of the Judge of the said Court of General Sessions of Warren County, Tennessee; giving the Judge of said Court concurrent jurisdiction with Judges of all Courts and Chancellors to grant fiats authorizing the issuance of injunctions and attachments; and to repeal all laws and parts of laws in conflict with this Act. Section 1. Be it enacted by the General Assembly of the State of Tennessee, That House Bill No. 239, Chapter No. 91 of the Private Acts of 1941, the caption of which is fully set forth in the caption of this Act, be and the same is hereby amended as follows: Sec. 2. Be it further enacted, That the Court of General Sessions of Warren County, Tennessee, shall have concurrent jurisdiction with Circuit and Chancery Courts in all proceedings for divorces as provided by Sections Nos. 10325 and 10379 of the official Code of the State of Tennessee for the year 1932. An appeal from the judgment of said Court in all divorce matters shall be to the Court of Appeals or to the Supreme Court in the same manner as provided in such cases from the Circuit and Chancery Courts. Sec. 3. Be it further enacted, That the Court of General Sessions of Warren County, Tennessee, shall be and is hereby made a Court of Record, and the laws regulating pleading and practice, stay of judgments, writs and processes in civil and criminal cases in Courts of Justice of the Peace, shall apply to the Court of General Sessions of Warren County, Tennessee, and in all other cases to be tried and determined by said Court, having jurisdiction concurrent with the Circuit and Chancery Courts, the pleadings and practices in such cases shall be the same provided by law for such Courts. * * * * * * Defendant complains that neither Chapter 253 nor Chapter 372 of the Private Acts of 1943 are mentioned in the caption or body of the Act presently under attack (Chapter 54, 1959), and cites Cheatham County v. Murff, 176 Tenn. 93, 138 S.W.2d 430 (1940), which contains the following: "The object of the constitutional provision under consideration was to prevent the pernicious practice of enacting statutes whose effect was unknown to the members of the Legislature and to the people. * * * To direct the attention of the Legislature to the existing law and the proposed change and thus prevent improvident legislation. [176 Tenn. at 102, 138 S.W.2d at 433]. When, under an appropriate caption, an Act of the Legislature on its face plainly discloses its whole effect and where it is independently operative, neither legislators nor the people would be 654 further enlightened as to its scope by a recital of the title or substance of former laws. If there is irreconcilable conflict, the former laws are repealed by implication. If there is no such conflict and the earlier and later laws involve the same subject matter, they will be construed in pari materia." (176 Tenn. at 103, 138 S.W.2d at 433.) We cannot agree that the omission of the amendatory acts (Chapters 253 and 372) invalidates the later amendatory act, Chapter 54, 1949, now under consideration. In the case of State v. McConnell, 71 Tenn. 332 (1879) it was held that an act entitled "an Act to create and establish the sixteenth judicial circuit of the state" was sufficiently captioned to authorize the transfer of Overton County from the Fifth Circuit to the new circuit, and the transfer of Trousdale County from the Seventh Circuit to the Fifth Circuit. The same opinion states: "The establishment of a new judicial circuit in a State already divided into circuits, must necessarily require some change in the circuits previously existing, and such change may well be considered as germane to the subject and embraced in a caption embodying the general object. Cannon v. Mathes, 8 Heis., 504. And the positive provision of the act by which a designated county is detached from one circuit and attached to another, takes the act out of the class of cases intended by that part of the 17th section of the second article of the Constitution of 1870, which relates to "all acts which repeal" former laws. Morrill v. Fickle, 71 Tenn. at 340." The act designed and captioned to amend the original General Sessions Court Act of Warren County certainly was of purpose broad enough to effect any incidental changes in acts amendatory to the original act. By alternate reasoning, the Act of 1941 had been twice amended in 1943, so that in 1949, a reference to the Act of 1941 was reasonably intended to mean the Act of 1941 as amended from time to time and as it existed in amended form in 1949. Defendant asserts that the effect of the Act of 1949 would be to authorize Justices of the Peace to issue writs in divorce cases contrary to Section 12, Article 6, of the Constitution providing that writs shall "be signed by the respective clerks". We do not hold that the act has such effect, but its effect in this regard is not before the court in this case. No writ in the present case is shown to have been issued by a Justice of the Peace. 2. In further support of his first assignment of error, defendant insists that the subject of divorce involves the interests of the State to such extent that divorce judges serve essentially State purposes, and that their salaries may not be paid out of county funds. Judges' Salary Cases, 110 Tenn. 370, 75 S.W. 1061, (1903) does hold that the judges of the chancery, circuit and criminal courts are state officers, elected and commissioned as such, holding state offices, created and existing for distinctively and essentially State purposes; and therefore they are not county officers and may not be paid out of county funds. In the case of Hancock v. Davidson County et al., 171 Tenn. 420, 104 S.W.2d 824 (1937), the Supreme Court found that the Court of General Sessions of Davidson County was designed to serve both State and County, and therefore refused to apply the holding of the Judges' Salary Cases, supra, to a General Sessions Court. Davidson County v. Kirkpatrick, 150 Tenn. 546, 266 S.W. 107 (1924) was a case in which the county was permitted to contribute to the salary of a District Attorney General, a state official. 3. It is next insisted that the Act of 1949 is void for vagueness, however the insistence is supported by neither argument nor authorities, and we find no merit therein. 655 4. In further support of his first assignment, defendant insists that the Act of 1949 is broader than its caption because of its reference to Sections 10325 and 10379 of the Code of 1932 (now 16-508 and 16-612 T.C.A.) which sections pertain to other matters in addition to divorce. The Act of 1949 plainly states "in all proceedings for divorce as provided by Sections Nos. 10325 and 10379 * * ". Non-divorce matters contained in said code sections are plainly excluded by omission from the Act of 1949. 5. Defendant further insists under his first assignment of error that Title 36, Chapter 8 of the present code deals with both Divorce and Annulment and thereby is created a vagueness as to whether the Warren County General Sessions Court may hear and determine annulment cases. No question of annulment is involved in the present case, hence we consider the insistence to be moot. 6. Finally, under the first assignment, it is insisted, without argument or citation of authorities that the trial court "is without jurisdiction to hear and determine divorce cases and divest title to real estate without regard to its jurisdictional limitation as to value." A recently announced opinion in the case of Langford v. Langford, 220 Tenn. 600, 421 S.W.2d 632. (1967) recognizes the jurisdiction of the General Sessions Court of Overton County to divest real estate out of the husband and to vest the same in the wife as an incident to a divorce proceeding. Said opinion contains the following: "The General Sessions Court of Overton County, having been given concurrent jurisdiction with the circuit and chancery courts in matters relating to divorce, is, when acting in this area of the law, a court of general jurisdiction." 220 Tenn. at 603, 421 S.W.2d at 634. Section 1 of Article 6 of the Constitution of Tennessee, and the many cases annotated thereunder in Volume 1 of Tennessee Code Annotated, adequately dispose of any question of the authority of the General Assembly to make allocation of judicial powers and jurisdiction. The first assignment of error is respectfully overruled. The second assignment of error is as follows: "The Court erred in divesting title to certain real estate from the Appellant to the Appellee as alimony, which was not described in the petition, attached or otherwise impounded." The original bill contains the following: "For the past six years your complainant has managed the homeplace paid fire insurance on the barn and house has painted the house totally fenced made several household repairs . * * * * * Premises considered, Complainant prays: * * * * * * (4) That because of her labors as aforesaid your complainant alleges that she is entitled to substantial alimony and she prays that same be decreed her along with her right of homestead for which she now makes demand. (5) That upon the hearing she be given absolute title to their homeplace at Route #2 Woodbury in Warren County, which is owned as tenants by the entireties, including all furniture and furnishings therein." The answer of the defendant is coupled with a cross bill which contains a metes and bounds description of the real estate involved, which description is included in the decree from which defendant has appealed. Defendant complains that complainant's bill contains no specific prayer for alimony, no adequate description of the property subsequently decreed to her and that 656 no attachment was issued to bring the property before the court. We are of the opinion that by a fair interpretation the above quoted portions of complainant's bill are sufficient to apprise defendant of her claims for alimony; that the bill, as supplemented by the answer of defendant, himself, certainly identifies the property to be dealt with; and that no attachment was necessary to subject the property to the jurisdiction of the court where both owners were before the court in personam. Brown v. Brown, 198 Tenn. 600, 281 S.W.2d 492 (1955) is cited by defendant as authority for the proposition that a judgment or decree beyond the fair scope of the pleadings is void. In the Brown case, the cross bill of the wife did not mention the property at all, but the husband's bill described the property in question. The court held that the husband could not complain of a deficiency in his wife's pleading which was supplied by his own, and said: In determining whether or not a judgment is beyond the scope of the pleadings, those pleadings must be given a liberal construction with all reasonable intendments taken in favor of the judgment." 198 Tenn. at 611, 281 S.W.2d at 497. The case of Terrell v. Terrell, 192 Tenn. 317, 241 S.W.2d 411 (1951), cited by defendant, involved a non-resident publication without personal service or pleading by defendant, hence cannot control the decision in this case where both personal service and pleading by defendant are involved. The subsequent case of Wilson v. Andrew, 213 Tenn. 173, 375 S.W.2d 650 (1963) held that an attachment was not necessary to bring before the court in a divorce action the Tennessee real property rights of a non-resident defendant wife who was before the court by publication only. A fortiori, where both parties are before the court in personam, and the property is within the territorial jurisdiction of the court and reasonably identified in the pleadings, there can be no question of the power of the court to decree proper disposition of the property pursuant to Sections 36-820 et seq. T.C.A. The second assignment of error is respectfully overruled. The third assignment of error is as follows: "The Court erred and abused its discretion, as a matter of law, in divesting title to all of the property owned from Appellant to the Appellee as alimony." By this assignment we are asked to review the discretionary ruling of the trial judge in allowance of alimony and vesting of property in complainant. The factual background of the ruling is as follows: Originally, complainant's father gave her a small plot of ground upon which the parties built a small house through their joint efforts. Later, complainant purchased from her father an additional five acres, and still later she purchased between 17 and 20 acres more from her father. Apparently, all acquisitions were put in the joint names of the parties. After a sojourn in another state, the parties returned and built a barn and new house through their joint efforts and finances, and later sold the small house first built and occupied by them. Thereafter, defendant abandoned complainant and their minor child for a period of six years, during which time complainant worked, supported herself and son, and made a number of improvements in the property. From rental of a part of the property she derived some minor income, the amount of which is not shown. During the six years of abandonment, defendant has been employed in various kinds of work, and appears to have been self-sufficient until recently. He now complains of arthritis and says he is unemployed because of his ailment, but offers no medical testimony on the subject. His own testimony does not make out a satisfactory 657 case of either total or permanent disability. In addition, he is shown to be a veteran. As such, he would undoubtedly have recourse in a case of destitute disability. Section 36-820 T.C.A. provides for awards of alimony and/or child support to a wife to whom a divorce is granted. The following Section provides as follows: "36-821. Portion of husband's estate decreed to wife. In such case, the court may decree to the wife such part of the husband's real and personal estate as it may think proper. In doing so, the court may have reference and look to the property which the husband received by his wife at the time of the marriage, or afterwards, as well as to the separate property secured to her by marriage contract or otherwise." This section empowers the court in a divorce proceeding to award the wife part or all of the husband's real estate as alimony. Terrell v. Terrell, supra. Toncray v. Toncray, 123 Tenn. 476, 131 S.W. 977, 34 L.R.A.,N.S., 1106 (1910) is cited for the proposition that a husband should not be divested of all of his property in awarding alimony. The Toncray case is distinguishable on at least two grounds. In the Toncray case, the husband had already obtained a divorce in another state, had remarried and had a child of the second marriage. In the present case, the defendant has assumed no new marital responsibilities in good faith. At the time of the Toncray decision, "estate" figured largely in the ability of a man to provide for himself and his dependents. In the intervening years from 1910 to the present time, the economy of our society has changed to an emphasis upon earning capacity rather than "estate." As stated in Toncray v. Toncray: "Each case depends upon its own circumstances, and the amount is within the discretion of the court." 123 Tenn. at 495, 131 S.W. at 981. Although the Court awarded the property of the parties to the wife "as alimony", there is no indication in the record as to what the Court found to be the proportionate share of the property equitably owned by the parties before this cause originated. At first blush, it would seem that property held jointly by husband and wife would be owned in equal shares. Circumstances of acquisition, maintenance, or improvement may, as in the present case, create equities between the parties which the Court is authorized to adjust as an incident to the divorce decree. See Witherspoon v. Witherspoon, 55 Tenn. App. 484, 402 S.W.2d 492 (1966). All of the real property awarded to complainant was received by the parties from her father by gift or purchase. A fair inference would be that the father was generous in fixing the purchase price. Complainant assisted in or completely performed all improvements made on the property and has maintained it since being deserted by defendant. Surely, she has acquired a substantial equitable interest therein in addition to bare joint title. During six years of desertion complainant supported the minor child without any real assistance from defendant who was regularly and gainfully employed. Surely an equitable obligation of reimbursement accrued during this six years, which was considered by the trial court in adjusting the equities of the parties. See Kittrell v. Kittrell, 56 Tenn. App. 584, 409 S.W.2d 179 (1966) wherein the court said "It seems to us no proper adjustment of the rights and interests of the parties under the 1959 Amendment of the Act can be made without taking into account complainant's past contributions to the care, support and education of the daughter as well as the contributions it is quite apparent he must continue to make until the daughter marries, becomes self-supporting or reaches her majority. *658 Every equity favors the position of complainant. It would be most inequitable and unjust to allow defendant to take an undivided interest in the property which she acquired only because of the marital relationship and the generosity of complainant and escape all responsibility for the care, maintenance and education of the daughter of the parties." The protestations of defendant that he is disabled and unable to support himself are not well supported. We feel, as the trial court evidently felt, that the disabilities of the defendant were aggravated by the pendency of this proceeding and will subside somewhat upon its termination. If the defendant's claims to complete disability be well founded, then he will be unable to pay the award of $50.00 per month for child support, and the complainant will thereby sustain (as she has in the past) the entire responsibility of supporting the minor child. In such event, the award to the wife will have even greater foundation and usefulness. The award of alimony was within the sound discretion of the court which was not abused. The third assignment of error is respectfully overruled. Each assignment of error having been carefully considered and overruled, the decree of the trial court is affirmed with costs, and the cause is remanded to the trial court for any necessary further proceedings. Affirmed. SHRIVER, P.J., and PURYEAR, J., concur.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527342/	428 S.W.2d 190 (1968) Charles MARSHALL et al., Appellants, v. The PEERLESS INSURANCE COMPANY et al., Appellees. Court of Appeals of Kentucky. January 26, 1968. As Modified on Denial of Rehearing June 7, 1968. O. T. Hinton, Pikeville, for appellants. E. R. Hays, Baird & Hays, Jack T. Page, Pikeville, for appellees. OSBORNE, Judge. This action involves the right of the owners of an aircraft to recover under a collision insurance policy for damages incurred when the craft overshot a landing and went off the end of the runway. Appellee, the Peerless Insurance Company, as insurer of the aircraft insists that it is not liable for the damages because of an exclusion in the policy. The pertinent facts developed on the trial of the action are as follows: Charles Marshall, Maurice Newsom and James Thacker purchased a Cessna 182 aircraft. 191 They procured from Peerless a policy covering damages to the aircraft incurred as a result of its operation. Section 7 of the policy provided: "7. Pilots: It is a condition hereof that such `Flight' coverage as is provided by this policy applies only while the aircraft is being operated by the following specified pilot(s) while holding proper certificate(s) and rating(s) as required by the Federal Aviation Agency for the flight involved: "(a) Charles Marshall; Maurice J. Newsom; James Thacker, as student pilot * ." "(c) Any private pilot or any commercial pilot, who has logged solo or pilot in command flight time of at least 300 total hours during the past 10 years; 50 hours in aircraft of like kind of which 10 total hours shall have been logged during the past 90 days." James Thacker was licensed as a student pilot. Student pilots under the rules and regulations of the Federal Aviation Agency cannot act as pilot in command of an aircraft while carrying passengers. On April 17, 1965, Thacker agreed to fly a friend, Hap Early, and his two daughters, to Huntington, West Virginia, on the following day for a dental appointment. Another friend, Bill Davis, who also owned a plane, decided he would like to go along. This made five people, which was more than the aircraft could accommodate, and all parties decided to take Davis's plane, also. When it was ascertained that Davis would take his plane, Thacker invited Sgt. Owen C. Hammonds, who was an army recruiter and a duly licensed and qualified pilot, to go along in his aircraft as command pilot. On the trip to Huntington, Early and the two girls flew with Davis in his plane. Thacker and Hammonds flew in the Thacker plane. On the return trip, Early rode with Davis and the two girls returned with Thacker and Hammonds. The Thacker plane was equipped with two complete sets of controls, one on either side. On the return trip, which is the one here under consideration, Thacker and Hammonds alternated in manipulating the controls. Upon approaching the landing strip in Pikeville, where the questioned collision occurred, Thacker was manipulating the controls with the intention of landing the plane, while Hammonds was monitoring the other set of controls with the intention of lending assistance where need be. The landing was normal until the plane almost touched down. However, in the last few seconds the wind changed 180°, the plane picked up speed accordingly and raised 15 to 20 feet into the air. Thacker was of the opinion that he might overshoot the field so he closed the carburetor heat and advanced the throttle with the intended purpose of going around the field again. Hammonds decided that the landing could be made and that there might be danger in going around. He accordingly took control of the plane, closed the throttle, and made the landing. But, by this time the plane was approaching the end of the runway and because of the added momentum due to the shift of the wind and a wet landing surface, he was unable to stop it. The plane left the runway, collided with a fence, and was damaged in the amount of $6657.28. There are other questions involved in the appeal, but we believe the one that will be dispositive of all issues is whether an exception in the policy precludes recovery. The exception is as follows: "This policy does not apply while the aircraft is in flight and operated by a student pilot unless such flight or attempted flight is with the specific advance approval of and under the supervision and control of an F.A.A. Certified Commercial Instructor Pilot." Appellee insists that this exception applies to the circumstances above outlined and it is therefore not responsible for the repair of the aircraft. We can not agree with this contention for two reasons. The Federal Aviation Regulations[1] adopted by the 192 Federal Aviation Agency govern the operation of all aircraft within the continental United States. The pertinent part of these regulations governing this flight is as follows: "F.A.R. § 61.73. General limitations. (a) Except as provided in paragraph (b) of this section, a student pilot may not act as pilot in command of an aircraft (1) That is carrying a passenger; (2) That is on an international flight; (3) For compensation or hire; (4) In furtherance of a business; or (5) Other than the make and model endorsed on his certificate by his certificated flight instructor." "F.A.R. 61.101. (1) A private pilot may, for compensation or hire, act as pilot in command of an aircraft in connection with any business or employment if the flight is only incidental to that business or employment and the aircraft does not carry passengers or property for compensation or hire."[2] (Emphasis added). "F.A.R. 91.3 Responsibility and authority of the pilot in command. (a) The pilot in command of an aircraft is directly responsible for, and is the final authority as to, the operation of that aircraft. (b) In an emergency requiring immediate action, the pilot in command may deviate from any rule of this subpart or of Subpart B to the extent required to meet that emergency. (c) Each pilot in command who deviates from a rule under paragraph (b) of this section shall, upon the request of the Administrator, send a written report of that deviation to the Administrator." As the policy provides coverage if any one of the pilots designated under Section 7-c was operating the aircraft at the time of the accident, we are of the opinion appellee is liable. It is not questioned but what Hammonds met the requirements of Section 7-c. Under the regulations he was pilot in control of the aircraft, therefore its legal operator. He had a full set of controls and complete authority to use them. We believe this takes the flight from under the exclusion insisted upon by appellee. Our second reason for believing appellee liable is simply this: Thacker testified that Hammonds was operating the aircraft at the time of the accident.[3] *193 Hammonds testified that at the time of the accident he was operating the aircraft.[4] When there is a pilot in the aircraft with access to a full set of controls, who meets the requirements of the policy, then in our opinion the requirements as to the operator of the aircraft are met. The presence of such pilot has long been accepted as satisfying the requirements of the Federal Air Regulations prohibiting a student pilot from carrying passengers, though at times certain officials of the Federal Aviation Agency have viewed these rules askance. In discussing this matter, the editor of a trade magazine, THE FLYER, points out the following incident: "This pilot wasn't as lucky as another jump plane pilot we know, who tangled with the FAA and won. He was a student pilot and was nabbed by an FAA inspector after landing from hauling a load of skydivers aloft. `What,' the FAA man demanded, `were you doing carrying passengers on a student license?'" "`I was perfectly legal,' the pilot said, as the inspector reddened. `You see that third skydiver to come down? He has a private license and as long as he's on board, I'm legal even if I'm flying the plane. He jumps out last, so then I'm legal again, flying the plane solo!'" THE FLYER, January, 1968, Vol. 7 No. 10. Hammond's presence at the controls of the aircraft, having satisfied the provisions of the Federal Aviation Regulations made him pilot in command of the aircraft and therefore legally responsible for its operation. For this reason and for the further reason that he was actually operating the aircraft at the time of the accident, it is our opinion that the exception in the policy does not apply. Therefore, this case is remanded back to the trial court with directions to enter judgment for the plaintiffs in accord with the provisions of the policy. The judgment is reversed. WILLIAMS, C. J., and HILL, MONTGOMERY, MILLIKEN and PALMORE, JJ., concur. STEINFELD, Judge (dissenting). I respectfully dissent because I would hold that Thacker, an owner of the plane, was piloting in violation of the exclusion of the policy. Thacker's own testimony, which is confirmed by the answers of Hammonds, clearly shows that Thacker and not Hammonds was the operator. Thacker was asked and answered: "Q. You were in command when landing the plane? "A. I had hold of the controls and Mr. Hammonds had access to them from the seat on his side. "Q. But you actually manipulated it in making the landing until such time as Mr. Hammonds decided you were in trouble and then he attempted to do something about it? "A. Up to that time I was manipulating the controls, Yes, sir." The owners would have us say that one of them could set in motion the events which caused the damage but be free from the consequences because Hammonds took control at the last moment before the damage occurred. This we should not do. NOTES [1] Hereafter will be cited as F.A.R. [2] The prohibition here is against carrying passengers for compensation or hire. This is the only restriction we find in the regulation upon a private pilot. [3] "Q. 72. By that do I understand you to mean you didn't think you were going to make it and you had to go up and come back again?" "A. Then I decided it would be safer to go around than to roll all the way to the end of the runway, and I pushed the carburetor heat in with my thumb and opened the throttle with my hand, it has a little control on the throttle control, tightens up the shaft to keep it from working out, and I did that in about one motion, dropping my hand to the nose trim. The airplane was trimmed for a landing nose high and I had hold of the control throttle with my left hand, and as I said, I gave the airplane full power, the prop control was in and locked, so therefore we had full power on the prop and I pushed the throttle all the way in and we had full throttle power on the engine and at that time, almost instantaneously, Mr. Hammon's decision was that we couldn't make it and chopped the throttle, or pulled the throttle back out, which caused the airplane to just about quit flying, and he had control on the right, and whenever we both had control and got it on the ground below the road, which is approximately 500' below the fence, and if the grass hadn't been wet could have stopped, but the grass was wet and made it difficult to stop coming in hot, or fast, and the result was we went across a bank into a fence, not going completely through it, doing the damage they put on these repair bills, and that's the extent of it up that point." Thacker's testimony, Q. 72, T.E. pp. 36 & 37. [4] "Q. 28. You were in control when it struck and crashed and hit?" "A. Yes, sir; I was." Hammond's testimony, Q. 28, T.E. p. 62.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527352/	357 B.R. 680 (2006) In re HOUSTON STEEL FABRICATORS, LLC, Debtor. J. Coleman Tidwell, Trustee, Plaintiff, v. Jerry R. Sheffield and Amanda Sheffield, Defendants. Bankruptcy No. 05-50456-JDW. Adversary No. 05-5122. United States Bankruptcy Court, M.D. Georgia, Macon Division. May 25, 2006. Ed S. Sell, III, Blake Edwin Lisenby, Macon, GA, for Plaintiff. 681 Jerry and Amanda Sheffield, Eastman, GA, pro se Defendants. MEMORANDUM OPINION JAMES D. WALKER, JR., Bankruptcy Judge. This matter comes before the Court on Plaintiffs complaint to recover preferences and motion for summary judgment. This is a core matter within the meaning of 28 U.S.C. § 157(b)(2)(F). After considering the pleadings, the evidence, and the applicable authorities, the Court enters the following findings of fact and conclusions of law in conformance with Federal Rule of Bankruptcy Procedure 7052. Undisputed Facts Debtor Houston Steel Fabricators, LLC filed a bankruptcy petition on February 3, 2005. On September 8, 2005, Plaintiff, the Chapter 7 Trustee, filed this adversary proceeding to recover preferences. Plaintiff subsequently filed a motion for summary judgment including a statement of material facts not in dispute. Pursuant to Local Rule 7056-1(c), the facts alleged in Plaintiffs statement may be deemed admitted unless controverted by a statement of facts from Defendants Jerry and Amanda Sheffield. Defendants have not contested the motion for summary judgment and have not filed a statement controverting the facts alleged by Plaintiff. For that reason, the Court will accept the following facts asserted by Plaintiff as true: Defendants do business as J & M Homes. During the 90 days prior to filing bankruptcy Debtor made two payments on an unsecured debt it owed to the Sheffields. One payment of $103,214.46 was made on December 9, 2004. Another payment of $18,000 was made on November 26, 2004. The debt was incurred prior to either payment. Plaintiff has also contended as a matter of fact that the payments allowed Defendants to receive more than they would have in a hypothetical liquidation had the payments not been made. Conclusions of Law Summary judgment is governed by Federal Rule of Civil Procedure 56, made applicable to adversary proceedings through Federal Rule of Bankruptcy Procedure 7056. Under Rule 56, a party is entitled to summary judgment when the "pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed. R.Civ.P. 56(c); McCaleb v. A.O. Smith Corp., 200 F.3d 747, 750 (11th Cir.2000). The Court views all evidence and reasonable factual inferences in the light most favorable to the nonmoving party. Burton v. Tampa Housing Auth., 271 F.3d 1274, 1277 (11th Cir.2001). However, the Court neither weighs the evidence nor determines its credibility. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S. Ct. 2505, 2511, 91 L. Ed. 2d 202 (1986). At issue in this case is whether certain transfers made by Debtor to Defendants may be avoided as preferences. Section 547(b)[1] provides as follows: Except as provided in subsection (c) of this section, the trustee may avoid any transfer of an interest of the debtor in property (1) to or for the benefit of a creditor; (2) for or on account of antecedent debt owed by the debtor before such transfer was made; 682 (3) made while the debtor was insolvent; (4) made (A) on or within 90 days before the date of the filing of the petition; or (B) between ninety days and one year before the date of the filing of the petition, if such creditor at the time of such transfer was an insider; and (5) that enables such creditor to receive more than such creditor would receive if (A) the case were a case under chapter 7 of this title; (B) the transfer had not been made; and (C) such creditor received payment of such debt to the extent provided by the provisions of this title. 11 U.S.C. § 547(b). The first question is whether the transfers were made to or for the benefit of a creditor. In this case, Debtor owed an unsecured debt to Defendants and the transfers were payments on that debt. Thus, the transfers were made both to and for the benefit of a creditor. The second question is whether the transfers were made on account of an antecedent debt. Because the debt in this case arose prior to the transfers at issue, the transfers were made on account of antecedent debt. The third question is whether the transfers were made while Debtor was insolvent. Section 547(f) provides that "the debtor is presumed to have been insolvent on and during the 90 days immediately preceding the date of the filing of the petition." 11 U.S.C. § 547(f). Because both transfers were made during the 90 days preceding the bankruptcy filing, Debtor was presumptively insolvent at the time they were made. The fourth question is whether the transfers were made during the 90 days prior to the filing of the petition. In this case, the bankruptcy petition was filed on February 3, 2005, and the transfers were made during the prior 90 days on December 9, 2004, and November 26, 2004. The final question is whether the transfers caused Defendants to receive more than they would have received in a hypothetical liquidation had the transfers not been made. Plaintiff has alleged that this statement is true, and Defendants have not refuted it. However, the statement is a legal conclusion for which Plaintiff has provided no factual basis. In Kelley v. Chevy Chase Bank (In re Smith), 231 B.R. 130 (Bankr.M.D.Ga.1999) (Walker, J.), this Court denied a summary judgment motion in similar circumstances. In Smith, the trustee sought to recover a preference and filed a motion for summary judgment. The Court denied the motion because "he failed to state facts necessary for the Court to find" that the fifth element of a preference was satisfied. Id. at 133. "In order to determine whether this test has been satisfied, the Court must, at a minimum have facts which establish Debtor's total assets and liabilities." Id. at 134. The Court rejected the trustee's argument that it could take judicial notice of such facts from the debtor's case file for three reasons: First, it is not the Court's duty to comb the case file for facts that support the trustee's motion; second, the movant has the burden of alleging all material facts; and third, the respondant's ability to challenge facts is compromised when the Court takes judicial notice of such facts without any notice to the respondant. Id. at 135. The court could speculate with near perfect assurance of certainty that unsecured creditors in the case will not be paid in full. However, such speculation, however *683 certain, is not fact. A conclusory allegation to that effect is still an allegation, and not a fact. Because Plaintiff in this case has not alleged facts to support the fifth element of a preference claim, the Court cannot conclude that Plaintiff has proven all the elements of a preference action. Consequently, the Court must deny Plaintiff s motion for summary judgment without prejudice. An Order in accordance with this Opinion will be entered on this date. NOTES [1] The applicable law in this case is the law as it existed prior to the enactment of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527350/	428 S.W.2d 664 (1968) Antonio VERA, Appellant, v. The STATE of Texas, Appellee. No. 41289. Court of Criminal Appeals of Texas. May 29, 1968. 665 Max J. Luther III, Corpus Christi, for appellant. Sam Jones, Dist. Atty., Douglas Tinker, Asst. Dist. Atty., Corpus Christi, and Leon B. Douglas, State's Atty., Austin, for the State. OPINION WOODLEY, Presiding Judge. At the trial which began July 29, 1967, appellant was found guilty by a jury of assault with intent to murder with malice one Humberto Perez on or about October 24, 1966. He elected to have the court assess the punishment and it was assessed at 20 years. Appellant had been previously tried and convicted in the same court on April 6, 1967, for a like assault on the same day upon one Benny Perez, and had received at the hands of the same judge a like term of 20 years which was affirmed in Vera v. State, Tex.Cr.App., 423 S.W.2d 585. The sentence from which this appeal is prosecuted was cumulated with the sentence in the first conviction. Appellant's first ground of error is that "the court erred in having the state's witness Santos Capello sworn in English, when the witness did not fully understand the English language, and could not therefore understand the oath given him, and such fact was known to the state before the oath was administered in English." His second ground of error is that "the court erred in not allowing the attorney for defendant on cross-examination to inquire as to whether or not the state's witness, Santos Capello understood and complied with the instructions given by the court in English." The witness Capello testified at both trials. 666 When this witness was called to testify, counsel for the state suggested to the court that he believed he needed an interpreter, and the record indicates that Mr. Abarca informed the witness that he would translate the questions, put them in Spanish and his answers in English, and that the witness, when asked by the court if he understood the oath, replied "Yes, sir." The trial court properly used the English language in administering the oath to the witness. There is nothing in the record which reflects that the witness was incompetent to testify or that he did not understand the obligation of an oath. The trial court did not abuse his discretion in not excluding his testimony. See McCormick and Ray, Texas Law of Evidence, 2nd Ed., Sec. 294. Grounds of error Nos. 1 and 2 are overruled. Ground of error No. 3 complains that the court erred in not granting the defendant's motion for continuance because of the absence of the witnesses Eduardo Garza and Juan Candela. The motion was made orally after the state had rested. At appellant's request, the testimony of the witnesses at the former trial was read to the jury. Ground of error No. 3 is overruled. The remaining ground of error is the denial of appellant's motion for instructed verdict at the close of the state's evidence. It is well settled that the question of the sufficiency of the evidence to sustain the conviction will be determined from all of the evidence. Bellah v. State, Tex.Cr.App., 415 S.W.2d 418; Lopez v. State, 172 Tex. Cr.R. 317, 356 S.W.2d 674; Cross v. State, 100 Tex. Crim. 88, 271 S.W. 621. The judgment is affirmed.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527367/	428 S.W.2d 268 (1968) Paul SHIPLEY et al., Appellants, v. NORTHWESTERN MUTUAL INS. CO., Appellee. No. 5-4591. Supreme Court of Arkansas. June 3, 1968. 269 Chas. W. Garner, Little Rock, for appellants. Barber, Henry, Thurman, McCaskill & Amsler, Little Rock, for appellee. BROWN, Justice. Plaintiffs-appellants sued Northwestern Mutual Insurance Company to recover under a medical payment provision included in Paul Shipley's policy of public liability insurance. At the close of all the testimony the trial court entered a directed verdict for Northwestern Mutual. The appeal challenges the propriety of that verdict. Paul Shipley's policy bound the Company to pay medical bills incurred by Shipley and his passengers. The coverage was limited to $500 per person. In the event of any payment under the policy it was stipulated that the Company would be subrogated to any right of recovery vested in the injured persons. It was further provided that those who were so insured would do nothing to prejudice the Company's subrogation rights. On April 29, 1966, Shipley was involved in a collision with a vehicle driven by Eva M. Baldwin. The accident was reported to Shipley's insurance agent. As a result of that contact Northwestern's adjuster called on Shipley. The adjuster obtained information concerning the collision and advised Shipley to supply him with the medical bills. Shipley and the other three occupants of the vehicle, his wife and two grandchildren, were receiving medical attention. Treatment for some or all of them continued for a matter of months. When the bills would come to Mr. Shipley on the first of each month he would take them to the adjuster. Shipley seemed to be of the impression that as each bill was submitted Northwestern would forthwith supply the funds to pay it. On the other hand the adjuster understandably was desirous of garnering all the bills and disposing of the claims with final instruments of settlement and subrogation. In that connection he assured Shipley that Northwestern was not attempting to avoid its obligations under the policy. On September 15, 1966 less than four months after the accident the Shipleys filed suit against Mrs. Baldwin. That filing was not made known to Northwestern or its adjuster. The attorney for the Shipleys shortly began correspondence with Northwestern's adjuster concerning the claimed medical payments. Counsel was advised that numerous medical bills had been supplied but the adjuster had not been informed as to whether the Shipleys had 270 been discharged from treatment; nor had the proofs of loss and subrogation agreements been executed as requested. After further correspondence between those two parties, the adjuster prepared all the forms and attached detailed instructions for their execution. Those were forwarded to the attorney for the Shipleys with the assurance that their execution and return would result in payment of the medical claims. Those instruments were mailed on January 4, 1967. The attorney received them but elected not to have them executed and returned. A follow-up letter from the adjuster brought no response. On February 28, 1967, the case against Mrs. Baldwin was tried. The following awards were made: Paul Shipley, $6,602; Novella (wife), $350; Terry, $275; and Karen, $65. The same medical bills forming the basis of this suit against Northwestern were introduced in the Shipleys-Baldwin trial. Suit against Northwestern Mutual was filed April 26, 1967. Northwestern's refusal to pay the medical claims under its policy was grounded on the recovery in the Baldwin case. The Company contended (1) that its insurance contract was one of indemnity, and (2) that the Shipleys violated the subrogation and cooperation provisions of the policy, thereby precluding Northwestern from recouping any payments made by it from the party at fault (Mrs. Baldwin). In directing a verdict for Northwestern the trial court found that "the Shipleys have been paid for the medical expenses and that this company is not now obligated to pay same." We hold the court was correct on both findings, that is, first, the Shipleys had been paid, and second, Northwestern is not now obligated to pay. Novella Shipley contends that the judgment in her favor, and against Mrs. Baldwin, for $350 was $31.40 short of her actual medical. Her individual recovery was not for medical but for physical injuries. The instructions to the jury in the Shipleys-Baldwin trial are not in this record; however, it is shown that Paul Shipley paid the medical expenses for his wife and grandchildren. Paul Shipley recovered $6,602. Having paid the medical, Shipley was the person entitled to recover for it. So we certainly cannot say the trial court was in error in stating that all medical payments were paid when Mrs. Baldwin paid the judgment against her. Nor is there anything in the record to show that the awards to the Shipleys were reduced by comparative negligence. To hold that Northwestern was obligated to pay the Shipleys, the court would have ignored the well established rules (1) that the object of subrogation is to prevent the insured "from recovering twice for the one harm, as would be the case if he could recover from both the insurer and from a third person who caused the harm, and (2) reimbursing the surety for the payment which it has made." Couch on Insurance 2d § 61:18 (1966). In the contract of insurance before us the insured and the insurance company entered into an agreement whereby the insurer would be subrogated to any right possessed by the insured to reimbursement of medical expenses from a third party, in this instance a tort-feasor; the contract contained the usual cooperation clause; and it provided that the insured would do nothing after loss to prejudice the insurer's interest under subrogation. In view of those provisions, together with the fact that full medical compensation has been paid by the tort-feasor, Mrs. Baldwin, the Shipleys are precluded from recovering from Northwestern. See Travelers Indemnity Co. v. Cole, CCH 1967 Automobile Law Reports, ¶ 5608 (Tenn.Ct. of Appeals, M.S., June 30, 1967); Travelers Ins. Co. v. Lutz, 3 Ohio Misc. 144, 210 N.E.2d 755 (1964); DeCespedes v. Prudence Mutual Casualty Co., 193 So. 2d 224 (Fla. App.1966); Bernardini v. Home & Automobile Ins. Co., 64 Ill.App.2d 465, 212 N.E.2d 499 (1965). Affirmed.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527356/	238 N.J. Super. 463 (1990) 570 A.2d 29 THEODORE J. GEHERTY, PLAINTIFF-APPELLANT, AND CROSS-RESPONDENT, v. RICHARD J. MOORE, DEFENDANT-RESPONDENT, AND JOHN DOE BEING A PERSON OR OTHER ENTITY TRADING AS MCGUINN'S PLACE, DEFENDANT-RESPONDENT, AND CROSS-APPELLANT, AND RICHARD ROE NUMBER 1 THROUGH RICHARD ROE NUMBER 10, BEING PERSONS OR ENTITIES CONSTITUTING THE EMPLOYER, MASTER, PARTNER, OR OTHER PRINCIPAL OR PRINCIPALS OF DEFENDANT, RICHARD J. MOORE, AND ALSO CONSTITUTING THE PERSONS OR ENTITIES PROVIDING RICHARD J. MOORE WITH ALCOHOLIC BEVERAGES OR OTHER INTOXICANTS ON OR ABOUT APRIL 22, 1983, AND NEW JERSEY MANUFACTURERS INSURANCE COMPANY,[1] DEFENDANTS. Superior Court of New Jersey, Appellate Division. Argued November 29, 1989. Decided February 8, 1990. 465 Before Judges DREIER, SCALERA and D'ANNUNZIO. Lowell F. Curran, Jr., argued the cause for appellant. Lois Ann Wood argued the cause for respondent Richard Moore (Lewis and Wood, attorneys, Lois Ann Wood, on the brief). 466 C. Woodward Strong argued the cause for respondent, cross-appellant McGuinn's Place, Inc., (Smith, Stratton, Wise, Heher & Brennan, attorneys, Peter R. Freed, of counsel, C. Woodward Strong, on the brief). The opinion of the court was delivered by SCALERA, J.A.D. Theodore Geherty brought suit against Richard Moore and McGuinn's Place, Inc., for personal injuries sustained when his parked vehicle was negligently struck by Moore's vehicle. Geherty alleged that Moore was intoxicated at the time and that prior thereto, he negligently had been served alcoholic beverages by McGuinn's Place. Summary judgment was entered against Moore on the issue of liability. Thereafter, a jury trial was held on the liability issue against McGuinn's Place and on the issue of damages against both defendants. Geherty's motion at the conclusion of the evidence, to eliminate the issue of proximate cause as to McGuinn's Place, was denied. The verdict returned was molded to indicate that McGuinn's Place was not liable to plaintiff and damages of $80,000.00 were entered against Moore alone. Subsequently, plaintiff moved for a new trial on the issue of liability against McGuinn's Place. Moore moved for a new trial on the issue of damages. Both motions were denied. Plaintiff filed an appeal from the judgment in favor of McGuinn's Place and McGuinn's Place filed a cross-appeal alleging that the award of money damages was excessive. Moore's motion seeking leave to file a cross-appeal nunc pro tunc, was denied. Most of the operative facts involving liability were not disputed at trial. On April 22, 1983, at approximately 10:30 in the morning, Moore drove his 1980 Toyota to Baltimore, Maryland in connection with his work in a research program. Sometime around 1:00 p.m. he had lunch, during which he had "several beers." At about 4:30 in the afternoon he drove back toward his home at 12 Stonicker Drive, in Lawrence Township, New 467 Jersey. Somewhere above Philadelphia, just before crossing over the bridge to New Jersey, at about 6:00 p.m., Moore stopped at a bar for an hour or so, during which he consumed a "couple of beers." He then drove into New Jersey and, at approximately 8:00 p.m., stopped at McGuinn's Place in Lawrenceville. He had been there on several occasions before. He drank beer while he was there, but could not recall how much. However, it was his "habit and custom" to drink "two to three beers per hour." He did recall that the beer was served in sixteen ounce glasses. Moore did not eat while at McGuinn's Place, nor did he recall having any conversations with the bartender that evening. At approximately 11:00 p.m., Moore left McGuinn's Place for home. Then 19 years old, Geherty and his girlfriend, Susan Berry, arrived at her home at 13 Stonicker Drive sometime around 11:00 p.m. in a 1979 Volkswagen. Geherty parked in front of Susan's home for two to three minutes without any lights on. As Geherty was about to exit, he noticed Moore's car coming "quite fast" from the opposite direction. It came over to Geherty's side of the road and struck his car on the front driver's side pushing it over the curb, across the sidewalk and onto the lawn of a neighbor's yard. When Geherty went over to Moore, who was sitting in the driver's seat, he saw that Moore was "sort of swaying around a little bit" and smelled of alcohol. Geherty called for help and then suddenly felt as though "someone hit [him] in the head with a baseball bat." He sat on the lawn and shortly thereafter the police arrived. At this point he began to "shiver uncontrollably" and was taken to Princeton hospital. Moore's deposition was read into evidence and indicated that after turning down Stonicker Drive and traveling about two blocks, Moore was "wide-angling to the left" as he normally does, to pull into the driveway of his house. All of a sudden, he 468 struck a car parked in a spot where none had ever been parked during the four years that he had lived there. Lieutenant James Kelley was dispatched to the accident and found Moore standing outside of his vehicle. He appeared to be swaying a bit and Kelley smelled the odor of alcohol on his breath. Kelley asked Moore to perform several sobriety tests. During the finger to the nose test with his right hand, Moore appeared "sure" but seemed "a little uncertain" when using his left hand. Although Moore's speech was slurred and Kelley felt that he was "under the influence of alcohol," Moore was not loud, boisterous or rambling. Rather, he was polite, cooperative and appeared calm. However, because Kelley believed that Moore was intoxicated he was taken to police headquarters for a breathalyzer test. At headquarters, Moore was given a breathalyzer test by Sergeant Richard Stout who used the Stevenson, model 900, machine. The first breath test, performed at 12:24 a.m., revealed Moore's blood alcohol content to be .21 percent. Approximately ten minutes later a second test indicated a blood alcohol content of .20 percent. Plaintiff produced Richard Zylman, who testified without objection as an expert regarding "alcohol in the human body and the breathalyzer." He opined that the beer which Moore had drunk during lunch would have dissipated long before the time of the accident. However, he reached various conclusions by extrapolating the results of the breathalyzer test, Moore's body weight, the amount of beer consumed and the time over which he had been drinking. He calculated that Moore had drunk approximately 167 ounces of beer, or about 10 sixteen ounce glasses, between 6:00 p.m. and 11:00 p.m. He indicated that while drinking at the first bar in Pennsylvania, Moore's blood alcohol rose from zero to between .02 and .03 percent. After entering McGuinn's Place his blood alcohol level rose to .10 percent by 9:20 p.m. and to .15 percent by 10:30 p.m. Finally, by the time he left McGuinn's at 11:00 p.m., Moore's 469 blood alcohol level was up to about .17 percent. Eventually, his blood alcohol level increased to the .21 percent registered by the breathalyzer. Zylman opined that at that point, Moore was "highly intoxicated." He concluded with the opinion that when the blood alcohol range of .12 percent was reached, even an "experienced drinker" would have exhibited effects which would have been "observable by an ordinary person." As part of its case, McGuinn's Place read Moore's deposition into evidence wherein Moore denied that his ability to drive had been affected by his consumption of alcoholic beverages. Further, David Lester, the expert for McGuinn's Place, testified that the particular model of breathalyzer machine used by the police to test Moore was subject to operator error, making its readings unreliable. In sum, McGuinn's Place sought to establish that Moore was not intoxicated that night and that, in any event, he did not exhibit any signs of intoxication while at its establishment. At the conclusion of the evidence, with respect to the liability of McGuinn's Place, the trial judge charged: Now, in this case, the plaintiff, as I've said, seeks damages against the defendant, McGuinns Place, contending that McGuinns Place was negligent by serving alcoholic beverages to defendant Moore while defendant Moore was intoxicated, and that such negligence proximately caused an accident in which the plaintiff was injured. Plaintiff contends that at the time the alcoholic beverages were served, defendant McGuinns Place knew or in the circumstances, should have known that the patron, Mr. Moore, was intoxicated. In this case, I will use the phrase visibly intoxicated to mean a patron who McGuinns Place knew or from the circumstances, should have known was intoxicated. Now, I've used the term negligence. Negligence is generally defined as the failure to exercise that degree of care for the safety of others which a reasonably prudent person would exercise in the same or similar circumstances. In determining whether such care has been exercised, you should consider whether the defendant and again now, we're talking about McGuinns Place only, should have foreseen in the attending circumstances that the natural and proximate consequences of its conduct would have been some accident or injury. For a person to be negligent, it is not necessary that it foresees the particular accident that occurred or the specific injuries which result from the accident. A person or in this case, the tavern owner, is negligent, however, if it does those acts which a reasonably prudent person would not have done, thereby creating 470 or contributing to a risk of harm and circumstances where a reasonably prudent person would have foreseen that the probable consequence of its conduct would be some accident or injury. Thus, negligence is the doing of an act which a reasonably prudent person would not have done in the same or similar circumstances because that act creates or contributes an unreasonable and foreseeable risk of harm to others. A person is also deemed negligent if it creates or contributes to an unreasonable risk of injury by its conduct when that conduct is combined with the conduct of others which a reasonably prudent person would foresee. In other words, a tavern owner is deemed negligent if it serves alcoholic beverages to a visibly intoxicated person in circumstances where a reasonably prudent person would foresee that by serving alcoholic beverages to such a person, it is causing or contributing to an unreasonable risk of harm to others that may result thereafter by the conduct of the intoxicated person. In this connection, you may consider that in current times, traveling by car to and from a tavern is commonplace, and you may consider that the effects of intoxication of a driver may reasonably be foreseen. Now, the Division of Alcoholic Beverage Control which is a state agency, pursuant to authority granted by a statute, enacted by our legislature has adopted Regulation 20, Rule 1, which provides in pertinent part as follows: No licensee shall sell, serve or deliver or allow or permit the sale, service or delivery of any alcoholic beverage directly or indirectly to any person actually intoxicated, or allow or permit the consumption of any alcoholic beverages by any such person in or upon the licensed premises. Now, such a regulation establishes a standard of conduct for tavern owners. The law's designed to protect not only patrons who are visibly intoxicated, but also to protect members of the public from foreseeable risk of injury. If you find that the defendant McGuinns Place has violated that standard of conduct, such violation is evidence to be considered by you in determining whether negligence, as I've defined that term for you, has been established. Thus, you may find the tavern owner negligent if you find that the tavern owner served or permitted to be served alcoholic beverages to a person who was intoxicated and that the tavern owner knew or from the circumstances, should have known that the person was intoxicated at the time that he was served. Now, a person who is negligent is liable for injuries which are proximately caused by his negligence. And by proximate cause, as I've previously defined that for you, we mean a cause which naturally and probably led to the accident and resulting injuries. Where there are two or more causes of an accident, a person whose negligence is a substantial factor in contributing to a cause of the accident, is held liable to a person injured in said accident. If a tavern owner negligently served alcoholic beverages to a patron who was visibly intoxicated, and if such service of alcoholic beverages was a substantial factor in bringing about an accident, it would make no difference that other causes intervened and contributed to the accident, so long as those other intervening causes were 471 foreseeable or were natural and probable consequences of the risk of harm created by the sale of liquor to the visibly intoxicated person. Thus, plaintiff is entitled to recover from the defendant if plaintiff proves by the preponderance of the evidence, the following elements: One, that defendant was negligent in serving alcoholic beverages to defendant Moore when defendant Moore was intoxicated. Two, that at the time when the alcoholic beverages were served, defendant McGuinns Place knew or should have known from the circumstances that defendant Moore was intoxicated. And three, that such service of alcoholic beverages was a proximate cause or a substantial factor in causing the accident and injury complained of. This charge was taken virtually verbatim from the language of Model Jury Charge 5.31. Cf. State v. Concepcion, 111 N.J. 373, 379, 545 A.2d 119 (1988) (commenting on the use of such aids). A verdict sheet was also submitted to the jury which contained five interrogatories, the first three of which also followed the language in that same Model Charge and read: 1. Was defendant McGuinn's Place negligent in serving alcoholic beverages to defendant Richard Moore, when defendant Moore was intoxicated? 2. At the time alcoholic beverages were served, did defendant McGuinn's Place know, or should defendant McGuinn's Place have known from the circumstances that defendant Richard J. Moore was intoxicated? 3. If you answered questions 1 and 2 "yes", was the conduct of defendant McGuinn's Place a proximate cause of plaintiff's injuries? The fourth interrogatory inquired about the defendants' comparative negligence and the fifth instructed the jury to assess plaintiff's damages, which it did at $80,000. The jury, by vote of 5 to 1, answered the first question in the negative and, as instructed, did not answer the second or third interrogatory. Geherty contends that this charge was erroneous, confusing and was compounded by the submission of the erroneously phrased interrogatories. He argues that in Thompson v. Victor's Liquor Store, Inc., 216 N.J. Super. 202, 523 A.2d 269 (App.Div. 1987), we held that the sale or service of alcoholic beverages to an intoxicated person constitutes negligence per se, and that the jury may not find otherwise where that is properly established by the proofs. 472 As noted in Buckley v. Estate of Pirolo, supra. [101 N.J. 68, 500 A.2d 703 (1985)] our dram-shop rule is one of common law, emanating from Rappaport v. Nichols. [31 N.J. 188, 156 A.2d 1 (1959)] This rule parallels the dram-shop statutes in many other states. We know that a violation of most statutes and administrative regulations is merely evidence of negligence, thus we might consider that a violation of the Rappaport rule or of the administrative regulation be merely such evidence. But the violation of some statutes, when coinciding with established common-law principles of tort liability, has been considered `negligence' as opposed to just `evidence of negligence.' See Dolson v. Anastasia, 55 N.J. 2, 10-11 [258 A.2d 706] (1969). Considering the treatment by the Supreme Court of the ramifications of the sale or service of alcoholic beverages to an intoxicated person or a minor in Rappaport vs. Nichols and its progeny, it is fair to hold that such a sale, is negligence per se. ... [Id., Thompson, 216 N.J. Super. at 210, 523 A.2d 269.] In other words, the jury must be clearly instructed, without qualification, that once a plaintiff proves the elements set forth in Rappaport, infra, and Anslinger v. Martinsville Inn, Inc., 121 N.J. Super. 525, 532, 298 A.2d 84 (App.Div. 1972), certif. den., 62 N.J. 334, 301 A.2d 449 (1973), it must find the tavern owner to have been negligent. The prerequisites to establish a tavern owner's negligence are threefold: (1) The patron must be intoxicated; (2) the tavern owner or its employee must know or should have known he was intoxicated and (3) the tavern owner must serve liquor to the intoxicated person. Anslinger, 121 N.J. Super. at 532, 298 A.2d 84. This common law liability was first recognized in the landmark case of Rappaport v. Nichols, 31 N.J. 188, 156 A.2d 1 (1959). Applying fundamental negligence principles, the Supreme Court there held that a negligence cause of action would lie against a tavern owner where he serves an intoxicated patron who thereafter proximately causes injuries. In Soronen v. Olde Milford Inn, Inc., 46 N.J. 582, 218 A.2d 630 (1966), the establishment of this principle was reaffirmed, although the verdict for the plaintiff was reversed because the charge allowed the jury to find the tavern owner to have been negligent without considering whether or not he knew or should have known that the patron was intoxicated. Id. at 593-594, 218 A.2d 630. 473 Our examination of this charge and the interrogatories submitted in connection therewith, leads us to conclude that they were erroneous in several respects. The trial judge first generally defined the principles of negligence and then undertook to define the common law negligence cause of action or "dram shop" rule enunciated in Rappaport.[2] In connection with the latter he cited the Division of Alcoholic Beverage Control (ABC) regulation prohibiting service of alcoholic beverages to an intoxicated person and then told the jury that a violation thereof only could be considered as "evidence" of negligence. Our courts have emphasized that such negligence is established where it is proven that a tavern owner served an intoxicated person alcoholic beverages in circumstances where such seller knows or ought to have known that the patron is intoxicated. Anslinger, 121 N.J. Super. at 532, 298 A.2d 84. Thus, in order to resolve the question of negligent conduct the jury in this case basically had to determine only whether McGuinn's Place had sold beer to an intoxicated Moore when it knew or should have known that he was in that condition. However, by injecting the ABC regulation into the case N.J.A.C. 13:2-23.1 the trial judge unnecessarily confounded that determination. Cf. Thompson, 216 N.J. Super. at 205, 523 A.2d 269. It is true that, in Rappaport and Soronen, the Court recognized the existence of such a regulation. But it is equally clear that the Rappaport Court relied upon that regulatory provision primarily to point out the existence of a "legislative policy" which was supportive of its conclusion there that such activity also constitutes common law negligence. Notwithstanding the usual admonition that the violation of such a regulation will constitute only "evidence of ... negligence" (Rappaport, 31 N.J. at page 203, 156 A.2d 1) it is settled that 474 the standard of conduct prohibited by the regulation also constitutes negligent behavior, independent of any violation thereof. In Soronen, 46 N.J. 582, 218 A.2d 630 (1966), the Supreme Court recognized this principle when it noted that a tavern owner is subjected to common law liability "despite the regulation." Id. at page 586, 218 A.2d 630. Thompson, 216 N.J. Super. at 210, 523 A.2d 269.[3] Thus, a jury ordinarily should be charged without reference to any regulation violation (although the terminology of "negligence per se" is not very helpful to a jury). The facts of this case did not warrant any mention of the regulation especially because of the explanation that a violation was only "evidence of negligence." The jury might have been misled because evidence of the elements necessary to prove liability against McGuinn's Place had been produced by plaintiff and therefore there was no need to inject the subject matter of the regulation.[4] Moreover, we are compelled to also express our disapproval of the phrasing of the interrogatories in this case. R. 4:39-1 provides, The court may require a jury to return only a special verdict in the form of a special written finding upon each issue of fact, in which case it may submit to the jury either written questions which can be categorically or briefly answered or written forms of the several special findings which might properly be made under the pleadings and evidence; or it may use such other method of submitting the issues and requiring written findings thereon as it deems appropriate. The court shall instruct the jury concerning the matters submitted as is necessary to enable it to make its findings upon each issue. If in so doing the court omits any issue of fact raised by the pleadings or by the evidence, each party waives his right to a trial by jury of the issues so omitted unless before the jury retires he demands its submission to the jury. The court may make a finding as to an issue omitted without such demand, or, if it fails to do 475 so, it shall be deemed to have made a finding in accord with the judgment on the special verdict. See the extensive discussion in Bree v. Jalbert, 87 N.J. Super. 452, 209 A.2d 836 (Law Div. 1965), aff'd, 91 N.J. Super. 38, 219 A.2d 178 (App.Div. 1966), in which Judge Botter traced the history of R.4:39-1 and R. 4:39-2, authorizing the use of special verdicts and of a general verdict accompanied by answers to inter-rogatories, respectively. See also Nylander v. Rogers, 41 N.J. 236, 196 A.2d 1 (1963) explaining when such verdicts should be utilized and cautioning that a special verdict under [now] R.4:39-1 requires a "written finding upon each issue of fact in the case from which the judge forms and enters the resultant judgment." Id. at pages 240-241, 196 A.2d 1; Bleeker v. Trickolo, 89 N.J. Super. 502, 215 A.2d 571 (App.Div. 1965). The bottom line is that a court must be careful to avoid phrasing such questions inartfully, lest they encourage the return of inconsistent answers or operate to exclude some of the factual hypotheses upon which a general verdict is to be based. Pressler, Current N.J. Court Rules, Comment R. 4:39-1 and R.4:39-2. See also 5A Moore, Federal Practice, § 49-02 through § 49-04. The trial judge prepared the verdict sheet based on the misleading language in the Model Civil Jury Charge 5.31. Instead of asking the jury to determine factually whether Moore was intoxicated and whether McGuinn's Place knew or ought to have known thereof, he phrased it in terms of whether McGuinn's Place was "negligent" in "serving" Moore when he was "intoxicated." Obviously, the term "negligence" in such a case necessarily includes all of the Anslinger elements, including that described in the second interrogatory. Since the jury answered only the first, they never went on to consider the elements described in the second one which asked if McGuinn's Place "knew, or should ... have known ... that ... Moore was intoxicated." Cf. Soronen, 46 N.J. at 585-589, 218 A.2d 630. In other words, by framing the first interrogatory as he did, the trial judge erroneously centered attention on the legal concept 476 of negligence but only alluded to some of the fact elements of such a cause of action. Again, the jury may have been confused or misled by such. Navarro, 211 N.J. Super. at 570-571, 512 A.2d 507. We are cognizant of the practice wherein the jury is asked to return a verdict indicating only legal conclusions instead of resolving specific fact issues. For example, the jury may be asked to decide only questions framed in terms of negligence and proximate cause. Such practice is the equivalent of calling for the return of general verdicts. Ball v. N.J. Bell Telephone Co., 207 N.J. Super. 100, 114, 504 A.2d 29 (App.Div. 1986), certif. den., 104 N.J. 383, 517 A.2d 391 (1986). In this case, had the trial judge framed the interrogatories so as to elicit only the issues of fact as set forth in Anslinger, he could then have molded the consequent determination of "negligence" or lack thereof, on the part of McGuinn's Place. Alternatively, he could have instructed them to consider only the legal issues of negligence and proximate cause. However, on this record we are unable to discern the basis for the jury's determination that McGuinn's Place was not "negligent." Did it find that McGuinn's Place did not serve Moore at all or, that it did not serve him when he was intoxicated? Moreover, did the jury consider whether McGuinn's Place knew or should have known of Moore's intoxication under the circumstances? This factor was included in the Court's charge as an element of the definition of negligence, however, it was to be separately considered according to the interrogatories. We acknowledge that our responsibility is to examine a charge in its entirety to determine its overall effect. State v. Wilbely, 63 N.J. 420, 422, 307 A.2d 608 (1973), certif. granted, 63 N.J. 504, 308 A.2d 669 (1973). So long as the law standing alone is stated correctly and intelligently, the ultimate test of the soundness of instructions is, not what the ingenuity of counsel can, at leisure, work out the instructions to mean, but how and in what sense, under the evidence before them and the circumstances of the trial, would 477 ordinary men and jurors understand the instructions as a whole. [Citation omitted]. The acid test is would the jury be misled. Vadurro v. Yellow Cab Co. of Camden, 6 N.J. 102, 107-108 [77 A.2d 459] (1950). In this case, however, there was no direct proof that Moore was visibly intoxicated when he was served at McGuinn's Place. The only evidence which plaintiff did produce on this point was the extrapolated opinion evidence of the expert, Richard Zylman. On the other hand, the arresting officer testified that while Moore's speech was slurred, he was not loud, boisterous or rambling and that he was polite, cooperative and calm at the scene. Cf. Anslinger, 121 N.J. Super. at 533, 298 A.2d 84. Thus, the evidence of Moore's condition and its noticeability that night was crucial. Therefore, any confusion generated in resolving this issue was critical. Geherty also urges that the trial court erred in instructing the jury that it "may" find McGuinn's Place to be negligent if the Anslinger elements had been found to have been proven. Our concurring colleague accepts this as a contention but disagrees that doing so is erroneous. However, we read that language in Rappaport and Soronen as merely ancillary to the common law policy the Court was adopting. We do not attempt to "rewrite" what those cases say but merely interpret them to mean that the Court used the permissive language in an effort to be careful lest anyone believe that a jury was required to find liability even where the proofs did not establish the necessary elements. Without further expounding on this issue, suffice it to say that the errors which we have previously discussed, when viewed with the misleading juxtaposition of the permissive "may" in the charge, lead us to conclude that this verdict may well have resulted in an unjust result, requiring a new trial concerning the liability of McGuinn's Place. See R. 2:10-2; Jenoff v. Gleason, 215 N.J. Super. 349, 521 A.2d 1323 (App.Div. 1987). We recommend that this model charge be reframed and that such permissive language be located and phrased in such a manner so as to underscore that it is 478 cautionary only in the sense indicated. We reiterate that if plaintiff demonstrates service to an underage or intoxicated patron and that the tavern owner knew or ought to have known thereof, such conduct constitutes negligence (per se) and the only remaining inquiry should be directed to the proximate cause element of such a claim. In other words, we disagree with McGuinn's Place's contention that, even assuming that the charge was erroneous in minor respects, it effectively told the jury that McGuinn's Place was negligent if it found all of the elements outlined in Anslinger. We also note that, at the argument on the motion for a new trial and at oral argument here, the parties raised the fact that no charge of respondeat superior had been given. Plaintiff even speculated that this may have been the reason for the jury's determination absolving McGuinn's Place. However, no request to charge such had ever been made and we prefer not to discuss that question on the merits. Nonetheless, we expect that the concept will be incorporated in the charge at the time of retrial. Geherty also claims that the trial judge erred in submitting the issue of proximate cause to the jury.[5] While a finding that defendant McGuinn's Place served Moore when it knew or should have known that he was intoxicated amounts to actionable negligence, the law requires that such negligence also be a proximate cause of the accident. Rappaport, 31 N.J. at 203, 156 A.2d 1; Thompson, 216 N.J. Super. at 212, 523 A.2d 269. See also Jensen v. Schooley's Mountain Inn, 216 N.J. Super. 79, 81-82, 522 A.2d 1043 (App.Div. 1987), certif. den., 108 N.J. 181, 528 A.2d 11 (1987). Ordinarily, the question of proximate cause is left 479 to the jury for a determination. Rappaport, 31 N.J. at 203, 156 A.2d 1. Contrary to plaintiff's assertions here, there was evidence to support a finding by the jury that the accident was not proximately caused by Moore's alleged intoxication but simply his negligent operation of the car. For example, Moore himself had insisted that the alcohol he had consumed did not influence his ability to drive at the time of the accident. Rather, he attributed the happening of the accident to his "wide-angling" in order to enter his driveway and the fact that the Geherty car was parked without lights in a spot that he did not expect. Moreover, the police indicated that Moore showed only some of the classical signs of impairment from the ingestion of alcoholic beverage. Thus, the issue of proximate cause was preeminently a question for the jury to determine and the trial judge did not err in submitting it to the jury. Parenthetically, we note that the jury never reached the issue of proximate cause in this case. Cf. Allen v. Rutgers, State University of New Jersey, 216 N.J. Super. 189, 195, 523 A.2d 262 (App.Div. 1987), certif. den., 107 N.J. 653, 527 A.2d 472 (1987). Plaintiff also claims error regarding the trial judge's charge on foreseeability (although he apparently did not object to it below). The trial court charged the issue in classical terms. However, it went on to instruct that, In this connection, you may consider that in current times, traveling by car to and from a tavern is commonplace, and you may consider that the effects of intoxication of a driver may reasonably be foreseen. Thus, it was made clear to the jury that foreseeability was not a serious issue in this case. Accordingly, if there was any deficiency, we see no harmful error. R.2:10-2. Cf. Thompson, 216 N.J. Super. 202, 523 A.2d 269. On its cross-appeal, McGuinn's Place argues that the jury's award of $80,000 in favor of plaintiff was clearly excessive. Generally, an award of damages is to be left to the sound discretion of the trier of fact, Endress v. Brookdale Community College, 144 N.J. Super. 109, 142, 364 A.2d 1080 (App.Div. 1976), and such awards should be upset for excessiveness only in clear cases. Fritsche v. Westinghouse Electric Corp., 55 480 N.J. 322, 330, 261 A.2d 657 (1970). In Baxter v. Fairmont Food Co., 74 N.J. 588, 379 A.2d 225 (1977), our Supreme Court cautioned that, "... a trial judge should not interfere with the quantum of damages assessed by a jury unless it is so disproportionate to the injury and resulting disability shown as to shock his conscience and to convince him that to sustain the award would be manifestly unjust." Id. at 596, 379 A.2d 225. There was conflicting evidence concerning the extent of plaintiff's injuries here. However, there was no evidence to dispute the contention that he now suffers some mental disability. Further, it was conceded that he had suffered some physical injuries and pain as a result of the accident. He produced evidence to indicate that he had to undergo extensive medical and chiropractic treatment and that he suffers from resultant permanent injuries. Both defendants emphasized the period of time between Geherty's visits to his various treating physicians and the fact that he has participated in some athletic activity. However, the jury apparently chose to place little weight on such evidence. Finally, the trial judge observed that the award did not shock his judicial conscience and further concluded that the jury had obviously accepted plaintiff's proofs concerning the extent of his injuries. In light of the conflicting evidence, we agree with his conclusions and likewise see no reason to disturb that portion of the verdict. Baxter, 74 N.J. 588, 379 A.2d 225 (1977). In sum, we vacate the judgment in favor of McGuinn's Place and remand for a new trial on liability only as against it. Naturally that retrial will also implicate the crossclaims filed by both defendants in this case. Greenberg v. Stanley, 30 N.J. 485, 153 A.2d 833 (1959). However, we affirm the jury's award of $80,000 on the issue of damages. Cf. Coll v. Sherry, 29 N.J. 166, 148 A.2d 481 (1959).[6] *481 D'ANNUNZIO, J.A.D. (concurring). I concur in the reversal of the judgment in favor of McGuinn's Place on the ground that the first interrogatory failed to include as an element of negligence defendant's knowledge of Moore's intoxication. This was error necessitating a new trial as to McGuinn's Place's liability. See Soronen v. Olde Milford Inn, Inc., 46 N.J. 582, 593, 218 A.2d 630 (1966). The same error was included in the judge's instructions when he attempted, in recapitulation, to re-state the elements of the cause of action against McGuinn's Place. I find the charge to be otherwise correct and consistent with the principles announced in Rappaport v. Nichols, 31 N.J. 188, 156 A.2d 1 (1959): If the patron is a minor or is intoxicated when served, the tavern keeper's sale to him is unlawful; and if the circumstances are such that the tavern keeper knows or should know that the patron is a minor or is intoxicated, his service to him may also constitute common law negligence. In view of the standard of conduct prescribed by the statute and the regulations, a tavern keeper's sale of alcoholic beverages when he knows or should know that the patron is a minor or intoxicated may readily be found by the jury to be imprudent conduct. [at 202-203, 156 A.2d 1] Thus, I disagree with the majority's attempt to rewrite Rappaport because it is beyond our authority. But see Thompson v. Victor's Liquor Store, Inc., 216 N.J. Super. 202, 210, 523 A.2d 269 (App.Div. 1987). I also concur in the affirmance of the damage award. NOTES [1] Apparently none of the Richard Roes mentioned in plaintiff's complaint were identified or served; the insurance benefits claim against New Jersey Manufacturers was "severed." Answers and Crossclaims for contribution and indemnification as between codefendants were filed by "Richard J. Moore" and "McGuinn's Place Inc., a New Jersey Corporation." [2] We question whether such an extensive definition of the general principles of negligence was necessary in the circumstances of this case. A summary thereof would have been sufficient followed by a correct exposition of the elements of dram shop negligence action. [3] We note also that the duty imposed by the ABC regulation does not articulate all of the elements imposed by the case law. [4] In an appropriate case, where the evidence of a violation of such regulation becomes an issue, perhaps mention thereof may be relevant or helpful. Cf. Navarro v. George Koch Sons Inc., 211 N.J. Super. 558, 512 A.2d 507 (App.Div. 1986), certif. den., 107 N.J. 48, 526 A.2d 138 (1986), (indicating that a charge should be tailored to the facts of each case). [5] Since we have not been furnished with the opening statements or the summations we do not know whether, as plaintiff alleges, McGuinn's Place ever contended that Moore's intoxication "was not a proximate cause of the accident" or that the accident "was not foreseeable." R.2:5-3(b). [6] In light of the fact that this accident occurred on April 22, 1983, the provisions of the New Jersey Licensed Alcoholic Beverage Server Act, N.J.S.A. 2A:22A-1 et seq. (to take effect 90 days after June 25, 1987), do not apply by its terms. Consequently, we do not undertake to address the impact of that legislation on the principles enunciated herein. Additionally, no party has raised its applicability or even cited to it.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2857738/	IN THE COURT OF APPEALS, THIRD DISTRICT OF TEXAS, AT AUSTIN NO. 3-91-216-CR ZACHARY VON DAVIS, a/k/a ZACHARY NICHOLS, APPELLANT vs. THE STATE OF TEXAS, APPELLEE FROM THE DISTRICT COURT OF BELL COUNTY, 264TH JUDICIAL DISTRICT NO. 39,689, HONORABLE JACK W. PRESCOTT, JUDGE PRESIDING Appellant appeals his conviction as a party to the offense of delivery of cocaine of less than twenty-eight grams. After the jury found appellant guilty, the trial court found the indictment's enhancement allegations as to a prior felony conviction to be true. The trial court assessed appellant's punishment at thirty years' imprisonment. Appellant does not challenge the sufficiency of the evidence to sustain the conviction, but does advance two points of error concerning jury argument at the guilt/innocence stage of the trial. First, appellant contends that the trial court erred in overruling his motion for a mistrial when the prosecutor asked the jury to speculate on matters not in the evidence. Second, appellant urges that the trial court erred in overruling his objection to the prosecutor's argument asking the jury to consider matters not in evidence. We will affirm the judgment of conviction. We shall briefly state the facts to place the points of error in proper perspective. Coryell County Deputy Sheriff Dale Cobb was assigned to the Killeen Police Department to do undercover narcotics work. On October 12, 1990, Cobb met Killeen Police Officer John Mosely. They discussed the street that they planned to target that evening. Officer Cobb taped a microphone and transmitter to his body and proceeded in a rental car to the 1300 block of Jefferies Street in Killeen. He was looking for a man wearing a beige jacket and blue jeans. Officer Cobb spotted a man fitting the description given him. The man flagged Officer Cobb to a stop and asked Cobb what he "needed." Officer Cobb replied that he wanted a "boulder" (cocaine substance). The man, whom Officer Cobb identified as the appellant, got into Cobb's car. Appellant directed Cobb to drive up the street about half a block and stop by a house on the left. Appellant got out of the car and approached two or three men standing a few feet away. After a conversation with the appellant, one of the men came to Cobb's car. He was identified as Richard Avery Wright. It was Wright who delivered a rock of cocaine to Officer Cobb for money. The chain of custody of the substance was established. Chemist Joel Budge testified that the substance was 0.11 grams of cocaine. Appellant called Wright as a witness. Wright denied selling cocaine to Cobb on the night in question and stated that he was not associated with the appellant on October 12, 1990, in connection with any kind of drug transaction. Wright had been acquainted with the appellant for about twenty-five years, although Wright was much younger. Wright recalled that when he was in elementary or junior high school he read in the newspaper about appellant competing in a state track meet as a high jumper and about appellant being a boxing champion at a boys' club. On cross-examination, Wright acknowledged that he had read appellant's name "in the paper when it didn't have to do with track or boxing"; and that he knew appellant "real well." No further interrogation on this score was undertaken by either party. In closing argument at the guilt stage of the trial, the prosecutor recalled Wright's testimony: Well, I was aware of him as a boxer and in track and stuff. Yeah, I read his name in the paper and other things but I don't know what that is. Defense didn't come back and ask him, well, what did you read about him in the paper? There are questions that aren't asked in a trial that are sometimes that are extremely important. Mr. Brown [defense counsel]: Objection, your Honor. I think the State is asking the jury to consider something which is not in evidence. The Court: Any response? Mr. Convery [Prosecutor]: I'll -- I'll move on from it, your Honor. I said the question was not asked is significant. Mr. Brown: Your Honor, I think the jury -- I request that the jury -- do I have a ruling on my objection, your Honor? I think he's asking them to stipulate [speculate]. The Court: I sustain the objection. The jury is instructed not to consider it. Proceed on. Mr. Brown: Request a mistrial, your Honor. The Court: Denied. . . . Appellant points out that he had a prior felony conviction and had been "handled" on misdemeanor charges; that the court granted his timely request under Tex. R. Crim. Evid. Ann. 404(b) (Pamph. 1992) for reasonable notice of the State's intent to introduce evidence of other crimes, wrongs or acts; and that counsel had filed a motion in limine requesting that the State be ordered not to mention appellant's prior convictions until the admissibility of such evidence had been determined. The court also granted this motion. Appellant contends this background should be taken into consideration of his first point of error. Broadly speaking, there are four general areas of permissible jury argument: (1) summation of the evidence; (2) reasonable deduction from the evidence; (3) answer to argument of opposing counsel; or (4) plea for law enforcement. Kinnamon v. State, 791 S.W.2d 84, 89 (Tex. Crim. App. 1990); Todd v. State, 598 (Tex. Crim. App. 1980); Alejandro v. State, 493 S.W.2d 230 (Tex. Crim. App. 1973). Following an objectionable argument, an instruction by the court to disregard the comment will normally obviate the error, Bell v. State, 724 S.W.2d 780, 803 (Tex. Crim. App. 1986), except in extreme cases when it appears the argument was clearly calculated to inflame the minds of the jurors and was of such character as to suggest the impossibility of withdrawing the impression produced on their minds. Port v. State, 798 S.W.2d 839, 846 (Tex. App. 1990, pet. ref'd). Moreover, in order for an improper argument to rise to a level mandating reversal, the argument must be extreme or manifestly improper, violative of a mandatory statute or inject new facts harmful to the accused into the trial. Jacobs v. State, 787 S.W.2d 397, 406 (Tex. Crim. App. 1990); Allridge v. State, 762 S.W.2d 146, 155 (Tex. Crim. App. 1988). In the instant case, the prosecutor had the right to summarize the evidence and draw reasonable deductions therefrom. If his inquiry as to why the defense did not ask a certain question was improper, the court sustained the objection and instructed the jury to disregard. This was sufficient to cure the error, if any. Pyles v. State, 755 S.W.2d 98, 118 (Tex. Crim. App.), cert. denied, 488 U.S. 986 (1988). The court did not err in denying the motion for mistrial. The first point of error is overruled. In his second point of error, appellant complains of the prosecutor's argument asking the jury to consider matters not in the record. During the trial, appellant called four witnesses who knew him. They listened to the tape made by Officer Cobb and testified that appellant's voice was not on the tape recording. Appellant's counsel pointed out this evidence and other discrepancies to the jury. Responding to this argument, the prosecutor noted that the defense could have had the tape analyzed, and the State had not "because this case is really quite simple." The prosecutor then added: It's all been laid out to you how it happened. That tape is not necessary by the way to find this man guilty. There are drug cases that happen all the time where an agent gets up on the stand and testifies to exactly what . . . . Mr. Brown: Object to that what happens . . . I object to any arguments about what happens in other cases. This jury is to decide this case based upon the event in this case not which is not what happens in other cases. The Court: Objection is overruled. Proceed on please. Mr. Convery: Folks, what I'm trying to tell you is when all you've got is a little drug transaction, the attack is on the agent who made the deal and they say why wasn't he wired? Why wasn't there a tape and then when there's a tape, then it's well, it's not a good tape or it's not a good voice or why was there a video taken? There's always going to be something. A prosecutor is permitted to summarize the evidence, draw reasonable deductions from the evidence, respond to argument of opposing counsel, and make a plea for law enforcement. Briddle v. State, 742 S.W.2d 379, 388-90 (Tex. Crim. App. 1987). Clearly, the prosecutor in the instant case was discussing the evidence and responding to the argument of opposing counsel until the time of the complained-of statement. In concluding there was no error, we find compelling the fact that the prosecutor was unable to complete his statement by virtue of appellant's objection. We are not inclined to speculate whether the prosecutor's argument would have encroached upon an improper area for jury argument. Harris v. State, 784 S.W.2d 5, 13 (Tex. Crim. App. 1985), cert. denied, 494 U.S. 1090 (1990); Hodge v. State, 631 S.W.2d 754, 755-56 (Tex. Crim. App. 1982); Carrillo v. State, 566 S.W.2d 902, 913 (Tex. Crim. App. 1978). Certainly, it is improper for an attorney to argue outside the record. Everett v. State, 707 S.W.2d 638, 640-41 (Tex. Crim. App. 1986). Here, the prosecutor may well have been heading in that direction, but the objection stopped him. The objection was based on what "happens in other cases." After the objection was overruled, the statement was not completed. The prosecutor instead made an explanation of his previous argument. This was done without objection. Taken in context, it appears that the prosecutor was arguing that independent of the tape there was sufficient evidence to convict the appellant. We find no error in the trial court's action in overruling the objection. If there be error, it was harmless error under Tex. R. App. P. Ann. 81(b)(2) (Pamph. 1992), applying the test set forth in Orona v. State, 791 S.W.2d 125, 129-30 (Tex. Crim. App. 1990). The second point of error is overruled. The judgment is affirmed. John F. Onion, Jr., Justice [Before Justices Aboussie, Kidd and Onion] Affirmed Filed: August 12, 1992 [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) (1988).	01-03-2023	09-05-2015
https://www.courtlistener.com/api/rest/v3/opinions/2857757/	IN THE COURT OF APPEALS, THIRD DISTRICT OF TEXAS, AT AUSTIN NO. 3-92-160-CV LUIS E. GUERRERO-RAMIREZ, M.D., APPELLANT vs. HOMER GOEHRS, EXECUTIVE DIRECTOR OF THE TEXAS STATE BOARD OF MEDICAL EXAMINERS, ET AL., APPELLEES FROM THE DISTRICT COURT OF TRAVIS COUNTY, 250TH JUDICIAL DISTRICT NO. 91-14745, HONORABLE JOHN K. DIETZ, JUDGE PER CURIAM Appellant Luis E. Guerrero-Ramirez, M.D. appeals from an order of the district court of Travis County denying his request for temporary injunctive relief. See Tex. Civ. Prac. & Rem. Code Ann. § 51.014 (Supp. 1992). We will affirm the order of the district court. The Texas State Board of Medical Examiners initiated a disciplinary proceeding to revoke Guerrero-Ramirez's license to practice medicine pursuant to the Medical Practice Act, Tex. Rev. Civ. Stat. Ann. art. 4495b (Supp. 1992) ("MPA"). See MPA § 4.01(a) (Supp. 1992). In March 1992, Guerrero-Ramirez filed his first amended original petition for temporary restraining order, temporary injunction and permanent injunction in the district court of Travis County seeking to enjoin appellees (1) from proceeding against him until the Board held a hearing in compliance with the Administrative Procedure and Texas Register Act, Tex. Rev. Civ. Stat. Ann. art. 6252-13a (Supp. 1992) ("APTRA"). Guerrero-Ramirez alleged that the hearing examiner arbitrarily and capriciously overruled a motion for continuance of the agency hearing and, thereby, denied Guerrero-Ramirez his right to counsel. See MPA § 4.06 (Supp. 1992); APTRA § 14(r) (Supp. 1992). After a hearing, the district court denied the request for a temporary injunction. In an appeal from an order denying a request for a temporary injunction, appellate review is confined to the validity of the order denying the injunctive relief. The merits of the lawsuit are not presented for review. Davis v. Huey, 571 S.W.2d 859, 861-62 (Tex. 1978); Public Util. Comm'n v. Coalition of Cities for Affordable Util. Rates, 776 S.W.2d 224, 226 (Tex. App. 1989, no writ). Indeed, appellate consideration of the merits of the underlying lawsuit is error. Davis, 571 S.W.2d at 862; Hertz Corp v. State Dept. of Highways & Pub. Transp., 728 S.W.2d 917, 919 (Tex. App. 1987, no writ). This Court may reverse the district court's order only on a showing of a clear abuse of discretion. Transport Co. of Tex. v. Robertson Transp., 261 S.W.2d 549, 552 (Tex. 1953). In one point of error, Guerrero-Ramirez contends that the district court abused its discretion in denying his request for a temporary injunction. To be entitled to the injunction, Guerrero-Ramirez had the burden to demonstrate both a probable right to recover and a probable, irreparable injury that would occur if the court did not order an injunction. Tex. Civ. Prac. & Rem. Code Ann. § 65.011(3) (Supp. 1992); Robertson Transp., 261 S.W.2d at 552; Rutherford Oil Corp. v. General Land Office, 776 S.W.2d 232, 234 (Tex. App. 1989, no writ). We conclude that the district court did not abuse its discretion because Guerrero-Ramirez did not demonstrate a probable right to recover as he had not exhausted his administrative remedies. We first note that the underlying lawsuit is not an action for declaratory judgment pursuant to APTRA § 12 (Supp. 1992). In fact, § 12 expressly prohibits its use to "delay or stay a hearing . . . if a suspension, revocation, or cancellation of a license by an agency is at issue before the agency." APTRA § 12 (Supp. 1992). The only proceeding remaining in the district court is the request for a permanent injunction to enjoin the Board from proceeding against Guerrero-Ramirez. Generally, a party to an administrative proceeding is not entitled to judicial review of the agency actions until the party has pursued correction through the prescribed process. APTRA § 19(a) (Supp. 1992); Texas Educ. Agency v. Cypress-Fairbanks Indep. Sch. Dist., 830 S.W.2d 88, 90 (Tex. 1992); Texas State Bd. of Examiners in Optometry v. Carp, 343 S.W.2d 242, 246-47 (Tex. 1961); see APTRA § 19(e) (Supp. 1992). A party who files a lawsuit while a dispute is still pending before the Board obviously has not exhausted his administrative remedies. See MPA § 2.09(n); APTRA § 16(c),(e) (Supp. 1992). On appeal, Guerrero-Ramirez does not assert that the instant proceeding falls within any exception to the general rule of exhaustion of administrative remedies. See generally City of Sherman v. Public Util. Comm'n, 643 S.W.2d 681, 683 (Tex. 1984); Public Util. Comm'n v. Pedernales Elec. Coop., Inc., 678 S.W.2d 214, 219-20 (Tex. App. 1984, no writ). The legislature has expressly delegated the authority to regulate the practice of medicine to the Board. MPA §§ 2.01, 2.09(a), 4.01. Section 1.02 of the MPA provides that the Board "should remain the primary means of licensing, regulating, and disciplining the individual physicians and surgeons who are licensed to practice medicine." MPA § 1.02(2) (Supp. 1992). See Texas Dept. of Human Servs. v. ARA Living Centers of Tex., Inc., No. 3-91-422-CV (Tex. App.Austin, July 1, 1992, n.w.h.); D&S Inv., Inc. v. Mouer, 521 S.W.2d 118, 120 (Tex. Civ. App. 1975, writ ref'd n.r.e.) (doctrine of primary jurisdiction). More particularly, the determination of the motion for continuance, a matter that involves the Board's control of its administrative docket, was a matter within the discretionary authority of the hearing examiner. Gibraltar Sav. Ass'n v. Franklin Sav. Ass'n, 617 S.W.2d 322, 327-28 (Tex. Civ. App. 1981, writ ref'd n.r.e.). The Board, which has the authority and responsibility to determine in the first instance whether to take certain action, is not subject to restraint by the courts whenever a party alleges that the Board has reached an erroneous conclusion on a preliminary or procedural question. Carp, 343 S.W.2d at 246. If aggrieved by the denial of the motion for continuance, Guerrero-Ramirez may seek judicial review of the Board's final order pursuant to the MPA and APTRA. MPA § 4.09 (Supp. 1992); APTRA § 19 (Supp. 1992). If the Board determines to revoke Guerrero-Ramirez's license, the Board may provide that its order be probated. MPA § 4.11 (Supp. 1992). If Guerrero-Ramirez does file a petition for judicial review in the district court of Travis County, he may then request that court to enjoin or stay the Board's decision. MPA § 4.08 (Supp. 1992); see Carp, 343 S.W.2d at 246 (if license revoked, party may seek review in district court which may then stay or enjoin agency decision if necessary to protect party's rights). Because the doctrine of exhaustion of administrative remedies precludes a probable right of recovery, the trial court's denial of the request for a temporary injunction was not an abuse of discretion. The point of error is overruled The order of the district court is affirmed. [Before Justices Powers, Jones and Kidd] Affirmed Filed: August 12, 1992 [Do Not Publish] 1. Appellees are Homer Goehrs, executive director of the Texas State Board of Medical Examiners; Mark Foster, hearing examiner; and the fifteen members of the Board. We refer to the named appellees and the Board collectively as "the Board."	01-03-2023	09-05-2015
https://www.courtlistener.com/api/rest/v3/opinions/2857701/	cv1-369 IN THE COURT OF APPEALS, THIRD DISTRICT OF TEXAS, AT AUSTIN NO. 3-91-369-CV DAVID FRYMIRE, APPELLANT vs. RANDELL W. ORCUTT AND RONDA ORCUTT, APPELLEES FROM THE COUNTY COURT AT LAW NO. 3 OF TRAVIS COUNTY NO. 193,719, HONORABLE MICHAEL J. SCHLESS, JUDGE PRESIDING PER CURIAM This cause arises out of a landlord-tenant contract dispute. The landlord, appellant David Frymire, sued the tenants, appellees Randell and Ronda Orcutt, for breach of contract. The Orcutts counterclaimed alleging, among other causes of action, that Frymire breached the lease agreement. The case was submitted to the jury on special questions. After the jury returned its verdict, the trial court rendered judgment that the parties take nothing on their respective breach of contract claims, awarded attorney's fees to both parties, and denied all other relief. We will reverse in part and affirm in part. BACKGROUND David Frymire owned a house at 4931 Trail West in Austin, Texas. The New Management Company managed Frymire's house while he was on military duty in Japan during 1988 and 1989. In January 1988, Randell and Ronda Orcutt signed an agreement to lease Frymire's house. The lease term ended on January 31, 1989. In early January 1989, the Orcutts signed a second agreement to lease Frymire's house. The lease term for the second lease ended on January 31, 1990. In August 1989, Jack Newman of New Management Company orally notified the Orcutts that Frymire would be returning to Austin before the expiration of the lease term. Newman requested that the Orcutts move out before the end of the lease term so that Frymire could move back into his house when he returned to Austin. The parties dispute whether Newman requested that the Orcutts move out by December 1, 1989, or merely asked them if they would consider moving out a month early. In any event, the Orcutts vacated the premises at the end of September 1989. They did not make any of the remaining rent payments due under the lease. Frymire sued the Orcutts alleging they breached their lease agreement with him when they vacated the leased premises before the end of the lease term and failed to pay the rents that remained due under the lease. The Orcutts counterclaimed alleging breach of contract, violation of the Texas Property Code (1) and Deceptive Trade Practices Act, (2) negligent misrepresentation, and unjust enrichment. The trial court submitted the case to the jury on seven special questions. Following the jury's verdict, the trial court rendered judgment that: (1) Frymire and the Orcutts recover nothing on their respective breach of contract claims; (2) Frymire and "counter-cross plaintiff" (3) recover $500.00 each in attorney's fees from the Orcutts for defense of the Orcutts' DTPA claim against them; and (3) the Orcutts recover $1800.00 in attorney's fees from Frymire for services rendered in the prosecution of their breach of contract claim against him. Frymire appeals from the trial court's judgment. DISCUSSION 1. The Orcutts' Breach of Contract Claim Against Frymire In his first three points of error, Frymire contends that the trial court erred in submitting, and then failing to disregard the answer to, question 1a. In his motion to disregard, Frymire requested the court to disregard the answer to that question. See Tex. R. Civ. P. 301. The jury answered "yes" to the question did Frymire breach the lease agreement. Upon further inquiry, however, the jury failed to find that the Orcutts suffered any damages as a result of Frymire's breach of the lease agreement. The trial court rendered judgment "in favor of [the Orcutts] on [Frymire's] claim for breach of contract" and "in favor of [Frymire] on [the Orcutts'] claim for breach of contract." Thus, the jury's answer to question 1a is immaterial and has not harmed Frymire. The judgment is in his favor; therefore, any error is harmless. See Tex. R. App. P. 81(b)(1). Frymire simply has no complaint. Swaim v. International Harvester Co., 505 S.W.2d 634, 638 (Tex. Civ. App.Ft. Worth 1974, writ ref'd n.r.e.) (an appellant is confined in his complaint on appeal to prejudicial error); see also Phelan v. Phelan, 471 S.W.2d 605, 609 (Tex. Civ. App.Beaumont 1971, no writ). We overrule points of error one through three. 2. Trial Court's Award of Attorney's Fees to The Orcutts In point of error six, Frymire complains of the award of attorney's fees to the Orcutts for their prosecution of their breach of contract claim. Any award of attorney's fees is within the discretion of the trial court and will not be disturbed on appeal absent a showing of an abuse of discretion. Keller Indus. Inc. v. Reeves, 656 S.W.2d 221, 228 (Tex. App.Austin 1983, writ ref'd n.r.e.). A party may recover attorney's fees only if a contract or statute authorizes such recovery. New Amsterdam Casualty Co., v. Texas Indus., Inc., 414 S.W.2d 914, 915 (Tex. 1967). In answer to question seven, the jury found $1800.00 to be reasonable attorney's fees for the Orcutts' prosecution of their breach of contract claim. Based on the jury's answer to question seven, the trial court awarded the Orcutts $1800.00 for the "prosecution" of their breach of contract claim. The Orcutts pleaded for attorney's fees pursuant to Tex. Civ. Prac. & Rem. Code Ann § 38.001 (4) and Tex. Bus. & Com. Code Ann. § 17.50(c) and 27.01 (West 1987). Texas Civ. Prac. & Rem. Code Ann. § 38.001(8) (West 1986) allows a party to recover attorney's fees "in addition to the amount of a valid claim and costs, if the claim is for . . . an oral or written contract." Under § 38.001, the Orcutts are not entitled to attorneys' fees based on mere prosecution of their contract claim. They must prevail on their claim. Davis Masonry, Inc. v. B-F-W Constr. Co., 639 S.W.2d 448 (Tex. 1982); Chapman Air Conditioning, Inc. v. Franks, 732 S.W.2d 737, 741 (Tex. App.Dallas 1987, no writ). The Orcutts did not prevail on their contract claim; the trial court rendered judgment in favor of Frymire and awarded the Orcutts no damages on their contract claim. The Orcutts argue that they are entitled to recover attorney's fees pursuant to the lease agreement because they prevailed on their breach of contract claim. We have already held that they did not prevail on their claim. Furthermore, the Orcutts did not plead for recovery of attorney's fees pursuant to the lease agreement. Finally, the Orcutts did not satisfy the requirements for recovery of attorney's fees under Tex. Bus. & Com. Code Ann. § 17.50(c) and § 27.01. Because the Orcutts did not prevail on their contract claim, the trial court abused its discretion when it awarded the Orcutt's $1800.00 in attorney's fees for the prosecution of that claim. We sustain appellant's sixth point of error. We will reverse the portion of the judgment awarding the Orcutts attorney's fees, and render judgment that the Orcutts take nothing on their claim for attorney's fees. 3. Frymire's Breach of Contract Claim Against the Orcutts In point of error four, Frymire asserts that the trial court erred in failing to disregard the answer to question 1b because the answer is against the great weight and preponderance of the evidence. The jury answered "no" to the question did the Orcutts breach the lease agreement in question. The jury failed to find that the Orcutts breached the lease. This is an issue on which Frymire had the burden of proof. The appropriate point of error to bring forward on appeal is that the failure of the jury to find that Randell and Ronda Orcutt breached the lease agreement, in response to jury question 1b, is against the great weight and preponderance of the evidence. Cropper v. Caterpillar Tractor Co., 754 S.W.2d 646, 648 (Tex. 1988). In his motion for new trial, Frymire preserved this precise point. We will address the point as an attack on the jury's failure to find that the Orcutts breached the lease agreement. See O'Neil v. Mack Trucks, Inc., 542 S.W.2d 112, 114 (Tex. 1976) (rule of liberal construction applies to points in appellant's brief; merits of error will be passed on in light of the statement and arguments). In considering a great weight point complaining of the jury's failure to find a fact, courts of appeals should be mindful that a jury was not convinced by a preponderance of the evidence. Therefore, in such instances, courts of appeals are not entitled to reverse merely because they conclude the evidence preponderates toward an affirmative answer. Reversal is warranted only if the great weight of the evidence supports an affirmative answer. Herbert v. Herbert, 754 S.W.2d 141, 144 (Tex. 1988). It is undisputed that the Orcutts moved before the lease term ended and did not pay rent due under the lease for the remainder of the lease term. The evidence also shows that: (1) Frymire was returning to Austin before the end of the lease term and wanted to secure the use of his residence on his return; (2) in August 1989, Newman, acting as Frymire's agent, requested that the Orcutts move before the end of the lease term; (3) the Orcutts complied with Newman's request; (4) the Orcutts would not have moved but for Newman's request, (5) Newman did not anticipate the Orcutts' swift response to his request; and (6) Frymire sent Newman a letter indicating that the earliest he could let the Orcutts out of the lease was December 31st, but Newman did not receive this letter until after the Orcutts moved. Essentially, Frymire now alleges that the Orcutts' compliance with Newman's request that they move out early constitutes a breach of the lease, because they moved out earlier than he wanted them to. The jury was presented with conflicting evidence regarding when Newman specified the Orcutts should move. Such conflicts are reserved for the jury to decide. In light of this evidence we cannot say the jury's answer is against the great weight and preponderance of the evidence. We overrule Frymire's fourth point of error. 4. Frymire's Waiver of His Rights to The Unpaid Rents In his fifth point of error, Frymire asserts that the trial court erred in failing to disregard the jury's answers to jury questions 2a, 2b, 2c, and 2d, because there is no evidence or at least insufficient evidence of any express waiver by him or of any conduct by him or his agent manifesting an unequivocal intention to relinquish the right to receive rent. A trial court may disregard jury findings only if they are immaterial or have no support in the evidence. Tex. R. Civ. P. 301; Eubanks v. Winn, 420 S.W.2d 698, 701 (Tex. 1967). The trial court cannot disregard the jury's answer merely because the evidence is factually insufficient. Garza v. Alviar, 395 S.W.2d 821, 824 (Tex. 1965). Thus Frymire's point of error can be sustained only if there is no evidence to support the jury's finding. Id. (5) In reviewing a complaint that there was no evidence to support a jury finding, we must examine only the evidence and reasonable inferences that support the finding in the light most favorable to the finding and disregard all contrary evidence and inferences. Campbell v. Northwestern Nat'l. Life Ins. Co., 573 S.W.2d 496, 497 (Tex. 1978); Winograd v. Clear Lake City Water Auth., 811 S.W.2d 147, 154 (Tex. App.Houston [1st Dist.] 1991, writ denied); see Alm v. Aluminum Co. of Am., 717 S.W.2d 588, 593 (Tex. 1986), cert. denied, 111 S. Ct. 135 (1990). Jury question number two inquired: Did David Frymire waive his right to receive rent from the Orcutts for the following months, if any? The jury answered: a. October, 1989 yes b. November, 1989 yes c. December, 1989 yes d. January, 1990 yes The court's charge to the jury contained the following instruction on waiver: You are instructed that a waiver is the relinquishment of a known right. A waiver occurs where there is conduct inconsistent with the claiming of that certain right. A waiver need not be intended, but may arise from the acts of the party. The right may be expressly waived, or it may be impliedly waived by acts or conduct evidencing an intent not to assert the right. Waiver may also be inferred from circumstances or courses of dealing between the parties to a contract. There was no objection to this instruction. The evidence shows that Newman requested that the Orcutts move before the lease term ended. This evidence supports an inference that Frymire intended to relinquish his right to receive rents for the period covered by his request. Newman sent the Orcutts a "Written Description of Security Deposit Deduction" ("Security Deposit Statement") which itemized the unpaid rent as a deduction against their security deposit. Randell Orcutt testified that he called Newman when he received the security deposit statement and asked why he had sent the bill. Randell testified that Newman told him it was "for his records." Newman testified that when Randell called about the Security Deposit Statement, he told Randell the bill was "for your records and it was for our records." Newman testified that he did not tell Randell that he had to pay the bill. Newman further testified that when Ronda Orcutt told him they were going to move out, he did not inform her that there could be a problem if they did so. This evidence supports an inference that Newman's conduct was inconsistent with a claim for rents. The Orcutts were not required to show that Frymire intended a waiver, only that his acts evidenced an intent not to assert his right to the rents. The evidence supports an implied finding that Newman did not intend to assert a right to the unpaid rents. Because Newman was Frymire's agent, his actions are imputed to Frymire. In light of this evidence, we cannot say the trial court erred in failing to disregard the jury's answers to questions 2a, 2b, 2c, and 2d. Appellant's fifth point of error is overruled. CONCLUSION Because the Orcutts did not prevail on their breach of contract claim, the trial court abused its discretion when it awarded the Orcutts $1800.00 in attorneys fees for the prosecution of that claim. Accordingly, we reverse that portion of the trial court's judgment awarding the Orcutts $1800.00 in attorney's fees and render judgment that the Orcutts take nothing on their claim for attorney's fees. We affirm the remainder of the trial court's judgment. [Before Chief Justice Carroll, Justices Aboussie and B. A. Smith] Reversed and Rendered in Part; Affirmed in Part Filed: September 16, 1992 [Do Not Publish] 1. 1 See Tex. Prop. Code Ann. § 92.104 (b) & (c) (West 1984) (governing landlord's retention of security deposit). 2. 2 Deceptive Trade Practices-Consumer Protection Act (DTPA), Tex. Bus. & Com. Code Ann. § 17.41, et seq. (West 1987 & Supp. 1992). 3. 3 Apparently, this refers to Newman. There is testimony in the record indicating that the Orcutts sued Newman in this cause, but that the action against him was dismissed before trial. 4. 4 Misidentified in their pleadings as Tex. Bus. & Com. Code § 38.001. 5. 5 Frymire preserved the no-evidence challenge to the jury's answers to question 2a and 2b in his motion to disregard jury findings and to questions 2a, 2b, 2c, and 2d in his motion for new trial.	01-03-2023	09-05-2015
https://www.courtlistener.com/api/rest/v3/opinions/1527377/	428 S.W.2d 441 (1968) R. M. WILLIAMS, Appellant, v. GENERAL MOTORS ACCEPTANCE CORPORATION et al., Appellees. No. 14634. Court of Civil Appeals of Texas, San Antonio. March 27, 1968. Rehearing Denied April 24, 1968. 442 Rizik & Lieck, San Antonio, for appellant. Clemens, Knight, Weiss & Spencer, Beckmann, Stanard, Wood & Vance, San Antonio, for appellees. KLINGEMAN, Justice. General Motors Acceptance Corporation, hereinafter referred to as GMAC, brought suit on a conditional sales contract between Smith Motor Sales, hereinafter referred to as Smith, as seller and R. M. Williams, hereinafter referred to as Williams, as purchaser of a 1965 Chevrolet Diesel Tractor, 443 which contract was assigned by Smith to GMAC. Williams filed a cross-action against GMAC and a third-party action against Smith for fraud, breach of warranty and rescission. Smith filed a cross-action against Williams for down payment allegedly due it. Trial was to a jury and judgment entered by the trial court for GMAC against Williams in the amount of $9,194.81, interest and cost of suit, and for foreclosure of GMAC's lien on the tractor. Judgment was also entered in favor of Smith against Williams in the amount of $950.00, and that Williams take nothing on his cross-action against GMAC and his third-party action against Smith. Williams, by his first five points of error, asserts there is no evidence or insufficient evidence to support the jury's answers to Special Issues Nos. 2, 7 and 12, and that the jury's answers to these special issues are against the overwhelming preponderance of the evidence. Special Issue No. 1 reads as follows: "Do you find from a preponderance of the evidence that the brochure (Cross-Plaintiff's Exhibit No. 2) given by Smith Motor Sales to R. M. Williams represented as a fact the following: `While it's a more costly way to build an engine, it's unbeatable where results really count, and this characterizes every phase of the Detroit Diesel design and manufacturing policy. Though the initial investment is substantial, a Detroit Diesel can pay it back fast in savings on the job, thanks to the superior efficiency, durability, and performance that result from building the highest design, material, and manufacturing standards throughout.' Answer `It did' or `It did not,' We, the jury, answer: It did." Special Issue No. 1 quotes from a brochure constraining approximately 16 pages on "1965 CHEVROLET TRUCKS," given to Williams by a representative of Smith in the negotiations relative to the purchase of the truck, and is taken from page 10 under the heading "2-CYCLE CHEVY-GM-DETROIT DIESEL ENGINES." The jury found by Special Issue No. 2 that such representation was not false as to the diesel truck delivered to Williams. Williams' contentions that such representation was false are basically founded on his own testimony and that of his shop foreman, Clyde Peek, as to alleged excessive repairs made on such truck in the 90-day period they operated it, and on their testimony that such truck was inoperable 31½ days out of approximately 90 days that Williams had the truck. This testimony is controverted both as to the amount of the repairs and as to the period of time that the truck was inoperable, by testimony of appellees' witnesses. It is to be noted that Special Issue No. 1 is restricted to representations in regard to the engine alone, and a careful examination of all the testimony as to the amount of repairs shows that the majority of such repairs do not involve the engine itself. Williams and Peek both testified that the engine used excessive oil, that it sprayed oil, and that the engine lugged when it had a 72,000-pound gross load. There was controverting testimony that the amount of oil used was not excessive, that all diesel engines sprayed oil, and that engine lugging was due to the driver's inexperience. There is no expert testimony that the statements contained in the brochure were false. On the other hand, there was testimony that the statements in such brochure were true. E. L. Smith, merchandising manager for new trucks for the Chevrolet Motor Division, when questioned directly as to the quoted portion of the brochure, testified that such statements were true. He further testified that the two leading types of diesel engines were Cummins and Detroit Diesel. W. B. Crimm, a truck salesman for Smith at the time of the sale and who was referred to by another witness as a highly qualified truck man, when questioned directly as to the brochure, testified that he found no errors in it. There was testimony that such truck when repossessed had a mileage of 25,700 miles and that this was a good use for the period of time it was owned. 444 It is the province of the trier of the facts to judge the credibility of the witnesses and the weight to be given their testimony, and the jury, after hearing the testimony, found such representation not to be false. After a careful examination of the entire record, it is our opinion that the jury's answer to Special Issue No. 2 is sufficiently supported by the evidence. By their answer to Special Issue No. 6, the jury found that the seller represented as a fact to Williams that the diesel truck ordered by Williams could perform the job required by Williams in the operation of his brick plant; and in answer to Special Issue No. 7, the jury found that such representation was not false. The requirements referred to appear to be based upon Williams' negotiations relative to the purchase of the truck with a representative of Smith, in which Williams told such representative that he needed a truck in his brick business that could haul a total gross load of 72,000 pounds (which is generally referred to as the GCW rating, being the gross combination weight of the truck and load); that such truck would be used to go to Houston twice a day, would have to go over curbs to be unloaded; and would have to have a brick unloader, so that one man could unload the truck. The representative of Smith, W. B. "Buddy" Crimm, thereafter drew up specifications for such a truck and such specifications were submitted to Williams and were introduced into evidence. The testimony discloses that in order to carry the 72,000-pound gross load, which is the legal limit in Texas, such truck would have to have a tandem axle installed on it, and it is undisputed that such an axle was installed by Fruehauf Trailer Company. Williams testified that the truck required extensive repairs; that the truck was inoperable for 31½ days out of 90 days; and that it could not carry 72,000 pounds without caving in. This testimony was in part supported by testimony of his plant manager, Peek. This testimony was controverted by a number of appellees' witnesses on all points. Crimm testified that in his opinion the truck was entirely capable of doing the job, and that it could carry a 72,000-pound gross load. Sid Bowdler, truck manager for Smith, testified that such truck was capable of carrying 72,000 pounds, that it was capable of making the trip to Houston and operating for a man in the brick business. E. L. Smith testified that the truck in question was capable of handling the 72,000-pound maximum load at the speed in the specification; that said truck could be used to go over curbs, and that it would haul a full load. Peek, Williams' foreman, testified that the truck did make trips to Houston and it did carry 72,000 pounds, but that when it did it would lug. There was testimony that lugging is due to driver inexperience. Although Williams testified that such truck could not carry 72,000 pounds without having in, the record shows that the one time when such truck was weighed, the gross weight of the vehicle (GCW) was 73,600 pounds, or 1,600 pounds over the 72,000-pound load requirement. As herein before noted, the testimony as to the excessive amount of repairs and the time that the truck was inoperable was also controverted. The answer of the jury to Special Issue No. 7 is sufficiently supported by the evidence. In answer to Special Issue No. 11, the jury found that the seller represented that the truck could haul a full load twice a day to Houston, Texas; and in Special Issue No. 12 they found that such representation was not false. William testified that the truck could and did make two trips a day to Houston on various occasions, and that the truck went to Houston twelve to thirteen times each month for the three months they had it. Williams' foreman, Peek, testified that the truck did make trips to Houston, that it carried 72,000 pounds when it did, which is the maximum legal limit in Texas, and that such truck could and did make two trips a day to Houston. The testimony shows that such truck 445 was also used to haul bricks in the immediate San Antonio area and to other points outside the San Antonio area. There is testimony that Williams also owned a larger diesel truck which cost approximately $18,000, which he procured one day before he got the Chevrolet diesel, and which was also used in his operations. It is undisputed that the Chevrolet truck at the time of its repossession had a mileage in excess of 25,000 miles, and even if it be assumed that Williams' testimony was true, that the truck only operated sixty days during the period of time he had it, this would be an average of over 400 miles a day. The jury's answer to Special Issue No. 12 is sufficiently supported by the evidence. Williams by his sixth point of error complains that the trial court erred in excluding the testimony of the witness Grubbs. Grubbs' testimony can be summarized as follows: He was in the truck leasing business and operated 21 diesels; he was familiar with the Chevrolet diesel and had on one occasion examined Williams' Chevrolet diesel truck; he had a Chevrolet diesel which was basically similar to Williams' except that it was a single axle truck; he had considerable trouble with it; it got hot, thermostat wasn't right, the solonids would go out; he had to change electrical systems; it blew oil out over the trailer; he was of the opinion that General Motors should do something about the truck and they didn't; the truck was still giving him trouble; it would pull the 11,000 pound load for which he purchased it, but that was about all; it wouldn't give the fuel mileage it should. Appellees objected to such testimony on the grounds that such witness; was not qualified as an expert witness; that the evidence sought to be introduced was of a separate transaction and a separate vehicle and was not competent testimony as to the truck involved in the lawsuit; that there was no evidence showing that it was the same type of truck, or put to the same use; and that if such testimony were allowed it would open the door for appellees to bring in the testimony of all satisfied customers they could find. Such testimony was excluded. Generally, evidence to show defects in a piece of machinery under investigation by showing that another machine by the same builder was defective is not admissible testimony. Fetzer v. Haralson, 147 S.W. 290 (Tex.Civ.App.-San Antonio 1912, writ ref'd). In any event it would be necessary to show that such machines were identical or so similar that the proposed evidence would reasonably tend to establish the truth of the inquiry, and also to show that such machines were operated under the same or similar conditions. See Hill v. Hanan & Son, 62 Tex. Civ. App. 191, 131 S.W. 245 (1910, no writ); Haynie v. Plano Mfg. Co., 36 Tex. Civ. App. 567, 82 S.W. 532 (1904, no writ). We find no error of the trial court in excluding such testimony. Appellant also complains that the court erred in overruling his motion for new trial on the grounds of newly discovered evidence. Appellant in the hearing on such motion offered in support thereof the testimony of Roger Stoskopf, Branch Manager of International Harvester in San Antonio, Texas, who testified that the Detroit diesel engine was used by International Harvester in some of its trucks, and that he would not sell the type of engine in question for a 72,000-pound load. However, he testified that he was "sure it would pull it," and further testified that he was no expert on Chevrolets. He testified that the Detroit diesel engine was used by other manufacturers and that this fact was well known in the trucking industry; that it is a sound engine; that there is no secret that they used this type of engine; that they advertised it; and that they were listed in the San Antonio telephone directory as a representative for Detroit Diesel, and that other companies were also listed as representatives of Detroit Diesel in San Antonio. Appellant also offered the testimony of Pierre Bernard, a truck salesman with 446 International Harvester in San Antonio, who testified that he was familiar with the Detriot Diesel 6V-53N engine and that he would not sell an International Harvester truck with this engine for the purpose of hauling a 72,000-pound pay load. When asked whether such diesel engine could haul a gross weight capacity load of 72,000 pounds, he stated that it would depend on various factors and that he wouldn't qualify himself as an expert on General Motors trucks. He stated that their Company, International Harvester, was one of the authorized representatives of Detroit Diesel in San Antonio, and that the Detroit Diesel engine was used by other truck manufacturers. Both appellant and his attorney testified that they did not know that Detroit Diesel was used by other truck manufacturers prior to the trial, and that such information was not discovered until after the trial. The Supreme Court in New Amsterdam Casualty Company v. Jordan, 359 S.W.2d 864 (1962), set forth the requirements for granting a new trial on the grounds of newly discovered evidence as follows: "`A new trial will not be granted on the ground of newly-discovered evidence, unless it is made to appear that it has come to the knowledge of the applicant since the trial; that it could not have been sooner discovered by the exercise of diligence; that it is not merely cumulative; that it is not for the purpose of impeachment.' Conwill v. Gulf, C. & S.F. Ry. Co., 85 Tex. 96, 19 S.W. 1017 (1892)." This Court in Austin v. Gallaher, 417 S.W.2d 363, 368 (1967, writ dism'd), said: "An indispensable element for the granting of a new trial on the grounds of newly discovered evidence is that movant exercised due diligence to discover the evidence. Foster v. McClain, Tex.Civ.App., 197 S.W.2d 508, no writ; 41 Tex.Jur.2d, New Trial, § 109 (1963). The evidence must not be merely cumulative of the evidence already received, and must be of such a character as will probably change the result on another trial, and the question of whether the new evidence will probably have this effect is one to be determined by the trial court in its discretion. Munden v. Chambless, Tex.Civ.App., 315 S.W.2d 355, writ ref'd n.r.e.; Texas Emp. Ins. Ass'n v. Pillow, Tex.Civ.App., 268 S.W.2d 716, writ ref'd n.r.e.; 41 Tex.Jur.2d, New Trial, §§ 118 and 122." Appellant failed to show that he was entitled to a new trial on the grounds of newly discovered evidence and the court did not commit error in this respect. Appellant's eighth and last point of error is that reversible error was committed by counsel for appellee, Mr. Wood, during counsel for appellant's closing argument, when he repeatedly injected prejudicial and unsworn testimony before the jury, and that the court's instruction to the jury could not remove the damage and harm that had been done. During the course of counsel for appellant's closing argument to the jury, he stated: "They have made several comments that we have not sued General Motors. Well, I don't feel that we should have to go to Detroit and sue General Motors." At this point, counsel for Smith stated, "They can sue them right here." After some discussion as to whether General Motors would have to be sued in Detroit, appellant's counsel stated, "I am objecting to him testifying in front of this jury." The record then reflects "COURT INSTRUCTS JURY," without setting forth such instruction. During the trial, numerous references were made to the warranty on the truck and that it was issued by General Motors, and such warranty was introduced into evidence, all without objections from appellant. Counsel for Appellee Smith in his opening statement before the jury stated that his client did not warrant the truck and he intended to prove by evidence that this "was up to General Motors, and General Motors has not been made a party 447 to this case * * *." Counsel for appellant made no objection to this statement. As a general rule, in order to entitle one to a new trial because of improper argument of counsel, it must be shown that objection was made and over-ruled at the very time the argument was made, and it is only when the probable harm or the resulting prejudice cannot be eliminated or cured by retraction or instruction that a new trial will be awarded in the absence of timely objection. Texas Employers' Ins. Ass'n v. Haywood, 153 Tex. 242, 266 S.W.2d 856 (1954); Ramirez v. Acker, 134 Tex. 647, 138 S.W.2d 1054 (1940); Dallas Railway & Terminal Co. v. Clayton, 274 S.W.2d 422 (Tex.Civ. App.-Dallas 1954, writ ref'd n.r.e.); 41 Tex.Jur.2d, New Trial, § 31; 56 Tex. Jur.2d, Trial, § 324. The discussion of venue of the suit, complained of by appellant, was first interjected before the jury by argument of counsel for appellant. A new trial will ordinarily not be granted where unauthorized statements were provoked by the arguments of the opposing counsel, and will also be denied if any prejudicial effect of improper argument was cured by admonition or instructions of the court. 41 Tex.Jur.2d, New Trial, § 30. Before a judgment is reversed because of argument of counsel, the argument must be improper, and it must be such as to satisfy the reviewing court that it is reasonably calculated to cause and probably did cause rendition of an improper judgment in the case. Aultman v. Dallas Ry. & Terminal Co., 152 Tex. 509, 260 S.W.2d 596 (1953); Texas General Indemnity Co. v. Bridwell, 304 S.W.2d 131 (Tex.Civ.App.Beaumont, 1957, writ ref'd n.r.e.). After a careful consideration of the record before us, we find nothing contained in the argument complained of that could not have been cured by proper instruction of the court. The record does not establish any reversible error of the trial court pertaining to the matter of argument of counsel. Appellant's eighth point of error is overruled. All of appellant's points of error are overruled and the judgment of the trial court is affirmed. CADENA, J., not participating.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527365/	428 S.W.2d 766 (1967) Carlton N. KLUTEY et al., Appellants, v. COMMONWEALTH of Kentucky, DEPARTMENT OF HIGHWAYS, Appellee. Court of Appeals of Kentucky. December 8, 1967. As Modified on Denial of Rehearing June 14, 1968. 767 John L. Dorsey, Jr., Dorsey & Sullivan, Henderson, for appellants. Robert Matthews, Atty. Gen., H. C. Smith, Asst. Atty. Gen., Frankfort, M. T. Quinton, Jr., Madisonville, for appellee. CLAY, Commissioner. This action was brought by the Commonwealth to enjoin appellants from maintaining embankments on their property which diverted the flow of water from two drainage pipes under a new highway constructed in the City of Henderson. Appellants counterclaimed and sought an injunction against the Commonwealth. The Chancellor found in favor of the latter. Appellants owned a 70-acre tract. The Commonwealth condemned an 8-acre strip running from north to south for the construction of a limited access highway. This left a landlocked area of 8 acres on the east side of the highway. When it was constructed, two drainage pipes were built to carry water from the east side to the west side. One was 24 inches in diameter and the other 18 inches. Water flowing through these pipes was cast onto appellants' land on the west. Appellants claim that by virtue of the accelerated flow deep ditches were cut in their property and a flooding condition was created. To stem the tide appellants built embankments opposite the western openings of these two drainage pipes, thereby backing water up on the highway. It is these embankments the Chancellor ordered removed. It is appellants' contention that the Commonwealth had no right to cast this surface water on their land through the drainage pipes and they requested an injunction compelling the Commonwealth to channel the flow in a different direction. There is a sharp issue of fact as to whether, prior to the construction of the highway, surface waters naturally drained from land on the east to appellants' property in the area where the 24-inch pipe is located. Appellants' evidence was that there was no east-west natural drainage at this point. On the other hand, witnesses for the Commonwealth testified that prior to the construction of the highway there was a drainage ditch ranging from one to four feet in depth at this point and that an area of approximately 8 acres to the east drained onto appellants' land. On the basis of testimony and topographical and engineering maps the Chancellor found there had been a natural flow of surface water onto appellants' land at this point. Since there was substantial credible evidence to support this finding, we cannot say it was clearly erroneous. With respect to the 18-inch pipe, admittedly the natural drainage at that point was from east to west on a gentle slope. However it is clear that the drainage pipe substantially accelerated the flow. The same may be said about the 24-inch pipe. It may be pointed out that as a result of appellants' protests, the Commonwealth partially sealed the eastern end of the 24-inch drainage pipe so that instead of draining an area of 8 acres it now accommodates a flow from an area of something over one acre. On the theory that there was no natural drainage onto appellants' land at the point of the 24-inch pipe, appellants contend the Commonwealth has changed the direction of the natural flow and has in effect tapped additional territory and subjected their property to an additional servitude. The finding of the Chancellor with respect to the natural drainage course answers that argument. The additional argument is made, however, that the Commonwealth had no right 768 with either pipe to so accelerate the flow of water as to cause the serious damage of which appellants complain. Their evidence was to the effect they had never had a drainage problem before but after the highway was constructed the discharge from the 24-inch pipe caused a flooding condition and the discharge from the 18-inch pipe was cutting a deep gorge through their land. The Chancellor apparently took the view that since the Commonwealth was not tapping an additional source of surface water, it had the right to accelerate the flow by the construction of drainage pipes without regard to the damage caused. (The Chancellor also intimated that in the prior condemnation suit appellants had been compensated for the potential water damage that would be caused by the construction of the highway, a matter we will discuss later in this opinion.) Reliance was placed upon Wallace v. Schneider, 310 Ky. 17, 219 S.W.2d 977. The difficult question presented, which has both legal and equitable aspects, requires a re-examination of surface water rights in Kentucky. We will assume (as do the parties) that the Commonwealth stands in the position of an adjoining property owner. The conflicting rights of such parties at an earlier time led to the development of two doctrines which were almost diametrically opposed. Under the "common enemy" doctrine each landowner had the right to dispose of surface water on his land in any manner he saw fit, regardless of the adverse consequences to his neighbor. Under the "civil law" doctrine, while the lower owner was bound to accept natural drainage from the upper owner, the upper owner had no right, by artificial means, to change or increase the normal flow. It was soon found that the strict application of either doctrine would often cause an inequitable result as between the parties, and neither theory took into account the socially desirable uses of the property or the extent of damage one property owner might cause his neighbor. For this reason exceptions and modifications gradually infused the doctrines and there evolved a flexibility in their application. For a history of the developments in this field, attention is called to 59 A.L.R. 2d 421. In one of our earlier Kentucky cases, Pickerill v. City of Louisville, 125 Ky. 213, 100 S.W. 873, we purported to adopt the "civil law" doctrine, although the opinion recognizes that formerly the "common law" ("common enemy") principle had been applied. That case involved a situation (which naturally develops under the "common enemy" concept), quite similar to the one before us, where the upper property owner ditches his land to rid himself of surface water and the lower owner, to avoid the consequences, throws the water back by obstructing the flow with an artificial embankment. In the opinion we stated the rule to be (page 876 of 100 S.W.): "* * * the owner of the upper ground has no right to make excavations, barriers, or drains upon his ground by which the flow of surface water is diverted from its natural channel and a new channel made on the lower ground, nor can he collect into one channel waters usually flowing off into his neighbor's land by several channels, and thereby increase the flow upon the lower ground." The same principle was followed in Gott v. Franklin, 307 Ky. 466, 211 S.W.2d 680, where we held the plaintiff had no right by artificial means (the tiling of a garden) to collect water and cause it to flow onto neighboring property in accelerated and larger quantities. Here again we substantially applied the "civil law" doctrine. The following year the case of Wallace v. Schneider, 310 Ky. 17, 219 S.W.2d 977, was decided. There the defendant, in establishing a subdivision, graded the land, built roads, gutters and sewers, and thereby accelerated the flow of water onto plaintiff's property. The applicable law was thus stated (page 980 of 219 S.W.2d): "The owner of the dominant estate may drain and ditch his land for the purpose 769 of ridding it of surface water even to the extent of building sewers, gutters, and culverts without liability to the owner of the servient estate, even though such methods of ridding his own property of surface water causes such water to be accelerated in its flow onto the servient estate, so long as he does not tap additional territory from which surface waters otherwise would not have flowed through the natural drain in which the ditches, gutters, sewers, or culverts are constructed." (Emphasis added) This would appear to be a modified "common enemy" doctrine. In the later case of Rutherford v. Louisville & Nashville R. Co., Ky., 243 S.W.2d 1017, the defendant railroad company had dug a new ditch, or widened an old one, on its right-of-way, whereby a greatly accelerated flow of water was channeled through a 24-inch culvert emptying into a ditch on property adjoining the plaintiff's land and caused a flooding condition. We held the defendant could not unreasonably subject plaintiff's property to a servitude involving more than the absorption of the natural flow of water, and the owner of the lower estate could recover damages from the owner of the upper estate (page 1018 of 243 S.W.2d): " * * if the latter unreasonably changes the natural course of the water or causes it to collect and be cast upon the lower estate in an unnatural volume or in an unusual or swift stream; * * * or if he collects in one channel waters usually flowing onto his neighbor's land by several channels and thereby increases the flow on the lower ground." (Emphasis added) It will be noted this opinion uses the terms "unreasonably", "unnatural" and "unusual." Our prior opinions had not made reference to such factors. Recognition of their significance established a middle ground principle between the "common enemy" doctrine (which favors the upper owner) and the "civil law" doctrine (which favors the lower owner). In the recent case of Commonwealth, Dept. of Highways v. Robbins, Ky., 421 S.W.2d 820, we determined that the Commonwealth had "unreasonably" diverted surface water from its natural course of drainage. Thus in Kentucky we have developed a "reasonable use" rule, which is followed in other states. See Bassett v. Salisbury Mfg. Co., 43 N.H. 569, 82 Am.Dec. 179; Bush v. City of Rochester, 191 Minn. 591, 255 N.W. 256; Armstrong v. Francis Corp., 20 N.J. 320, 120 A.2d 4, 59 A.L.R. 2d 413; and Weinberg v. Northern Alaska Development Corp., Alaska, 384 P.2d 450. In substance the rule balances the reasonableness of the use by the upper owner against the severity of damage to the lower owner, and is identical with the principle we had adopted in determining the existence of a nuisance. In Louisville Refining Company v. Mudd, Ky., 339 S.W.2d 181, 186, we said: "* * * we accept the proposition that the existence of a nuisance must be ascertained on the basis of two broad factors, neither of which may in any case be the sole test to the exclusion of the other: (1) the reasonableness of the defendant's use of his property, and (2) the gravity of harm to the complainant." In fact, our problem is a nuisance problem. See Pickerill v. City of Louisville, 125 Ky. 213, 100 S.W. 873; Commonwealth, Dept. of Highways v. Cochrane, Ky., 397 S.W.2d 155. The difficulty of course lies in determining and applying the tests of reasonableness. To begin with, the lower owner has the servient estate and he must accept drainage from his neighboring upper owner. Also it must be recognized that any artificial utilization of land by the latter may, in some degree, affect the natural drainage on adjoining lower lands. Acceleration of the flow of surface water onto his lower neighbor often results when the upper 770 owner modifies his drainage system. Our problem is the extent to which this may be done without liability. In Enderson v. Kelehan, 226 Minn. 163, 32 N.W.2d 286, 289, the principle involved and the pertinent considerations are thus set forth: "As promulgated in the leading case of Sheehan v. Flynn, 59 Minn. 436, 61 N.W. 462, 26 L.R.A. 632, and as amplified by subsequent decisions, the rule is that in effecting a reasonable use of his land for a legitimate purpose a landowner, acting in good faith, may drain his land of surface waters and cast them as a burden upon the land of another, although such drainage carries with it some waters which would otherwise have never gone that way but would have remained on the land until they were absorbed by the soil or evaporated in the air, if "(a) There is a reasonable necessity for such drainage; "(b) If reasonable care be taken to avoid unnecessary injury to the land receiving the burden; "(c) If the utility or benefit accruing to the land drained reasonably outweighs the gravity of the harm resulting to the land receiving the burden; and "(d) If, where practicable, it is accomplished by reasonably improving and aiding the normal and natural system of drainage according to its reasonable carrying capacity, or if, in the absence of a practicable natural drain, a reasonable and feasible artificial drainage system is adopted." We believe this constitutes a sound approach to the problem and obviously requires consideration of all relevant factors and special circumstances in each particular case. Maryland followed the reasonable use doctrine in Whitman v. Forney, 181 Md. 652, 31 A.2d 630. For a discussion by the Maryland court, see Battisto v. Perkins, 210 Md. 542, 124 A.2d 288. In Keys v. Romley, 64 Cal. 2d 396, 50 Cal. Rptr. 273, 412 P.2d 529, is a comprehensive discussion of the three rules. There the California court modified the civil law rule which that state follows by applying the reasonableness concept. Though appellants argue to the contrary, we do not have in this case the tapping of a new watershed, as appeared in Commonwealth, Dept. of Highways v. Roundtree, Ky., 372 S.W.2d 804, and was referred to in the above quotation from the Schneider case.[1] While the Commonwealth actually tapped a new source in constructing a median strip catch basin, there was a substitution of this surface water for that formerly draining from an 8-acre area through the 24-inch pipe, and from a practical standpoint the tapping of the new source did not itself increase the volume of water flowing toward appellants' land. The narrow question involves the extent to which the Commonwealth, by an artificial drainage system, may lawfully accelerate the flow of surface water onto appellants' land in a natural drainage direction. If the Commonwealth was creating a nuisance, it was taking an easement over appellants' land for drainage purposes and the landowner would be entitled to compensation therefor as allowed in Bowling Green-Warren County Airport Bd. v. Long., Ky., 364 S.W.2d 167, or equitable relief as upheld in Pike County Board of Education v. Belfry Coal Corp., Ky., 346 S.W.2d 37. If, in the light of all the circumstances, the Commonwealth was not creating a nuisance, it was entitled to the relief granted. While the Chancellor relied upon the Schneider opinion[2] (which has been somewhat qualified as herein pointed out), his opinion convinces us that he took into consideration those factors which we have heretofore indicated were relevant in determining 771 the respective rights of the parties. Of significance was the public necessity for the construction of this highway and the engineering necessity for this type of drainage system according to accepted standards. Cf. Louisville and Jefferson County Air Bd. v. Porter, Ky., 397 S.W.2d 146. Another consideration was the action taken by the Commonwealth in good faith prior to this suit to ameliorate the situation by sealing off a substantial source of flow through the 24-inch drainage pipe. Of some significance was the prior condemnation suit between the parties. In that proceeding appellants were awarded $30,000 damages when the Commonwealth acquired a strip through their land for the construction of the highway. When that trial was held, the new road and the two culverts had been constructed. One of the appellants testified to the drainage condition created and pointed out how it was damaging his property. In the closing argument his counsel commented on this element of damage. The Chancellor therefore properly assumed (as he noted in his opinion) that the $30,000 award for the land taken included compensation for the accelerated flow created by these drainage pipes.[3] In our opinion the Chancellor properly balanced the equities between the parties and we find no error in his judgment. The judgment is affirmed. WILLIAMS, C. J., and HILL, PALMORE, MILLIKEN, and STEINFELD, JJ., concur. Dissenting opinion by OSBORNE, J., in which MONTGOMERY, J., joins. DISSENTING OPINION OSBORNE, Judge. It appears that the holding of the trial court which is affirmed by the majority opinion herein is to the effect that the dominant tenement is free to release surface water upon the servient tenement in any quantity or with any force that it chooses so long as an additional source of water is not tapped. The same applies to the acceleration of flow. In affirming this revolutionary principle the majority opinion turns to the courts of Minnesota for authority. Enderson v. Kelehan, 226 Minn. 163, 32 N.W.2d 286. The respective rights of property holders as they relate to the use and disposition of surface waters greatly differ in the several states. The reason for this being that problems pertaining to surface water vary with the difference in rainfall, soil texture, steepness of slope and many other factors. What is a problem in one state is not a problem in another. For this reason, the law of Arizona would differ from the law of Florida, etc. Over a period of years, each state has developed its set of rules controlling the use and disposition of surface water. We have done this in Kentucky and have adopted what is known as the "civil law doctrine" which holds that while the lower owner is bound to accept natural drainage from the upper owner, the upper owner has no right by artificial means to change or increase the normal flow of water or to accelerate the flow at any one point in such manner as to unreasonably damage the lower owner. Jarvis v. Cornett, Ky., 257 S.W.2d 524; Gott v. Franklin, 307 Ky. 466, 211 S.W.2d 680; Cissell v. Grimes Investments Inc., Ky., 383 S.W.2d 128, citing 87 C.J.S. Trespass § 106; Com., Dept. of Highways v. Roundtree, Ky., 372 S.W. *772 2d 804; Louisville & N. R. Co. v. Bush, Ky., 336 S.W.2d 578; Rutherford v. Louisville & N. R. Co., Ky., 243 S.W.2d 1017; Wallace v. Schneider, 310 Ky. 17, 219 S.W.2d 977; Lewallen v. Davenport, Ky., 255 S.W.2d 16; Board v. Schneider, 301 Ky. 289, 191 S.W.2d 418; Newport News & M. V. Co. v. Wilson, 16 Ky.Law Rep. 262; Franz v. Jacobs, 183 Ky. 647, 210 S.W. 163; Kraver v. Smith, 164 Ky. 674, 177 S.W. 286; Smith v. Wathen, 156 Ky. 820, 162 S.W. 88; Raleigh v. Clark, 114 Ky. 732. 71 S.W. 857, 24 Ky.Law Rep. 1554; Stone v. Ashurst, 285 Ky. 687, 149 S.W.2d 4; Board of Trustees of Town of Auburn v. Chyle, 256 Ky. 283, 75 S.W.2d 1039; Steinke v. North Vernon Lumber Co., 190 Ky. 231, 227 S.W. 274; Wharton v. Barber, 188 Ky. 57, 221 S.W. 499; Louisville & N. R. Co. v. Stephens, 188 Ky. 1, 220 S.W. 746; Pickerill v. City of Louisville, 125 Ky. 213, 100 S.W. 873, 30 Ky.Law Rep. 1239; Robertson v. Daviess Gravel Road Co., 116 Ky. 913, 77 S.W. 189, 25 Law Rep. 1114; Bonte v. Postel, 109 Ky. 64, 58 S.W. 536, 22 Ky.Law Rep. 583, 51 L.R.A. 187; Grinstead v. Sanders, 56 S.W. 665, 22 Ky. Law Rep. 51. This is a well-settled principle in this state and well defined though there is some unfortunate language in a few isolated cases which can not be avoided when the question is written on by so many different individuals over such a long period of time. The law generally is well settled. No later than last week the principles enunciated in the above cases were reaffirmed by this court. Commonwealth, Department of Highways v. Robbins, Ky., 421 S.W.2d 820. The majority opinion herein can do nothing but inject confusion and consternation. For the foregoing reasons, I respectfully dissent. MONTGOMERY, J., joins in this dissent. NOTES [1] Wallace v. Schneider, 310 Ky. 17, 219 S.W.2d 977. [2] Wallace v. Schneider, 310 Ky. 17, 219 S.W.2d 977. [3] When the Commonwealth is actually taking an easement for drainage or other purposes, the pleadings and the judgment should so provide. See Bowling Green-Warren County Airport Bd. v. Long, Ky., 364 S.W.2d 167.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527388/	221 F. Supp. 762 (1963) Elsie B. SONITZ and Madeline Basile, Plaintiffs, v. The UNITED STATES of America, Arthur G. Darling and Skeffington, Haskins and Robottom, Defendants. Civ. A. No. 758-62. United States District Court D. New Jersey. September 20, 1963. 763 Charles M. Grosman, Newark, N. J., for plaintiff Elsie B. Sonitz; Aro G. Gabriel, Union City, N. J., for plaintiff Madeline Basile (William F. Kolbe and Leo C. Duersten, Foley, Capwell, Foley & Kolbe, Racine, Wis., of counsel), for both plaintiffs. David M. Satz, Jr., U. S. Atty., Newark, N. J., by Vincent J. Commisa, Asst. U. S. Atty., for the United States; Louis F. Oberdorfer, Asst. Atty. Gen., Fred B. Ugast and Arnold Miller, Dept. of Justice, Washington, D. C., of counsel. Haskins, Robottom & Hack, by Guy H. Haskins, Jr., Bloomfield, N. J., for defendants, Arthur G. Darling and Skeffington, Haskins and Robottom. AUGELLI, District Judge. This action is brought under 28 U.S. C.A. §§ 1340, 2410 and 2463, and involves the validity of certain tax assessments made against plaintiffs. According to the complaint, plaintiffs, Elsie B. Sonitz and Madeline Basile, were the daughter and wife, respectively, of one Joseph Basile, who is now deceased. On April 20, 1955, Joseph Basile paid $17,850.00 for a residential property located at 222 Watchung Avenue, Bloomfield, New Jersey, and had said property conveyed by warranty deed to plaintiffs as joint tenants. On April 14, 1961, the Commissioner of Internal Revenue assessed certain taxes, penalties and interest against Joseph Basile, following a determination thereof made by the United States Tax Court on March 17, 1961. Basile died on June 22, 1961. Thereafter, on July 26, 1962, plaintiffs contracted to sell the property at 222 Watchung Avenue, by warranty deed, free and clear of all encumbrances, to defendant Arthur G. Darling, for $23,000.00, title to pass on September 17, 1962. On September 14, 1962, the Internal Revenue Service, having learned of the contemplated sale, served plaintiffs with notices that each of them was liable to the United States of America as a transferee of the assets of Joseph Basile, and that jeopardy assessments ($16,925.00 in the case of Elsie B. Sonitz and $24,513.02 764 in the case of Madeline Basile) had been made against them. Pursuant to the action thus taken, defendant United States of America claimed to have valid tax liens which attached to all of plaintiffs' properties, including 222 Watchung Avenue, as of September 14, 1962, and demanded the entire proceeds of the sale of said property. Upon plaintiffs' offer of delivery of a warranty deed to Darling, the purchase price was paid to defendant law firm of Skeffington, Haskins and Robottom, attorneys for Darling, as escrowee, and Darling took possession of the premises. Plaintiffs contend that the assessments made on September 14, 1962 are barred by the one year statute of limitations imposed by section 6901(c) (1) of the Internal Revenue Code of 1954, 26 U.S.C. A. § 6901(c) (1), and that therefore any liens arising thereunder on any of their properties are invalid. They also deny that Joseph Basile was insolvent when he made any transfers of property to them or that he was rendered insolvent by such transfers so as to subject them to liability under section 6901 of the Code. The principal relief sought by plaintiffs is that the September 14, 1962 assessments against plaintiffs be declared invalid, and the liens thereunder ineffective; that the United States of America be found to have no interest in or claim upon the realty at 222 Watchung Avenue, or the proceeds from its sale, or any other property of plaintiffs by virtue of the September 14, 1962 assessments; that the law firm of Skeffington, Haskins and Robottom be ordered to pay the proceeds of the sale to plaintiffs; and that the United States of America be ordered to expunge and remove all liens and repay to plaintiffs any amounts of money or other property seized or collected by virtue of said liens. The United States of America has moved to dismiss the complaint on the grounds that the complaint fails to state a claim upon which relief may be granted; that the suit is prohibited by 28 U.S.C.A. § 2201, in that it is a suit seeking a declaratory judgment with respect to federal taxes; that the United States has not waived its sovereign immunity in this suit which seeks, under 28 U.S. C.A. § 2410, to inquire into the merits of the assessment underlying the lien sought to be expunged; that the suit is prohibited by 26 U.S.C.A. § 7421, in that it is an action seeking injunctive relief in restraining the assessment or collection of a tax; and that the suit is prohibited by 26 U.S.C.A. § 7422, as being a suit for refund. The Court has jurisdiction over the subject matter of this action under 28 U.S.C.A. § 1340, relating to suits arising under the internal revenue laws. In the Court's opinion, this suit is not one for a declaratory judgment, nor for an injunction, nor for a refund. Essentially it is an action to expunge Government tax liens, and thereby quiet title to property of the plaintiffs. The Government raises the issue as to whether it has waived its sovereign immunity in this case. The resolution of this issue depends on the Court's construction of 28 U.S.C.A. § 2410(a), which provides that the United States consents, under prescribed conditions, to be "* * * named a party in any civil action or suit in any district court * * * to quiet title to * * * real or personal property on which the United States has or claims a * * * lien." The Government contends that in a suit to quiet title under this section, only the procedural defects of the lien sought to be expunged can be examined by the Court; and that the merits of the assessment underlying the lien, including procedural defects in such assessment, are not a proper subject of inquiry. In support of its argument, the Government relies primarily on the case of Pipola v. Chicco, 274 F.2d 909 (2 Cir., 1960). The issue of whether a suit to inquire into the merits of an assessment is maintainable under 28 U.S.C.A. § 2410 has had an interesting history in the Second Circuit. At first, in Pipola v. Chicco, supra, the Court held that such an action was not permitted. This opinion was *765 largely based on the Government's argument that since in a suit by the United States to enforce a tax lien under what is now 26 U.S.C.A. § 7403, the taxpayer could not inquire into the merits of an assessment, the taxpayer should not be entitled to raise this issue in an action under 28 U.S.C.A. § 2410, which merely permits the taxpayer to initiate the suit on a lien. Later, in United States v. Coson, 286 F.2d 453, 463-464 (9 Cir., 1961), another Court of Appeals appeared to be troubled with Pipola on this point. Finally, in United States v. O'Connor, 291 F.2d 520, 526 (2 Cir., 1961), the Second Circuit overruled Pipola after the Government had confessed error in arguing in Pipola that in a suit under 26 U.S.C.A. § 7403, the taxpayer may not challenge the merits of the assessment underlying a tax lien. Since the basic premise in Pipola was found to have been incorrect, its holding that the merits of the assessment could not be raised in a suit under 28 U.S.C.A. § 2410 was of doubtful validity. In Falik v. United States, 206 F. Supp. 181 (E.D.N.Y.1962), the district court adopted this view, and held that the merits of an assessment could be challenged under section 2410. The Government says in effect that the Falik case was incorrectly decided, and that the O'Connor overruling of Pipola was limited to cases involving a section 7403 lien foreclosure suit by the Government. It argues that Pipola was also based on a finding by the Court that section 2410 was not intended to permit inquiry into the merits of an assessment, and that even if the taxpayer is permitted to question the assessment under section 7403, it was not intended he should have that power under section 2410. Finally, the Government asserts that the allowance of an inquiry into the merits of an assessment under section 2410 would sanction an easy circumvention of the Government's refund or Tax Court procedures, and result in a multiplicity of lawsuits by taxpayers who would challenge their assessments piecemeal, as tax liens attach to their property. See Flora v. United States, 357 U.S. 63, 78 S. Ct. 1079, 2 L. Ed. 2d 1165 (1958). This Court is of the opinion that since the taxpayer can inquire into the merits of an assessment in a suit by the Government under 26 U.S.C.A. § 7403 to enforce a tax lien, there is no reason to deny the taxpayer this right in an action which he brings under 28 U.S.C.A. § 2410 to expunge such a lien. See Falik v. United States, supra, 206 F.Supp. at p. 182. The discussion in Pipola (274 F.2d at pp. 913-914) of the legislative history behind the adoption of the amended section 2410 was largely based on Supreme Court dicta in Bull v. United States, 295 U.S. 247, 260, 55 S. Ct. 695, 79 L. Ed. 1421 (1935), to the effect that a taxpayer could not challenge the merits of an assessment under section 7403. Since the Government has admitted error in this regard, the legislative history affords little additional light on the subject. See United States v. O'Connor, supra, 291 F.2d at pp. 526-527. As to the Government's objections to the taxpayers' refusal to follow the refund or Tax Court procedures, suffice it to say that section 2410 exists to permit taxpayers to expunge Government tax liens and thereby quiet title to their property. This is primarily the relief plaintiffs seek in this case in order to be able to sell their Watchung Avenue property free and clear of all liens by warranty deed as they have contracted to do. They should not be deprived of this relief merely because other courses of action might be available to them, which they have chosen not to take. The Court holds that this is a suit to quiet title, maintainable under 28 U.S.C.A. § 2410. The Court has jurisdiction to determine the validity of the tax assessments against plaintiffs, and to grant any other relief incidental to such determination. The motion of the defendant United States will be denied in all respects. Submit order.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527395/	221 F. Supp. 370 (1963) The NEW YORK, NEW HAVEN AND HARTFORD RAILROAD COMPANY (Richard Joyce Smith, William J. Kirk, and Harry W. Dorigan, Trustees, et al., Plaintiffs, v. UNITED STATES of America and Interstate Commerce Commission, Defendants. Civ. A. No. 9229. United States District Court D. Connecticut. July 23, 1963. Thomas P. Hackett, Eugene E. Hunt, New Haven, Conn., Edward A. Kaier, Philadelphia, Pa., for plaintiff. John S. Fessenden, Homer S. Carpenter, Washington, D. C., Robert J. Gillooly, New Haven, Conn., for defendants. John H. D. Wigger, Atty., Dept. of Justice, Washington, D. C., Lee Loevinger, Asst. Atty. Gen., Robert C. Zampano, U. S. Atty., for the United States. Robert W. Ginnane, Gen. Counsel, Fritz R. Kahn, Asst. Gen. Counsel, Interstate Com. Commission, Washington, D. C., for I. C. C. Before SMITH, Circuit Judge, ANDERSON, Chief District Judge, and BLUMENFELD, District Judge. J. JOSEPH SMITH, Circuit Judge. This is an action under 28 U.S.C. §§ 1336, 1398, 2284 and 2321-2325,[1] and 371 5 U.S.C. § 1009, in which the New York, New Haven and Hartford Railroad Company and its trustees in reorganization and 18 other railroad corporations seek 372 to set aside and annul a report and order of the Interstate Commerce Commission in Investigation and Suspension Docket No. 7131, All Commodities from New England to Chicago and St. Louis, in which the Commission, three commissioners dissenting, overruled a report and order of its Division 2, and struck down so-called all-commodity rates on mixed or straight shipments of manufactured articles published by the New Haven and other plaintiffs, finding the rates to be a destructive competitive practice and unjust and unreasonable in violation of section 1(6) of the Interstate Commerce Act, 49 U.S.C. § 1(6), Act of June 18, 1910, c. 309, § 7, 36 Stat. 544. We find the Commission's order unlawful because based on an erroneous interpretation of § 1(6) of the Act and order it set aside and annulled. The New Haven, faced with loss of traffic to highway carriage and TOFC (trailer on flatcar carriage) which latter it was not in a favorable position to handle extensively because of equipment and clearance difficulties, and plagued with a large tonnage of empty box cars moving West, devised a schedule of reduced boxcar rates on freight in straight or mixed carloads from points in New England territory to Chicago and East St. Louis, Illinois, Gibson and Hammond, Indiana, and St. Louis, Missouri, and filed appropriate tariffs containing these rates. Competing railroads followed suit. Eastern Central Motor Carriers Association, Inc. filed protests and petitions for suspension of the New Haven schedules. Later, 10 of its member carriers joined in the protests. The Commission suspended the schedules and instituted investigations. Subsequently, on petition of the New Haven and certain intervening shippers the suspension was vacated and the rates became effective July 16, 1959, the investigation, however, proceeding to its conclusion December 28, 1961 in the order under review. The Commission's principal argument in support of its order is the asserted violation of § 1(6) of the Act and its claimed destructive effect on the general rate structure. Under § 1(6), it is "the duty of all common carriers * * * to establish, observe, and enforce just and reasonable classifications of property for transportation, with reference to which rates, tariffs, regulations, or practices are or may be made or proscribed * * * and every unjust and unreasonable classification, regulation, and practice is prohibited and declared to be unlawful." Under this provision all carriers subject to the Act publish classifications, in groupings, of all commodities subject to transportation, and tariffs, that is rates per hundred pounds, at which articles in each classification grouping will be carried between any two points. These are 373 the class rates. The characteristics of the commodities considered in fixing classification ratings are generally: 1. Shipping weight per cubic foot. 2. Liability to damage. 3. Liability to damage other commodities with which it is transported. 4. Perishability. 5. Liability to spontaneous combustion or explosion. 6. Susceptibility to theft. 7. Value per pound in comparison with other articles. 8. Ease or difficulty in loading or unloading. 9. Stowability. 10. Excessive weight. 11. Excessive length. 12. Care or attention necessary in loading and transporting. 13. Trade conditions. 14. Value of service. 15. Competition with other commodities transported. The most important are density of the item (light, bulky goods are charged more per 100 pounds as it takes more cars to carry a given tonnage), perishability, difficulty in handling, and value of service. Under the latter, commodities of higher value, whose transportation characteristics were otherwise no different from those of lower value have historically been charged higher rates. The semimonopoly position of the railroads allowed them to do this well into this century. By exacting a premium charge from high-priced commodities, the railroads were enabled to carry low-priced goods at rates not much above the out-of-pocket costs of carriage. Many times, these low rates were necessary as the lower-priced goods could not compete in the market to which they were brought unless the transportation costs were low. Otherwise, they would not move at all, and the traffic was desirable for the railroad as it did contribute something towards overhead. Common carrier and private trucks have today skimmed off most of the high-rated traffic, leaving the railroads with the unprofitable freight and resulting deficits. A second type of rate is the commodity rate. This is often described as a "concession to a particular situation" (Commission Brief, p. 14) or in some other terms implying that it is an extraordinary deviation from the normal pattern of class rates. It is a particular price quoted for freight of a particular kind from one place to another. It is lower than the class rates, and set to meet competition (either rail or by other carrier) that would otherwise take away the traffic. It is not a recent innovation, but seems historically to have always been part of the rate structure. See ICC 17th Ann.Rep. pp. 115-16 (1903). Thus, its status as exceptional is questionable. Further, commodity rates appear to have largely superseded the class rates. Only about 1 (one) percent of all railroad carload tonnage in the East moves on class rates. All-commodity rates (sometimes called all-freight rates) are a natural outgrowth of the rate structure. Since cost of handling is greater, rates on less-than-carload-lots (LCL) are higher per hundred pounds than rates on carload lots. This appears to be true of both class and commodity rates. Shippers thus tried to tender carload lots for shipment. The problem arose when a shipment of mixed articles was tendered. Unless the articles were of the same class, the shipper was at first charged the LCL rate on each item, thus paying high charges for what was actually more like carload service. To remedy this, the mixing rule (Rule 10) was instituted, allowing shipment of a mixed carload at the carload rate and minimum weight of the highest class of article. This concession permitted the growth of the freight forwarders. They operated by collecting LCL shipments and shipping them at the carload rate, making a profit out of the difference between the carload rate they were charged and the LCL rate which was approximately their charge to the original shipper. With the 374 growth of motor carriers, the railroads began to lose this freight to them both the LCL shipments and the freight forwarder shipments moved increasingly by truck. The railroads countered with rates for truck bodies, containers (holding any goods), and rates for all-commodities, regardless of their class. The Commission found little difficulty approving this kind of all-commodity rates, especially since they were generally either subject to a mixing rule (e. g., no more than 60% by weight of a shipment may be of one commodity) or were higher than the carload class rates that would otherwise have applied. All-Commodity Rates Between California and Oregon, Washington, 293 ICC 327 (1954); All Freight, Straight Carloads, To and From the South, 258 ICC 579 (1944); All Freight from Butte, Mont., to Spokane, Wash., 257 ICC 291 (1942); All-Freight Rates to Points in Southern Territory, 253 ICC 623 (1942); All Freight to Pacific Coast, 248 ICC 73 (1941), aff'd sub nom. Pacific Inland Tariff Bureau v. United States, 50 F. Supp. 376 (W.D. Wash.1943); All Freight from Chicago and St. Louis to Santa Rosa, N. Mex., 243 ICC 517 (1941); All Freight Between Harlem River, N. Y. and Boston, 234 ICC 673 (1939); All Freight Between St. Louis and Kansas City, 234 ICC 589 (1939); All Freight from Chicago and St. Louis to Birmingham, 226 ICC 455 (1938); Commodities Between Chicago, Ill. and Twin Cities, 226 ICC 356 (1938). All-commodity rates on straight shipments (no mixing rule) thus almost never supplanted the classifications or the commodity rates on carloads then in force, except for the LCL freight, and the railroads themselves at that time had no intention of generally superseding the existing rates. See All Freight, Straight Carloads, To and From the South, 258 ICC 579 (1944). The all-commodity rate was thought of as meeting this particular problem only. The present rate is an advance only in that it is lower than the existing class and commodity rates, and is intended to apply to the exclusion of those rates on the commodities that it covers. But it is not what the layman would call "all-commodity" either. It excludes anything that cannot be carried in a boxcar this is obviously a substantial number of things; it is graduated according to minimum weight per car, denser items thus paying less per hundred pounds as has always been true; it excludes perishables, easily damaged goods, explosives, and other such goods whose cost of handling might be extreme; it applies only to freight westward; and there are other exclusions on basis of cost of shipment and handling. The just and reasonable classification requirement of § 1(6) was adopted in 1910 to give the Commission power to control classification, there being some doubt as to the existence of the power, and its purpose was to protect shippers by controlling the maximum charges for transportation of commodities. This purpose is fulfilled by the maintenance in being of class rates even though competitive conditions lead to the furnishing of service through variously constructed rates at lower charges. The practice of the Commission over the past 21 years, as pointed out by Commissioner Webb in his dissent in the instant case, was consistent with this interpretation, permitting competitively compelled departures from the classification in e. g. All Freight to Pacific Coast, 248 ICC 73, aff. Pacific Inland Tariff Bureau v. United States, 50 F. Supp. 376 (W.D.Wash.1943), and cases cited, supra, We can see no difference in principle between those cases and the one before us and no sound reason for so interpreting § 1(6) as to prohibit such competitively compelled departures from classifications, within the established maxima, absent some other violation of the Act than the mere departure from the classification. The Commission fears that approval of these rates would be legislation on its part, apparently because it would be the final blow to classification as a control over minimum rates and a further weakening of its role as a "giant handicapper." Having permitted over a long 375 period exceptional rates which actually move the vast preponderance of this traffic at rates below the class rates, it would seem that it has already effectually legislated or interpreted the modification of what it now claims was the original meaning and purpose of § 1(6). It is strange to find it boggling at this final step of so little effect on traffic actually moving under class rates. In any case, we do not agree that these rates are or ever were a violation of the language or intent of section 1(6). Commodity rates are sufficiently policed under sections 1(5); 2; 3(1); and 15a(3).[2] The record discloses no violation of these sections. It would appear that the Commission here invokes § 1(6) as a means of preserving a basis for the "value of service" concept in ratemaking referred to above, in a desire to hold fast to a past which has already slipped away beyond our reach. This "value of service" principle was useful in the early years of the Interstate Commerce Act in requiring the more prosperous East to assist in the development of railroads and commercial and agricultural enterprises in the undeveloped West at a time when the existing railroads were powerful monopolies. In his opinion in New York, New Haven & Hartford R. Co. v. United States, 199 F. Supp. 635, 643 (D.C.1961), vacated I. C. C. v. New York, N. H. & H. R. Co., 372 U.S. 744, 83 S. Ct. 1038, 10 L. Ed. 2d 108, Judge Hincks described the value of service concept as among the "official discriminations, hallowed and encrusted by time and inertia, (which) now pervade the rate structure." The continuing application of the principle is, however, contrary to the letter and spirit of the National Transportation Policy amendment to the Interstate Commerce Act, passed in 1940, 49 U.S.C. note preceding 376 § 1, which, as its legislative history makes clear, was intended to permit the railroads, no longer effective monopolies, to respond to competition by asserting whatever inherent advantages of cost and service they possessed. The Commission also concludes that the rates at issue constitute a destructive competitive practice under § 15 a(3) of the Interstate Commerce Act. This term was meant to be applied only in the context of competition between different modes of transportation and not for the purpose of supporting the classification provisions of the Act. This phrase, in its proper area of application, was dealt with by this court in New York, New Haven & Hartford R. Co. v. United States, supra, [see also Missouri Pacific R. Co. v. United States, 203 F. Supp. 629, 634 (E.D.Mo.1962)], as follows: "* * * the differential prohibition was intended to be qualified only when factors other than the normal incidents of fair competition intervened, such as a practice which would destroy a competing mode of transportation by setting rates so low as to be hurtful to the proponent as well as his competitor or so low as to deprive the competitor of the `inherent advantage' of being the low-cost carrier. The `inherent advantage' factor and the `destructive competitive practice' factor were the only two policy factors mentioned in the committee reports. * * " The finding that the rates will be destructive of competition rests on a basis not entirely clear to us. It would appear rather that they would enable the railroads "to respond to competition by asserting whatever inherent advantages of cost and service they possessed." The rates are admittedly compensatory, exceeding the out-of-pocket costs and in most instances making a substantial contribution to overhead. There is no finding based on evidence that the rates would destroy or impair the inherent advantages of other modes of transportation. The finding of destructive competition is not adequately supported on the present record. The issues of this case should never have been framed under § 1(6) nor should the meaning of The National Transportation Policy, as referred to in § 15a(3), have been distorted to supplement it. The order under review is annulled and set aside. NOTES [1] "§ 1336. Interstate Commerce Commission's orders "Except as otherwise provided by Act of Congress, the district courts shall have jurisdiction of any civil action to enforce, enjoin, set aside, annul or suspend, in whole or in part, any order of the Interstate Commerce Commission." "§ 1398. Interstate Commerce Commission's orders "Except as otherwise provided by law, any civil action to enforce, suspend or set aside in whole or in part an order of the Interstate Commerce Commission shall be brought only in the judicial district wherein is the residence or principal office of any of the parties bringing such action." "§ 2284. Three-judge district courts; composition; procedure "In any action or proceeding required by Act of Congress to be heard and determined by a district court of three judges the composition and procedure of the court, except as otherwise provided by law, shall be as follows: (1) The district judge to whom the application for injunction or other relief is presented shall constitute one member of such court. On the filing of the application, he shall immediately notify the chief judge of the circuit, who shall designate two other judges, at least one of whom shall be a circuit judge. Such judges shall serve as members of the court to hear and determine the action or proceeding. (2) If the action involves the enforcement, operation or execution of State statutes or State administrative orders, at least five days notice of the hearing shall be given to the governor and attorney general of the State. "If the action involves the enforcement, operation or execution of an Act of Congress or an order of any department or agency of the United States, at least five days' notice of the hearing shall be given to the Attorney General of the United States, to the United States attorney for the district, and to such other persons as may be defendants. "Such notice shall be given by registered mail or by certified mail by the clerk and shall be complete on the mailing thereof. (3) In any such case in which an application for an interlocutory injunction is made, the district judge to whom the application is made may, at any time, grant a temporary restraining order to prevent irreparable damage. The order, unless previously revoked by the district judge, shall remain in force only until the hearing and determination by the full court. It shall contain a specific finding, based upon evidence submitted to such judge and identified by reference thereto, that specified irreparable damage will result if the order is not granted. (4) In any such case the application shall be given precedence and assigned for a hearing at the earliest practicable day. Two judges must concur in granting the application. (5) Any one of the three judges of the court may perform all functions, conduct all proceedings except the trial, and enter all orders required or permitted by the rules of civil procedure. A single judge shall not appoint a master or order a reference, or hear and determine any application for an interlocutory injunction or motion to vacate the same, or dismiss the action, or enter a summary or final judgment. The action of a single judge shall be reviewable by the full court at any time before final hearing. A district court of three judges shall, before final hearing, stay any action pending therein to enjoin, suspend or restrain the enforcement or execution of a State statute or order thereunder, whenever it appears that a State court of competent jurisdiction has stayed proceedings under such statute or order pending the determination in such State court of an action to enforce the same. If the action in the State court is not prosecuted diligently and in good faith, the district court of three judges may vacate its stay after hearing upon ten days notice served upon the attorney general of the State." "§ 2321. Procedure generally; process "The procedure in the district courts in actions to enforce, suspend, enjoin, annul or set aside in whole or in part any order of the Interstate Commerce Commission other than for the payment of money or the collection of fines, penalties and forfeitures, shall be as provided in this chapter. "The orders, writs, and process of the district courts may, in the cases specified in this section and in the cases and proceedings under sections 20, 23, and 43 of Title 49, run, be served, and be returnable anywhere in the United States." "§ 2322. United States as party "All actions specified in section 2321 of this title shall be brought by or against the United States." "§ 2323. Duties of Attorney General; intervenors "The Attorney General shall represent the Government in the actions specified in section 2321 of this title and in actions under sections 20, 23, and 43 of Title 49, in the district courts, and in the Supreme Court of the United States upon appeal from the district courts. "The Interstate Commerce Commission and any party or parties in interest to the proceeding before the Commission, in which an order or requirement is made, may appear as parties of their own motion and as of right, and be represented by their counsel, in any action involving the validity of such order or requirement or any part thereof, and the interest of such party. "Communities, associations, corporations, firms, and individuals interested in the controversy or question before the Commission, or in any action commenced under the aforesaid sections may intervene in said action at any time after commencement thereof. "The Attorney General shall not dispose of or discontinue said action or proceeding over the objection of such party or intervenor, who may prosecute, defend, or continue said action or proceeding unaffected by the action or nonaction of the Attorney General therein." "§ 2324. Stay of Commission's order "The pendency of an action to enjoin, set aside, annul, or suspend any order of the Interstate Commerce Commission shall not of itself stay or suspend the operation of the order, but the court may restrain or suspend, in whole or in part, the operation of the order pending the final hearing and determination of the action." "§ 2325. Injunction; three-judge court required "An interlocutory or permanent injunction restraining the enforcement, operation or execution, in whole or in part, of any order of the Interstate Commerce Commission shall not be granted unless the application therefor is heard and determined by a district court of three judges under section 2284 of this title." [2] "§ 1, par. (5). "Just and reasonable charges. All charges made for any service rendered or to be rendered in the transportation of passengers or property as aforesaid, or in connection therewith, shall be just and reasonable, and every unjust and unreasonable charge for such service or any part thereof is prohibited and declared to be unlawful." "§ 2. Special rates and rebates prohibited "If any common carrier subject to the provisions of this chapter shall, directly or indirectly, by any special rate, rebate, drawback, or other device, charge, demand, collect, or receive from any person or persons a greater or less compensation for any service rendered or to be rendered, in the transportation of passengers or property, subject to the provisions of this chapter, than it charges, demands, collects, or receives from any other person or persons for doing for him or them a like and contemporaneous service in the transportation of a like kind of traffic under substantially similar circumstances and conditions, such common carrier shall be deemed guilty of unjust discrimination, which is prohibited and declared to be unlawful." "§ 3, par. (1). "Undue preferences or prejudices prohibited It shall be unlawful for any common carrier subject to the provisions of this chapter to make, give, or cause any undue or unreasonable preference or advantage to any particular person, company, firm, corporation, association, locality, port, port district, gateway, transit point, region, district, territory, or any particular description of traffic, in any respect whatsoever; or to subject any particular person, company, firm, corporation, association, locality, port, port district, gateway, transit point, region, district, territory, or any particular description of traffic to any undue or unreasonable prejudice or disadvantage in any respect whatsoever: Provided, however, That this paragraph shall not be construed to apply to discrimination, prejudice, or disadvantage to the traffic of any other carrier of whatever description." "§ 15a. Fair return for carriers * * * * "(3) In a proceeding involving competition between carriers of different modes of transportation subject to this chapter and chapters 8, 12, 13 and 19 of this title, the Commission, in determining whether a rate is lower than a reasonable minimum rate, shall consider the facts and circumstances attending the movement of the traffic by the carrier or carriers to which the rate is applicable. Rates of a carrier shall not be held up to a particular level to protect the traffic of any other mode of transportation, giving due consideration to the objectives of the national transportation policy declared in this chapter and chapters 8, 12, 13 and 19 of this title.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527396/	618 S.W.2d 543 (1981) BIG THREE INDUSTRIES, INC., Petitioner, v. RAILROAD COMMISSION OF TEXAS et al., Respondents. No. B-9651. Supreme Court of Texas. April 29, 1981. Rehearing Denied July 8, 1981. 544 Anderson, Brown, Orn & Jones, Nelson Jones, Liddell, Sapp, Zivley, Brown & LaBoon, Robert J. King and William W. Ogden, Houston, Thomas Ausley, Austin, Orgain, Bell & Tucker, John G. Tucker, Paul W. Gertz and D. Allen Jones, Beaumont, for petitioner. Mark White, Atty. Gen., and J. Scott Wilson, Asst. Atty. Gen., Austin, Clyde A. Mote, Houston, Graves, Dougherty, Hearon & Moody, Dan Moody, Jr., Austin, for respondents. CAMPBELL, Justice. Big Three Industries sought a temporary injunction to enjoin enforcement of a Railroad Commission order allowing Amoco Gas Company to pass through its increased costs on gas obtained from Lo-Vaca Gathering Company. The trial court granted the temporary injunction. The Court of Civil Appeals reversed and vacated the temporary injunction. 601 S.W.2d 186. We reverse the judgment of the Court of Civil Appeals.[1] Big Three Industries, Inc. has a fixed price gas sales contract with Amoco Gas Company. Amoco buys part of the gas sold to Big Three from Lo-Vaca Gathering Company and its successors. Lo-Vaca filed a petition with the Railroad Commission of Texas seeking review and revision of Lo-Vaca's contracts with its customers and permission for gas cost adjustment in those contracts. The case between Lo-Vaca and its customers is known as Gas Utilities Docket No. 500.[2] Amoco intervened in Docket 500 seeking to flow-through to Amoco customers the increase in gas prices that it would have to pay Lo-Vaca upon entry of a final order in Docket No. 500. On August 7, 1978, the Railroad Commission severed from Docket 500 the question of Amoco's flow-through of costs to its customers. Amoco's flow-through to Big Three was later considered in Gas Utilities Docket No. 1702. The Railroad Commission order of June 18, 1979 in Docket 1702 provides: ACCORDINGLY, IT IS ORDERED by the Railroad Commission of Texas that: (1) Amoco shall flow through to and collect from customers, on a pro rata basis as set forth in Appendix A to this order, the increased natural gas costs, if any, to Amoco attributable to a Commission final order in Gas Utilities Docket 500, such flow-through to begin at the time such order may be entered in Gas Utilities Docket 500 ... Big Three Industries filed a motion for rehearing with the Railroad Commission in Docket 1702. The Railroad Commission overruled the motion and the first administrative appeal was filed in the district court of Travis County on August 20. On September 4, a final order of the Railroad Commission in Docket 500 allowed Lo-Vaca to flow-through its increased costs to Amoco. The order in Docket 500 provides, inter alia: 545 8. That each customer of Lo-Vaca which purchases natural gas for resale from Lo-Vaca (Lo-Vaca Gas) at the rate established by this Final Order (Resale Customer), or any amended or modified version thereof, is and shall be entitled to, and shall flow-through, charge, collect and retain on a pro rata basis OR OTHER BASIS AS THE COMMISSION MAY IN THE FUTURE DIRECT ... without liability on the part of such Resale Customer to its Secondary Lo-Vaca Customers to refund or in effect to refund (by offset against future collections or retentions or otherwise), TO THE EXTENT AND BY THE METHOD NOW OR HEREINAFTER REQUIRED OR PERMITTED BY COMMISSION ACTION OR CONTRACTUAL PROVISION THE INCREASED COSTS ATTRIBUTABLE TO THIS ORDER. (emphasis in the original.) On September 4, Big Three was granted a temporary restraining order preventing the flow-through in Docket 1702. On October 4, the Travis County district court temporarily enjoined enforcement of the flow-through in Docket 1702. The Court of Civil Appeals on January 30, 1980, held that the June 18 order in Docket 1702 was not a final order and vacated the temporary injunction. Railroad Commission v. Air Products and Chemicals, Inc., 594 S.W.2d 219 (Tex.Civ.App.Austin 1980, writ ref'd n.r. e.). That court held the order was not final because the order in Docket 1702 was contingent on future action in Docket 500. A final order was entered in Docket 500 after this appeal commenced. The Court of Civil Appeals suggested that Big Three seek a final order in Docket 1702. After the Court of Civil Appeals' opinion in the first appeal, Big Three filed additional motions for rehearing and motions for the entry of a final order in Docket 1702 in February 1980. The Railroad Commission took no action and the motions were overruled by operation of law. Art. 6252-13a, Section 16(e). Big Three filed this motion for rehearing in Docket 1702 nine days after the final order in Docket 500. Big Three requested the Railroad Commission to reconsider its action in Docket 1702 because of the final order in Docket 500. The Railroad Commission took no action and the motion for rehearing was overruled by operation of law on October 29, 1979. This second administrative appeal in Docket 1702 is the appeal before this Court. On February 20, 1980, Big Three was granted a temporary injunction in the second appeal enjoining the flow-through by Amoco of the gas price increases by Lo-Vaca. Amoco and the Railroad Commission again appealed. The Court of Civil Appeals vacated the temporary injunction, holding the June 18, 1979 order in Docket 1702 is not a final order, and that it did not become final by entry of the final order in Docket 500. 601 S.W.2d 186. The court suggested that Big Three's remedy is by mandamus if the Railroad Commission refuses to enter a final order in Docket 1702. Big Three filed no further motions with the Railroad Commission, but filed a motion for rehearing in the Court of Civil Appeals. Big Three also filed a Motion for Leave to File Petition for Writ of Mandamus to compel the Railroad Commission to enter a final order in Docket 1702. The motions were denied. Big Three has not attempted an administrative appeal from the final order in Docket 500. The Railroad Commission and Amoco contend that Big Three should be appealing the final order in Docket 500, and not Docket 1702. The Railroad Commission order severing Docket 1702 from Docket 500 provides: 7. That the issues raised during this proceeding relating to the flow-through of costs incurred pursuant to this order from Lone Star Gas Co. to Charter International Oil Co., Inc., and from AMOCO Gas Company to its customers Champion International, Inc., Big Three Industries, Inc., Air Products and Chemicals, Inc., Mobay Chemical Corp., Gulf Oil Corp., and Upjohn Co. are hereby severed from the disposition of this docket on final 546 order, without prejudice to the position of the Commission, the parties affected, or any other party to this or any other docket or proceeding. (emphasis in the original.) Amoco and the Railroad Commission contend this order severs only the issue of the pass-through from Amoco to Big Three, and Big Three and Amoco are still parties to Docket 500 because Big Three continued to monitor the Docket 500 proceedings. Amoco and the Railroad Commission also contend Big Three is actually complaining of Docket 500 because it provides for the flow-through to them of increased natural gas costs. Finally, they argue that under existing case law, the proper order to appeal is the last and final order of the administrative agency. Thus, they appear to be arguing that the parties and issues were not severed from Docket 500.[3] In dealing with Docket 500, the Railroad Commission has "severed" various issues and parties into separate dockets. The Railroad Commission has no express rules on severance of issues or dockets. There is nothing in the Administrative Procedure Act governing severance. In civil cases, either a separate trial of issues or a severance of causes may be ordered. With a separate trial of issues, there is only an interlocutory order determining claims or issues. All claims or issues are finally resolved with the entry of one final judgment. When there is a severance of causes, the lawsuit is divided into two or more independent causes, each of which terminates in a separate, final and enforceable judgment. Kansas University Endowment Association v. King, 162 Tex. 599, 350 S.W.2d 11 (1961). We hold the Commission intended to sever Docket 1702 from Docket 500 to create separate dockets because: (1) The final order in Docket 500 was not made contingent upon the resolution of Docket 1702 in the original order of severance, or at any later time. (2) An Amoco motion for consolidation of Dockets 1702 and 500 was denied by the Railroad Commission. The order stated: The issues to be dealt with in Docket 1702 involve relationships between Amoco Gas Company and its fixed price customers. The central issues in Gas Utilities Docket 500 which are of importance to Amoco Gas Company deal with the Company's relationship with Lo-Vaca Gathering Company and its affiliates and are not the same issues involved in this proceeding even though in some cases, common fact situations may be involved. (3) The Railroad Commission prevented Lo-Vaca Gathering Company from intervening in Docket 1702. The Commission stated "no issue involving the relationship between Lo-Vaca Gathering Company and Amoco Gas Company will be considered in Gas Utilities Docket No. 1702." (4) The Commission has not consolidated Dockets 500 and 1702. Amoco and the Railroad Commission contend there is no final order to appeal in Docket 1702. They argue the final order in Docket 500 cannot transform the non-final order in Docket 1702 into a final order. They contend the June 18, 1979 order in Docket 1702 always has been and always will be a non-appealable interim order. There are at least two kinds of non-final administrative orders. The first are interim orders, which by their terms, are to be superseded by a final order. These interim orders are not appealable. City of Corpus Christi v. Public Utility Commission, 572 S.W.2d 290 (Tex.1978); City of Corpus Christi v. Public Utility Commission, 569 S.W.2d 494 (Tex.1978); Lower Colorado 547 River Authority v. Coastal States Gas Producing Co., 551 S.W.2d 340 (Tex.1977). These cases involve interlocutory orders intended to be effective only until the final order. The Railroad Commission and Amoco contend the June 18 order is interlocutory. Big Three argues the Railroad Commission has determined all issues in Docket 1702 and that the only issue to be determined after the June 18 order was the increased cost Lo-Vaca was to pass through to Amoco. We agree with Big Three. The June 18 order in Docket 1702 does not recite that any further action will be taken, does not make provisions for refunds pending further action, and does not recite that it is either an interlocutory or interim order. The orders in the Corpus Christi and Lower Colorado River Authority cases stated in many places that they were "interim," "pending final decision" or "interlocutory." This distinguishes the June 18 order from those orders. The second group of administrative orders is expressly subject to, conditioned upon or contingent upon resolution of another matter. Mahon v. Vandygriff, 578 S.W.2d 144 (Tex.Civ.App.Austin 1979, writ ref'd n.r.e.); Walker Creek Homeowners Association of Ellis County v. Texas Department of Health Resources, 581 S.W.2d 196 (Tex.Civ.App.Austin 1979, no writ). In Walker Creek, the agency order granting a permit for operation of a sanitary landfill specified that it did not become operational until one of the parties submitted further plans with that department and those were approved. The Court of Civil Appeals held that this was more than a mere "self-reporting requirement" and the order was not yet final. In Mahon v. Vandygriff, five savings and loan associations applied to the Savings and Loan Commission to reorganize and merge. The Commissioner approved the merger conditioned upon receipt of a ruling from the Internal Revenue Service and receipt of a resolution from the Federal Home Loan Bank Board. The Court of Civil Appeals held the order was not final because it was contingent upon favorable action by the two federal agencies. However, the Mahon case is different from the present case because a subsequent order was issued by the Savings and Loan Commission stating that the conditions had been met, incorporating the prior order by reference, and stating that the merger was effective the following day. The real issue in Mahon was the prerequisites for the appeal. The only motion for rehearing was to the first and non-final order. No motion was filed to the second order. The Court of Civil Appeals held an appeal did not lie because there was no timely motion for rehearing. In the first appeal of this case, the Court of Civil Appeals followed Mahon and Walker Creek. It held that the order in Docket 1702 was not final and appealable because it was contingent on future action in Docket 500. Railroad Commission v. Air Products and Chemicals, Inc., 594 S.W.2d 219 (Tex.Civ.App.Austin 1980, writ ref'd n.r. e.). Unlike Mahon, the Railroad Commission entered no further order in Docket 1702. Big Three followed the holding of Mahon and filed a motion for rehearing in Docket 1702 after the entry of the final order in Docket 500. It requested the Railroad Commission to reconsider the June 18 order in Docket 1702 as affected by the final order in Docket 500. The Railroad Commission took no action, the motion was overruled as a matter of law after 45 days, and Big Three appealed to the district court of Travis County. The June 18 order in Docket 1702 is regular and final on its face other than being contingent on action in Docket 500. The order conforms with the Administrative Procedure Act, Article 6252-13a, Section 16 format for final orders.[4] The Railroad 548 Commission argues that it should be allowed to enter subsequent orders in Docket 1702. It has entered no orders since overruling the motions for rehearing to the June 18 order. Big Three has filed at least two motions for rehearing and a motion for entry of a final order since then. The Court of Civil Appeals held the entry of an order in Docket 500 cannot transform a non-final order in Docket 1702 into a final order. We disagree. Parties must be able to determine with reasonable certainty when an administrative proceeding becomes ripe for judicial review. We hold the June 18 order in Docket 1702, by its own terms, became final with the September 4 order in Docket 500. This appeal is from the granting of a temporary injunction by the trial court. We must determine if the trial court abused its discretion in granting the injunction. Davis v. Huey, 571 S.W.2d 859, 862 (Tex. 1978). Big Three must demonstrate that it is entitled to preservation of the status quo of the subject matter of the suit pending trial on the merits. The status quo is the last actual, peaceable, noncontested status which preceded the pending controversy or the status as it existed prior to the entry of the order by the Railroad Commission. Transport Co. of Texas v. Robertson Transports, 152 Tex. 551, 261 S.W.2d 549 (1953). Big Three argues that the Commission's June 18 order in Docket 1702 repudiates the standards set in High Plains Natural Gas Co. v. Railroad Commission, 467 S.W.2d 532 (Tex.Civ.App.Austin 1971, writ ref'd n. r. e.). Conclusion of Law 4 in the Commission's order states that its powers with respect to contract rates between parties under Article 6054 were "described, but not limited" in several cases including High Plains, supra; Houston Lighting & Power Company v. Railroad Commission, 529 S.W.2d 763 (Tex.1975); and Railroad Commission v. City of Austin, 524 S.W.2d 262 (Tex.1975). Big Three contends it is entitled to the temporary injunction because: (1) All notices and orders in Docket 1702 prior to the June 18 order stated the purpose of Docket 1702 was to determine if the High Plains test was met; (2) The June 18 order violates the Administrative Procedure Act because: (a) findings of fact were in conclusory terms; (b) the findings of fact set forth in statutory language were not accompanied by a statement of the underlying facts supporting the finding; and (c) matters outside of the record were "noticed" by the Commission without following the statutory procedure. (3) The June 18 order is defective because it is based on matters outside of the record in Docket 1702specifically on matters of record in Docket 500; (4) The June 18 order in Docket 1702 is not supported by substantial evidence; (5) Finding of Fact 4 is incorrect because it states that Amoco is "required" to purchase gas from Lo-Vaca when it can buy gas from anyone but must pay above its contract price for gas bought from Lo-Vaca; (6) Big Three could be required to pay up to $8,640 per day ($3,124,000 per year) above its contract price for gas under the Commission's orders; (7) Amoco Gas Company was operating at a loss prior to the June 18 order in Docket 1702; (8) Amoco may be unable to respond in damages or a refund if the order in Docket 1702 is overturned, leaving Big Three with no adequate remedy at law; (9) The injunction would not impose a greater hardship on Amoco than on Big Three. Eighty-two percent of 549 Amoco customers have contracts which determine price according to Amoco's costs. Big Three alleges that under the Commission's order in Docket 1702, the fixed price customers will pay 97% of the actual increased cost to Amoco for Lo-Vaca gas; (10) The Commission's calculations of Amoco's increased costs of Lo-Vaca gas are contested by Big Three. Temporary injunctive relief has been granted in economic regulation cases, even though the injury to be incurred was financial. Glen Oaks Utilities, Inc. v. City of Houston, 161 Tex. 417, 340 S.W.2d 783 (1960); Southern Union Gas Co. v. City of Port Neches, 544 S.W.2d 176 (Tex.Civ.App. Beaumont 1976, no writ). Without intruding on the merits of the underlying cause of action, it appears there is some basis for the trial court's judgment. We hold the trial court did not abuse its discretion in granting the temporary injunction. The judgment of the Court of Civil Appeals is reversed, the temporary injunction is reinstated, and the cause is remanded to the trial court for consideration of the merits. BARROW, J., concurs in the result of this opinion. ON MOTION FOR REHEARING Amoco Gas Company and the Railroad Commission have filed separate motions for rehearing. The motions primarily concern consideration by the trial court of the final (September 4, 1979) order in Docket 500. The final written order in Docket 500 was not physically made a part of the record in Docket 1702 before the Commission. The Railroad Commission objected to the introduction of the order at the hearing on the temporary injunction insisting the order should have been introduced at the agency level. Section 16(a) of the Administrative Procedure Act requires that a final decision be in writing or stated in the record. When, as here, the review is on the agency record, Section 19(d)(1) requires the agency to transmit the entire record (unless shortened by agreement) to the district court. The Commission does not contest the existence of a final order in Docket 500; it only asserts the order is not part of the record and is inadmissible in the trial court. The Commission specifically incorporated the final order in Docket 500 into the record in Docket 1702 by its June 18 order. However, it did not physically place the Docket 500 order in the record. The Commission cannot defeat appellate review by failing to include the final order or any other order properly a part of the record. Amoco argues that Big Three's first attempt to appeal the June 18, 1979 order in Docket 1702 deprived the Railroad Commission of jurisdiction to enter any further orders affecting Docket 1702. Thus, it argues we should remand this case to the Commission to enter a final order. An untimely appeal of an interlocutory order cannot deprive the Commission of jurisdiction. Railroad Commission v. Continental Bus System, Inc., 616 S.W.2d 179 (Tex.1981). The motions for rehearing are overruled. No further motions for rehearing will be entertained. NOTES [1] Air Products and Chemicals, Inc. and Champion International, Inc. were parties to this lawsuit. Both filed applications for writ of error and then settled with Amoco. Their applications for writ of error were dismissed. [2] The term "docket" is a contested case under the Administrative Procedure Act. Article 6252-13a, Section 3(2). [3] In the hearing before the trial court on the temporary injunction in this second appeal, the trial court stated: Well it seems to me that what you are saying is that the Commission can sever this issue out of 500 and set up a separate docket, and then somehow make it impossible to appeal the order that arises out of that docket. [4] One of Big Three's theories on the merits in this appeal is that the Railroad Commission order does not in fact comply with the statutory format because various findings of fact are not supported by evidence in the record. As this is an interlocutory appeal involving a temporary injunction, we express no opinion on the merits of the substantive content of the order; we only note that the order is in writing, contains separately stated findings of fact and conclusions of law, and is not expressly interlocutory.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527416/	357 B.R. 497 (2006) In re Ricky L. NOCKERTS and Geri L. Nockerts, Debtors. No. 06-24480-svk. United States Bankruptcy Court, E.D. Wisconsin. December 14, 2006. 498 499 John A. Foscato, Green Bay, WI, for Debtors. MEMORANDUM DECISION ON MOTION TO DISMISS SUSAN V. KELLEY, Bankruptcy Judge. The U.S. Trustee has moved to dismiss this case based on a presumption of abuse under Bankruptcy Code § 707(b)(2) or as an abuse under § 707(b)(3). This chapter 7 case was filed on August 15, 2006, and is governed by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA). The parties have stipulated to most of the facts. The Debtors are "above-median" debtors; their annualized current monthly income is $82,131, which exceeds the Wisconsin median of $60,106 for a family of three. Accordingly, in BAPCPA jargon, the Debtors must pass the "means test" in order to qualify for chapter 7 relief. The means test is codified in the provisions of § 707(b)(2) and the calculations are performed on Official Form B22A. Under § 707(b)(2)(A), the case will be presumed an abuse unless the debtor passes the means test or successfully rebuts the presumption of abuse by showing special circumstances, and then only to the extent that those circumstances are proven to justify additional expenses or adjustments. Section 707(b)(2)(A) states that the Court shall presume that the debtor's case is an abuse of chapter 7 if the debtor's current monthly income, less the amounts deductible under § 707(b)(2)(A)(ii), (iii) and (iv), over a 60-month period, equals or exceeds the lesser of (A) 25% of the nonpriority unsecured claims in the case or $6,000, whichever is greater; or (B) $10,000. In this case, 25% of the Debtors' general unsecured claims exceeds $11,500; therefore, $10,000 is the lesser amount, and serves as the threshold for determining whether a presumption of abuse arises. If, after subtracting the allowable deductions found in § 707(b)(2)(A)(ii), (iii) and (iv), the Debtors' current monthly income exceeds $167 ($10,000 ÷ 60), the Court must presume that the case is an abuse of chapter 7 of the Bankruptcy Code. The Debtors' Amended Form B22A shows that their monthly income is $6,844.30 and their total monthly deductions total $8,625.56, so that the bottom line is a negative number. However, the U.S. Trustee takes issue with certain deductions claimed by the Debtors. Specifically, the U.S. Trustee focuses on § 707(b)(2)(A)(iii) which allows a debtor to deduct "average monthly payments on account of secured debts." That section provides: The debtor's average monthly payments on, account of secured debts shall be calculated as the sum of (I) the total of all amounts scheduled as contractually due to secured creditors in each month of the 60 months following the date of the petition; and (II) any additional payments to secured creditors necessary for the debtor, in filing a plan under chapter 13 of this title, to maintain possession of the debtor's primary residence, motor vehicle, or other property necessary for the support of the debtor and the debtor's dependents, that serves as collateral for secured debts; divided by 60. Question 42 of Form B22A, entitled "Future payments on secured claims" corresponds to this portion of the statute, and asks debtors to list the average monthly payments "due to each Secured Creditor in the 60 months following the filing of the bankruptcy case, divided by 60." In response 500 to this Question, the Debtors listed three amounts: $2,839.00 monthly for two mortgages on their homestead; $59.40 monthly for their 2003 Chevy Avalanche; and $133.40 monthly for their 2004 Pontiac Bonneville. The U.S. Trustee's Motion to Dismiss asserts that according to the Debtors' testimony at the § 341 meeting, the Debtors are not reaffirming the mortgage debts on their homestead, are not making the monthly payment on the mortgages and intend to surrender the homestead to the secured creditors. The Debtors may not therefore "claim a Line 42 deduction for payments on collateral that they intend to surrender," since they "were not making this payment at the time they filed their bankruptcy petition and will not make this payment in the future." If this deduction is allowed, and the Debtors therefore pass the means test, the U.S. Trustee contends that their case should be dismissed under § 707(b)(3)(B), because the totality of the circumstances of the Debtors' financial situation demonstrates abuse. The Debtors objected to the Motion, and after a hearing, the Court took the matter under advisement. This Memorandum Decision constitutes the Court's findings of fact and conclusions of law. The first issue in this case is the construction of the words "scheduled as contractually due," found in § 707(b)(2)(A)(iii). The U.S. Trustee argues that this language allows a means test deduction only if the Debtors are actually making the monthly payment, and only if the Debtors intend to retain the collateral securing the debt. In the absence of an actual monthly payment, the U.S. Trustee contends that a debtor should list the appropriate IRS allowances, as described in § 707(b)(2)(A)(ii)(I). The Debtors, however, urge a plain reading of the statute, and assert that "scheduled as contractually due" means that a debtor may list a payment that the debtor is contractually obligated to make as of the date of the petition, regardless of what the debtor intends to do with the property. The few courts that have decided this issue are evenly divided. The earliest case, In re Walker, 2006 WL 1314125 (Bankr.N.D.Ga. May 1, 2006), supports the Debtors' argument. There, chapter 7 debtors included in their means test calculations a deduction for average monthly payments on property they intended to surrender at the time of filing. Id. at 1. The U.S. Trustee filed a motion to dismiss arguing that debtors should not be able to deduct an expense when they have no intention of making those payments in the future. The Walker court applied a "plain meaning" rule in interpreting the statute, and determined that the common meaning of the words "scheduled as contractually due" is "those payments that the debtor will be required to make on certain dates in the future under the contract." Id. at 3. As a result of this interpretation, "nothing the debtor does or does not do changes the fact that scheduled payments remain contractually due." Id. at 4. The date of the petition is the applicable time frame to apply the means test, because the statute requires a determination of "how many payments are owed under the contract for each secured debt at the time of filing:" Id. Since the debtors were contractually obligated to make payments on the date they filed for bankruptcy, the court allowed the deduction. See also In re Oliver, 2006 WL 2086691 (Bankr.D.Or. June 29, 2006). The court faced the same issue in In re Singletary, 2006 WL 2987945 (Bankr. S.D.Tex. Oct.19, 2006), where chapter 7 debtors deducted future payments on their house and vehicle, but also filed a statement of intention indicating they were going 501 to surrender the property. Id. at 5. In analyzing § 707(b)(2)(A)(iii), the court first noted that the means test is both backward-and forward-looking at the same time. Id. at 6. Following Fifth Circuit precedent established in In re Cortez, 457 F.3d 448 (5th Cir.2006), the Singletary court rejected the "snapshot" approach embraced by Walker. Because Cortez requires a court to "consider post-petition events in deciding whether to dismiss a case for substantial abuse under § 707(b)," the Singletary court determined it could not examine the means test strictly as of the filing date. Id. at 7 (quoting Cortez, 457 F.3d at 450). However, the court determined that a debtor would be able to deduct future expenses even if the debtor intended to surrender the property, as long as the property had not actually been surrendered as of the date the § 707(b) motion to dismiss was filed. Id. at * 15. Although this Court is not bound by Cortez, and the Seventh Circuit has no similar precedent, the decision warrants consideration. In Cortez, a pre-BAPCPA case, the debtor had been unemployed on the date of the bankruptcy filing, but four days later found employment at an annual salary of $95,000. The Fifth Circuit held that "post-petition events should be considered up until the date of discharge," and that a bankruptcy court "should consider any post-petition events affecting [the debtor's] financial situation, including any post-petition improvements in income, or if still applicable, . . . unemployment." 457 F.3d at 454. In considering the language of the prior statute, which conditioned dismissal on a finding "that the granting of relief would be a substantial abuse of the provisions of this chapter," the court focused on the phrase "granting of relief," reasoning that the relief was actually the chapter 7 discharge. Therefore, depending on what events occurred during the case, a substantial abuse could occur at any point up to the discharge. Id. at 455. In Singletary, although the debtors had listed both the house and a vehicle on their statement of intention, only the vehicle had been surrendered as of the date of the U.S. Trustee's § 707(b) motion, and therefore, the debtors' home mortgage payments were properly deductible on the means test, but the vehicle payments were not. The problem with basing a BAPCPA means test analysis on Cortez-style reasoning is that, although the "granting of relief" language did not change, nearly everything else about § 707(b) did. Section 707(b)(2)(A)(iii)(I) now specifically refers to "the total of all amounts scheduled as contractually due to secured creditors in each month of the 60 months following the date of the petition." (Emphasis added). Further, § 707(b)(2)(A)(ii)(I) expressly requires that a debtor calculate expenses "as in effect on the date of the order for relief." The statute governing Cortez lacked such explicit and undeniable references to the date of the petition. Removing the Cortez-based focus on post-petition events from Singletary's analysis, this Court agrees with the result: based on the plain language of the statute, when completing Form B22A, a chapter 7 debtor may deduct future payments on secured debts that are contractually due as of the date of the petition, including debts for mortgages on property to be surrendered, as long as the debtor has not surrendered the collateral as of the petition date. The U.S. Trustee disagrees with Walker and Singletary, and relies on In re Skaggs, 349 B.R. 594 (Bankr.E.D.Mo.2006), and In re Harris, 2006 WL 2933891 (Bankr. E.D.Okla. Oct.13, 2006). In Skaggs, chapter 7 debtors included in their means test calculation deductions for "average monthly expenses" on debts where the property was going to be surrendered or where the 502 lien was going to be avoided. 349 B.R. at 598. The U.S. Trustee contended that since the debtors would not actually have payments on these debts, these amounts should not be deducted from the means test calculation; the debtors argued that the plain language of the statute would allow them to make this deduction regardless of their intention to surrender the collateral or avoid the liens. Id. The Skaggs court first noted that "[i]n interpreting one part of a statute, we must not be guided by a single sentence or member of a sentence, but look to the provisions of the whole law, and to its object and policy." Id. at 599 (quoting Philbrook v. Glodgett, 421 U.S. 707, 713, 95 S. Ct. 1893, 44 L. Ed. 2d 525 (1975)). The court then took issue with Walker's resort to the common usage definition of "scheduled as contractually due," and combed the text of the Bankruptcy Code for instances where Congress used the phrase "scheduled as." Id. This interpretation convinced the court that "scheduled as" was intended to "refer not to the common dictionary meaning for the word schedule (i.e., `to plan for a certain date'), but to whether a debt is identified on a debtor's bankruptcy schedules." Id. However, although the Bankruptcy Code uses the phrase "scheduled as contractually due" only once (in § 707(b)(2)(A)(iii)), it also uses the phrase "scheduled as" only one timein § 1111(a), which provides: "A proof of claim or interest is deemed filed under section 501 of this title for any claim or interest that appears in the schedules filed under section 521(1)[1] or 1106(a)(2) of this title, except a claim or interest that is scheduled as disputed, contingent, or unliquidated." (Emphasis added). While it is readily apparent from the highlighted terms and the context of the section that § 1111(a) is referring to the bankruptcy schedules, there is no similar reference or apparent context in § 707(b)(2)(A)(iii). Broadening the review to include the Bankruptcy Code's references to a claim or debt being "scheduled" turns up two provisions that obviously mean "listed on the bankruptcy schedules": § 523(a)(3) (discharge of a debt that is "neither listed nor scheduled under section 521(1)"); and § 554(c) (deemed abandonment of property "scheduled under section 521(1)"), and two provisions that equally obviously do not: § 524(k)(3)(H)(ii) (suggested reaffirmation agreement language "describing the repayment schedule with the number, amount, and due dates or period of payments scheduled to repay the debts reaffirmed to the extent then known by the disclosing party"); and § 1326(a)(1)(B) (debtor shall make pre-confirmation payments "scheduled in a lease of personal property directly to the lessor"). This exercise in statutory analysis compels the conclusion that "scheduled as contractually due" does not refer to the bankruptcy schedules. When describing the bankruptcy schedules, Congress included in the statute a reference to the schedules, either directly by name or indirectly by reference to § 521, the provision that requires the debtor to file bankruptcy schedules.[2] On the other hand, when the statute refers to scheduled payments, such as in the reaffirmation or pre-confirmation lease provision, the bankruptcy schedules are not mentioned.[3]503 Accordingly, this Court respectfully disagrees with Skaggs that § 707(b)(2)(A)(iii) is referring to the listing of the debt in the bankruptcy schedules. In addition to Skaggs, the U.S. Trustee relies on Harris, a case rejecting Walker's reasoning, and holding that the analysis in Skaggs produces a result in line with Congressional intent in enacting BAPCPA: "The means test was intended to `ensure that those who can afford to repay some portion of their unsecured debts [be] required to do so.'" Harris, 2006 WL 2933891, at 5 (quoting In re Hardacre, 338 B.R. 718, 725 (Bankr.N.D.Tex.2006)). However, when applying an arbitrary test like the means test, which substitutes formulaic calculations for judicial discretion, resort to the "spirit" of the law is inappropriate and leads to misapplication of the statute. As illustrated by the court in In re Hartwick, A debtor with a $7,000.00 monthly mortgage payment and $2,000.00 in combined vehicle payments on a Hummer and Lexus escapes the presumption of abuse. Another debtor in the same locale with a mortgage payment $392.00 per month more than the Local Standard monthly housing allowed amount of $1,033.00, who plans to give up the home post-petition, and who owns a modest older vehicle debt free, should be denied the actual housing cost at filing deduction and the car ownership expense $427.00, suffering the presumption of abuse? How does the first example serve the gate-keeping purpose of keeping debtors who can afford to pay a portion of their debts out of Chapter 7? How does the second example? Not so apparent. What to do? Nothing. Application of the means test is not left by the BAPCPA legislation to judicial discretion. 352 B.R. 867, 870 (Bankr.D.Minn.2006) (footnotes omitted). While the means test may not function perfectly, as noted in Hartwick, courts should apply the means test as it was constructed and should not attempt to tamper with it to achieve a particular result in a particular case. The Walker court's interpretation of § 707(b)(2)(A)(iii) is correct for two more reasons. First, because "a court should give effect, if possible, to every clause and word of a statute," Moskal v. U.S., 498 U.S. 103, 109-110, 111 S. Ct. 461, 112 L. Ed. 2d 449 (1990), the distinction between subsections (I) and (II) of § 707(b)(2)(A)(iii) is noteworthy. While subsection (I) refers generally to "amounts scheduled as contractually due," subsection (II) is much more specific. That section refers to payments "necessary to maintain possession of the debtor's primary residence, motor vehicle, or other property necessary for the support of the debtor and the debtor's dependants, that serves as collateral for secured debts." 11 U.S.C. § 707(b)(2)(A)(iii)(II). Under the "negative pregnant" rule of statutory construction, "[w]here Congress includes particular language in one section of a statute but omits it in another section of the same Act, it is generally presumed that Congress acts intentionally and purposely in the disparate inclusion or exclusion." Gozlon-Peretz v. United States, 498 U.S. 395, 404, 111 S. Ct. 840, 112 L. Ed. 2d 919 (1991) (internal 504 quotations omitted). Subsection II allows the deduction of certain "additional payments," specifically that would allow a chapter 13 debtor to keep necessary property. Congress's failure to limit subsection (I) with such specific, explicit qualifiers, such as "estimate of actual payments on property to be retained by the debtor," is evidence of Congress's failure to intend that result. It follows that scheduled payments on all secured debts are included under subsection (I), regardless of whether the debtor needs the property or will sur render the property. Finally, using a "snapshot" view of the debtor's expenses on the date of filing makes sense in the context of a chapter 7 case. The distinction between application of the means test in chapter 7 and chapter 13 (where above-median debtors use the means test to determine the disposable income necessary to fund the plan) is explained by the court in In re Crittendon, 2006 WL 2547102, 2006 Bankr.LEXIS 2172 (Bankr.M.D.N.C. Sept. 1, 2006). There, a chapter 13 debtor attempted to claim the same types of deductions as the Debtors here, subtracting average monthly expenses on a house that had been sold after the date of the petition. The chapter 13 trustee objected to confirmation of the debtor's plan. The court explained: The Debtors argue that section 707(b)(2)(A)(iii), in plain language, specifically allows a deduction for "the total of all amounts scheduled as contractually due to secured creditors" and does not condition such calculation on whether the collateral is retained by the debtors after the case is commenced. According to the Debtors, the means test contained in section 707(b)(2) is a "backward looking test" which is designed to measure the debtor's financial condition at the time of filing, and to determine whether at that time the debtor is in need of bankruptcy relief, On that basis, the Debtors conclude that a surrender of collateral after the commencement of the case is inconsequential. Debtors' argument may be correct in the context of a chapter 7 case in which the court is called upon to determine whether the granting of relief would be an abuse of the provisions of chapter 7. In that context, the application of the provisions of section 707(b)(2) involves a snapshot evaluation of the debtor's financial condition on the petition date such that a surrender of collateral arguably may be irrelevant and inconsequential. However, the situation presented by a section 1325(b) objection in a chapter 13 case is materially different because the timing of the application of section 707(b)(2)(A) and (B) is different in the chapter 13 case. Id. at 2006 WL 2547102, 2, 2006 Bankr.LEXIS 2172, 7-9. This difference is critical to understanding the purpose of the means test in a chapter 7 case, interpreting the complicated (and sometimes arbitrary) calculations that comprise it, and establishing a meaningful application of its provisions. The means test is statutorily defined as a mechanism for determining whether a presumption of abuse arises in a chapter 7 case, 11 U.S.C. § 707(b)(2)(A)(i), with reference to expenses "as in effect on the date of the order for relief," id. § 707(b)(2)(A)(ii)(I). The test is better described as a "snapshot" on the petition date rather than an evolving progress report on the debtor's finances. In this case, according to the Stipulation of the parties, the Debtors had made mortgage payments as late as July 2006. Their petition was filed in August 2006. Although they did not intend to reaffirm the mortgage debts, on the date of the petition (and even as of the date of the 505 U.S. Trustee's Motion to Dismiss), they had not surrendered the homestead. Neither had any other event occurred that would have relieved the Debtors of their contractual obligations to make the scheduled mortgage payments, such as a foreclosure judgment or sale of the property.[4] Therefore, the payments on their mortgages were still "scheduled as contractually due" on the date of the petition. Accordingly, these payments were appropriately deducted from the Debtors' current monthly income in performing the means test calculations, the presumption of abuse does not arise, and the U.S. Trustee's Motion to Dismiss under § 707(b)(2) is denied. The U.S. Trustee alternatively contends that the Debtors' case should be dismissed as an abuse under the "totality of circumstances" test of § 707(b)(3). That section of the Bankruptcy Code states: In considering under paragraph (1) whether the granting of relief would be an abuse of the provisions of this chapter in a case in which the presumption in subparagraph (A)(i) of such paragraph[5] does not arise or is rebutted, the court shall consider (A) whether the debtor filed the petition in bad faith; or (B) the totality of the circumstances (including whether the debtor seeks to reject a personal services contract and the financial need for such rejection as sought by the debtor) of the debtor's financial situation demonstrates abuse. Unlike when proceeding under § 707(b)(2), the U.S. Trustee does not enjoy the benefit of a presumption of abuse when pursuing a § 707(b)(3) motion. To succeed, the U.S. Trustee must prove that the debtor filed the case in bad faith or that the totality of the circumstances of the debtor's financial situation demonstrates abuse. The "totality of circumstances" test has its roots in pre-BAPCPA law. Although the Seventh Circuit Court of Appeals had not weighed in on the issue, a District Court in this Circuit analyzed the case law in In re Ontiveros, 198 B.R. 284 (C.D.Ill.1996). The court explained that in ruling on "substantial abuse" motions under the prior version of § 707(b), the circuit courts devised three main approaches: (1) the per se rule of the Eighth and Ninth Circuits under which the debtor's ability to pay his debts, standing alone, justified dismissal; (2) the totality of the circumstances test of the Fourth Circuit which required a showing of more than an ability to pay; and (3) the hybrid approach of the Sixth Circuit which permitted the dismissal based on ability to pay alone, but also allowed the debtor to demonstrate mitigating circumstances. Id. at 287. The means test of § 707(b)(2) appears to be a codification of the per se rule, with its presumption of abuse for debtors who have the ability to pay based on application of the means test formula. The Fourth Circuit's "totality of the circumstances" test was adopted by name in BAPCPA § 707(b)(3)(B), suggesting that something other than an ability to pay is required to succeed on a Motion to Dismiss under this 506 section. Further, as illustrated in Ontiveros, examining the "totality" of the circumstances suggests considering more than one factor (i.e., ability to pay). In Green v. Staples (In re Green), the Fourth Circuit Court of Appeals held that other factors must be considered in addition to the debtor's ability to fund a chapter 13 plan: The "totality of the circumstances" approach involves an evaluation of factors such as the following: (1) Whether the bankruptcy petition was filed because of sudden illness, calamity, disability, or unemployment; (2) Whether the debtor incurred cash advances and made consumer purchases far in excess of his ability to repay; (3) Whether the debtor's proposed family budget is excessive or unreasonable; (4) Whether the debtor's schedules and statement of current income and expenses reasonably and accurately reflect the true financial condition; and (5) Whether the petition was filed in good faith. 934 F.2d 568, 572 (4th Cir.1991). The Fourth Circuit rejected the notion that ability to pay alone is cause for dismissal as a substantial abuse of chapter 7. Id. Interpreting the § 707(b)(3) test as requiring proof of more than the ability to fund a chapter 13 plan gives appropriate weight to the statutory means test, which is, after all, the Congressional formula for determining ability to pay. To apply the means test, dislike the result, and then examine the debtor's ability to fund a chapter 13 plan under § 707(b)(3), renders the means test "surplusage." For example, line 22 of Form B22A allows a debtor to deduct local standards for transportation, vehicle operation or public transportation. According to Form B22A, these expenses are deductible regardless of whether the debtor pays the expenses of operating a vehicle and regardless of whether the debtor uses public transportation. Debtors in this area can deduct $358 for operating two or more vehicles. If the Schedule J discloses that the debtor was paying significantly less to operate the vehicles (for example, if the debtor was a little old above-median income lady who only drove the vehicles to church on Sunday), it would not appear appropriate for the U.S. Trustee to move for dismissal under §' 707(b)(3) solely because the debtor had the ability to use the excess income to fund a chapter 13 plan. To perform the means test and then perform another means test that is more to the U.S. Trustee's liking ignores the plain language of the statute and would be a waste of judicial resources. In In re Deaton, discussing why the "totality of circumstances" test must include more than a simple calculation of the debtor's ability to fund a chapter 13 plan, the court reviewed the legislative history of the "substantial abuse" provision and stated: If Congress had intended to institute a system of mandatory Chapter 13, it would have had no difficulty in saying so in direct, explicit language. Congress rejected this proposal, at least in part, because its adoption would have laid an unbearable burden on the bankruptcy court system as presently constituted. That system depends for its viability upon the administrative disposition without significant intervention by the bankruptcy judge, of the great bulk of consumer Chapter 7 cases. To require that official to review every Chapter 7 consumer case and make the kind of careful determination required in determining whether a successful Chapter 13 case could be maintained by the debtor, would call for a great expansion of manpower, 507 and consequent expense, in the bankruptcy court system. 65 B.R. 663, 665 (Bankr.S.D.Ohio 1986). This Court is not suggesting that the debtor's ability to pay should not be considered as a factor in the "totality of the circumstances" test, or that passing the means test ends the inquiry. For example, where debtors have "manipulated" the means test, the case should be dismissed under § 707(b)(3). As Judge Wedoff explained in Means Testing in the New § 707(b): Thus, for purposes of the means test, debt secured even by such items as luxury vehicles, pleasure boats, and vacation homes would be deductible. Moreover, under a plain language analysis, the balance of a balloon mortgage that became contractually due during the five years after the bankruptcy filing-and perhaps even the total balance due on a defaulted mortgage that had been contractually acceleratedwould be entirely deductible. However, if deductions of this sort allowed a wealthy debtor to avoid the presumption of abuse under the means test, an abuse might still be found in consideration of the "the totality of the circumstances . . . of the debtor's financial situation" pursuant to 707(b)(3). 79 Am. Bankr.L.J. 231, 273 (Spring 2005). Moreover, the cases that have granted § 707(b)(3) "totality of the circumstances" motions based on a debtor's ability to pay are distinguishable from this one. In re Paret, 347 B.R. 12 (Bankr.D.Del.2006), In re Pennington, 348 B.R. 647 (Bankr.D.Del. 2006), and In re Pak, 343 B.R. 239 (Bankr. N.D.Cal.2006), all involved below-median income debtors. Accordingly, the courts in those cases, limited by § 707(b)(7), were prohibited from subjecting those debtors to the means test under § 707(b)(2). Since no means test was performed, an inquiry into the debtors' ability to pay was rightly conducted, for the first time. Here, the Debtors have already undergone-and passed-the means test. As § 707(b)(3) states, the court shall consider the totality of the circumstances "in a case in which the presumption . . . does not arise [ (i.e., the debtor passed the means test) ] or is rebutted [ (i.e., the debtor failed the means test, but provided a sufficient explanation) ]." This language suggests that an inquiry into a debtor's financial situation requires an inquiry into more than what is tested in the means test. Under the pre-BAPCPA totality of the circumstances test, proof of more than just an ability to fund a chapter 13 plan was needed to demonstrate "substantial abuse."[6]Green, 934 F.2d at 572. Stated another way, while ability to pay is a factor in the totality of circumstances test, and may even be the primary factor to be considered, if it is the only indicia of abuse, the case should not be dismissed under that test. Given the detailed nature of the means test in § 707(b)(2), this Court holds that similar to the old totality of the circumstances test, more than an ability to pay (as shown on the debtor's Schedule I and J) must be shown to demonstrate, abuse under § 707(b)(3)(B). This additional evidence may include the Green factors, 508 or may point to a manipulation of the means test as illustrated by Judge Wedoff's s article.[7] In this case, the parties focused almost exclusively on § 707(b)(2), and very little evidence was introduced at the hearing relating to the totality of the circumstances test under § 707(b)(3). Before the Court can decide whether the totality of the circumstances illustrates abuse and warrants dismissal of the Debtors' case, the parties must improve the record and support their § 707(b)(3) arguments. The Court will schedule a hearing at which the U.S. Trustee will be allowed to establish that additional factors warrant dismissal, and the Debtors will be allowed to establish any mitigating factors that would suggest this case is not an abuse of chapter 7 under the totality of the circumstances. NOTES [1] There is no section 521(1) after BAPCPA. Presumably the reference is to § 521(a)(1). [2] The only exception appears in § 523(a)(10), but reference to the bankruptcy schedules is abundantly clear: "that was or could have been listed or scheduled by the debtor in a prior case concerning the debtor under this title or under the Bankruptcy Act in which the debtor waived discharge." [3] The legislative history does not suggest that § 707(b)(2)(A)(iii) is referring to the bankruptcy schedules. In describing the means test, the House Report states that the debtor is allowed to deduct "the debtor's average monthly payments on account of secured debts, including any additional payments to secured creditors that a chapter 13 debtor must make to retain possession of a debtor's primary residence, motor vehicle, or other property necessary for the support of the debtor and the debtor's dependents that collateralizes such debts." H.R.Rep. No. 109-31, pt. 1, at 12 (2005). [4] Presumably at some point in the foreclosure process under Wisconsin law, the payments on a mortgage debt could no longer be considered scheduled as contractually due. That issue is not before the Court in this case. [5] Although it appears that "such paragraph" refers to "paragraph (1)," § 707(b)(1)(A)(i) does not exist. The presumption referred to in § 707(b)(3) most logically refers to the presumption in § 707(b)(2)(A)(i). [6] It should be noted that pre-BAPCPA "substantial abuse" and BAPCPA "abuse" are, so far, virtually the same. As Collier on Bankruptcy observes: "The 2005 amendments also changed the standard for dismissal from `substantial abuse' to `abuse.' It is unclear how much impact this will have; few, if any, courts permitted a chapter 7 case to proceed because they found it to be an abuse, but not a substantial abuse, under prior law. If courts found cases to be abusive under the totality of the circumstances, those cases were dismissed". 6 Alan N. Resnick & Henry J. Somer, Collier on Bankruptcy ¶ 707.05[1] (15th ed. rev.2006). [7] In another article, Judicial Discretion to Find Abuse Under § 707(b)(3), Judge Wedoff paints an even more drastic example of manipulation of the means test, in which a wealthy CEO is unemployed for the 6 months prior to the petition, and then becomes reemployed. This Court agrees that such a case should be dismissed under § 707(b)(3), even though the debtor's case is not a presumed abuse under the means test. 25 Am. Bankr. Inst. J. 1 (April 2006).	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527411/	357 B.R. 250 (2006) In re Petition of Zoran MILOVANOVIC, as Liquidator of Jugoscovenska Izovzna I Kreditna Banka a/k/a Jik Banka, a/k/a Yugoslav Export & Credit Bank, Debtor in Foreign Proceedings. No. 03-40940 (ALG). United States Bankruptcy Court, S.D. New York. November 30, 2006. 251 Healy & Baillie, LLP, by Jeremy J.O. Harwood, Jack A. Greenbaum, New York, NY, for Petitioner. Barnes & Thornburg, LLP, by Kevin C. Driscoll, Michael B. Watkins, Chicago, IL, for Nugent Establishment Industrie F.L. MEMORANDUM OF DECISION AND ORDER ALLAN L. GROPPER, Bankruptcy Judge. Jugoscovenska Izovzna i Kreditna Banka, a/k/a JIK Banka, a/k/a Yugoslav Export & Credit Bank (the "Debtor") was a bank organized in the former Federal Republic of Yugoslavia, now the Republics of Serbia and Montenegro. Pursuant to local insolvency law, the Debtor was placed into liquidation proceedings on July 26, 2000, and on December 29, 2000, Zoran Milovanovic 252 (the "Petitioner") was appointed as the Debtor's liquidator by the Commercial Court of Belgrade. On April 17, 2003, acting in that capacity, Milovanovic filed a petition under § 304 of the Bankruptcy Code, seeking recognition of the foreign insolvency proceeding and an injunction to restrain the disposition of approximately $848,000 in the United States allegedly belonging to the Debtor.[1] The Petitioner also sought to have those funds and any other property of the Debtor in the United States transmitted abroad for administration in the foreign insolvency proceedings. The § 304 petition was opposed by Nugent Establishment Industrie, F.L. ("Nugent"), a Lichtenstein corporation that had obtained a default judgment from the New York Supreme Court against JIK Banka in 1998 in the amount of approximately $2,500,000. It is not contested that Nugent's judgment was based on a letter of credit that JIK Banka had failed to honor, apparently because on May 30, 1992, the President of the United States blocked the property in the United States of all nationals of what was then the Federal Republic of Yugoslavia. (Nugent Mem. of Law p. 3, citing Executive Order 12808.) In February 2003, when the freeze was lifted, Nugent executed on the judgment, and the Debtor's funds on deposit in the United States were garnished by the New York City Sheriff. (Nugent Resp. to Petitioner's Statement of Material Facts, ¶ 5.) This § 304 proceeding followed, and the funds were placed in the registry of this Court pending further proceedings. Nugent opposed the § 304 petition on grounds that Milovanovic was not a valid "foreign representative," as defined in § 101(24) of the Bankruptcy Code, and that Serbian law was not entitled to recognition under § 304. On November 26, 2003, this Court issued a written decision finding that the Petitioner was entitled to recognition as the foreign representative of the Debtor and that further proceedings would be required in order to apply the factors set forth in § 304 and determine whether the proceedings in Belgrade were entitled to recognition. There is now before the court a motion for summary judgment on the § 304 issues filed by a successor to the original petitioner. Nugent opposes the motion and seeks dismissal of the § 304 petition entirely, or, in the alternative, for the Court to continue the status quo pending further factual determinations. (Resp. to Mot. For Summ. J. at 15.) Nugent makes three arguments in opposition to the motion for summary judgment.[2] 253 The Petitioner's Status as "Foreign Representative" Nugent's first point is that the original petitioner herein, Zoran Milovanovic, has been replaced and that the insolvency proceedings in Belgrade have changed from a liquidation to a bankruptcy. There is no dispute that Milovanovic was replaced as liquidator, and there is no real dispute that he was succeeded, first by an individual named Zivulovic, and then, due to a change in the law, by two governmental agencies, initially the Agency for Deposit Insurance, Rehabilitation, Bankruptcy and Liquidation of Banks and then by the Agency for Deposit Insurance.[3] However, aside from raising the issue and expressing uncertainty as to the identity of the Petitioner, Nugent did not contravene the showing made on behalf of the Petitioner that the Agency for Deposit Insurance is now the insolvency representative for the Debtor, and the succession has been fully explained in the declarations of Miulorad Dzambic, sole director of the Agency for Deposit Insurance, and Luka Andric, a Serbian attorney. In its initial response to the § 304 petition, Nugent also attempted to raise issues as to the capacity of the liquidator as foreign representative, and these were rejected in the Court's prior opinion. Nugent's vague contentions of uncertainty do not raise a triable issue of fact on this record, especially as Nugent has fully participated in the Serbian insolvency proceedings and has had its claim recognized there. Nugent also points out that the title to the proceedings in Belgrade has changed from "liquidation" to "bankruptcy" and that the Agency for Deposit Insurance is now a bankruptcy administrator. As Serbian law was explained in the Andric Declaration, a liquidation proceeding is converted to a bankruptcy case when it is known that the debtor has insufficient funds to provide a 100% recovery to its creditors. (Andric Decl. at 3.) The fact that liquidation may follow other proceedings is well-known in American bankruptcy law, where reorganization proceedings may be converted to a chapter 7 liquidation for many reasons. See, e.g., 11 U.S.C. § 1112. The fact that the proceedings have been converted provides no reason for refusing to recognize the ongoing case in Belgrade. The Court will order the substitution in connection with the final § 304 order in accordance with § 304(b)(3), which permits the Court to grant "other appropriate relief," and (by analogy) Bankruptcy Rule 2012, which provides for the automatic substitution of a successor trustee when a trustee ceases to hold office during a case under the Bankruptcy Code. Treatment of Letters of Credit under Serbian Law Nugent's second objection is that Serbian law should not be afforded recognition 254 by means of an order under § 304 because it does not appropriately treat letters of credit. (Resp. to Mot. for Summ. J. at 8-11.) Therefore, Nugent contends, § 304(c)(1), which requires "just treatment of all holders of claims," would not be satisfied if the funds in the United States were repatriated to Serbia. Nugent relies upon Murphy v. FDIC, 38 F.3d 1490 (9th Cir.1994), to support its contention that letters of credit must be treated preferentially in an insolvency proceeding. In Murphy, a U.S. bank issued, possibly illegally, a letter of credit. 38 F.3d at 1501. When the bank subsequently failed, the Court held that the possibility of illegality did not void the letter of credit since, among other things, its beneficiary was not aware of any wrongdoing. Murphy, 38 F.3d at 1503. However, the court in Murphy did not hold that letters of credit receive a priority payout in a bank insolvency proceeding or a Bankruptcy Code proceeding; rather, it held that "a letter of credit remains enforceable despite irregularities in the underlying transaction." Id. at 1502. Nugent has cited no authority that the beneficiary of a letter of credit issued by an insolvent entity has a priority claim on the assets of that entity. The Court recognizes the fundamental role letters of credit play in international business transactions. However, Nugent has provided no support for its contention that it deserves priority on its letter of credit claim. Serbian law should not be refused recognition because it fails to afford a priority that would not be generally recognized under the Bankruptcy Code or under the insolvency laws of the United States. Nugent's second ground for opposition to the grant of summary judgment to Petitioner is rejected. Principles of Fairness and Due Process Nugent's final argument is that the procedures governing the Debtor's liquidation in Serbia violate principles of fairness and due process and should therefore not be recognized under § 304(c). Specifically, Nugent contends that Serbian law lacks (i) the principle of equitable subordination, (ii) proper notice to creditors, (iii) procedures to prevent undue delay, and (iv) a right to a substantive appeal. Nugent relies upon Interpool Ltd. v. Certain Freights, 102 B.R. 373 (D.N.J. 1988), as support for its argument that Serbia's lack of the principle of equitable subordination and individualized notice procedures provides a basis for denial of § 304 recognition. The court in Interpool denied recognition under § 304 to an Australian proceeding, and sustained a competing Chapter 7 petition filed in the United States, on the grounds, among others, that Australian insolvency law lacks equitable subordination principles and certain notice procedures. Interpool, 102 B.R. at 378-79. However, Interpool has been soundly and properly criticized. See Westbrook, Theory and Pragmatism in Global Insolvencies: Choice of Law and Choice of Forum, 65 Am. Bankr.L.J. 457, 474-78 (1991). First, as Professor Westbrook demonstrates there, the denial of § 304 recognition in Interpool on the ground that the Liquidator's arrangement with a large creditor might have been treated differently under U.S. law, and U.S. creditors might have been better off, was unjustified. As Westbrook argues, if a different outcome were alone enough to deny § 304 recognition, "this reading of Interpool would make § 304 a dead letter." Id. at 475. Second, the Court expressed concern in Interpool that an ex parte agreement had been reached between the Liquidator and the creditor and approved by the Australian court without prior notice to creditors. However, this resulted from the fact that Australian law enhances a liquidator's ability to take action without notice to 255 creditors and thereby promotes speed, efficiency, and cost-reduction. The U.S. may favor more transparency at greater expense, but as Westbrook contends, this cannot be said to be the right balance under § 304. Id. at 476. In any event, Interpool also involved claims of insider dealing that directly raised the possibility of equitable subordination and called into dispute a specific arrangement agreed to by the Liquidator without notice to creditors. 102 B.R. at 379. There has been no suggestion here that insider dealing is at issue or that the doctrine of equitable subordination would be relevant here or that the Liquidator in Serbia has agreed to an ex parte arrangement involving Nugent. The facts here are inapposite to those in Interpool, and this Court declines to extend Interpool to cover the present case. Nugent supports its claim that the absence of proper notice procedures precludes recognition of the Serbian proceeding by citing the fact that Serbian law only requires that notice to creditors be posted in the courthouse and published in a local newspaper. However, § 304 does not require that any specific form of notice be provided to creditors. Rather, it requires this Court to consider the "just treatment" of claim holders, § 304(c)(1), whether U.S. creditors are protected against prejudice and inconvenience, § 304(c)(2), and whether the distribution of proceeds is "substantially in accordance" with the Bankruptcy Code, § 304(c)(4). The pleadings submitted by the Petitioner in response to Nugent's argument on the issue of notice demonstrates that there are adequate procedures to inform creditors of the liquidation and that the proceedings are open and not filed in secret. Moreover, there is no dispute that Nugent received actual notice of the insolvency proceeding in Serbia, and in fact filed one or more proofs of claim with the Serbian court.[4] (Reply Mem. of Law in Supp. of Petitioner's Mot. for Summ. J. at 7.) There is authority that an individual creditor should not be able to oppose the grant of comity by raising abstract notice deficiencies in foreign law that do not affect its personal rights. See Finanz AG Zurich v. Banco Economico, 192 F.3d 240, 249 (2d Cir.1999), citing Cunard S.S. Co. v. Salen Reefer Servs. AB, 773 F.2d 452, 458 (2d Cir.1985). The Court in Bank of New York v. Treco (In re Treco), 240 F.3d 148 (2d Cir.2001), also addressed issues of fundamental fairness of process in the § 304 context. In Treco, the Court refused to grant a § 304 petition and order the turnover of funds to a Bahamian proceeding in light of the harm that would have been inflicted on the Bank of New York, if it were a secured creditor. Id. at 161. However, the Court did not hold that the foreign proceeding should be denied any recognition, and the Court treated the issue of turnover on an individualized basis based on the premise that the bank in fact had a secured claim. Nugent cites In re Hourani, 180 B.R. 58, 65 (Bankr.S.D.N.Y.1995), where the Court denied a § 304 petition that sought recognition of a Jordanian bank insolvency proceeding and expressed concern about "the lack of procedural and substantive safeguards" in the relevant Jordanian law. There, the Court was disturbed by a liquidation committee's unfettered discretion, and affidavits from Jordanian lawyers relied upon by the Court were replete with descriptions of a proceeding that lacked a statutory or common-law framework, with unappealable decisions made confidentially by a liquidation committee. Id. at 66-68. 256 There is no allegation in this case that the proceedings in Serbia have been kept secret from the creditors, and there is a governing body of Serbian law that satisfies the criteria of § 304. Moreover, as discussed below, there is a right to appeal decisions made in the proceeding. Hourani is not controlling in this case. Nugent also claims that there has been undue delay in the Serbian proceedings in that the case has been underway for approximately six years without payment to creditors. (Resp. to Mot. for Summ. J. at 12-13.) However, all Nugent alleges is delay, not undue delay. As Petitioner has indicated, the liquidators have spent years litigating and administering claims filed against the estate and undertaking other actions necessary for the liquidation. (Reply Mem. of Law in Supp. of Petitioner's Mot. for Summ. J. at 8-9.) The allegation of undue delay is unsupported by the record and cannot justify the further delay that would result from denial of Petitioner's motion for summary judgment. Nugent finally asserts that Serbian law provides only a "limited" substantive right to appeal the decisions of a bankruptcy court. (Resp. to Mot. for Summ. J. at 13.) In the first place, a right to appeal is not constitutionally mandated even in the United States. See Griffin v. Illinois, 351 U.S. 12, 18, 76 S. Ct. 585, 100 L. Ed. 891 (1956). Moreover, although procedurally different from the United States appellate process, there is a Serbian right of appeal. (Andric Decl. at 7.) For example, the prospective appellant can initiate a plenary lawsuit on the issue to be appealed, or the bankruptcy panel can instruct the bankruptcy administrator to initiate the lawsuit. Id. Furthermore, the Serbian court has recognized Nugent's claim, rendering Nugent's concern about a "limited" right of appeal hypothetical. Nugent's Further Correspondence In a letter to the Court dated August 3, 2006, counsel for Nugent makes several further arguments against granting the § 304 petition. Among other things, Nugent alleges that the Serbian proceeding is unfair because the "Governor of the National Bank ignored the Federal [C]ourt's decision" concerning revocation of the Debtor's license. (Aff. of Srdjan Josimov at 2.) This argument echoes the contentions already made by Nugent and addressed in this Court's November 2003 Opinion. At that stage of this case, Nugent asserted that even if the National Bank had the power to enter a second order of liquidation, the order was rendered ineffective due to the National Bank's failure to follow appropriate procedures. However, this Court found sufficient evidence on the record to show that the Debtor was in a liquidation proceeding notwithstanding the alleged procedural deficiencies. Nugent's current rendition of its past contentions is again rejected. Another argument raised by Nugent is that it might be a secured creditor. As Nugent's papers are unclear as to the source of its security interest, the Court addresses the two possibilities. First, Nugent might argue that it holds a secured claim in the United States since it has caused funds of JIK Banka to be executed upon by the New York City Sheriff. However, there is no dispute that Nugent executed upon these funds in 2003, well after the liquidation was filed in 2000. Just as the automatic stay under 11 U.S.C. § 362(a) precludes creditors from attaching property after a bankruptcy filing, Serbian law generally prevents creditors from attempting to collect on a pre-existing debt or to enforce a security interest after the commencement of a bankruptcy proceeding. (Decl. of Radomir Milosevic at ¶ 20.) Under the circumstances of this case, this *257 Court is not required to recognize an attachment that would be void under applicable foreign law. See Cunard S.S. Co. v. Salen Reefer Servs. AB, 773 F.2d 452, 457 (2d Cir.1985), where the Court voided Cunard's attachment of the Debtor's property in the United States in deference to an earlier commenced Swedish bankruptcy proceeding. Nugent's alternative ground for attaining secured creditor status would be through a process in Serbia initiated by Nugent's Serbian counsel to attain a "third-party right . . . secured by the mortgage." (Aff. of Predrag Pantelic at 2.) Nugent is of course free to pursue all of its rights and claims in the Serbian court, including its right to claim secured status. However, the possibility that Nugent might be considered a secured creditor by a Serbian court applying Serbian law is hardly a ground for sustaining Nugent's objection to the § 304 petition. The § 304 order will specifically reserve Nugent's right to claim that it is a secured creditor under Serbian law. As Nugent itself admits, § 304 does not require foreign law to mirror United States law. (Resp. to Mot. for Summ. J. at 10.); see also Hourani, 180 B.R. at 65; In re Garcia Avila, 296 B.R. 95, 109, 111-112 (Bankr.S.D.N.Y.2003). Rather, this Court needs to consider the requirements of § 304 while taking into account that "comity is the ultimate" factor in a § 304 analysis. Treco, 240 F.3d at 156. Nugent has not shown Serbian law to be offensive to U.S. law, and Petitioner has adequately demonstrated that there is no triable issue of fact. Petitioner's motion for summary judgment is granted, with the funds to be released to Petitioner for delivery to the Debtor's Serbian estate for distribution in accordance with Serbian law. Petitioner should settle an order on five days' notice. NOTES [1] Since this case was filed before October 17, 2005, § 304 applies, rather than Chapter 15, adopted pursuant to the Bankruptcy Abuse and Prevention Act of 2005. See In re Wuthrich, 337 B.R. 262, 267 n. 3 (Bankr.S.D.N.Y. 2006). [2] Nugent does not argue that summary judgment is not an appropriate procedure for granting § 304 relief. It has been used in this fashion. See In re Hackett, 184 B.R. 656 (Bankr.S.D.N.Y.1995). The principles that govern summary judgment motions are also well-known. In accordance with Bankruptcy Rule 7056, which incorporates Fed.R.Civ.P. 56, summary judgment may be granted "if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed.R.Civ.P. 56(c); see also Celotex Corp. v. Catrett, 477 U.S. 317, 322, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986); Morenz v. Wilson-Coker, 415 F.3d 230, 234 (2d Cir. 2005). The moving party bears the burden of demonstrating the absence of any genuine issue of material fact. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986); see also Ames Dep't Stores, Inc. v. Wertheim Schroder & Co., Inc., 161 B.R. 87, 89 (Bankr.S.D.N.Y.1993). When a court considers a motion for summary judgment, it must resolve all ambiguities and draw all permissible factual inferences in favor of the party against whom summary judgment is sought. Heyman v. Commerce & Indus. Ins. Co., 524 F.2d 1317, 1318 (2d Cir.1975); see also Ames Dep't Stores, Inc., 161 B.R. at 89. However, a party opposing a motion for summary judgment cannot rest on its pleadings but must provide evidence to support the essential elements of its case. See Anderson, 477 U.S. at 248, 106 S.Ct, 2505; DePippo v. Kmart Corp., 335 B.R. 290, 294-95 (S.D.N.Y.2005), citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986). [3] The Agency for Deposit Insurance, Rehabilitation, Bankruptcy and Liquidation of Banks was recognized as a foreign representative in another § 304 case. See In re Agency for Deposit Ins., Rehab., Bankr. and Liquidation of Banks, 310 B.R. 793 (S.D.N.Y.2004), reconsideration denied, 313 B.R. 561 (S.D.N.Y. 2004). [4] In fact, Petitioner has agreed to recognize Nugent's claim, and it has been entered against the estate in the foreign proceeding.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527427/	618 S.W.2d 905 (1981) STATE BANKING BOARD, et al., Appellants, v. FIRST STATE BANK OF GAINESVILLE, et al., Appellees. No. 13349. Court of Civil Appeals of Texas, Austin. June 24, 1981. Rehearing Denied July 29, 1981. 906 Mark White, Atty. Gen., Patrick Lanier, Asst. Atty. Gen., Larry Temple, Austin, for appellants. Conrad P. Werkenthin, Gary Evatt, Clark, Thomas, Winters & Shapiro, Austin, for appellees. ON MOTION FOR REHEARING PHILLIPS, Chief Justice. We withdraw the opinion of April 15, 1981, and substitute the following opinion. This is a suit for judicial review of the order of the State Banking Board approving the charter application for the proposed North Texas Bank and Trust to be located in Gainesville, Cooke County, Texas. The trial court invalidated the order and appellants have perfected their appeal to this Court. We reverse the judgment of the trial court and render judgment affirming the order of the State Banking Board granting the charter application to appellant North Texas Bank and Trust. The organizers of North Texas Bank and Trust made application to the State Banking Board for a new bank to be located in Gainesville, Texas. A protest to the application was filed by appellees, First State Bank of Gainesville and Gainesville National Bank, and a hearing was held before the State Banking Board hearing officer in September of 1979. From a review of the record,[1] the State Banking Board concluded that North Texas Bank and Trust met all the requirements of law and should be approved. Therefore, by order dated December 17, 1979, the appellant State Banking Board approved the North Texas Bank and Trust charter. Thereafter, appellees instituted an appeal from the Board's order in district court contesting the validity of the order. The 907 court reversed the Board and set aside the order. I. Appellants' first point of error and, in our judgment, the principal question involved in the case, is that the trial court erred in concluding and holding that two directors approved by the Board were automatically disqualified from serving as directors of appellant bank because of the provisions of the Depository Institution Management Interlocks Act.[2] Appellees maintain, and the trial court agreed, that certain interlocking bank directorships are prohibited by federal law inasmuch as the "Interlocks Act," cited above, provides that: "A management official [statutorily defined to include a director] of a depository institution ... may not serve as a management official of any other depository institution ... not affiliated therewith if an office of one of the institutions... is located within ... any city, town, or village ... adjacent thereto." 12 U.S.C. § 3202 (emphasis added). Two of the six proposed directors of appellant bank, Lowell T. Miller and Mildred Selyer, are also directors of Valley View National Bank in Valley View which is approximately seven miles from the city limits of Gainesville. Appellant bank is not an affiliate of Valley View National Bank or any other financial institution. Appellee contends as a consequence of the current disqualification of the two above-named directors to serve on the Board, by virtue of the Interlocks Act, appellant bank has only four named directors plus a proposed but unnamed and unknown president. Appellees further maintain that inasmuch as the Texas Banking Code[3] requires that every state bank "have not less than five (5)" directors able to serve at the time the Board acts upon the charter application, the proposed bank charter must fail. We think not. In the first place, and in our judgment, the short answer to this question is that Tex.Rev.Civ.Stat.Ann. art. 342-305 (1973) requires the State Banking Board of Texas to make affirmative findings on the following statutory provisions before approving a new bank charter: a public necessity exists for the proposed bank; the proposed capital structure is adequate; the volume of business in the community where such proposed bank is to be established is such as to indicate a profitable operation of the proposed bank; the proposed officers and directors have sufficient banking experience, ability, and standing to render success of the proposed bank probable; and last, the applicants are acting in good faith. The trial court engrafted a new requirement for charter approval onto the Texas Banking Code: whether the organizing directors meet the standards of the federal authorities to serve on the board of more than one bank. That additional standard cannot be added judicially. State Banking Board v. Valley National Bank, 604 S.W.2d 415 (Tex.Civ.App. 1980, writ ref'd n.r.e.). In the second place, the "Interlocks Act" is a very long and comprehensive statute passed by Congress and authorized by Congress to be implemented by rules and regulations to be prescribed by the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Board of Directors of the Federal Deposit Insurance Corporation, the Federal Home Loan Bank Board and the National Credit Union Administration.[4] It would serve no useful purpose to set out in detail the various provisions of the Act itself or the rules and regulations heretofore prescribed by the agencies outlined above. Although we have not been furnished with any judicial authority interpreting this new federal act and accompanying regulations, several clear factual conclusions can be reached from an examination of the statutes and regulations. Not all interlocks are prohibited; the Act is administered by 908 the federal regulatory agencies; broad latitude of discretion is granted these federal agencies as to which interlock will be permitted and which ones will be precluded; and there is no way to determine in advance what action will be taken by the federal regulatory agencies on a particular application or a particular set of facts. Obviously, the Board had no way to predetermine what action would be taken by the federal regulatory authorities so it proceeded, as required by statute, to determine whether the proposed organizing directors met the qualification requirements for approval under state law. For the Board to have adopted the position advanced by appellees, it would have had to assume that the charter applicants would not get the federal approval. It is well settled that presumptions of illegal or improper activity cannot be entertained. Lewis v. Davis, 145 Tex. 468, 199 S.W.2d 146 (1947); First National Bank of Jacksonville v. First State Bank of Jacksonville, 291 S.W. 206 (Tex.Comm'n App. 1927, jdgmt adopted). Our holding in this respect has been followed by the Colorado courts in analagous situations. See Banking Board v. Columbine State Bank, 569 P.2d 871 (Colo. 1977); Academy Boulevard Bank v. Banking Board, 492 P.2d 76 (Colo.App. 1971). Due to our position on appellants' point number one, we do not reach their second point.[5] II. Appellees bring two cross points. The first cross point alleges the trial court erred in failing to hold that the Banking Board's ultimate findings of public necessity and profitable operation are not reasonably supported by substantial evidence in view of the reliable and probative evidence in the record as a whole. The Supreme Court of Texas has defined public necessity within the meaning of the statute[6] as being "a substantial or obvious community need for the proposed [bank] in the light of attendant circumstances, as distinguished from a mere convenience on the one hand and an absolute or indispensable need on the other." Gerst v. Nixon, 411 S.W.2d 350, 358 (Tex. 1966). These are the basic standards to be applied. Appellees have characterized appellants' effort as an attempt "to begin a new commercial bank between a car wash and a pizza hut on the flood plain in a trailer house in Gainesville, with three of the four legal directors of the bank residents of Tarrant County, Texas." Appellees then contend that their three directors have subscribed 45% of the stock proposed for the bank in question. Appellees argue that an application so structured is not in the public interest and not likely to meet a friendly welcome in Gainesville and Cooke County. This may well be. However, the order of the Board is tested by the substantial evidence rule where the administrative decision is to be upheld if reasonable minds could have reached the same conclusion reached by the administrative agency from the evidence in the record. Mineola State Bank v. First National Bank of Mineola, 574 S.W.2d 246 (Tex.Civ.App. 1978, writ ref'd n.r.e.). Stated another way, the administrative decision is not to be reversed unless it is shown that the administrative agency acted arbitrarily and capriciously, and totally without regard to the facts in evidence before it. Chemical Bank & Trust Co. v. Falkner, 369 S.W.2d 427 (Tex. 1963). The record before us contains a transcript of the hearing before the Board of 276 pages plus 26 separate exhibits submitted to the Board by the charter applicants and 8 exhibits submitted by appellees. In State Banking Board v. Airline National Bank, 398 S.W.2d 805 (Tex.Civ.App. 1966 writ ref'd n.r.e.), this Court held that there may be evidence of a substantial nature that would have reasonably supported an order denying the charter as well as an 909 abundance of evidence reasonably supporting the order entered. This Court went on to state that "[i]t is in such situations that the expertise of the Board is employed with conclusive effect." Id. at 816. Appellees' arguments against the granting of the charter were made to the Board and were rejected. The Board found favorably on all of the statutory requirements for public necessity and buttressed these findings with an elaborate statement of underlying facts in support of its ultimate findings. Briefly, the Board found that the growth and development of Gainesville and Cooke County have now reached the stage where it would be in the public interest to establish a new banking competitor in this market place. The Board then found that the population growth in the area and job market portend healthy future economic growth. We hold that the Board's ultimate findings of public necessity and profitable operation are reasonably supported by substantial evidence. Appellees' second cross point alleges that the district court erred in failing to hold the order in litigation invalid because certain underlying facts, with respect to the issues of public need and profitable operation, were based upon the report of a Banking Department field examiner's report which only one of the members of the Board read. Appellants argue that appellees have failed to preserve their second cross point in that they failed to include the alleged errors in their motion for rehearing as required by the Administrative Procedure and Texas Register Act (APTRA), Tex.Rev.Civ. Stat.Ann. art. 6252-13a § 16(e) (Supp. 1980-81), and United Sav. Ass'n of Texas v. Vandygriff, 594 S.W.2d 163 (Tex.Civ.App. 1980, writ ref'd n.r.e.). The State Banking Board's order stated that the Board had "examined the evidence and exhibits" in reaching their decision. It was not until after the case was appealed to the district court did the appellees discover that two Board members had not read the report. Section 19(d)(3) of APTRA permits the district court to receive evidence of procedural irregularities that are not reflected in the record. In such a situation, a point of error or cross point alleging such procedural irregularities, not reflected in the record, is not waived by the failure to include it in the motion for rehearing filed with the agency. Nevertheless, we overrule appellees' second cross point. Board members do not have to read every word contained in the record. It is sufficient for them to read the testimony given before the hearing examiner and then review "only those exhibits or portions thereof necessary to clarify the testimony of the witnesses." Lampasas Federal Savings & Loan Association v. Lewis, 558 S.W.2d 913, 915 (Tex.Civ.App. 1977, no writ). Under those circumstances, the agency members have "read the record" within the meaning of Section 15 of Article 6252-13a. Id. All the members of the State Banking Board stated, in answers to interrogatories, that they had read the oral testimony that was presented before the hearing examiner. Board members Perry and Stewart stated that they "reviewed only those exhibits or portions thereof necessary to clarify the testimony offered by the witnesses." These two members voted in favor of the complained of portions of the order.[7] Only a majority of the Board need "read the record" if that majority voted for the order. Citizens Bank of Bryan v. First State Bank, 580 S.W.2d 344 (Tex. 1979). Appellees claim that the rule stated in Lampasas Federal is not applicable because the unread report formed the basis of a finding of fact. We do not decide this question because if there was any error in this case, it was harmless. The exhibit that was not read was a field investigation report. In the Board's order it was stated: "Understandably, the opponent banks would prefer not to have any additional *910 bank charter approved at this time. Their position is probably best summed up in the following statement contained in the field investigation report conducted for the Board by Banking Examiner Michael Bryant: `The two existing banks in Gainesville, Texas, generally contend Gainesville could handle another bank in two or three years, but they would not like to see a new bank of any kind at this time.'" The observation that existing banks oppose the creation of a new bank is not a finding of fact necessary or required for the granting of a charter for a new bank. It also does not form the basis for any other necessary findings of fact or conclusions of law. If the Banking Board erred in using this quote, it was harmless error. We reverse the judgment of the trial court and render judgment affirming the order of the State Banking Board granting the charter application. Reversed and Rendered on Motion for Rehearing. POWERS, J., not sitting. NOTES [1] This appeal is to be decided upon the record which was made before the State Banking Board. Imperial American Resources Fund, Inc. v. Railroad Comm'n, 557 S.W.2d 280 (Tex. 1977). [2] 12 U.S.C. §§ 3201-07 (Supp. 1980) (effective March, 1979). [3] Tex.Rev.Civ.Stat.Ann. art. 342-404 (1973). [4] 12 U.S.C. § 3207 (Supp. 1980). [5] Appellants' point of error No. 2: The trial court erred in concluding and holding that the Texas Banking Code requires that a state bank charter application must have at least five named and known directors qualified to serve at the time the State Banking Board acts. [6] Tex.Rev.Civ.Stat.Ann. art. 342-305 (1973). [7] All three members of the Board voted in favor of all parts of the order except Stewart who dissented only on the points on which he believed the federal interlocking directors statutes applied.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527434/	618 S.W.2d 184 (1981) William Brittingham MENGEL, Appellant, v. HAWAIIAN-TROPIC NORTHWEST AND CENTRAL DISTRIBUTORS, INC. and/or Don Faughn Enterprises, Inc.; Meridian Mutual Insurance Co.; and the Workers' Compensation Board, Appellees. Court of Appeals of Kentucky. June 12, 1981. 185 Thomas H. Watson, Louisville, for appellant. Wm. Donald Overbey, Overbey & Overbey, Murray, for appellees. Before LESTER, McDONALD and REYNOLDS, JJ. REVERSING WITH DIRECTIONS McDONALD, Judge: This is a Workers' Compensation case in which the trial court affirmed the board's denial of the appellant's claim of occupational disability due to a back injury. The appellant claims to have initially injured his back in June of 1976, when he stepped into a hole in the floor of the appellee's warehouse while moving a pallet loaded with merchandise. His left leg was cut as it went through the floor. Dr. Gordon, a general practitioner, examined him, treated the leg, diagnosed back sprain and prescribed a conservative course of physical therapy and medication which lasted about four months. The appellant did not file a claim for Workers' Compensation but his employer paid his medical expenses. The appellant continued to work for Hawaiian-Tropic until December of 1976. He states that a nagging pain persisted from the time of the accident and that his left leg remained generally weaker than the right. After he quit working for Hawaiian-Tropic, he worked at assorted odd jobs. In March of 1978, he slipped on ice, caught himself and pulled a muscle in his leg. He immediately consulted Dr. Gordon complaining of leg and back pain and the doctor reinstituted ultrasound, whirlpool and other forms of physical therapy. He referred the appellant to a neurosurgeon, Dr. Noonan, who ordered a myelogram. The test revealed a ruptured disc; Dr. Noonan recommended surgery. Upon a second concurring medical opinion, the appellant submitted to surgery by a Dr. Jelsma on April 7, 1978. He filed the claim that is the subject of this appeal on April 13, 1978. The problem presented to the board was essentially one of medical causation; i. e., was there a relationship between the first work related injury and the disc rupture? The medical testimony before the board consisted of the depositions of Drs. Gordon and Jelsma. Dr. Gordon stated that it was possible that the first injury contributed to the disc problem. Dr. Jelsma thought that the first injury did "play some role and was a contributing factor to the ruptured disc." The appellant's history of pain suggested to him that the first injury caused a slight rupture of the disc which was worsened by 186 the second slip. He estimated that fifty percent of the appellant's total injury was attributable to the slip and fall in June, 1976, and that fifty percent was attributable to the slip in February, 1978. No other medical testimony was offered and the board dismissed the claim. The board concluded that it was the later slip that caused the disc problem, and as that did not occur in a work related setting, the injury was noncompensable. The circuit court found adequate and competent evidence to support the board's order and affirmed. The scope of review for this court in Workers' Compensation cases as set out in K.R.S. 342.290 includes all matters subject to the circuit court's review. Under K.R.S. 342.285(3)(a)-(e), the circuit court's review is limited to certain determinations, including whether the board's order is clearly erroneous on the basis of the reliable, probative and material evidence contained in the whole record. The appellant's first argument is that the board's finding that the appellant had sustained merely a leg injury is clearly erroneous. In finding No. 2 the board stated: Plaintiff alleges that on June 29, 1976, he was working in defendant's warehouse when he stepped into a hole in the floor sustaining a laceration of the left leg. Plaintiff saw Dr. Wendell Gordon for his leg injury but made no claim for any temporary total disability benefits for this particular injury. The appellant also disputes finding No. 4 and argues that the board arbitrarily rejected uncontradicted medical evidence and reached an erroneous conclusion. The board stated: Plaintiff presently works as a carpenter and sustained no temporary, total disability from his June 1976, injury and we further conclude that the testimony of Dr. Wendell Gordon or Dr. Richard Jelsma does not persuade the board that the plaintiff's back surgery was a result of his stepping in the hole incident on June 29, 1976. We believe from the evidence that it was probably caused by plaintiff's slipping incident on the ice and snow in February or March of 1978, which was a non work related injury and is noncompensable. Based on a review of the record it is our opinion that the two findings cited above were in error. While the record supports finding No. 2 as far as it goes, the finding misrepresents the situation by omitting any reference to the claimant's back injury. In his deposition, Dr. Gordon summarized his early encounters with the patient as follows: I didn't see him until 7-2-76. . . . he had fallen through a floor with his left leg about four weeks ago and was having pain in his leg and back . . . . I treated him with physical therapy consisting of muscle stimulation and heating pad at home and aspirin and an antihistamine. . . . On the 14th of July, 1976 . . . he had a cramping in his thigh moving down the calf of his leg; and he was treated with physical therapy as before . . . and he was scheduled for workup the next day on 7-15-76. Diagnosis was sprained back . . . and he was continued with heat treatments to his back and ultrasound treatment to his back and some more muscle relaxants to take at bedtime; and I gave him 30 capsules of Darvon. The course of treatment described by the doctor obviously went to a back injury, not the cut on the leg. As for the finding against causation, all the medical evidence supports a finding that the initial trauma was causally related to the disc herniation. We have reviewed the testimony and found that Dr. Gordon's testimony on causation was cautious, but did not conflict with Dr. Jelsma's opinion that the first injury was a substantial factor contributing to the claimant's need for surgery after the second. There are some situations in which a board decision will be upheld on review when the board has made findings contradicting the medical testimony. Those cases usually involve matters of observable causation where the doctors have testified negatively and the board has found causation. See 3 *187 Larson, Workmen's Compensation Law § 79.52 (1981). There are also situations in which the board may ignore medical testimony and rely on lay testimony and its own expertise. But when the question is one properly within the province of medical experts, the board is not justified in disregarding the medical evidence. See 3 Larson, supra, § 79.54. Especially in this case, where the causal relationship is not apparent to the layman and where there has been a lapse of time between the initial trauma and the disc operation, we think that the board's decision, based on its own observations and contrary to the medical evidence, was improper. We find no competent substantial evidence to support the board's finding that no causal connection existed between the 1976 injury and the subsequent herniated disc. Dr. Gordon's testimony in no way contradicts that of Dr. Jelsma who testified positively on causation. Teague v. South Central Bell, Ky.App., 585 S.W.2d 425 (1979), Watts and Williams Drilling Company v. Slone, Ky., 437 S.W.2d 723 (1969). In order for this court to reverse the findings of the board unfavorable to the claimant and upon which he had the burden of proof, the test is whether the evidence compelled a finding in his favor. Wagoner v. Smith, Ky., 530 S.W.2d 368 (1975). This is such a case. The judgment below is reversed with directions to the circuit court to set it aside and remand the case to the board for further proceedings. All concur.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527658/	292 B.R. 49 (2003) In re MONTGOMERY WARD, LLC, et al., Debtors. Montgomery Ward, LLC, et al., Plaintiffs, v. Wiseknit Factory, Ltd., Defendant. Bankruptcy No. 00-4667(RTL). Adversary No. 01-6607. United States Bankruptcy Court, D. Delaware. April 17, 2003. 50 51 Robyn C. Quattrone, Skadden, Arps, Slate, Meagher & Flom, Washington D.C., Mark A. Fink, Skadden, Arps, Slate, Meagher & Flom, Wilmington, DE, Co-Counsel for Plaintiff. Robert K. Wrede, Russ, August & Kabat, Los Angeles, CA, Duane D. Werb, Werb & Sullivan, Wilmington, DE, Co-Counsel for Defendant. OPINION RAYMONF T. LYONS, Bankruptcy Judge.[1] Plaintiff/debtor, Montgomery Ward, LLC ("Montgomery Ward"), brought a motion for summary judgment on its complaint alleging that Defendant, Wiseknit Factory Ltd., ("Wiseknit"), violated the automatic stay of 11 U.S.C. §§ 362(a)(1), (3), and (6) by instituting a breach of contract action in California to collect on a pre-petition obligation.[2] Montgomery Ward further alleges that Wiseknit's violation of the automatic stay was willful and seeks damages under 11 U.S.C. § 362(h), as well as other relief. The relief sought by Montgomery Ward in its complaint is for judgment: a. Declaring that the Defendant has violated sections 362(a)(1), 362(a)(3), and 362(a)(6) of the Bankruptcy Code; b. Declaring that the Defendant's violations of the Automatic Stay were willful and knowing violations under section 362(h) of the Bankruptcy Code; c. Declaring that the Suit is void ab initio; d. Preliminarily and permanently enjoining defendant from pursuing the Suit and instead enjoining Defendant to dismiss the Suit; e. Awarding Plaintiff actual and punitive damages, and such interest as may be permitted by law, as a result of the Defendant's knowing and willful violation of the Automatic Stay; f. Awarding Plaintiff reasonable and necessary attorneys' fees to the extent permitted by law; g. Awarding Plaintiff its costs and expenses incurred in connection with this action; h. Awarding Plaintiff sanctions against Defendant for its willful and knowing violation of the Automatic Stay; i. Granting Plaintiff such other and further relief as the Court deems just and proper.[3] Wiseknit brought a cross-motion for summary judgment, alleging that its claim against Montgomery Ward arose post-petition, and thus its lawsuit was not subject to the stay. Because Wiseknit's right to payment arose before the debtor filed for bankruptcy, the debt is a pre-petition claim subject to the automatic stay. Summary judgment is granted in favor of Montgomery Ward. 52 This court has jurisdiction under 28 U.S.C. § 1334(a) and (b), 28 U.S.C. § 157(a) and (b)(1), and the Order of Reference from the United States District Court for the District of Delaware. Additionally, this is a core proceeding that can be heard and determined by a bankruptcy judge under 28 U.S.C. § 157(b)(2)(G) involving the automatic stay. Facts: The facts are not disputed. Montgomery Ward owned and operated a large chain of retail department stores. Wiseknit, a Hong Kong corporation that manufactures and exports clothing, was one of its suppliers, the two having done business from 1994 to December 2000. In September 2000, Montgomery Ward issued four Import Purchase Orders (IPOs), totaling $220,548.99, for merchandise from Wiseknit. The following month, at Montgomery Ward's request, LaSalle National Bank ("LaSalle") issued three letters of credit naming Wiseknit as the beneficiary to pay for the goods. Each of the letters of credit expired on December 20, 2000. LaSalle was not required to act under the letters of credit until the end of LaSalle's seventh business day following presentment of documents and a draft. Wiseknit duly manufactured (or acquired) and delivered the requested goods to Montgomery Ward's consolidating agent in Hong Kong, Fritz Transportation International (HK) Ltd. ("Fritz"), between December 5 and 15, 2000. Upon delivery of the goods, Montgomery Ward's agent inspected and accepted them on behalf of Montgomery Ward. On December 16 and 18, 2000, the goods were shipped from Hong Kong bound for the Port of Los Angeles. On December 15 and 19, 2000, Fritz certified that it had distributed all of the shipping documents to Liu Chong Hing Bank Ltd. (Wiseknit's advising bank), Montgomery Ward and Montgomery Ward's California customs broker, Carmichael International Service. On December 27, 2000, documents to draw on the letters of credit, including the bills of lading, a commercial invoice and a sight draft, were presented. The following day, the debtors filed for chapter 11 protection. On January 8 and 9, 2001, LaSalle dishonored the letters of credit because (1) they had expired, and (2) discrepancies existed between the letters of credit and the tendered bills of lading, other supporting shipment documents and IPOs such as different factory names, addresses and merchandise descriptions. LaSalle returned the documents to Liu Chong Hing Bank. Despite LaSalle's refusal to pay Wiseknit, Carmichael delivered the goods to Montgomery Ward's facility in Chino, California on January 9 and 16, 2001. On January 15 and 18, 2001, Liu Chong Hing Bank notified Wiseknit that the letters of credit had been dishonored. No payments have ever been received by Wiseknit for the goods. Montgomery Ward sold the goods as part of its going-out-of-business sale. Wiseknit filed a complaint against Montgomery Ward, Carmichael, and BT Commercial Corporation[4] in the United States District Court for the Central District of California in June 2001 alleging, inter alia, breach of contract. Although Montgomery Ward notified Wiseknit that prosecuting the collection action violated the automatic stay, Wiseknit maintained that the automatic stay did not apply where the breach of contract occurred post-petition. On September 18, 2001, Montgomery Ward 53 instituted an adversary proceeding before this court against Wiseknit alleging violation of the automatic stay in contravention of 11 U.S.C. § 362. The parties have now brought cross motions for summary judgment, which, they agree, turn on whether Wiseknit's claim arose pre- or post-petition. Discussion: I. The Automatic Stay § 362(a) When a debtor files for bankruptcy protection, all efforts by creditors to collect on antecedent debts are forestalled by the automatic stay. 11 U.S.C. § 362(a) (1993 & Supp.2003). The stay applies to any "judicial, administrative, or other proceeding against the debtor that was or could have been commenced before" the debtor's filing, or other effort "to recover a claim against the debtor that arose before the commencement of the case." 11 U.S.C. § 362(a)(1). Post-petition claims or proceedings are generally not subject to the stay. Avellino & Bienes v. M. Frenville Co. (In re M. Frenville Co.), 744 F.2d 332, 335 (3d Cir.1984), cert. denied, 469 U.S. 1160, 105 S.Ct. 911, 83 L.Ed.2d 925 (1985) [hereinafter Frenville]. A creditor has a claim under the Bankruptcy Code if it has either (1) a right to payment or (2) an equitable remedy for breach of performance that gives rise to a right to payment, regardless of "whether or not such right . . . is reduced to judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured or unsecured." 11 U.S.C. § 101(5) (1993 & Supp.2003). Congress deliberately defined "claim" with broad strokes in order to ensure that "all legal obligations of the debtor, no matter how remote or contingent, will be able to be dealt with in the bankruptcy case." H.R.Rep. No. 595, 95th Cong., 2nd Sess. 309, U.S.Code Cong. & Admin.News 1978, 5963, 6266, quoted in Frenville, 744 F.2d at 336. A party to a contract has a right to payment when it has fully performed its obligations under the contract terms. See In re A. Marcus Co., 64 B.R. 207, 210 (N.D.Ill.1986). In a sale of goods contract, tender of conforming goods "entitles the seller to acceptance of the goods and to payment according to the contract."[5] U.C.C. §§ 2-507(1) and 2-301 (West 2000) ("The obligation of the seller is to transfer and deliver and that of the buyer is to accept and pay in accordance with the contract."). To effect a proper tender under the U.C.C., the seller must "put and hold conforming goods at the buyer's disposition and give the buyer any notification reasonably necessary to enable him to take delivery." U.C.C. § 2-503(1) (West 2000). The seller's invoice normally satisfies the notice requirement. 1 James J. White & Robert S. Summers, Uniform Commercial Code, § 3-5, at 130 (4th ed.1995). Where a seller must deliver at a particular destination (e.g., the contract states F.O.B. seller's city), tender may also require the delivery of documents, in which case the tender may be made through normal banking channels. U.C.C. §§ 2-503(3) and (5) (West 2000). Once the seller has tendered all of the necessary documents, it "has discharged its delivery obligations and becomes entitled to payment." 1 White & Summers, supra, § 3-5, at 134. Wiseknit was obliged to manufacture or obtain certain goods and deliver those goods to Montgomery Ward's freight consolidator Fritz. Thus, when Wiseknit 54 delivered the goods to Fritz between the 5th and 15th of December 2000, it had successfully tendered the goods and had a right to payment. Montgomery Ward did not file for bankruptcy until two weeks later. Wiseknit argues that because of the use of letters of credit, the instant transaction is a documentary transaction as contemplated in sections 2-503 and 505 of the U.C.C. Even if this were so, and Wiseknit was, thus, required to deliver the bills of lading and supporting shipping documents as part of its tender, it accomplished that on December 27, 2000 when it tendered the documents through normal banking channels, still prior to the date of Montgomery Ward's petition. When Wiseknit issued its invoice and draft, it was stating that it had a right to payment. Both documents were issued pre-petition. Wiseknit argues that its right to payment under the contract did not arise until seven days after it presented the bills of lading and supporting documents to LaSalle, in other words, a week after Montgomery Ward filed its petition. There are two components to this contention. First, Wiseknit predicates its argument on the provisions of the letters of credit issued by LaSalle, which state that LaSalle need not act on any tendered documents until the close of its seventh business day after receiving them. Second, arguing that the letters of credit "obligat[e] the seller to present documents evidencing the right to possess and dispose of the goods to the issuing bank and the bank to pay the seller the amount set in the sales contract exchange,"[6] Wiseknit assumes that the letters of credit are either a contract between it and LaSalle, or give rise to third party beneficiary rights under the contract between LaSalle and Montgomery Ward. This argument fails for three reasons. First, these "7 business day" provisions of the letters of credit do not give the beneficiary any rights. Rather, they act as an outside limit circumscribing what is considered a reasonable amount of time for the issuing bank to examine tendered documents and determine whether to honor the letter of credit. U.C.C. § 5-108(b) (West 2000). If the bank were to put off making a decision on whether to honor the letter of credit beyond a reasonable time, then the beneficiary could pursue the remedies provided under section 5-111 of the U.C.C. for wrongful dishonor. However, U.C.C. § 5-108(b) does not address the rights of the beneficiary. Second, this argument misconstrues the nature of letter of credit transactions because letters of credit are not contracts. A letter of credit does not oblige the seller/beneficiary to do anything as a bilateral contract would require. If it did, then the issuing bank would have a cause of action against the beneficiary if it failed to submit the documents to draw on the letter of credit. Article 5 of the U.C.C. contemplates no such remedy. Rather, a letter of credit is a mode of payment, an "undertaking" by a lender, designed to protect a buyer and seller from certain risks often involved in international sales of goods. 3 White & Summers, supra, § 26-2, at 112. A letter of credit transaction typically involves three parties and two contracts in addition to the letter of credit. In all cases there will be a reimbursement contract between the issuer and the applicant requiring that the applicant reimburse the issuer for payments made on the letter of credit. Usually, there will also be a contract between the applicant and the beneficiary. Then there will be the issuer's obligation on the letter of credit itself. The unwashed 55 characterize the letter of credit as a contract between the beneficiary and the issuer, but it is better to call it an "undertaking" and so avoid the implication that contract principles might apply to it. Id. at 113. In issuing a letter of credit, a lender does not make a contract with the beneficiary; it performs its contract with the applicant. Moog World Trade Corp. v. Bancomer, S.A., 90 F.3d 1382, 1386 (8th Cir.1996). Finally, this argument confuses Wiseknit's right to payment with the contract term, as incorporated from the letters of credit, for time and place for payment. As noted above, right to payment accrues when the seller tenders the goods to the buyer. U.C.C. § 2-507(1). The time and place of payment, on the other hand, is just one of the many terms upon which the parties may agree in making their contract, similar to price or quantity. 1 White & Summers, supra, § 3-7 at 142. In the absence of an express agreement, the U.C.C. provides that payment is to occur upon receipt of the goods, or in a documentary transfer, the documents, by the buyer. U.C.C. § 2-310 (West 2000). Here, however, the parties agreed that the medium of payment would be a letter of credit, and that time and place of payment would be according to the terms of that mechanism. Thus, they agreed to an express term directing that payment need not occur any sooner than seven days after LaSalle received the documents to draw on the letter of credit. Wiseknit further argues that its claim arose when Montgomery Ward took physical possession of the goods at its facility in Chino, California in January 2001 without payment. According to Wiseknit, Montgomery Ward rejected the goods when LaSalle dishonored the letters of credit. In a documentary transaction, "dishonor of a draft accompanying the documents constitutes non-acceptance or rejection." U.C.C. § 2-503(5)(b). However, Montgomery Ward then took possession of the previously rejected goods when Carmichael delivered them to Chino. Montgomery Ward's possession, Wiseknit argues, gave rise to its right to payment under U.C.C. § 2-507(2). U.C.C. § 2-507(2) states "where payment is due and demanded on delivery to the buyer of goods or documents of title, his right to retain or dispose of them is conditional upon his making the payment due." U.C.C. § 2-507(2) (West 2000). This argument misses the point. Whether Montgomery Ward took possession of the goods post-petition is irrelevant to whether Wiseknit has a pre- or post-petition claim based on its contract. A creditor has a claim where it has a right to payment, and Wiseknit's right to payment arose when it tendered the goods (or, at the latest, when it presented the draft through customary banking channels). Wiseknit's right to payment is distinct from Montgomery Ward's right to retain and dispose of the tendered goods. Taking possession may have been a subsequent bad act, but Wiseknit already had a claim under the Bankruptcy Code in December of 2000 upon tender of the goods or documents. Wiseknit cannot accrue a second claim based on the same contract or goods, nor can it transform a pre-petition claim into a post-petition claim by focusing on events that occurred after its right to payment arose. Thus, any effort to collect on the contract falls under the aegis of the automatic stay. Relying on the analysis articulated in Frenville, Wiseknit also contends that it could not have brought its cause of action until Montgomery Ward breached the contract in January 2001 by taking possession of the goods without payment. Frenville 56 is clearly distinguishable on these facts. In Frenville, the debtor's accountants, Avellino & Beines ("A & B"), were sued by a number of banks, over a year after the debtor was forced into bankruptcy by its creditors, for negligently preparing the debtor's financial statements. Frenville, 744 F.2d at 333. A & B tried to bring Frenville into the suit as a third-party defendant in order to obtain contribution or indemnification. Id. at 334. A & B and the debtor had no indemnity contract, either pre- or post-petition. Id. at 336-37. The only right to payment was based on the common law right to indemnification or contribution, which does not arise until payment of the judgment flowing from the underlying act. Id. at 337. The common law right to indemnification could not come into existence until A & B was sued, at which point A & B had a contingent right to payment from Frenville. Id. The mature right to payment from Frenville could not arise until A & B lost and paid a judgment to the banks. Id. Because the banks did not sue A & B until fourteen months after Frenville's petition, the court found that A & B could bring Frenville into the state court action without violating the stay. Id. at 338. Significantly, however, the Third Circuit noted that if A & B had had a contractual right of indemnity, the contingent claim would have arisen at the signing of the contract, pre-petition, and been subject to the automatic stay. Id. at 336. In the case at the bar, Wiseknit had a right to payment under U.C.C. § 2-507(1) when it tendered delivery to Montgomery Ward. Thus, regardless of whether a breach of contract occurred in January 2001, this is not a case where accrual of a cause of action post-petition gives rise to a right to payment.[7] In addition, the cases cited by Wiseknit in support of its breach of contract claim against Montgomery Ward do not address the liability, if any, of a buyer. Rather, they stand for the premise that where a carrier delivers goods to an entity other than the authorized holder of the bill of lading, the carrier is liable for misdelivery. Allied Chem. Int'l, Corp. v. Companhia de Navegacao Lloyd Brasileiro, 775 F.2d 476, 481-82 (2d Cir.1985); C-ART, Ltd. v. Hong Kong Islands Line America, S.A., 940 F.2d 530, 533 (9th Cir.1991). These holdings are based on the well settled legal principle that "absent a valid agreement to the contrary, the carrier . . . is responsible for releasing the cargo only to the party who presents the original bill of lading." Allied Chem. Int'l, Corp., 775 F.2d at 481 (emphasis added). Although these cases may help Wiseknit establish its claims against the carrier, they are not persuasive vis a vis Montgomery Ward. Finally, other bankruptcy courts have faced similar facts and held that the creditor's claim was pre-petition. In In re A. Marcus Co., 64 B.R. 207, the court had to determine whether a creditor's claim was a pre-petition debt or a post-petition administrative expense. In re A. Marcus Co., 64 B.R. 207. The debtor in that case ordered goods from a Japanese company called KKU, delivery was F.O.B. Japan, but debtor had 90 days from delivery to pay. Id. at 208. Although A. Marcus had ordered the goods prior to filing for chapter 11 protection, and KKU had delivered the goods to the carrier in Japan pre-petition, the goods were not physically delivered until after the petition date. Id. The court found that "the only question is whether KKU made the transaction with the debtor as opposed to the pre-petition company." 57 Id. at 209. The court held that the transaction was finalized and the creditor's performance complete when it delivered the goods and bill of lading to the debtor's agent in Japan. Because "KKU's performance was induced solely by pre-petition A. Marcus, not the debtor," the debt on the contract was also pre-petition. Montgomery Ward seeks to have the California suit declared void ab initio. Once a debtor files for bankruptcy protection and triggers the automatic stay, the stay suspends the authority of any non-bankruptcy court to hear a judicial proceeding against the debtor until the petition is dismissed, closed or the discharge is granted or denied. Constitution Bank v. Tubbs, 68 F.3d 685, 691-92 (3d Cir.1995). Absent stay relief, any such judicial proceedings are void ab initio. Id. at 692. Because pursuing the contract claim in the California District Court violated the automatic stay, count one of Wiseknit's complaint is void ab initio. II. Damages § 362(h) Montgomery Ward also seeks damages for Wiseknit's violation of the automatic stay. "An individual injured by any willful violation of a stay provided by this section shall recover actual damages, including costs and attorney's fees, and, in appropriate circumstances, may recover punitive damages." 11 U.S.C. § 362(h) (1993 & Supp.2003). Although the statute refers to "an individual," the Third Circuit has recognized that section 362(h) applies to corporate debtors, as well. Cuffee v. Atl. Bus. and Cmty. Dev. Corp., (In re Atl. Bus. and Cmty. Dev. Corp.), 901 F.2d 325, 329 (3d Cir.1990).[8] As discussed above, Wiseknit's pursuit of its contract claim violated the automatic stay. The only remaining issue is whether that violation was willful. A willful violation occurs where the defendant (1) knows about the automatic stay, and (2) the defendant's actions that violate the stay are intentional. Id. No specific intent requirement exists. Id. Although University Medical Ctr. v. Sullivan, 973 F.2d 1065, 1087-89 (3d Cir.1992) recognized a good faith exception to this rule where (1) the law on the issue is not settled, and (2) the defendant has persuasive legal authority indicating that his or her actions do not violate the stay, Wiseknit has not argued that any exception applies here. In paragraph four of its complaint in the California District Court, Wiseknit states that Montgomery Ward filed for bankruptcy on December 28, 2000, and that the "petition is currently pending." After receiving a copy of the complaint, Montgomery Ward sent a letter to Wiseknit stating that the suit violated the automatic stay and demanding that Wiseknit dismiss it. Wiseknit declined to do so. Clearly, Wiseknit knew of the bankruptcy and brought its suit despite the automatic stay. The violation is willful, and so damages are appropriate. Counsel for Montgomery Ward will submit a certification detailing their costs and fees. Conclusion: Wiseknit had a right to payment which arose either when it tendered the goods to Fritz in Hong Kong or, at the latest, when it tendered the documents through normal banking channels. Both of these events occurred pre-petition. Wiseknit's effort to recover on its contract claim in the first count of its complaint in California violated the automatic stay of 11 U.S.C. § 362(a)(1). Montgomery Ward's motion *58 for summary judgment is granted. Count one of Wiseknit's California complaint is void ab initio. An injunction against pursuing the contract claim, as requested by Montgomery Ward, is unnecessary because the claim is subject to the automatic stay. Wiseknit's violation of the stay was willful. Because damages were not quantified in the moving papers, Montgomery Ward will submit a certification describing the damages sought. Wiseknit may, of course, object to the amount or allowability of the damages sought. Wiseknit's cross motion for summary judgment is denied. NOTES [1] Honorable Raymond T. Lyons, U.S. Bankruptcy Judge, District of New Jersey; by assignment to the U.S. Bankruptcy Court, District of Delaware. [2] Wiseknit's complaint alleged four separate counts, the first of which was breach of contract. Whether the three remaining counts for conversion, fraud and tortious interference with contract violated the automatic stay was not fully briefed by the parties and so is not addressed by this court. The court has requested supplemental briefs on these counts. [3] Complaint at 14-15. [4] BT Commercial Corporation was a consignee of shipments of goods from Wiseknit to Montgomery Ward. Presumably, BT Commercial Corporation financed Montgomery Ward's inventory. [5] All parties agree that the Uniform Commercial Code ("U.C.C.") as adopted in Illinois is the governing law in the instant case, even though the transaction is international in scope. Illinois's citation convention merely adds the Illinois Compiled Statutes prefix to the U.C.C. cite, so U.C.C. § 2-503 is 810 Ill. Comp. Stat. 5/2-503. For brevity's sake, this opinion will refer only to the conventional U.C.C. cite. [6] Wiseknit's Brief in Support of Its Motion for Summary Judgment at 20. [7] The dicta in Frenville opining that a contingent claim arises upon signing a contract suggests that Wiseknit's claim arose pre-petition at the signing of the contract no matter when tender of the goods or documents occurred. [8] The majority rule is that a corporation is not an individual and is not entitled to damages under section 362(h). In re Am. Chem. Works Co., 235 B.R. 216 (Bankr.D.R.I.1999).	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527764/	292 B.R. 545 (2003) In re UNGER & ASSOCIATES, INC., Debtor. Marla Reynolds, Plan Trustee for the Estate of Unger & Assoc., Inc., Plaintiff, v. Steven Feldman, Melvin I. Feldman, Harvey Shredrick, David Kalicka, John Sullivan, Barry Schulman, Alan Goodman, Bruce F. Hambro, Stanley Winer, Myron D. Rowland and W. Robert Lawhorn, Defendants. Steven Feldman, Melvin I. Feldman, Harvey Shredrick, David Kalicka, John Sullivan, Barry Schulman, Alan Goodman, Bruce F. Hambro, Stanley Winer, Third-Party Plaintiffs, v. Ronald E. Unger, Arlene M. Unger, Dennis Unger, Donald J. Hess and Cargill Financial Services Company XXX, Defendants. Bankruptcy No. 99-41872-S. Adversary No. 01-4060. United States Bankruptcy Court, E.D. Texas, Sherman Division. March 17, 2003. 546 547 Paul Keiffer, Hance, Scarborough, Wright, Ginsberg & Brusilow, Dallas, TX, for Plan Trustee. Vernon Teofan, Jenkens & Gilchrist, P.C., Dallas, TX, for Defendants. OPINION DONALD R. SHARP, Chief Judge. Now before the Court for consideration is the Defendants' Motion To Dismiss Amended Complaint and Answer And First Amended Third-Party Complaint Subject Thereto ("Motion I") filed by Defendants Steven Feldman, Melvin I. Feldman, Harvey Shredrick, David Kalicka, John Sullivan, Barry Schulman, Alan Goodman, Bruce F. Hambro, Stanley Winer (the "Longmeadow Group") and the Motion by Defendants Myron D. Rowland and W. Robert Lawhorn To Dismiss Complaint ("Motion II"). The Court considered the entire record, including the argument of counsel at a scheduled hearing, in connection with these Motions. This opinion constitutes the Court's findings of fact and conclusions of law required by Fed.R.Bankr.Proc. 7052 and disposes of all issues in connection with the Motion to Dismiss currently before the Court. FACTUAL AND PROCEDURAL BACKGROUND Stated briefly, this is a Complaint brought by Marla Reynolds the Plan Trustee under the confirmed Plan in this 548 bankruptcy case. The Complaint seeks to avoid certain transfers and recover sums paid to eleven individuals who were alleged to be investors in Unger & Associates Inc. and received certain payments prior to the filing of bankruptcy which are subject to the avoidance actions provided in the Bankruptcy Code. Nine of those individuals have filed a Third Party Complaint against the principals of the company, and the primary lender who financed the operations of the company. The Third Party Complaint seeks contribution and/or indemnity from the principals of the company and the principal lender based on several theories including civil conspiracy, breach of fiduciary duty and the furnishing of incorrect information to the investors by the principals of the company. The Third Party Complaint is filed subject to the instant Motion to Dismiss. In order to better understand the scenario in which this action is presented to the Court a detailed recitation of the events leading up to the instant controversy as gleaned from the allegations of the Complaint and other pleadings in this action is necessary. In April of 1990, Unger & Associates, Inc., (the "Debtor") won four contracts to collect defaulted student loans on behalf of the Department of Education (the "DOE"). In August of 1990, certain of the Defendants, referred to as "the Longmeadow Group", purchased a cumulative 20% interest in the Debtor for the cumulative sum of $500,000. Ron Unger, Arlene Unger and Dennis Unger (the "Ungers") were the initial principals of the Debtor. Mssrs. Rowland and Lawhorn also invested $750,000 into the business venture for a 50% interest in one of the four contracts. In connection with the latter transaction, regarding the one "East Coast" contract, a new business entity, NIC was formed. Ultimately, the aforementioned interests were transferred to the Debtor. The DOE awarded two additional contracts to the Debtor. Several financial transactions occurred subsequently among the entities in attempts to fund unprofitable endeavors. The details are enumerated in the Complaint initiating these adversary proceedings ("the Complaint"). Pursuant to the Complaint, and for purposes of the instant matter only, suffice it to say that by July, 1996, the Debtor was operating at a loss from which it never recovered. The Debtor continued operations on existing accounts through 1998 and even obtained new contracts. To service the new contracts, the Debtor sought additional loans from Cargill Financial Services Company XXX ("Cargill"). Cargill requested stock in the Debtor to secure the approximately $2.2 million loan. The Longmeadow Group were the holders of certain Class "B" common stock of the Debtor. Under its 1990 agreement with the Longmeadow Group, on November 25, 1997, the Debtor exercised its option to call the stock of the Longmeadow Group effective in December, 1997. According to a pre-set formula, the price was $1,414,350. The Complaint alleges that Steven Feldman and Harvey Shredrick were on the Board of Directors during this transaction and that S. Feldman and David Kalicka served as attorneys in fact for the members of the Longmeadow Group in this transaction. Also in connection with the Cargill funding transaction, the Complaint alleges Rowland and Lawhorn, referred to as "the GRC Group", were paid $1,850,000 to release their lien against stock in the Debtor. Further, the Complaint alleges Rowland received $1,110,000, Lawhorn received $740,000, S. Feldman, Goodman and Schulman each received $282,869.70, M. Feldman, Hambro, Winer and Sullivan each received $70,717.42 and Shredrick and Kalicka each received $141,434.85 in 549 connection with the Cargill financing of the Debtor. Allegedly, the Debtor continued to operate at a loss of some $200,000 to $300,000 a month until it filed its petition on June 11, 1999. 11 U.S.C. § 546(a)(1)(A) limits the filing of actions under sections 544, 545, 547, 548 or 553 to "two years after the entry of the order for relief . . .". 11 U.S.C. § 546(a)(1)(A). The Complaint requests that the Court employ 11 U.S.C. § 544(b) of the Bankruptcy Code to avoid the payments made to the Longmeadow Group for the repurchase of their Class "B" shares of stock that had been called in by the Debtor and to avoid the payments to the GRC Group. After the Debtor filed its petition for relief under the Bankruptcy Code on June 11, 1999, William Eschrich was appointed Chapter 11 Trustee. On May 29, 2001 this Court entered its Order Confirming the Jointly Proposed First Amended Plan of Liquidation For Unger & Assoc., Inc., And Findings of Fact And Conclusions of Law In Support Thereof confirming the Plan, as Modified (the "Plan Order"). Central to the Confirmed Plan is the creation of a Liquidating Trust and the appointment of a Liquidating Trustee. The Plan, at Article 9.1, specifically identifies Marla Reynolds, the Plaintiff in this Adversary Proceeding, as Liquidating Trustee under the confirmed Plan ("Reynolds"). The Effective Date of the Plan, as defined by the confirmed Plan, is "the thirtieth (30) business day after the Confirmation Order becomes a Final Order."[1]Jointly Proposed First Amended Plan Article 1-1.01.28. Articles 2.01 and 6.01 of the confirmed Plan specifically contemplate that the Liquidating or Plan Trustee shall "prosecute claims and causes of action previously owned by the Debtor or Estate . . .". Jointly Proposed First Amended Plan Article 2.01, 6.01. The Plan is binding upon all parties and the order confirming the plan is res judicata. On June 6, 2001, Special Counsel for the Plan Trustee, filed the Complaint on behalf of Marla Reynolds, Plan Trustee, initiating this adversary proceeding under 11 U.S.C. § 544(b). On December 7, 2001, an Amended Complaint was filed on behalf of Marla Reynolds, as Plan Trustee; the Amended Complaint further identifies Reynolds as "successor in interest to William Eschrich, Chapter 11 Trustee" and adds a count under the Texas Business Corporation Act. In the interim period between June 6, 2001 and December 7, 2001, the time within which the Longmeadow Defendants might file their answers was extended eight times by agreement with Marla Reynolds in her capacity as Liquidating Trustee. Each order recites that the Defendants do not waive their rights to assert any defenses, including Rule 12 defenses, by agreeing to the entry of the order. Lawhorn and Rowland, however, filed their Answer on July 20, 2001. The first three motions requesting the extension of time within which to respond did not elucidate the Court as to the basis for the request. The fourth through eighth motions seeking extensions advise the Court that the parties are engaged in settlement discussions with the Plan Trustee. A few days following the filing of the Amended Complaint, the Longmeadow Group filed its Motion To Dismiss and Answer And Third Party Complaint (as thereafter amended) ("Motion To Dismiss" or "Motion I") together with a Demand for Jury Trial, a Motion to Withdraw the Reference and a motion for stay pending resolution of the motion to withdraw the reference. The Bankruptcy Court granted the motion for stay. Following its review of 550 the pleadings, the District Court found that the Motion To Withdraw the reference should be referred to the U.S. Bankruptcy Court for an evidentiary hearing and recommended disposition, if necessary. Following on the heels of the District Court's Order, Donald J. Hess filed his Motion To Dismiss the Third Party Complaint and Answer ("Hess' Motion"). The Longmeadow Group's Motion To Dismiss was adopted by Rowland and Lawhorn ("Motion II"). The Court set the Motion I, Hess' Motion and Motion II for hearing together. At the hearing, Hess' Motion was passed pending the Court's determination of the Motion I and Motion II. Following a full hearing on the merits, the issues raised by the Defendants' respective Motions to Dismiss were taken under advisement. Subsequently, Defendants filed an Affidavit of William Eschrich, Chapter 11 Trustee as supplemental evidence to which Reynolds responded in opposition. The two Motions to Dismiss[2] (as amended on January 4, 2002 for purposes of answering the First Amended Third Party Complaint and making a demand for a jury trial) challenge Reynolds' standing to file the adversary complaint and to prosecute the avoidance action. Particularly, Defendants Rowland, Lawhorn and the Longmeadow Group (henceforth referred to jointly as "Defendants") aver (1) "the Plan Trust did not own the claims and causes of action asserted in the Complaint and therefore the Plan Trustee had no standing or authority to file the Complaint on the date it was filed[3] and [ (2)] on the date the Plan Trust became vested with such claims and causes of action, any action thereon was barred by the two year limitations period of 11 U.S.C. § 546(a)." Specifically, as Defendants argued at the trial and in their Response to Case Law Supplement filed May 2, 2002, Reynolds was not the real party in interest required by Bankruptcy Rule 7017 applying Rule 17 F.R.Civ.P. 17. Notwithstanding that the objecting Defendants admit that the Plan designated Marla Reynolds as Plan Trustee [Defendants' Motion To Dismiss, P. 3, Para. 2(b)(ii)], Defendants assert that William Eschrich, the appointed Chapter 11 Trustee, was the proper party to file such cause of action under the Federal and Bankruptcy Rules of Procedure and that, as such, he elected not to file the lawsuit, although he had authority to do so pursuant to this Court's order. Real Party in Interest and Standing Frequently, attorneys and courts confuse the concepts of standing with that of capacity to sue and with the real party in interest principle. 6A Charles A. Wright, Arthur R. Miller & Mary K. Kane, Federal Practice and Procedure § 1542 (1990). [. . .] According to Wright, Miller and Kane, "the real party in interest principle is a means to identify the person who possesses the right sought to be enforced. . . . ." Id. Parties cannot waive an objection to standing which even the appellate Courts may raise sua sponte. Lang v. French, 154 F.3d 217 (5th Cir.1998). The standing doctrine, unlike Rule 17, relates only to the public law context. Rule 17 is implicated in suits between private parties. See 551 Malamud v. Sinclair Oil Corp., 521 F.2d 1142, 1147 (6th Cir. 1975)["The fundamental aspect of standing is that it focuses on the party seeking to get his complaint before a federal court and not on the issues he wishes to have adjudicated." Flast v. Cohen, 392 U.S. 83, 99, 88 S.Ct. 1942, 1952, 20 L.Ed.2d 947 (1968). Since standing refers to identifying the proper litigant in a suit, it is related but not identical to the concept of the real party in interest. The former doctrine usually applies to "public" suits and the latter to "private" ones.] Lucas v. Lucas, 946 F.2d 1318, 1322 n. 6 (8th Cir.1991) ("`Standing' is a constitutional doctrine regarding one's right to challenge a governmental action"), Federal Deposit Ins. Corp. v. Bachman, 894 F.2d 1233, 1236 (10th Cir.1990) ("Using the term `standing' to designate real-party-in-interest issues tempts courts to apply standing principles outside the context in which they were developed."). See, also, South African Marine Corp., Ltd. v. U.S., 10 C.I.T. 415, 417, 640 F.Supp. 247, 250 (1986) ("Closely related and often confused with standing are the concepts of `capacity' and `real party in interest.'") [citing to 6 Wright and Miller, Federal Practice and Procedure Civil § 1542 at 639 (1971)]. The Court is of the opinion that standing is not an appropriate objection in this particular action given no governmental action. Therefore, the objection to standing must be denied. Rule 17, entitled, "Real Party in Interest" sets forth: Every action shall be prosecuted in the name of the real party in interest. An executor, administrator, guardian, bailee, trustee of an express trust, a party with whom or in whose name a contract has been made for the benefit of another, or a party authorized by statute may sue in that person's own name without joining the party for whose benefit the action is brought; and when a statute of the United States so provides, an action for the use or benefit of another shall be brought in the name of the United States. No action shall be dismissed on the ground that it is not prosecuted in the name of the real party in interest until a reasonable time has been allowed after objection for ratification of commencement of the action by, or joinder or substitution of, the real party in interest; and such ratification, joinder, or substitution shall have the same effect as if the action had been commenced in the name of the real party in interest. FRCP Rule 17. The real party in interest is the person holding the substantive right sought to be enforced, and not necessarily the person who will ultimately benefit from the recovery. Farrell Construction Company v. Jefferson Parish, Louisiana, 896 F.2d 136, 139-140 (5th Cir.1990) citing to United States v. 936.71 Acres of Land, 418 F.2d 551, 556 (5th Cir.1969) and Lubbock Feed Lots, Inc. v. Iowa Beef Processors, 630 F.2d 250, 256-57 (5th Cir.1980). The purpose of [Rule 17] is to prevent multiple or conflicting lawsuits by persons such as assignees, executors, or third-party beneficiaries, who would not be bound by res judicata principles. Gogolin & Stelter v. Karn's Auto Imports, Inc., 886 F.2d 100, 102 (5th Cir.1989) citing to C. Wright & A. Miller, Federal Practice & Procedure § 1541, at 635 (1971). . . . . See, also, Resnick, Sommer and King, Collier on Bankruptcy, § 7017.02, 7017-2 through 4 (15th Ed.2002). [See, also, Wieberg [Wieburg] v. GTE Southwest, Inc., 272 F.3db 302 (5th Cir.2001).] While the rule adopted this policy, it also anticipated that real party in interest disputes should arise rarely and ought to be easily resolved. Such disputes are likely to be evident to a defendant at the onset of suit, because he almost always knows whether he has been sued by the party who "owns" the claim. 552 Gogolin & Stelter v. Karn's Auto Imports, Inc., 886 F.2d 100, 102. The "real party in interest" defense is waived when it is not timely asserted. The objection must be raised when joinder is "practical and convenient". Id. at 102. "The earlier the defense is raised, the more likely that the high cost of trial preparation for both parties can be avoided if a real party in interest question is determined adversely to a plaintiff." Id. Thus, the goal of judicial efficiency is furthered. Rogers v. Samedan Oil Corp. 308 F.3d 477, 483-484 (5th Cir.2002). See, also, United HealthCare Corp. v. American Trade Ins. Co., 88 F.3d 563 (8th Cir.1996) (failure to raise the assertion that plaintiff was not the real party in interest until pretrial conference constituted a waiver); Hefley v. Jones, 687 F.2d 1383, 1388 (10th Cir.1982) (failure to raise the assertion that plaintiff was not the real party until 16 days prior to trial constituted a waiver); Chicago & Northwestern Transp. Co. v. Negus-Sweenie, Inc., 549 F.2d 47, 50 (8th Cir.1977); McLouth Steel Corp. v. Mesta Machine Co., 116 F.Supp. 689, 691 (D.Pa.1953), affirmed on other grounds, 214 F.2d 608 (3rd Cir.1954), cert. denied, 348 U.S. 873, 75 S.Ct. 109, 99 L.Ed. 687 (1954)(failure to raise the assertion that the plaintiff was not the real party until four days prior to trial constituted a waiver). The Court has carefully considered Rule 17, its purposes, the possibility of prejudice to either party and the activities of the opposing parties in this proceeding from its inception on June 6, 2001 through Defendants' objection under Rule 17 which was raised for the first time in the Response filed on May 2, 2002. Given the Fifth Circuit's clear position on the real party in interest defense, the unusual numbers of extensions the objecting parties were willing to negotiate with Marla Reynolds as the Plan Trustee and the time which elapsed in the interim, this Court finds that the Defendants waived their right to object under Rule 17 notwithstanding their reservation of rights in the numerous agreed orders. In persisting in reserving the right, the Defendants were, as the Hon. Edith Jones aptly described such a strategy: "lay[ing] behind the log". Gogolin & Stelter v. Karn's Auto Imports, Inc., 886 F.2d 100, 102 (5th Cir.1989). Equity and judicial estoppel prevent the objecting Defendants from negotiating procedural issues (the extensions) and substantive issues (settlement negotiations) with Reynolds, acknowledging her authority to do so as Plan Trustee and her authority to do so in this adversary, then asserting a Rule 17 objection as a defense a year into the proceeding. It is clear to this Court based upon the language of the numerous agreed motions and agreed orders that the objecting Defendants contemplated their objection to Reynolds' authority to prosecute the action but secreted it as a trump to be laid upon the table if settlement negotiations failed. This Court does not treat deadlines lightly. It firmly believes in the principles expounded in Taylor v. Freeland & Kronz, 503 U.S. 638, 112 S.Ct. 1644, 118 L.Ed.2d 280, 26 C.B.C.2d 487 (1992). Assume, arguendo, that Reynolds was not a "real party in interest" as contemplated under Rule 17 until the Effective Date of the Plan, until the thirtieth business day following the order entered on May 30, 2001 becoming final (July 23, 2001). If so, Reynolds' act of filing the Complaint initiating the suit would be an invalid act. Is it possible to validate an invalid act? Defendants argue that ratification by the Plan Trustee via filing the Amended Complaint cannot cure the real party in interest defect because there was no "honest and understandable mistake". For this 553 proposition, the Defendants attempt to distinguish the facts in this case from those in Wieburg v. GTE Southwest, Inc., 272 F.3d 302 (5th Cir.2001). This Court disagrees with Defendants' conclusion and finds there was indeed an honest and understandable mistake as contemplated by the Fifth Circuit Court in Wieburg v. GTE Southwest, Inc., 272 F.3d 302, 308 (5th Cir.2001). The Order confirming the Plan recites that the Liquidating Trustee, by signing the Trust Agreement (placed into the Court's record as evidence at the confirmation hearing) "shall be assuming the duties of a Chapter 7 trustee pursuant to section 704 of the Bankruptcy Code . . .". Further, in the Conclusions of Law at paragraphs "E" and "H", the Order authorizes the Liquidating Trustee to take the necessary steps to implement the Plan "hereby". The Court finds that Reynolds reasonably believed she was empowered by this Court to initiate the lawsuit and that to have failed to do so would have placed her in breach of her duties. Moreover, the Court finds that by filing the suit and becoming qualified as soon as it was reasonably possible to do so Reynolds cured any defect in initiating the proceeding June 6, 2001. Any defect in her capacity is cured by her actions, both through becoming the proper party and through filing the appropriate pleadings, here, the Amended Complaint, once Reynolds became qualified under the Plan and Order. Moreover, once the Plan was accepted by the creditors and approved by the Court, Reynolds, who was named in the Plan as the Plan Trustee, became an indispensable party under Federal Rule 19 made applicable here pursuant to Fed.R.Bankr.P. 7019. The res judicata effect of any orders entered in this matter will bind her. This Court is also greatly influenced by the language of Rule 17 which provides in part "no action shall be dismissed on the ground that it is not prosecuted in the name of the real party in interest until a reasonable time has been allowed after objection for ratification of commencement of the action by, a joinder or substitution of, the real party in interest; and such ratification, joinder, or substitution shall have the same effect as if the action had been commenced in the name of the real party in interest." It is clear that the Rule envisions a liberal interpretation to allow the real party in interest to appear and be heard in any action in which this issue has been raised. In the instant case all necessary steps to ratify the action of the Liquidating Trustee had been taken before the issue even arose. The Liquidation Trustee is clearly the successor in interest to the Chapter 11 Trustee and to the extent that there was any lack of capacity on her part at the date of the filing of the suit that lack of capacity was cured upon the effective date of the Plan. Certainly, the short period of time involved does not constitute an unreasonable time for ratification of her actions when there may have been a question about her capacity to proceed. Another purpose has been attributed to Rule 17(a) besides preventing duplicate litigation, binding parties and the res judicata effect: prevention of forfeiture. Wieburg v. GTE Southwest, Inc., 272 F.3d 302, 308 (5th Cir.2001); South African Marine Corp. v. United States, 640 F.Supp. 247, 253-55 (C.I.T.1986). Therefore, in addition to the foregoing analysis, the Court weighed the relative harm to the adversarial parties and to the creditors of the Estate, the beneficiaries under the Plan and Liquidating Trust. The Defendants have failed to demonstrate to this Court that they have suffered prejudice as a result of Reynolds filing the suit then ratifying her actions. On the contrary, Reynolds and the Bankruptcy Estate *554 negotiated settlement and prosecuted this action in good faith and at some expense. Had Defendants raised their Rule 17 objection promptly, i.e. prior to seeking numerous extensions to their answer deadlines, Defendants could have mitigated the expenses to the estate. Furthermore, dismissal of this action based upon a Rule 17(a) objection rather than upon the merits of the case would result in forfeiture of the cause of action to the detriment of the creditors of the bankruptcy estate and beneficiaries of the Liquidating Trust created under the Plan and to the benefit of certain insiders of the Debtor, all of whom are bound by the confirmed Plan which included the underlying cause of action here. "Equity treats that as done which ought to be done". B. Cardozo, The Nature of the Judicial Process, 39 (Yale University Press, 1921). See, also, Russo v. Leary, 330 F.2d 572, 574 (4th Cir.1964). Therefore, the Court denies the objection under Rule 17(a) of the Federal Rules of Civil Procedure made applicable here pursuant to Fed.R.Bankr.P. 7017. Further, the Court finds that the avoidance causes of action held by the Chapter 11 Trustee passed from the Bankruptcy Estate to the Liquidating Trust under the auspices of the Liquidating Trustee pursuant to the terms of the Plan. The Defendants argued that the filing of the Amended Complaint violates the two year limitations period of 11 U.S.C. § 546(a). The Court concludes that the filing of the amended complaint which ratified the earlier filing relates back to the date of the filing of the original Complaint. F.Rule Civ.P. 15(c) made applicable here pursuant to Fed.R.Bankr.P. 7015. Following the hearing on two motions to dismiss, Defendants filed a pleading entitled Defendants' Submission of Affidavit of William Eschrich, Chapter 11 Trustee, As Supplemental Evidence In Support of the Motion To Dismiss. Reynolds filed an objection. The Court agrees with Reynolds' conclusion that the Eschrich Affidavit is a "sloppy attempt at a collateral attack on the prior orders of this Court" which should be overruled. Also, the Court finds that Defendants had every opportunity to provide testimony from William Eschrich at the trial and simply failed to do so. It defies this Court's credulity that Defendants would purport such readily discoverable material to be newly discovered evidence.[4] CONCLUSION For the foregoing reasons, this Court must deny Defendants' Motion To Dismiss Amended Complaint and Answer And First Amended Third-Party Complaint Subject Thereto, filed by Defendants Steven Feldman, Melvin I. Feldman, Harvey Shredrick, David Kalicka, John Sullivan, Barry Schulman, Alan Goodman, Bruce F. Hambro, Stanley Winer (the "Longmeadow Group") and the Motion by Defendants Myron D. Rowland and W. Robert Lawhorn To Dismiss Complaint. An order will be entered accordingly. NOTES [1] The Defendants incorrectly calculate such date to be June 29, 2001. [2] The Defendant's Motion To Dismiss was combined with its Answer containing additional defenses and Affirmative Defenses not addressed at the hearing on the Motions To Dismiss. The hearing was confined to the standing issue and whether Reynolds was the proper party-in-interest. [3] Although the Motion to Dismiss states that it is filed "Pursuant to Rule 12(b)(1) of the Federal Rules of Civil Procedure . . ." it is obvious that Rule 17 is the basis for the Motion. [4] Defendants also raised arguments citing to the very unsettled case of In re Cybergenics Corp., 226 F.3d 237, 44 Collier Bankr.Cas.2d 1418, 36 Bankr.Ct.Dec. 190, Bankr.L. Rep. P 78,263 (3rd Cir.2000). At this juncture, rehearing en Banc has been granted and the former Opinion has been vacated by Official Committee of Unsecured Creditors of Cybergenics Corp. v. Chinery, 310 F.3d 785 (3rd Cir.2002). The arguments made pursuant to Cybergenics are not persuasive.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527455/	357 B.R. 684 (2007) In re Michael MELITO and Paula A. Melito, Debtors. No. 06-10015-RS. United States Bankruptcy Court, D. Massachusetts. January 4, 2007. 685 Timothy M. Mauser, Mauser and Dipiano, LLP, Boston, MA, for Debtors. MEMORANDUM OF DECISION REGARDING HOMESTEAD EXEMPTION ROBERT SOMMA, Bankruptcy Judge. Before the Court are two objections to the Debtors' claim of a Massachusetts homestead exemption. The Debtors oppose the objections. At issue is whether the Debtors are entitled to the homestead exemption even though, when they commenced this bankruptcy case and because they were then expecting to sell the property, they neither occupied nor intended to occupy as their principal residence the property that is the subject of the exemption claim. For the reasons set forth below, the Court allows the Debtors' homestead exemption claim and overrules the objections. Procedural Status The Debtors commenced this Chapter 13 case on January 4, 2006 ("Petition Date"). They filed schedules listing their ownership of a Saugus property ("Property") and their claim of a Massachusetts homestead exemption as to the Property ("Homestead Claim"). On the Petition Date, they were residing in a Waltham rental apartment ("Apartment"). The Homestead Claim occasioned multiple contested matters. First, the above-noted objections ("Homestead Objections");[1]second, four objections to the Debtors' Chapter 13 plan ("Plan Objections");[2] and third, two objections to the Debtors' lien avoidance motions ("Lien Avoidance Objections")[3] (together, "Contested Matters"). The Contested Matters require determination of a single issue, namely, the Debtors' entitlement to the Homestead Claim. I held a non-evidentiary hearing on the Contested Matters on March 16, 2006 and an evidentiary hearing on the Homestead Claim on May 12, 2006. I took the matters 686 under advisement and now render my decision regarding the Homestead Claim. Background The Debtors acquired the Property in 1998. In 2000, they acquired a Massachusetts estate of homestead in the Property ("Homestead"). In 2005, facing financial problems, the Debtors decided to sell the Property to avoid foreclosure and to preserve their equity through the Homestead. In. August 2005, they entered into a contract for sale of the Property. Sometime in September 2005 but before the closing of the sale, the Debtors vacated the Property as an accommodation to the proposed buyer, who had requested an earlier occupancy than contemplated in the contract for sale. Due to financing problems, the buyer did not move in, the sale closing was rescheduled for November 2005, and, when the buyer's financing finally failed altogether, the sale fell through. The Debtors resumed their sale efforts but, when they commenced this case on January 4, 2006, the Property remained on the market, vacant and unsold, and they were residing in the Apartment. Until their relocation to the Apartment, the Debtors had occupied the Property as their principal residence without interruption from the time they acquired it in 1998. At their Section 341 meeting,[4] the Debtors testified that, although they owned the Property, they did not reside there and they did not intend to return there, having vacated it to accommodate a buyer and to facilitate a sale. The Objectors, present at the meeting, focused on the occupancy issue and paid little heed to the Debtors' sale-facilitation explanation. In March 2006, the Debtors' tenancy at the Apartment was unexpectedly terminated and they returned to the Property, which remained on the market and still was not sold at the time of the evidentiary hearing. The position of the Objectors is that the Debtors are not entitled to the Homestead Claim because they neither occupied nor intended to occupy the Property as their principal residence on the Petition Date.[5] The position of the Debtors is that (a) on the Petition Date, the Homestead was valid,, enforceable, and fully effective, (b) they did not abandon the Property or otherwise terminate the Homestead, (c) their relocation was incidental to their sale of the Property, and (d) their departure from the Property was intended to implement their realization of the Homestead protection. Discussion a. Framework 1. Bankruptcy Law Section 522 of the Bankruptcy Code affords an individual debtor the opportunity to elect the exemptions available either under federal bankruptcy law or under nonbankruptcy federal, state and local law. 11 U.S.C. § 522(b). The nonbankruptcy exemption law includes the Massachusetts homestead law. M.G.L.A. c. 188 § 1 et seq ("Homestead Statute"). The Debtors made the election with respect to the Property under the Homestead Statute. 2. The Homestead Statute The Homestead Statute protects up to $500,000 in the net equity of a home for its owner(s) or lessor(s) (and their families) who occupy that home, or intend to do so, as a principal residence. M.G.L.A. c. 188 § 1. With certain exceptions not 687 here implicated, the estate of homestead protects the home and its principally resident occupants from the claims of creditors for the benefit of the homesteader and his/her family. See In re Fiffy, 281 B.R. 451, 454 (Bankr.D.Mass.2002); see also In re Vasques, 337 B.R. 255 (Bankr.D.Mass. 2006) (homestead estate protects homesteader's economic interest as much as legal interest or property itself). 3. Homestead Acquisition Under the Homestead Statute, an estate of homestead is acquired by designation in the deed of transfer by which the subject property is acquired or by a declaration in customary form recorded in the requisite registry. M.G.L.A. c. 188 § 2. As reflected in the above-cited sections, homesteaders must occupy or intend to occupy a property as their principal residence at the time of acquisition of an estate of homestead, that is, at the time of the conveyance or declaration. See Thurston v. Maddocks, 88 Mass. 427 (1863); In re Webber, 278 B.R. 294, 298 (Bankr. D.Mass.2002). 4. Homestead Termination Under the Homestead Statute, termination like acquisition requires a writing. M.G.L.A. c. 188 § 7. See Webber at 297. Here, there is no allegation of termination by a writing. Rather, the logic of the Objectors is this: discontinuance of occupancy and of intent to occupy the Property means loss of the Homestead, whatever the circumstances of discontinuance, however temporary and for whatever purpose. Whether a homestead estate can be terminated by abandonment and whether abandonment can be established by, intent (and if so how) are matters not yet finally settled in this district. Bankruptcy Judge Kenner previously expressed reservations regarding termination by abandonment. "[By] specifying three methods of termination, all three requiring a writing, the Massachusetts legislature likely meant to preclude termination by simple abandonment." Webber at 298. Bankruptcy Judge Hillman has disagreed, noting long-standing Massachusetts decisions recognizing termination by abandonment. See In Marrama, 307 B.R. 332, 337 (Bankr. D.Mass.2004). See also In re Taylor, 280 B.R. 294 (Bankr.D.Mass.2002).[6] Even if abandonment were a valid termination methodology, it must be clearly and convincingly demonstrated. "If any acts of abandonment, short of acquiring a new homestead, will defeat a homestead estate, they must be such as afford unequivocal evidence of an intent to abandon." Silloway at 33 (emphasis added). b. Analysis The Debtors are entitled to a liberal construction of the exemption claim, and the Objectors bear the burden of proof by a preponderance of the evidence. Vasques at 256-257. The Objectors present the following evidence in support of their burden: first, the Debtors were not in occupancy at the Property on the Petition Date; second, the Debtors expressed an intention not to return to the Property once they moved out to facilitate the failed sale; third, they removed all their household items (leaving only clothes for Goodwill, fixtures, some tools, and a lawn mower); and fourth, they 688 intended to occupy the Apartment as their principal residence notwithstanding the unexpected termination of their tenancy there after only six months. The Debtors present the following evidence in rebuttal: first, they properly acquired the Homestead and it had not been terminated in writing on the Petition Date; second, their departure from the Property was merely a sale-related accommodation to their then-buyer; third, their intent not to occupy was, at all times, premised on the sale of the Property and their recognition that, upon sale, they would afterward reside elsewhere; fourth, no one but the Debtors and their family occupied the Property at any time after they acquired it; fifth, in selling the Property, they intended to preserve their equity in the Property to the extent covered by the Homestead; and sixth, but for the scheduled sale, they would not have vacated the Property at all until a sale closing. I share Judge Kenner's reservations regarding homestead termination by abandonment in Massachusetts. Abandonment is not mentioned in the statute, intent is an often elusive because often changeable creature, and it is not unreasonable to maintain that, a protection so formal in its acquisition should be at least as formal in its loss (what must be acquired in a writing should be required to be relinquished in a writing). That said, I make no definitive ruling on the subject here (since I need not do so for this decision) but merely note some considerations that would inform any such. ruling. In the matter before me, I decline to opine on termination by abandonment beyond this: either there is no termination by abandonment in respect of a Massachusetts estate of homestead or, if there is, the facts advanced by the Objectors to defeat the Homestead fall woefully short of the unequivocal evidence required under the cited Massachusetts decisional law. Surely abandonment, if it has any valid place in the homestead framework, must be reflected in a voluntary, informed and unconditional formation of intent not, as here, in an act (namely, relocation) premised on an event (namely, a sale) inextricably connected to and conditioning that act. Indeed, the Debtors' words and actions, far from signifying an intention to abandon the Homestead, rather clearly and convincingly signify an intention to preserve the benefit of the Homestead their unrebutted testimony is that, fearing foreclosure and owning a property with equity protected by a valid, enforceable, and effective homestead estate, they vacated that property to facilitate a sale that would realize that protected equity for their benefit. This is a far more logical reading of the evidence than abandonment. Having considered the evidence and applicable law, I find that a short-term, temporary and conditional discontinuance of occupancy in connection with and in contemplation of a sale of a principal residence neither constitutes nor establishes abandonment either of that principal residence or of the estate of homestead therein under the Homestead Statute. Hence, I find that the Objectors have not met their burden of proof and their objections do not stand. Conclusion On the Petition Date, the Debtors had a valid, effective and enforceable estate of homestead in their Saugus property. They did not abandon either the property or the homestead at any time from their acquisition of the property through and after the Petition Date. Rather, they acted to preserve the economic value of the property and their interest therein. Their intent was unequivocally to preserve and *689 retain that economic value for themselves, as the Homestead Statute authorizes them to do. Accordingly, the Homestead Claim is allowed and the Homestead Objections are overruled. In addition, the Lien Avoidance Objections and the Plan Confirmation Objections are also overruled to the extent they are based upon the Homestead Objections. A separate order will issue. NOTES [1] There are two formal homestead objections and two such objections raised in the context of the Debtors' judicial lien avoidance motions. The two formal objections are made by the Chapter 13 trustee ("Trustee") and Michael Kirby dba TPS Industries ("Kirby"). These are the subject of this decision. The two objections raised in the lien avoidance context are made by Eastern Savings Bank and Mortillaro Lobster, LLC. These four parties are hereinafter occasionally referred to as the "Objectors". [2] Made by the Trustee, Kirby, Eastern Savings Bank and Mortillaro Lobster, LLC. [3] Made by Eastern Savings Bank and Mortillaro Lobster, LLC. [4] The meeting took place on January 31, 2006. [5] The Homestead Objections cast the issue as one of intent to occupy rather than one of abandonment. [6] I acknowledge support for an inference of termination by abandonment in the early Massachusetts cases cited in Marrama, for example, Drury v. Bachelder, 77 Mass. (11 Gray) 214, 216, 1858 WL 6441 (1858); Silloway v. Brown, 94 Mass. (12 Allen) 30, 33, 1866 WL 4795 (1866).	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527494/	2 F. Supp. 601 (1933) LAW v. McLAUGHLIN, Collector of Internal Revenue. No. 19108. District Court, N. D. California, S. D. February 15, 1933. 602 Pillsbury, Madison & Sutro, of San Francisco, Cal., for plaintiff. Geo. J. Hatfield and Esther B. Phillips, Asst. U. S. Atty., both of San Francisco, Cal., for defendant. KERRIGAN, District Judge. Plaintiff sold certain properties in 1924 which he had acquired before March 1, 1913, and which are known as the Marina properties. The government contends that plaintiff made a profit on the sale and has assessed and collected, on that basis, an additional tax from plaintiff; the payment of it was accompanied by formal notice of protest on the part of the taxpayer. Plaintiff contends that he not only made no profit on the sale, but in fact suffered such a loss that his entire tax for the year 1924 should be eliminated. He is suing for a refund of both the original and the additional tax paid for that year. The matter is before me upon demurrer to the complaint which sets forth in nine counts facts to show plaintiff's right of recovery; a different basis of determining cost being set forth in each of the counts with the exception of the second count. The Marina properties were not purchased for cash by plaintiff, but were acquired as the result of the last transaction in a series of exchanges which tell an interesting story of the financial life of San Francisco. Prior to March, 1906, plaintiff acquired the Rialto building at a cost of over $1,200,000. In March, 1906, plaintiff traded this property for a one-half interest in the Fairmont Hotel property upon which the hotel was being constructed; his brother taking the other one-half interest for other consideration. In February, 1907, plaintiff and his brother transferred to Fairmont Hotel, Inc., a substantially closed corporation, their interest in the property, each receiving in exchange one-half of the capital stock of the corporation. April 16, 1908, plaintiff, his brother, and Fairmont Hotel, Inc., deeded to Mrs. Oelrichs the Fairmont Hotel property in exchange for the Marina property; plaintiff receiving an undivided 72 per cent. thereof, and his brother receiving the remaining undivided interest in the Marina and also other property not involved in this case. In October, 1908, plaintiff formed the Anglo-American Securities Company, a California corporation, and transferred to it certain properties belonging to him, including all of his interest in the Marina property. This was a one-man corporation, plaintiff owning all of the shares of stock with the exception of the directors qualifying shares, and during its entire existence plaintiff owned the sole beneficial interest in the corporation. In November, 1912, the Anglo-American Securities Company was dissolved, and plaintiff took back all of its assets into his own name, including the property in question. In 1913 plaintiff and his brother partitioned the Marina property according to their respective interests by an exchange of deeds. It is not claimed that the partition is a transaction having any bearing on the cost of the property. In 1917 plaintiff sold part of the Marina properties, and in 1924 sold the balance thereof. The capital gain or loss on this last transaction is the issue in this case. I have sketched the facts roughly eliminating the recitals in the complaint of capital investment by way of improvements and allocation of such investment to the sales in 1917 and 1924. These matters are not questioned on demurrer. The statute under which the tax is assessed (section 204 (b) of the Revenue Act of 1924, 26 USCA § 935 (b), provides in its pertinent portions as follows: "The basis for determining the gain or loss from the sale or other disposition of property acquired before March 1, 1913, shall be (A) the cost of such property * * or (B) the fair market value of such property as of March 1, 1913, whichever is greater." The second cause of action relies upon the fair market value of the property on March 603 1, 1913. It is conceded by the government that this cause states one correct basis for computing the gain or loss if the plaintiff wishes to rely on it, and it is not demurred to. I think the discussion of the other causes of action will be simplified if I state the theories upon which I am basing my ruling before discussing the allegations of the several counts. The fundamental question at issue in this case is: What was the cost of the Marina properties sold in 1924? Where property is acquired as the result of an exchange or series of exchanges, the cost is either the money investment in the property used in the first exchange plus subsequent capital outlays or it is the value of the property given up in the exchange whereby it is acquired. An exchange is a mutual transfer of property other than for money, although one of the parties may pay a sum of money in addition to the property. 23 Corpus Juris, 186; section 1804, Civil Code of California (as it provided prior to repeal in 1931 and at time of all exchanges affecting this case). The view that cost is the original cash outlay is objectionable because of the large gains or losses which may have occurred in earlier transactions and which have no logical relation to the gain or loss on the property sold during the taxable year. If the property given up in exchange had been sold for money and the money reinvested in the new purchase, there would be no question of going back of the last purchase to gains or losses on the original investment. Similarly, I believe that under this statute, the acquisition of a piece of property, when its price is not money but other property given up for it, is equally a closed transaction. The cost of property acquired by exchange is the fair market value of the thing given in exchange at the time of the exchange. In the case of Rice v. Commissioner, 47 F.(2d) 99, 100 (C. C. A. 1), the court adopted this view in construing section 204 (a) of the Revenue Act of 1924 (26 USCA § 935 (a), which has a parallel provision as to property acquired after February 28, 1913, as follows: "The basis for determining the gain or loss from the sale or other disposition of property acquired after February 28, 1913, shall be the cost of such property. * " In the Rice Case, a hotel had been taken in exchange for a block of stock in the purchasing company. The court held that the cost of the hotel was the fair market value of the shares of stock which were exchanged for it, saying, "Where property is acquired by exchange, it is the fair market value of the property exchanged for that acquired which determines the cost." The same theory of cost was followed in Volker v. U. S. (D. C.) 40 F. (2d) 697; Reliance Investment Co. v. Commissioner, 22 B. T. A. 1287; Appeal of John J. Radel Co., 5 B. T. A. 250 (property acquired before March 1, 1913). It is argued by plaintiff that the term cost as used in section 204 (b) is ambiguous, and that other statutory provisions relating to income tax on exchanges made under the Revenue Act of 1924 should be consulted to determine what Congress meant by cost on exchanges in the section in question. Since cost has been given a definite judicial construction in the cases cited above, it is unnecessary to consider this theory of plaintiff. The next question is: When did plaintiff acquire the Marina properties? The government contends that he acquired them in 1912 when the Anglo-American Securities Company was dissolved and the taxpayer received all of its assets in liquidation. Plaintiff rejects this view on the ground, principally, that the Anglo-American was a one-man corporation and had never been more than a convenient form through which plaintiff held his property. In other words, plaintiff contends that the transfer of the property to the corporation and the return of it to plaintiff on dissolution of the corporation were but shadowy transactions which did not affect the real nature of plaintiff's ownership, and that a case is presented where the corporate fiction should be disregarded. I am in accord with this view, and believe that plaintiff acquired the Marina properties in 1908, and that its cost was the value of his interest in the Fairmont Hotel property. It is not easy to formulate a simple and inclusive statement as to when the corporate entity will be disregarded. The cases are not altogether in harmony. The case principally relied on by the government is Insurance & Title Guarantee Co. v. Commissioner, 36 F.(2d) 842, 843 (C. C. A. 2). It is an income tax case in which Judge Learned Hand refused to disregard the corporate fiction. The plaintiff therein was a corporation which had transferred property to a new corporation which it had organized, received its entire authorized stock in exchange, and distributed the stock ratably among its own shareholders. Advantage was taken of the corporate attribute of divisible ownership of property, and Judge Hand expressly relies on that fact, saying: "Though courts at times 604 ignore the corporate guise, and look to the control reserved through share ownership, neither the law nor commercial custom assimilates absolute title with share holding for purposes of sale and so of profit. Shares are separate salable units, not even aliquot interests in the company's property, for their owner has no more than a right against the company, at least before insolvency. Collectively they may allow the holder still to deal with the assets as he will, but he adopts the corporate form just for a new convenience in subdividing and disposing of his rights, and because law and commerce impute substance to the change in form. This divisible command of money so realized does not exist until he does so; he must sell the goods en bloc or piecemeal, practically a very different thing. * * *" (The italics are mine.) The same comment applies to the case of Volker v. U. S. (D. C.) 40 F. (2d) 697. Property was issued to a trust in exchange for stock, and the stock was sold piecemeal. The case most nearly like the instant one is Hinkel v. Motter (D. C.) 39 F.(2d) 159, appeal dismissed (C. C. A.) 42 F.(2d) 1018. There a corporation in which plaintiff was the sole owner of the stock was dissolved and its property transferred to plaintiff in liquidation. The court disregarded the corporate fiction and held there was no realizable taxable gain resulting from the transaction. The tendency of the Supreme Court of the United States to disregard changes in form of ownership without change in substance in cases of corporate reorganization is declared in Weiss v. Stearn, 265 U.S. 242, 44 S. Ct. 490, 68 L. Ed. 1001, 33 A. L. R. 520, and Eisner v. Macomber, 252 U.S. 189, 40 S. Ct. 189, 64 L. Ed. 521, 9 A. L. R. 1570. The same tendency toward disregarding the corporate fiction is shown in other situations where all of the stock of a corporation is owned by one person or corporation. Davis v. Alexander, 269 U.S. 114, 46 S. Ct. 34, 70 L. Ed. 186; U. S. v. Reading Co., 253 U.S. 26, 40 S. Ct. 425, 64 L. Ed. 760; Wenban Estate v. Hewlett, 193 Cal. 675, 227 P. 723. The taxpayer, then, acquired the Marina properties in April, 1908; its cost was the value of his interests in the Fairmont Hotel property which he gave in exchange for it at that time. Passing now to a consideration of the several causes of action, the third cause sets forth the value of the plaintiff's interest in the Fairmont Hotel property at the time of the transfer for the Marina property, and, in accordance with the views just stated, states a cause of action. This cause is demurred to specially on the grounds that it does not allege the value of the stock in the Anglo-American Securities Company in 1912 and that it does not allege the March 1, 1913, value of the Marina properties. It is obvious from the discussion that the value of the Anglo-American stock is immaterial and need not be alleged. Neither do I believe that it is necessary to allege the March 1, 1913, value of the property. It is alleged and relied on in the second cause of action. The case may go to trial upon both counts, and, after the findings as to value, plaintiff may rely on the one most favorable to him. The general and special demurrers to this cause of action should be overruled. The first cause of action relies on an allegation of plaintiff's "basic cost," but there is nothing alleged to show the measure of such "basic cost." This cause alleges in paragraphs 1 to 10, inclusive, the jurisdictional facts and the proceedings in the Internal Revenue Department, and these paragraphs are incorporated by reference in the third cause of action. The demurrer to this count should be sustained, but it is understood that the ruling does not affect the allegations incorporated by reference in the third count. It is conceded by plaintiff that, if the demurrer to the third cause of action be overruled, the demurrers to the fourth, fifth, sixth, seventh, eighth, and ninth causes should be sustained. It is hereby ordered that the demurrers to the third cause of action be, and the same are hereby, overruled, and ten days are granted to answer this cause of action and the second cause of action. It is further ordered that the demurrers to the first, fourth, fifth, sixth, seventh, eighth, and ninth causes of action be, and the same are hereby, sustained without leave to amend.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527491/	2 F. Supp. 841 (1932) TORQUAY CORPORATION v. RADIO CORPORATION OF AMERICA et al. District Court, S. D. New York. December 14, 1932. 842 Nathan Burkan, of New York City, for plaintiff. Cravath, De Gersdorff, Swaine & Wood, of New York City (Robert T. Swaine and Wm. D. Whitney, both of New York City, of counsel), for defendant Westinghouse Electric & Mfg. Co. Cotton, Franklin, Wright & Gordon, of New York City (Thurlow M. Gordon, Paxton Blair, and E. Allen MacDuffie, all of New York City, of counsel), for defendant General Electric Co. Fish, Richardson & Neave, of New York City (Charles Neave, of New York City, of counsel), for defendant Radio Corporation of America. KNOX, District Judge. Three motions are here before the court: (1) Defendant corporations ask leave to amend their petition for removal, filed December 1, 1932; (2) plaintiff prays remand of the suit to the state court; (3) plaintiff seeks to enjoin defendants General Electric Company and Westinghouse Electric Manufacturing Company from distributing several million shares of stock of Radio Corporation of America, now held by them, to their stockholders or to any one else except the Radio Corporation. In connection with such relief, plaintiff wishes the appointment of a receiver of these shares of stock. 1. Defendants' motion to amend their removal petition will be granted. This court has power to permit such amendment. Kinney v. Columbia Savings & Loan Association, 191 U.S. 78, 24 S. Ct. 30, 48 L. Ed. 103; Hall v. Payne (D. C.) 274 F. 237; Matarazzo v. Hustis (D. C.) 256 F. 882; Woolridge v. McKenna (C. C.) 8 F. 650. The fact that defendants have so promptly docketed the record in this court, and that they have accepted plaintiff's motion to remand on only two days' notice, warrants the exercise of a liberal discretion in allowing them to amend. 2. Plaintiff's motion to remand to the state court will be denied. Complainant, a stockholder of Radio Corporation, alleges itself to be a citizen of Delaware, within which state the Radio Corporation, also, was incorporated. General Electric is a resident of New York, and Westinghouse is a resident of Pennsylvania. The bill of complaint, inter alia, alleges: General Electric and Westinghouse were large stockholders of Radio Corporation, having representation on its board of directors, and largely controlling its policies and actions. General Electric and Radio Corporation entered into an unlawful combination and conspiracy in restraint of interstate commerce, and in violation of the Sherman Anti-Trust Act (15 USCA § 1 et seq.), and Clayton Act (15 USCA § 12 et seq.). Westinghouse became a coconspirator in 1921. 843 About January 1, 1930, a group of contracts was entered into between these corporations, which constituted an unlawful conspiracy in restraint of trade, and which had the effect of giving Radio Corporation a monopoly in the manufacture and sale of radio devices in the United States. Since January 1, 1930, however, Radio Corporation has operated at a loss, and the market value of its common stock has dropped from $40 to approximately $5 a share. In May of 1930, the United States instituted suit in the District Court of the United States for the District of Delaware, against General Electric, Westinghouse, and Radio, charging that the various contracts and agreements between the parties, and the transfer of blocks of Radio stock in exchange for which Radio had received exclusive rights in patents, plants, and equipment of General Electric and Radio, constituted a combination in restraint of trade, and a conspiracy to create a monopoly in violation of the Sherman Anti-Trust Act and Clayton Act. Upon a stipulation of the parties to the suit of the United States, a consent decree was entered on November 21, 1932, requiring General Electric and Westinghouse to divest themselves of their holdings of Radio stock in certain ways and within specified times. The decree also enjoined the continued existence of various license agreements, and stated in detail various acts that should or should not be done. The court making the decree retained jurisdiction for the purpose of enforcing or modifying its decree, with leave to any of the defendants after three years to apply to the court for permission to acquire stock in any other of the defendant corporations, or their subsidiaries. The complaint before this court proceeds to allege that, as a result of the decree in the Delaware suit, the Radio Corporation lost rights that it had theretofore obtained, without securing a provision for the return of its own stock by the General Electric and Westinghouse companies. The result alleged is that Radio was deprived of fair and adequate consideration for the stock with which it had parted, and that General Electric and Westinghouse were unjustly enriched. Furthermore, it is charged that General Electric and Westinghouse and Radio deceived the District Court in Delaware as to the true facts and circumstances by failing to make a sufficient disclosure thereof with consequential injury to the Radio Company. The complaint then sets forth that General Electric and Westinghouse are threatening to dispose of all their holdings of Radio stock by ratably distributing the same as a bonus to their own stockholders; that plaintiff demanded of Radio that it insist that General Electric and Westinghouse return its stock, but that there has been no compliance with such demand; that the stock in question is physically located within the state of New York; and that plaintiff has no adequate remedy at law. The relief asked by the complaint is that General Electric and Westinghouse be enjoined pendente lite, and permanently, from distributing the stock; that they be required to retransfer the stock to the Radio Corporation; that a receiver be appointed to take possession of the stock; that it be declared to be the absolute property of the Radio Corporation; that a trust be impressed upon it for the benefit of the Radio Corporation; and that the individual defendants, the directors of General Electric, Westinghouse, and Radio, be compelled to account to Radio for all of their wrongful acts. From the foregoing it will readily be seen that the relief here sought, if granted, would constitute an interference with the operation of the decree of the United States District Court of Delaware. The effect of the requested relief would be nothing else than a modification of the terms of that decree in so far as it relates to the disposition of the Radio stock held by General Electric and Westinghouse. The Supreme Court of the United States has held the action of a state court, in enjoining a defendant from doing acts pursuant to the valid decree of a federal court, to be error. Central National Bank v. Stevens, 169 U.S. 432, 18 S. Ct. 403, 42 L. Ed. 807. It has also been held that a suit in a state court, attacking the title to property acquired under a decree of a federal court on the ground that such decree was void, involves a federal question and is, therefore, removable. South Dakota Central Railway Co. v. Continental & Commercial Trust & Savings Bank et al., 255 F. 941 (C. C. A. 8th). And in Cornue v. Ingersoll (C. C.) 174 F. 666, decision was made that a suit in equity in a state court the effect of which, as disclosed on the face of the bill, was to delay, obstruct, and perhaps defeat, the enforcement of the judgment of a federal court was removable, as involving a federal question. In addition, it should be remembered that the decree of the federal court in Delaware was a consent decree. Such a decree is not only a decree of court. It is also a contract between the parties to a suit in which it was entered. Garrett & Co., Inc., v. Sweet Valley Wine Company (D. C.) 251 F. 371. *844 See Kelley v. Milan, 127 U.S. 139, 8 S. Ct. 1101, 32 L. Ed. 77; Freeman on Judgments (5th Ed.) § 1350; 21 C. J. 815. A suit to rescind a contract requires that all the parties to it be made parties to the suit. Shields v. Barrow, 17 How. 130, 15 L. Ed. 158; United States v. Northern Pacific R. R. Co. (C. C. A.) 134 F. 715. Similarly, all the parties to a consent decree should be made parties to a suit assailing it. See Freeman on Judgments, supra, § 1352; 21 C. J. 817. Inasmuch as the United States was a party to the consent decree which was entered by the federal court in Delaware, it would seem to be not only a necessary but an indispensable party to the present suit, which would affect its rights under the decree. As all of us know, a suit against the United States raises a federal question. For this reason, also, the present suit is removable to this court. As previously stated, plaintiff's motion to remand to the state court will be denied. 3. Plaintiff's motion for an injunction pendente lite will also be denied. Assuming for the moment that this court has jurisdiction of the present suit, it is clear, as a matter of comity and of the orderly administration of justice, that this court should refuse to exercise its jurisdiction to interfere with the operation of a decree of another federal court. Especially is this so where it is clear that the United States District Court in Delaware would have jurisdiction of such a suit as is now before this court. A bill to modify or restrain the enforcement of a decree of a federal court may undoubtedly be brought in the court which entered such decree. Pacific Railroad of Missouri v. Missouri Pacific Railway, 111 U.S. 505, 4 S. Ct. 583, 28 L. Ed. 498. See Johnson v. Christian, 125 U.S. 642, 8 S. Ct. 1135, 31 L. Ed. 820; Sherman National Bank v. Shubert Theatrical Company (C. C. A.) 247 F. 256. See, also, Foster Federal Practice (6th Edition) §§ 51, 132. Furthermore, the consent decree stated that "jurisdiction is hereby expressly reserved for the purpose of enforcing or modifying this decree on application of any of the parties hereto." While the present plaintiff was not a party to the Delaware suit, complainant is suing as a stockholder on behalf of itself and other stockholders of the Radio Corporation. That company was a party to the decree, and complainant's rights, if any, would seem to be more properly justiciable in the court that made the decree, out of which complainant's grievance arises, than here. Finally, the present bill should be dismissed. As stated before, the United States is a necessary party to this suit. Since the United States cannot be sued in the state court, that tribunal was without jurisdiction of the suit. If the state court had no jurisdiction, this court acquired none upon its removal here. Lambert Run Coal Company v. Baltimore & Ohio Railroad Company, 258 U.S. 377, 42 S. Ct. 349, 66 L. Ed. 671. See General Investment Company v. Lake Shore & M. S. Railway Co., 260 U.S. 261, at page 288, 43 S. Ct. 106, 67 L. Ed. 244. Where it appears to a District Court of the United States that it has no jurisdiction of a suit, it may dismiss it of its own motion. 28 US CA § 80. Plaintiff's motion for an injunction pendente lite is denied, and the bill is dismissed, without prejudice.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527514/	618 S.W.2d 474 (1981) STATE of Tennessee, Plaintiff-Appellee, v. Elmer SMITH, Jr., Defendant-Appellant. Supreme Court of Tennessee. July 6, 1981. Gary R. Wade, Sevierville, for defendant-appellant. Al Schmutzer, Jr., Dist. Atty. Gen., Richard Vance, Asst. Dist. Atty. Gen., Sevierville, Claudius C. Smith, Asst. Atty. Gen., Nashville, for plaintiff-appellee; William M. Leech, Jr., Atty. Gen., of counsel. OPINION HARBISON, Chief Justice. Appellant was convicted for violation of statutes regulating the operation of automobile graveyards or junkyards. T.C.A. §§ 54-5-901 to 905 and T.C.A. §§ 54-20-101 to 121. His conduct consisted of establishing an automobile junkyard after 1965 within a prohibited distance from a state highway and operating the same without a proper permit or license. We affirm the convictions. Appellant concedes that both sets of statutes apply to his property and his business site if they are valid. The earlier statutes, T.C.A. §§ 54-5-901 to 905, were enacted in 1965. They prohibit the establishment of "automobile graveyards" within one thousand feet of certain "through routes" after their effective date. T.C.A. § 54-5-902. The later statutes, T.C.A. §§ 54-20-101 to 121, regulate junkyards in general, including "automobile graveyards" and "vehicle junkyards," as well as other types of waste or junk storage such as garbage dumps and sanitary fills. Apparently there is no insistence that the later statutes repealed or modified the earlier ones insofar as they affect appellant. Appellant insists that both sets of statutes are unconstitutional and represent an improper exercise of the state's police power 475 upon the single ground that both rest entirely upon aesthetic considerations.[1] These proceedings were instituted by the issuance of criminal warrants in the General Sessions Court of Sevier County. A separate warrant was issued under each set of statutes. Appeal was taken from a conviction and fine imposed under each warrant. Almost no evidentiary record was developed in the circuit court. The case was disposed of there upon a short stipulation of facts and very brief testimony from appellant. The stipulation established that appellant commenced his business in February 1980 upon a five-acre leased tract. The property fronts upon State Highway 66, and the business is located within one thousand feet of this highway. Appellant did not have a permit as required by T.C.A. § 54-20-113. The junkyard is situated within view of the highway. The property is not zoned or otherwise designated by any local governing body for use as a vehicle junkyard. The "area in question" where the tract is situated is sparsely populated, unincorporated, rural and consists primarily of farm land. The size of the "area" and its proximity to a city or town are not specified in the stipulation. There are statements of counsel that the highway is rather well-traveled and leads to a reservoir and recreational part which "is heavily used in the summer time." It was stipulated that the topography is such that a fence would not substantially hide the junkyard from public view, although one portion near a barn could be concealed by a fence. There is an unsworn statement in the record by patrolman that the barn is upon a hillside, situated two hundred fifty to three hundred yards from the highway. A used car lot and a "tire place" exist within three-tenths of a mile from the site. Upon this record appellant apparently insists that he is entitled to a finding of fact that, as applied to his business, the only purpose served by the regulatory statutes is an aesthetic one, to enhance the beauty of the landscape. The evidence does not justify such a finding. In enacting the most recent of the statutes, the General Assembly included the following statement: "For the purpose of promoting the public safety, health, welfare, convenience and enjoyment of public travel, to protect the public investment in public highways, and to preserve and enhance the scenic beauty of lands bordering public highways, it is hereby declared to be in the public interest to regulate and restrict the establishment, operation and maintenance of junkyards in areas adjacent to the interstate and primary systems within this state. The general assembly hereby finds and declares that junkyards which do not conform to the requirements of this chapter are public nuisances." T.C.A. § 54-20-102. This statute was enacted in 1967. By supplementary provisions effective July 1, 1974, vehicle junkyards were prohibited within one thousand feet of a state roadway without a current vehicle junkyard concealment control permit, issued by the Commissioner of Safety, except those located in areas zoned for industrial use. T.C.A. § 54-20-113. Only if we could say that these statutes have no reasonable relation whatever to safety, health, welfare, public investment in highways or convenience of public travel, as applied to the site in question, would we reach the broad proposition asserted by appellant that the statutes promote aesthetic goals only. There is no such factual showing in this record. 476 From such brief evidence as is in it, we are not prepared to find that the regulatory statutes are totally and completely unrelated to highway safety, maintenance and other purposes referred to by the legislature which are not necessarily wholly aesthetic in nature. Appellant relies principally upon the case of City of Norris v. Bradford, 204 Tenn. 319, 321 S.W.2d 543 (1958), in which this Court held invalid a local zoning ordinance prohibiting fences on residential lawns fronting on streets. In the course of that opinion the Court did state that exercise of the police power based solely upon aesthetic considerations could not be sustained. Appellant also relies upon language contained in Hagaman v. Slaughter, 49 Tenn. App. 338, 354 S.W.2d 818 (1961), in which the Court sustained an injunction against the operation of a junkyard as a public nuisance, but modified the relief granted by the chancellor so as to allow further operations if they could be conducted without certain offensive aspects. Appellant seems to concede that if other factors than aesthetics, such as traffic safety and the protection of the public investment in highways, did justify the statutory regulations involved here, then aesthetic considerations, in addition, might be taken into account by a legislative body. As stated, appellant has not eliminated such other factors in this case, nor has he contradicted the legislative declaration that those factors prompted the General Assembly to enact the statutes. It is true that there are limits upon the exercise of the police power of state and local governments. See Livesay v. Tennessee Board of Examiners in Watchmaking, 204 Tenn. 500, 322 S.W.2d 209 (1959). However, in the case of Ford Motor Co. v. Pace, 206 Tenn. 559, 564, 335 S.W.2d 360, 362 (1960), upholding a statute regulating the licensing of automobile dealers and salesmen, this Court said: "In considering the question, whether or not the Legislature has the right to enact such a statute under the police power, we must take into consideration and look at things in the light of the social and economic conditions existing at the present time rather than at the time our Constitution was adopted. Legislative power is not static and helpless but arises to adjust and face new conditions as they appear to affect the people of the State. Of course, the Legislature of the State cannot prohibit an ordinary business but it may, however, regulate the business to promote the health, safety, morals or general welfare of the public. The guarantees of the Constitution imply the absence of arbitrary restraint, but not immunity from reasonable regulations and prohibitions imposed in the interest of the people of the State." Certainly a legislative declaration of the need for regulation is not conclusive upon the courts. Nevertheless, as stated in the Pace case, supra: "It makes no difference what our personal views may be as to the necessity of such legislation as that herein, the fact remains that the Legislature of the State concluded that a reasonable basis existed for its enactment, and, there being some foundation in fact to justify this legislative action, the Court is powerless and it wouldn't be right on our part for us to substitute our judgment for that of the Legislature even if we cared to do so." 206 Tenn. at 567-68, 335 S.W.2d at 363. See also Chapdelaine v. Tenn. State Bd. of Examiners,, 541 S.W.2d 786 (Tenn. 1976); Mobile Home City of Chattanooga v. Hamilton County, 552 S.W.2d 86, 88 (Tenn. App. 1977), cert. denied, 431 U.S. 956, 97 S. Ct. 2678, 53 L. Ed. 2d 273 (1977) (if reasonableness of legislative classification be "fairly debatable" it must be upheld). Appellant had ample opportunity in this case to offer evidence that, as applied to his property, the legislation served nothing but aesthetic purposes. He wholly failed to do so. There are no photographs, testimony describing the highway, its intersection with the road leading to appellant's business, the nature and scope of that business, the area covered by the junkyard or traffic into and out of the premises. We simply *477 cannot conclude from the record that aesthetics alone constitute the only conceivable basis for application of the statutes to appellant. Wholly apart from this, however, as pointed out by appellee, in recent years most courts which have considered junkyard regulations similar to those involved here have had no difficulty in sustaining them as a proper exercise of the police power of a state or local government, even if scenic or aesthetic considerations have been found to be the only basis for their enactment. See Rotenberg v. City of Ft. Pierce, 202 So. 2d 782 (Fla.App. 1967); Jasper v. Commonwealth, 375 S.W.2d 709 (Ky. 1964); Deimeke v. State Highway Commission, 444 S.W.2d 480 (Mo. 1969); National Used Cars, Inc. v. City of Kalamazoo, 61 Mich. App. 520, 233 N.W.2d 64 (1975); State v. Buckley, 16 Ohio St. 2d 128, 243 N.E.2d 66 (1968); Farley v. Graney, 146 W. Va. 22, 119 S.E.2d 833 (1960). Although some authorities to the contrary may be found, we find these cases to be better reasoned and more in accord with modern concerns for environmental protection, control of pollution and prevention of unsightliness. We believe that the views expressed in City of Norris v. Bradford, supra, must be considered in the light of the facts of that case and that they cannot be literally applied to all of the myriad concerns and problems facing state and local governments at this time. As appellee further points out, there has been a strong trend toward upholding state and local regulation of land use in other areas than junkyard control, even though aesthetic considerations constitute the sole or primary reason for the legislation. The rule stated in City of Norris v. Bradford, supra, in our opinion, no longer represents the prevailing view on that subject. In addition to the authorities previously cited, see Penn. Central Transport Co. v. New York City, 438 U.S. 104, 129, 98 S. Ct. 2646, 2661, 57 L. Ed. 2d 631 (1978) (land use restrictions may be enacted "to enhance the quality of life by preserving the character and desirable aesthetic features of a city"); Berman v. Parker, 348 U.S. 26, 33, 75 S. Ct. 98, 102, 99 L. Ed. 27 (1954) (legislature may determine that "the community should be beautiful as well as healthy, spacious as well as clean, well-balanced as well as carefully patrolled"); Stone v. City of Maitland, 446 F.2d 83, 89 (5th Cir.1971) (zoning ordinances restricting size and location of service station sites upheld "enhancement of the aesthetic appeal of a community is a proper exercise of police power"); Sunad, Inc. v. City of Sarasota, 122 So. 2d 611 (Fla. 1960) (aesthetic considerations sufficiently justified regulating advertising signs, but regulation in question held unreasonable and discriminatory on particular facts); John Donnelly & Sons, Inc. v. Outdoor Advertising Bd., 369 Mass. 206, 339 N.E.2d 709 (1975) (off-premises advertising signs prohibited for purely aesthetic reasons; ordinance held valid exercise of police power); Mississippi State Highway Commission v. Roberts Enterprizes, 304 So. 2d 637 (Miss. 1974) (Outdoor Advertising Act upheld); Westfield Motor Sales Co. v. Town of Westfield, 129 N.J. Super. 528, 324 A.2d 113 (1974) (limitation upon size of signs in residential areas held valid); People v. Stover, 12 N.Y.2d 462, 240 N.Y.S.2d 734, 191 N.E.2d 272 (1963) (prohibition of clotheslines in front yards of residential neighborhoods sustained); see also 8 McQuillin, Municipal Corporations § 25.31 (3d ed. 1976). We therefore are of the opinion that in modern society aesthetic considerations may well constitute a legitimate basis for the exercise of police power, depending upon the facts and circumstances. Since that factor is by no means the only one shown to have controlled the enactment and enforcement of the statutes now under consideration, however, we have no hesitancy in upholding the validity of the statutes in general and their application to appellant in this case. The judgment of the circuit court is affirmed. Costs incident to the appeal are taxed to appellant; the cause will be remanded to the trial court for collection of costs accrued there. FONES, COOPER, BROCK and DROWOTA, JJ., concur. NOTES [1] It is somewhat difficult for us to ascertain whether appellant contends that such statutes, under all circumstances, are invalid and that they could never be the subject of proper exercise of the police power, or whether he confines his attack to their application to him and his particular situation. We have concluded that his attack is limited to the application of the statutes to his case. We would certainly not be prepared to hold that the General Assembly lacks power ever to regulate junkyards, advertising and other enterprises along and adjacent to national and state roadways. See e.g., T.C.A. §§ 54-17-108 to 112, regulating junkyards, advertising and trash disposal upon "scenic highways," and T.C.A. §§ 54-21-101 to 118, "The Billboard Regulation and Control Act of 1972."	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527517/	89 Md. App. 19 (1991) 597 A.2d 486 RICKEY ANTHONY HENDERSON v. STATE OF MARYLAND. No. 41, September Term, 1991. Court of Special Appeals of Maryland. October 29, 1991. Certiorari Denied February 12, 1992. Timothy J. Sullivan, College Park, for appellant. David P. Kennedy, Asst. Atty. Gen. (J. Joseph Curran, Jr., Atty. Gen., on the brief), Baltimore, for appellee. Argued before BISHOP, WENNER and CATHELL, JJ. WENNER, Judge. Appellant, Rickey A. Henderson, chose to flee from an orchard with fruit before the tree became poisonous. See, Wong Sun v. United States, 371 U.S. 471, 83 S. Ct. 407, 9 L. Ed. 2d 441 (1963). Appellant had been charged with importation of cocaine, possession with intent to distribute cocaine, and possession of cocaine. He filed a motion to suppress evidence he claimed had been obtained in violation of his constitutional rights. The motion was denied. Subsequently, upon an agreed statement of facts, appellant was convicted by the Circuit Court for Prince George's County of all charges against him. The court sentenced him to twenty years of imprisonment, with all but five years suspended in favor of five years probation. This appeal followed. Appellant has presented multiple issues for us to consider, and we shall discuss each of them in turn. We begin by considering whether the contraband dropped by appellant during a chase was the fruit of an unconstitutional seizure. Before answering this question, we shall have to determine when, from a Fourth Amendment standpoint, appellant's seizure occurred. Ultimately, we shall affirm the judgments of the circuit court. FACTS On April 5, 1989, as appellant got off an Amtrak train at the New Carrollton, Maryland Amtrak Station, his misfortune began. Unbeknownst to appellant, a drug interdiction task force had set up shop at the station. One of its members, Corporal Wilson of the Prince George's County Police Department, testified at the suppression hearing. The corporal testified that he observed appellant get off the train and move toward an escalator. The corporal followed appellant down the escalator. When they reached the bottom, the corporal began to identify himself as a police officer. As he did so, appellant fled. The corporal gave chase. Appellant ran out of the station and into a wooded area. During the chase, Detective Kerr, another member of the task force, passed Corporal Wilson. Kerr pursued appellant into the wooded area. After he had run about half a mile, appellant dropped what Kerr described as a white object. Appellant was ultimately caught by Detective Kerr and arrested. After he was arrested, the task force searched for and found the white object appellant had dropped during the chase. It was a torn plastic bag found to contain cocaine. As we said earlier, we shall determine from a Fourth Amendment standpoint when appellant was seized. BACKGROUND OF THE LAW The question of when the seizure of a person who is attempting to flee from the police occurs was addressed by the Supreme Court in Michigan v. Chesternut, 486 U.S. 567, 108 S. Ct. 1975, 100 L. Ed. 2d 565 (1988). In Chesternut, the Court adopted the so-called Mendenhall test, first penned by Justice Stewart in United States v. Mendenhall, 446 U.S. 544, 100 S. Ct. 1870, 64 L. Ed. 2d 497 (1980). According to Mendenhall, "A person has been `seized' within the meaning of the Fourth Amendment only if, in view of all the circumstances surrounding the incident, a reasonable person would have believed that he was not free to leave." Id., 446 U.S. at 554, 100 S.Ct. at 1877. In Hawkins v. State, 77 Md. App. 338, 550 A.2d 416 (1988), relying on Chesternut, we held that a seizure occurred when, upon noticing the approach of a plain clothes officer, one begins to run away, and the officer gives chase shouting, "Stop, police". In Hawkins, we held the officer lacked probable cause for the seizure, thus illegal contraband discarded by the defendant during the chase was inadmissible. Two years later, in State v. Lemmon, 318 Md. 365, 568 A.2d 48 (1990), the Court of Appeals, also relying primarily on Chesternut[1], addressed the issue of when a fleeing defendant is seized. The Court determined in Lemmon that the defendant was seized before discarding illegal contraband subsequently admitted at trial. The facts deemed relevant by the Court in determining that a seizure took place were: (1) the approach of two officers; (2) the command by the officers to, "come here"; (3) the immediate pursuit by the officers when Lemmon ran; (4) the attempt to set up a blockade with a police car when it was apparent Lemmon was getting away; (5) the joinder of a third officer in the posse; (6) leaving the police car unattended; and (7) the attempt by one of the pursuers to circumvent a possible line of flight. Lemmon, 318 Md. at 374, 568 A.2d 48. Very recently, in California v. Hodari D., ___ U.S. ___, 111 S. Ct. 1547, 113 L. Ed. 2d 690 (1991),[2] the Supreme Court somewhat redefined the definition of what, for Fourth Amendment purposes, constitutes a seizure. The facts of Hodari D. are quite similar to those before us in Hawkins, before the Court of Appeals in Lemmon, and are again before us in the case sub judice. In Hodari D., while patrolling a high-crime area, police officers came upon a number of youths huddled around a parked car. When the youths saw the officers approaching, they fled. The officers gave chase. While running, Hodari discarded what appeared to be a small rock which was later found to be crack cocaine. Ultimately, the officers caught Hodari, handcuffed him, and called for assistance. The Supreme Court phrased the issue before it as "whether, at the time [Hodari] dropped the drugs, Hodari had been `seized' within the meaning of the Fourth Amendment." Id., ___ U.S. at ___, 111 S.Ct. at 1549. In other words, when a person is neither physically restrained nor voluntarily submits to a police officer's show of authority, can it be said under the Fourth Amendment that that person has been seized? The Court succinctly held that seizure "does not remotely apply ... to the prospect of a policeman yelling `Stop, in the name of the law!' at a fleeing form that continues to flee. That is no seizure." Id., ___ U.S. at ___, 111 S.Ct. at 1550.[3] With Hodari D. firmly in mind, we turn to the case sub judice. Appellant contends that, for Fourth Amendment purposes, he was seized when Corporal Wilson and other police officers pursued him after he began to run.[4] In light of Hodari D., it is clear that appellant was not seized until Detective Kerr physically restrained him. Until then, appellant was neither under the physical control of the officers, nor was he acquiescing to their authority.[5] Therefore, we hold that appellant was not seized until after he dropped the contraband. Thus, the contraband was not the fruit of an illegal seizure. Article 26, Md. Declaration of Rights Appellant also contends that there are independent state grounds (ie., Art. 26 of the Md. Declaration of Rights) upon which he is entitled to have the judgments of the circuit court reversed. We shall briefly consider his contention. The Court of Appeals has previously considered whether Article 26 provides greater protection than the Fourth Amendment. In Gahan v. State, 290 Md. 310, 430 A.2d 49 (1981), the Court said: The [Court of Appeals of Maryland] cases clearly recognize the similarity between the Fourth Amendment to the Constitution of the United States and our own older Declaration of Rights, Art. 26, which grew out of the same historical background. Because of this similarity the consistent position of this Court has been that `decisions of the Supreme Court on the kindred 4th Amendment are entitled to great respect.' Gahan, 290 Md. at 321, 430 A.2d 49, citing Givner v. State, 210 Md. 484, 498, 124 A.2d 764 (1956), quoting Lambert v. State, 196 Md. 57, 62, 75 A.2d 327 (1949). The Court has consistently held Article 26 to be in pari materia with the Fourth Amendment of the Constitution of the United States. In fact the Court has said explicitly: It has been said by this Court in a number of cases that this Article [Art. 26] is in pari materia with the Fourth Amendment of the Constitution of the United States. Givner, 210 Md. at 492, 124 A.2d 764; see also Gahan at 319-20, 430 A.2d 49; McMillian v. State, 65 Md. App. 21, 30-31, n. 2, 499 A.2d 192 (1985). Consequently, we hold that Article 26 of the Md. Declaration of Rights does not afford appellant any greater protection than that of the Fourth Amendment to the United States Constitution. RETROACTIVE APPLICATION OF HODARI D. Finally, appellant contends that we should not apply the holding of Hodari D. to this case because it constitutes a "clean break from the past." As such, appellant contends that Hodari D. prejudiced his reliance upon existing law in formulating his defense. We point out to appellant that "[a]s a general rule, a change in law will be given effect while a case is on direct review." Potts v. State, 300 Md. 567, 581, 479 A.2d 1335 (1984), citing Solem v. Stumes, 465 U.S. 638, 642, 104 S. Ct. 1338, 1341, 79 L. Ed. 2d 579 (1984); United States v. Johnson, 457 U.S. 537, 562, 102 S. Ct. 2579, 2593, 73 L. Ed. 2d 202 (1982). Although Hodari D. is somewhat of a divergence from Chesternut, it is not a "clean break from the past" nor does it create an entirely new legal standard. As such, it does not warrant a departure from the general rule. CONCLUSION For the aforegoing reasons, we affirm the judgments of the circuit court. JUDGMENTS AFFIRMED. COSTS TO BE PAID BY APPELLANT. NOTES [1] We ... turn to Chesternut to determine the matter of the seizure of Lemmon. Lemmon, 318 Md. at 372, 568 A.2d 48. [2] See Johnson v. State, 87 Md. App. 579, 590 A.2d 1069 (1991). [3] The Court also said that an arrest did not take place since "[a]n arrest requires either physical force ... or, where that is absent, submission to the assertion of authority." Id., ___ U.S. at ___, 111 S.Ct. at 1551. [4] Interestingly, at oral argument counsel for appellant argued that appellant was seized when Corporal Wilson's and appellant's shoulders bumped accidentally while going down on an escalator in the station. [5] As we need not decide it, we express no opinion whether the officers' actions constitute a sufficient show of authority that, should appellant have acquiesced, it could be said he had been seized.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527572/	2 F. Supp. 165 (1931) METROPOLITAN LIFE INS. CO. v. DUNNE et al. District Court, S. D. New York. June 16, 1931. Edward M. Grout and Paul Grout, both of New York City (Dean Potter, of New York City, of counsel), for plaintiff. Arthur E. Schwartz, of New York City (Arthur E. Schwartz, of New York City, and James M. Lynch, of counsel), for defendants Dunne. A. D. Lent and A. W. Lent, both of Highland, N. Y. (A. W. Lent, of Highland, N. Y., of counsel), for defendant Wilcox. PATTERSON, District Judge. In 1918, the plaintiff issued two policies of life insurance on the life of one Johnson, each for the amount of $310. The policies were payable to Johnson's executor or administrator, but contained what is known in industrial insurance policies as a "facility of payment" clause, to the effect that the company might make payment to certain designated relatives or to persons appearing to be equitably entitled to payment by reason of having incurred expense for the insured or for his burial. On each policy the premium was 25 cents a week. At the time the policies were issued, Johnson was boarding at the home of Mrs. Bridget Dunne in Connecticut, where he continued to live until 1925. He then moved to New York state. Mrs. Dunne paid all the premiums on both policies, except the first two payments, and had the policies in her possession. She kept up the payments until 1929, when she discovered that Johnson had died in 1926. The premiums paid after death of the insured came to $59.50. Mrs. Dunne and a daughter of hers, Dorothy Dunne, then made claim to the proceeds of the policies. Howard 166 E. Wilcox, who resides in this district, is Johnson's executor and also claimed the proceeds of the policies. Confronted by these adverse claims, the plaintiff availed itself of the provisions of the Interpleader Act of 1926 (28 USCA § 41 (26), and brought this bill of interpleader, having paid into court the sum of $604.52, the total amount due on the two policies. Over objection by the executor, Mrs. Dunne testified that Johnson had delivered the policies to her back in 1918, telling her that they were for her little daughter. Decision on the executor's motion to strike out this testimony was reserved. Before passing to the merits, I will consider a question of jurisdiction. The executor made timely motion to dismiss the bill on the ground that the amount due on each policy is less than $500. Under the present Interpleader Act, the bill must aver that the insurance company "has in its custody or possession money or property of the value of $500 or more, or has issued a bond or a policy * * for the payment of $500 or more." I am referred to no authorities on the point, but it seems to me that the United States courts have jurisdiction to entertain a suit where the aggregate amount due on several policies issued by one company upon one life exceeds $500, although the amount due upon each single policy falls short of $500. The words "that such company, association or society has in its custody or possession money or property of the value of $500 or more," if taken in their ordinary sense, cover a case where the total amount involved in several policies exceeds $500. I do not believe that these words should be restricted to cases where there is a specific, separate fund of over $500 in the company's possession. Such a construction would be an extremely narrow one, in face of the fact that the statute is to be liberally construed. Hartford Fire Ins. Co. v. Sanders (C. C. A.) 38 F.(2d) 212. Support for jurisdiction in a case like the present is also found, by analogy, in the numerous cases under paragraph 1 of section 41, 28 USCA, holding that there is jurisdiction in cases where the total amount involved is more than $3,000, although the sums demanded under each of the several causes of action pleaded are less than the jurisdictional amount. Heffner v. Gwynne-Treadwell Cotton Co. (C. C. A.) 160 F. 635; Yates v. Whyel Coke Co. (C. C. A.) 221 F. 603; Mutual Life Insurance Co. v. Rose (D. C.) 294 F. 122. I am therefore persuaded that the objection to the jurisdiction of the court is not well taken. It is undisputed that Mrs. Dunne is entitled to recover the premiums paid by her after the death of the insured, in ignorance of his death. The controversy relates to the balance of the fund paid into court. The executor being the beneficiary specified in the policies, he is the person prima facie entitled to the proceeds, and the burden of proof rests upon the defendants Dunne to prove a superior right. It is claimed, first, that the proceeds are Mrs. Dunne's under the "facility of payment" clause, and, second, that the insured assigned the policies to Dorothy Dunne by way of gift. There is no merit in the first contention, even though it be true that these claimants or either of them "incurred expense" in behalf of the insured. The policies are payable to the executor or administrator, with the right reserved to the company to make payment to certain others in case it shall see fit to do so. This right to divert the proceeds from the insured's personal representative is a privilege possessed by the company alone, to be exercised or not at its option. Unless this right is exercised by the company, through actually making payment under the clause, its presence in the policies cannot extinguish or cut down the executor's claim to the proceeds. McCarthy v. Prudential Ins. Co., 252 N.Y. 459, 169 N.E. 645; Williard v. Prudential Ins. Co., 276 Pa. 427, 120 A. 461, 28 A. L. R. 1348; Prudential Ins. Co. v. Godfrey, 75 N. J. Eq. 484, 72 A. 456, affirmed in 77 N. J. Eq. 267, 76 A. 1067. Here the company took no action under the "facility of payment" provision, and that clause therefore cuts no figure in determining the rights of the parties. Was there a gift of the policies to Dorothy Dunne? One of the policies provided that it should be void if assigned. But such a provision is not self-executing; it is to be interpreted as giving the company a right to declare a forfeiture upon assignment, which it may waive if it chooses. See Grigsby v. Russell, 222 U.S. 149, 157, 32 S. Ct. 58, 56 L. Ed. 133, 36 L. R. A. (N. S.) 642, Ann. Cas. 1913B, 863. A clause practically identical was so construed in Holleran v. Prudential Ins. Co., 172 A.D. 634, 159 N. Y. S. 284. The payment of the proceeds into court and the bringing of the bill of interpleader constituted a waiver of any forfeiture. In the other policy the provision as to assignment is different; it is declared that an assignment shall be void and of no effect. I take it that *167 this provision is also designed to safeguard the company in making payments either to the beneficiary named in the policy or under the "facility of payment" clause, and that, if the company sees fit to waive this protection, an assignee of the policy is not without rights. As to both policies, therefore, the provisions against assignment are not operative where the company has paid the proceeds into court. The real question in the case is whether the proof shows an assignment. In this connection, it must be taken as settled that no writing is required to make an assignment of a life insurance policy effective. A delivery of the policy, under circumstances indicating quite clearly an intention to make a gift to the assignee, is sufficient. McGlynn v. Curry, 82 A.D. 431, 81 N. Y. S. 855. Mrs. Dunne testified that the insured handed the policies to her and said that they were for her daughter Dorothy. The admissibility of this evidence is challenged by the executor. Under section 858 of the Revised Statutes, as amended (28 USCA § 631), the competency of the witness to testify is to be determined "by the laws of the State or Territory in which the court is held." The laws of New York therefore control. Metropolitan Life Ins. Co. v. English (D. C.) 291 F. 577. The New York rule is that a party or person interested in the event, or a person through whom such a party or person derives his interest or title by assignment or otherwise, may not testify against an executor or administrator concerning a personal transaction with the decedent. Civil Practice Act, § 347. If the testimony of Mrs. Dunne as to this transaction were offered in support of any claim of her own to the policies, the incompetency of such proof would be clear. But the fact is that her testimony supports the claim of another, giving herself the role merely of custodian of the policies. It is certain that the relationship of mother and daughter, the daughter being interested, does not render incompetent the testimony of the mother. Eisenlord v. Clum, 126 N.Y. 552, 27 N.E. 1024, 12 L. R. A. 836. Likewise it is settled that the mere fact that the mother is a "party" to the suit does not exclude her testimony, where she is not financially interested in the result. Harrington v. Schiller, 231 N.Y. 278, 132 N.E. 89. If she had seen the policies delivered by the insured directly to the daughter and had heard him utter words indicative of a gift, she would have been competent to testify to the occurrence. The fact that the policies were handed over to her and the words spoken to her makes the point a closer one. It is arguable that in this case the daughter derived her interest from the mother's acceptance of delivery, and that, consequently, the mother may not testify concerning the transaction. But it seems to me that a person to whom policies are delivered by the insured, with the statement that they are for her daughter, may give testimony concerning the transaction against the executor of the insured, and that section 347 does not apply to such a case. Croker v. New York Trust Co., 121 Misc. 725, 201 N. Y. S. 811, seems analogous. That was a suit by the son of a decedent to enforce a promise made him by the decedent to convey property to a daughter. It was held that the plaintiff might testify that the decedent made him the promise. The executor's motion to strike out the testimony of Mrs. Dunne will therefore be denied. The testimony as to the delivery of the policies and as to the insured's statement that they were for the daughter, if true, establishes a gift of the policies to the daughter. I think that the other evidence in the case tends strongly to show that this testimony was true. Mrs. Dunne had possession of the policies and also of the premium receipt books. She paid the premiums for many years. The insured apparently paid no attention to his insurance; his executor did not even know of the existence of the policies until three years after his death when Mrs. Dunne supplied the information. Upon all the testimony, I have concluded that a gift of the two policies to the defendant Dorothy Dunne has been satisfactorily established and that she is entitled to a decree awarding the proceeds to her. The plaintiff is entitled to a reasonable attorney's fee out of the fund paid into court. Mutual Life Ins. Co. v. Bondurant (C. C. A.) 27 F.(2d) 464. In view of the modest amount at stake, I will fix this allowance at $100. The prayer for the interpleader will be granted. The plaintiff will have $100 of the fund for its attorneys' fee, and will also have its taxable costs; the defendant Bridget Dunne will have $59.50 out of the fund; and the defendant Dorothy Dunne will have the balance. There will be no costs as between the defendants Dunne and the executor.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527578/	618 S.W.2d 278 (1981) Ray GOODNIGHT, Clifford Goodnight, Leona E. Davis and Fay Maxcy Nichols, Plaintiffs-Appellants, v. James E. CURRY, Administrator, Maxine Campbell, Genevieve Storm, Lena Brent, Bill Goodnight, Leonard Goodnight, Patricia Arnette, Alfred Tate and Thelma Goodnight, Defendants-Respondents. No. 11847. Missouri Court of Appeals, Southern District, Division One. June 16, 1981. 279 Daniel P. Wade, Wade & Haden, Ava, John G. Moody, Mansfield, for plaintiffs-appellants. John E. Price, Woolsey, Fisher, Whiteaker, McDonald & Ansley, Springfield, for defendants-respondents. PREWITT, Judge. Plaintiffs brought this action contesting a purported will of William Goodnight. They contend that due to illness including a stroke, and advancing age, he did not have testamentary capacity at the time the document was signed and that it was executed as a result of undue influence. The trial court, finding that the decedent had testamentary capacity at the time he signed the will and that it was not executed due to undue influence, declared the contested will valid. Plaintiffs contend that the court's judgment "was against the weight of the evidence": (1) "because there was insufficient evidence to support the trial court's finding that William Goodnight had testamentary capacity when he executed the will"; and (2) "because there was insufficient evidence to support the trial court's finding that the will was not executed under the undue influence of Lena Brent." We should set aside a judgment on the ground that it is against the weight of the evidence with caution and with a firm belief that the judgment is wrong. Murphy v. Carron, 536 S.W.2d 30, 32 (Mo. banc 1976). "Weight of the evidence" means its weight in probative value, not the quantity or amount thereof. Langley v. Langley, 607 S.W.2d 211, 212 (Mo.App.1980). The weight of evidence is not determined by mathematics, but depends on its effect in inducing belief. Id. Proponents of a will have the burden to establish as a part of their prima facie case that at the time of the execution of the will decedent was of sound and disposing mind and memory. Maurath v. Sickles, 586 S.W.2d 723, 726 (Mo.App.1979). Defendants' evidence was sufficient to do so. They presented lay and medical testimony, including that from apparently disinterested witnesses, that decedent was of sound mind and competent to make a will at the time the will was executed. Plaintiffs offered lay and medical testimony that decedent was not competent at that time. The trial court chose to believe defendants' evidence. Where there is conflicting testimony we give deference to the trial court's conclusions. Lytle v. Page, 591 S.W.2d 421, 423 (Mo.App.1979). The burden of proving undue influence rests upon plaintiffs. Maurath v. Sickles, supra, 586 S.W.2d at 730. Motive and opportunity alone are not enough to establish undue influence. Sweeney v. Eaton, 486 S.W.2d 453, 456 (Mo.1972). A presumption of undue influence arises if: (1) a confidential or fiduciary relationship existed between the decedent and a beneficiary; (2) the beneficiary has been given substantial benefit by the will; and (3) the beneficiary caused or assisted in causing the execution of the will. Matthews v. Turner, 581 S.W.2d 466, 472 (Mo.App.1979). Plaintiffs contend that they have the benefit of such presumption. We question whether elements (1) and (3) were adequately established, but even if so, there was evidence indicating that no undue influence existed and the trial judge could have so found. This presumption presents an issue for the trier of fact. Maurath v. Sickles, supra, 586 280 S.W.2d at 730. There was evidence that the decedent was not under any undue influence and that he initiated the discussion of the will with its scrivener and that he made the decisions as to what the will should contain. There was substantial evidence to support the trial judge's determination on both points raised here and, giving deference to his ability to view the witnesses, we cannot say with a firm belief that the judgment was wrong. It therefore should be affirmed. Murphy v. Carron, supra, 536 S.W.2d at 32. The judgment is affirmed. All concur, except GREENE, P. J., recused.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527594/	357 B.R. 1 (2006) In re Paul A. HARRIS, Debtor. No. 05-12973-MWV. United States Bankruptcy Court, D. New Hampshire. July 27, 2006. Grenville Clark, Esq., Gray, Wendell & Clark, PC, Manchester, NH, for Debtor. Edmond J. Ford, Esq., Ford, Weaver and McDonald, PA, Portsmouth, NH, for Michael S. Askenaizer, Chapter 7 Trustee. Kevin Devine, Esq., Devine & Nyquist, P.A., Manchester, NH, Timothy P. Smith, Esq., for Joel B. Alvord. 2 Geraldine Karonis, Esq., Office of the United States Trustee, Assistant United States Trustee. MEMORANDUM OPINION MARK W. VAUGHN, Chief Judge. The Court has before it the "Debtor's Motion to Convert Case to One Under Chapter 13." Paul Harris (the "Debtor") seeks to convert pursuant to 11 U.S.C. § 706(a). The Chapter 7 trustee (the "trustee"), the United States Trustee, and Joel B. Alvord have filed objections to the Debtor's motion. The Court held a full-day evidentiary hearing on April 17, 2006. For the reasons set forth below, the Debtor's motion to convert to chapter 13 is denied. JURISDICTION This Court has jurisdiction of the subject matter and the parties pursuant to 28 U.S.C. §§ 1334 and 157(a) and the "Standing Order of Referral of Title 11 Proceedings to the United States Bankruptcy Court for the District of New Hampshire," dated January 18, 1994 (DiClerico, C.J.). This is a core proceeding in accordance with 28 U.S.C. § 157(b). BACKGROUND The Debtor Med a voluntary Chapter 7 petition on July 28, 2005, and filed his schedules and statement of financial affairs on August 25, 2005. Several corporations formed and held by the Debtor are relevant hereto. In January 2003, the Debtor incorporated Indoor Garden Systems of New Hampshire, Ltd. ("Indoor Garden Systems"). Indoor Garden Systems developed and sold various gardening devices, such as the "StandUp Garden" and the "Flower Wall." Another corporation formed by the Debtor, Lochinvar Holdings, Ltd. ("Lochinvar"), existed for the purpose of owning the Debtor's residence.[1] In addition, Lochinvar loaned a total of $150,000 to Indoor Garden Systems between October 2002 and March 2003. In exchange, Lo chinvar was granted a security interest in the assets of Indoor Garden Systems. The. Debtor, too, loaned at least $200,000 to Indoor Garden Systems between Au gust 2002 and March 2003, and, as evidenced by security agreements entered into evidence, he took a security interest in the assets of Indoor Garden Systems. Joel Alvord also invested in Indoor Garden Systems. Over four transactions between December 2003 and August 2004, Mr. Alvord loaned a total of $485,000, in exchange for which he was purportedly granted a priority security interest in the assets of Indoor Garden Systems. However, the Debtor apparently never revealed to Mr. Alvord that the Debtor, himself, held security interests senior to those of Mr. Alvord. Shortly before filing for bankruptcy protection, the Debtor foreclosed on the notes he held, transferring the assets of Indoor Garden Systems to himself. Several days post-petition, the Debtor wrote to Mr. Alvord, apprising him of the Debtor's foreclosure of the assets and the dissolution of Indoor Garden Systems, but neglecting to mention the recently filed bankruptcy case. Days after filing for bankruptcy protection, the Debtor formed a new corporation, Garden Innovations, Ltd., which, like the pre-petition corporation Indoor Garden Systems, assembles and sells gardening devices such as StandUp Gardens. The 3 Debtor produces these. StandUp Gardens using the same inventory and mold that were the property of Indoor Garden Systems until the Debtor's pre-petition foreclosure made him, personally, the owner of those assets. On Schedule B, the Debtor listed "Inventory, tools, & mold formerly belonging to Indoor Garden Systems, Ltd." as having a value of $8,600. As the owner of these assets at the time he filed his bankruptcy petition, the inventory and mold became property of the bankruptcy estate. See 11 U.S.C. § 541(a)(1). Soon after the petition date, without seeking permission from, or even notifying, the trustee or the Court, the Debtor "transferred" the inventory and mold to Garden Innovations, his post-petition corporation, in exchange for founders stock, though the Debtor testified that this transaction is not memorialized in writing. At the April 17 hearing, the Debtor estimated that 5,000 has been deposited into Garden Innovations' bank account, revenue generated by post-petition sales of StandUp Gardens. On February 16, 2006, pursuant to Federal Rule of Bankruptcy Procedure 2004, an examination of the Debtor was conducted at which much of the information discussed above came to light. Less than one month later, Mr. Alvord filed a complaint seeking, inter alia, to determine that the debt owed to Mr. Alvord is non-dischargeable pursuant to section 523 or, alternatively, to deny the Debtor a discharge pursuant to section 727. A week later, the Debtor filed his motion to convert to Chapter 13. The Court held an evidentiary hearing on April 17, 2006, at which the Debtor testified at length under oath. The Court took this matter under advisement at the close of the hearing. DISCUSSION A. The Right to Convert is Not Absolute The Debtor seeks to convert his bankruptcy case from Chapter 7 to Chapter 13 pursuant to section 706(a),[2] which provides: The debtor may convert a case under this chapter to a case under chapter 11, 12, or 13 of this title at any time, if the case has not been converted under section 1112, 1208, or 1307 of this title. Any waiver of the right to convert a case under this subsection is unenforceable. While a debtor's right to convert to Chapter 13 under section 706(a) has sometimes been described as "absolute," see, e.g., 6 Lawrence P. King, Collier on Bankruptcy ¶ 706.01 (15th ed. rev.2006), the First Circuit Court of Appeals has held that a court may deny a debtor's "motion to convert where the court determines that the debtor engaged in bad faith conduct." In re Marrama, 430 F.3d 474 (1st Cir.2005), cert. granted, ____ U.S. ____, 126 S. Ct. 2859, 165 L. Ed. 2d 894 (2006). In Marrama, the debtor transferred residential real estate to a trust seven months before filing for bankruptcy protection and designated himself sole beneficiary and his girlfriend as trustee. In his statement of financial affairs, the debtor disclosed that he was the beneficiary, listed the value of the trust's res as zero, and denied making any property transfers in the year preceding bankruptcy. The debtor maintained that the omission of the transfer was attributable to "scrivener error" and that he did not attempt to conceal the property, as he had disclosed the property's existence. Id. at 481-82. The bankruptcy court, without holding an evidentiary hearing, denied the debtor's motion to convert, and the Bankruptcy 4 Appellate Panel and the Court of Appeals affirmed. The debtor's concealment of the transfer, his valuation of the res at zero, and his attempted conversion to chapter 13 were done with the intention of keeping the property from creditors. Id. at 482-83. Explaining that bankruptcy protection "is to be accorded only to honest debtors," the First Circuit concluded that a debtor's right to convert under section 706(a) is not without limitation, and a bankruptcy court may deny a debtor's motion to convert "where the court determines that the debtor engaged in bad faith conduct." Id. at 480-81. Such a determination, based on the totality of the circumstances, "is a fact-intensive determination to be made on a case-by-case basis." Id. at 482. "In assessing the totality of the circumstances, the bankruptcy court may consider, inter alia, (i) the accuracy of the debtor's financial statements; (ii) any other attempts by the debtor to mislead the bankruptcy court or manipulate the bankruptcy process; (iii)' the type of debt sought to be discharged; (iv) whether the debt is dischargeable in chapter 7; and (v) the debtor's motivation in seeking to convert to chapter 13." Id. B. Indicia of Bad Faith 1. Undervaluation of Assets On Schedule B, the Debtor valued the "Inventory, tools, & mold formerly belonging to Indoor Garden Systems, Ltd." at $8,600. At the April 17, 2006, hearing, the Debtor explained that he considered portions of the inventory to have a "negative value" and, thus, his valuation reflected, in part, potential disposal costs. Rather than disposing of the mold and inventory, though, the Debtor, soon after. filing his bankruptcy petition, incorporated Garden Innovations and, after "transferring" the assets to his new corporation in exchange for stock, continued to generate revenue from sales of StandUp Gardens assembled from the scheduled inventory. At the Rule 2004 examination, the trustee instructed the Debtor to cease selling Standup Gardens or otherwise liquidating the inventory, and the Debtor agreed to this. However, one month later, at the April 17 hearing, the Debtor admitted that he continued assembling and selling Stand-Up Gardens, and had more sales in the works. The Debtor estimated that Garden Innovations had generated $85,000 from post-petition, sales of StandUp Gardens. "The bankruptcy court is entitled to demand utmost good faith and honesty from debtors in the preparation of their schedules and statements of affairs." In re Marrama, 430 F.3d at 482. The Court is unconvinced that the Debtor honestly believed the assets to have little value or that his valuation was partially based on disposal costs. Is the Court to believe that the Debtor, on his way to the dump with the inventory, suddenly realized their value? The Debtor has generated at least 5,000 from assets he valued at $8,600. This undervaluation and the Debtor's furtiveness in forming a new corporation a few days post-petition and `transferring his assets to that corporation indicate that the Debtor had his own plans for these assets when he Med his bankruptcy petition. 2. Misrepresentations Under Oath The Debtor gave a deposition under oath on April 2, 2004, in connection with a New Hampshire state court civil case, at which he made numerous misrepresentations. First, at the deposition, the Debtor testified that neither he nor any company he owned or controlled held a bank account other than one held by Lochinvar. However, at the time of the, deposition, Indoor Garden Systems maintained an active account with the Community Bank and Trust Company. At the April 17, 5 2006, hearing, the Debtor admitted that his testimony at the deposition and the existence of the bank account are "hard to reconcile." Second, at the deposition the Debtor testified that, other than stock in the Harris Group and Lochinvar, he had no investments and owned no other stocks. However, on Schedule B he stated that he owned "100% of stock of Indoor Garden Systems, Ltd." In light of the fact that Indoor Garden Systems was incorporated by the Debtor in 2003, with the Debtor as shareholder, it appears that the Debtor's testimony at the deposition was false. Finally, at the deposition, the Debtor testified that no entity owed either he or Lochinvar any money. However, as discussed above, four promissory notes dated August 20, 2002, October 14, 2002, March 10, 2003, and March 21, 2003,[3] reveal that, at the time of the deposition, Indoor Garden Systems owed the Debtor $200,000 and Lochinvar $150,000. At the April 17, 2006, hearing, the Debtor stated that the discrepancy was "inadvertent," explaining that at the deposition he did not make the association between an entity he owned and himself personally. In a different case this might be a credible explanation, however, this Debtor has revealed himself to be rather sophisticated when it comes to managing multiple corporations that do business with one another and with himself.[4] 3. The Debtor's Dealings with Joel Alvord Over four transactions, Joel Alvord invested a total of $485,000 in Indoor Garden Systems. The four promissory notes memorializing these transactions grant Mr. Alvord "a priority security interest in the assets of [Indoor Garden Systems], including equipment, inventory, accounts receivable and intellectual property." (Alvord.Exs.111-114.) However, apparently unknown to Mr. Alvord, the Debtor had already granted to himself security interests in the assets of Garden Innovations. Two promissory notes showing Indoor Garden Systems as the "borrower" and the Debtor as the "lender" are dated August 20, 2002 and March 21, 2003, each in the amount of $100,000. (Alvord Exs. 105 & 108.) Also, two promissory notes, each in the amount of $75,000, showing Indoor Garden Systems as the "borrower" and Lochinvar as the "lender" are dated October 14, 2002, and March 10, 2003. These security interests are senior to those granted to Alvord. On August 2, 2005, less than a week after filing for bankruptcy protection, the Debtor wrote a letter to Alvord explaining that he "had no alternative but to protect my secured position with respect to Indoor Garden Systems, Ltd. Therefore effective July 28th I have foreclosed on the defaulted secured loans I made to the company 6 and personally taken possession of the company's assets. . . ." (Alvord Ex. 102.) July 28 was the day the Debtor filed his bankruptcy petition, yet the letter written a few days later makes no mention of this. 4. Other Indicia of Bad Faith In addition to the matters discussed above, the Court considers a few other of the Debtor's practices to be indicative of the Debtor's lack of good faith and forthrightness. First, during most of the time period discussed herein, the Debtor has not had checking or savings accounts in his name. The Debtor testified that he used a credit card to pay his personal expenses and that Lochinvar payed the credit card bill. The Debtor has failed to produce any accounting records of his personal expenditures. Second, the Debtor has a practice of not owning his home in his name. Prior to bankruptcy, the Debtor formed Lochinvar Holdings, Ltd., which owned his home. Post-petition, the home was foreclosed upon but was bought by Limestone Real Estate, Inc., another corporation formed by the Debtor for the purpose of owning his home.[5] The Debtor's aversion to opening bank accounts in his own name, his failure to provide financial records, and his use of corporations to own his home lengthen the shadow of bad faith that the Debtor has cast upon himself. CONCLUSION Whether a debtor has acted in "`good faith' is a fact-intensive determination to be made on a case-by-case basis." In re Marrama, 430 F.3d at 482. The following statement made by the Marrama court is equally applicable to this opinion: "The instant case comports in all material respects with the classic profile of playing fast and loose with the bankruptcy process." Id. at 482. While some of the Debtor's actions might appear innocent viewed in isolation, the totality of the circumstances leaves no doubt that the Debtor has exhibited bad faith with respect to this bankruptcy case. This conclusion is reinforced by the Court's opportunity to observe, at length, the Debtor on the witness stand. The Court finds that the Debtor misled this Court by intentionally undervaluing and concealing assets and then covertly using them under the trustee's radar. The Court is equally troubled by the Debtor's multiple misrepresentations made under oath. Finally, the Debtor's conduct with regard to Mr. Alvord, his practice of not having personal bank accounts, not providing financial records, and forming corporations with which to own his home round out this portrait of bad faith. Finally, the Court does not believe that the Debtor's desire to convert to Chapter 13 is "to allow the debtor to better deal with his obligations, including claims asserted by one Joel Alvord, by proposing a Chapter 13 plan in good faith." (Debtor's Motion to Convert.) The Debtor moved to convert to Chapter 13 only after a wealth of potentially damaging information was elicited from him at the Rule 2004 examination and after Mr. Alvord filed a complaint seeking to deny the Debtor's discharge. The Debtor's motion to convert is another attempted manipulation of the bankruptcy process. Based on the totality of the circumstances, the Debtor's motion to convert his case to Chapter 13 is denied because the Debtor has engaged in bad faith. This opinion constitutes the Court's findings and conclusions of law in accordance with Federal Rule of Bankruptcy Procedure 7 7052. The Court will issue a separate order consistent with this opinion. NOTES [1] Since filing for bankruptcy protection, the home owned by Lochinvar was foreclosed upon, but another corporation formed post-petition by the Debtor, Limestone Real Estate, Inc., was the foreclosure sale buyer. [2] All references to the "Bankruptcy Code" or to specific sections are to the Bankruptcy Reform Act of 1978, as amended prior to April 20, 2005, 11 § 101, et seq. [3] There are apparently additional promissory notes that were not admitted into evidence. [4] For instance, the Debtor's ability to at least make it appear that he conducted business between he and Indoor Garden Systems at arm's length is evidenced by a July 25, 2005, letter from the Debtor to Indoor Garden Systems in which he wrote: "As you know from my letters to you of June 15, 2005 and June 30, 2005 and previous, you are presently in default under the terms of a certain promissory note in the face amount of $100,000 made by you on February 21, 2003 and under terms of a Security Agreement and Financing Statement dated February 21, 2003 as well as other previous and subsequent notes and agreements. . . . We hereby make demand for immediate payment for the balance in full, failing which we are repossessing the collateral described at paragraph 1 of the Security and Financing Agreement." (Alvord Ex. 104.) [5] At the April 16, 2006, hearing the. Debtor testified that Limestone bought the residence in a valid foreclosure sale in which several bidders participated. The Court has no reason to doubt this.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527597/	597 A.2d 798 (1991) Janet D. RUSSELL v. James V. RUSSELL. No. 89-564. Supreme Court of Vermont. August 23, 1991. 799 William E. Roper of Neuse, Smith, Roper & Venman, Middlebury, for plaintiff-appellee. John J. Bergeron and Norman C. Smith of Bergeron, Paradis, Coombs & Fitzpatrick, Burlington, for defendant-appellant. Before ALLEN, C.J., and GIBSON, DOOLEY, MORSE and JOHNSON, JJ. MORSE, Justice. This appeal from a divorce judgment entered eighteen months after the hearing on the merits presents such a procedural morass that a remand is necessary to reach an outcome in a manner consistent with the civil rules. Following a divorce hearing held May 2, 1988, the trial court filed, on August 18, 1988, a document entitled, "Findings of Fact, Conclusions, and Notice of Decision." In it, the court directed the husband's counsel to prepare a judgment. The decision divided the parties' net equity in marital property relatively equally and awarded the wife $300 a week in maintenance. For a pension distribution, the court stated: The parties shall share equally in pension pay when payment is received by [the husband]. Any pension which [the wife] may become entitled to through her employment or earnings shall be considered in any calculation or formula. [The husband] shall be required to pay or cause to be paid such portion of his pension as will enable [the wife] to have no less pension income than [the husband], including social security payments. [The husband] shall preserve [the wife's] interest so as to best accomplish equal pension payments when both are retired and living. The parties had addressed whether the husband would provide the wife's health insurance, but the notice of decision was silent on that issue. Although no judgment was prepared as ordered, on August 24 and August 29 the husband and the wife respectively filed V.R.C.P. 52(b) motions to amend the notice of decision. These motions were argued orally, without additional evidence, on September 13, 1988. Neither of the parties nor the court acknowledged that Rule 52(b) applies only post judgment ("after entry of judgment"). On November 2, 1988, the court filed a second "Notice of Decision upon Motions" amending its original notice of decision and, among other things, providing the wife with health insurance as additional maintenance. The court stated, 800 The insurance shall continue not only for the three-year period requested but until she remarries, is covered by Medicaid or its equivalent, or regularly lives with another as a spouse. On December 1, 1988, the husband submitted a proposed judgment order to the court. The wife objected to portions, and the husband responded to the objections. A conference was held to discuss the proposed final order on February 22, 1989. The day before, February 21, the wife filed a motion to "reconsider" under V.R.C.P. 60(b)(2) and 15 V.S.A. § 554. This motion alleged that the wife had quit her job due to a worsening diabetic condition and needed more maintenance. At the February 22 conference, the court scheduled the motion to reconsider for evidentiary hearing. On July 14, 1989, that hearing was held, and on September 6, 1989, the court filed a "Memorandum of Decision upon Further Hearing." The court increased maintenance from $300 to $400 a week, but temporarily increased it by $800 a month "while [the husband] has no substantial college expenses to meet for the children of the parties," to end in any event on July 1, 1993. The court also added a provision that the husband pay the wife $10,000 in trust to be applied toward the purchase of a home. On November 2, 1989, the court filed a "Final Order and Decree of Divorce." The husband raises six issues on appeal. I. The husband claims the court abused its discretion in awarding the wife permanent, rather than rehabilitative, maintenance. The parties were married in December 1963, shortly after the wife graduated from high school, and raised four children. During the marriage, the wife was primarily a homemaker. She had some experience with home decorating and as a secretary. At the time of the first divorce hearing, the wife worked at the Medical Center Hospital of Vermont as a secretary, earning $7.50 per hour. The husband was then 51 years old, the wife 44. The court found the wife's health during the summer of 1988 to be as follows: She is diabetic to the extent that she suffers depression and her eyesight is diminished and she suffers blurriness at times. She is overweight. She is participating, since September 1987, in an experimental diabetic research program associated with the University of Vermont College of Medicine. She is not dependent yet on the drug insulin, but she is on a severe diet. In contrast, at the time of the 1988 hearing, the husband was earning $82,000 a year as a manager at General Electric Company. He also was being treated for depression due to difficulties at work and the breakup of the marriage. Although the evidence suggested that the wife desired to pursue training in a decorating career, the prospects that she would remotely approach the husband's earning capacity were slim. Spousal maintenance is designed to correct "`vast inequality between the parties' financial positions'" resulting from divorce. Klein v. Klein, 150 Vt. 466, 473, 555 A.2d 382, 386 (1988) (quoting Buttura v. Buttura, 143 Vt. 95, 99, 463 A.2d 229, 231 (1983)). Therefore, the husband had a responsibility, within the limits of his resources, "to maintain the wife's standard of living as nearly as possible at the same level she enjoyed during the marriage. The husband, having entered one of the strongest and most fundamental relationships known to the law, must continue to bear its financial burden where he can reasonably do so and where it is necessary in order to prevent a relatively greater hardship to the wife." Id. at 473, 555 A.2d at 387 (quoting 2 H. Clark, The Law of Domestic Relations in the United States § 17.5, at 254-55 (2d ed. 1987)). Moreover, in a long-term marriage, maintenance serves more than a rehabilitative function; it also compensates the contributions of a homemaker to the family's well-being. Id. at 474, 555 A.2d at 387. 15 V.S.A. § 752(a) specifically provides for permanent maintenance and does not demand any heightened standard for 801 awarding it. Rather, § 752(b) permits the court to award maintenance "in such amounts and for such periods of time as [it] deems just," after consideration of the statutory factors. No abuse of discretion in the award of permanent maintenance has been shown. See Klein, 150 Vt. at 472, 555 A.2d at 386 (trial court has considerable discretion when ruling on maintenance and will be reversed only if no reasonable basis supports its order). II. Next, the husband maintains that the court's decision to increase maintenance was error. Review of this issue is complicated by the trial court's initial failure to enter judgment, instead filing a notice of decision. Nowhere in our rules is "a notice of decision," as a term of art, defined. The phrase is used in V.R.C.P. 52(a) as the event that triggers a party's deadline to request findings of fact and conclusions of law: In all actions tried upon the facts without a jury ... the court shall, upon request of a party ... made on the record or in writing within 5 days after notice of the decision, or may upon its own initiative, find the facts specially and state separately its conclusions of law thereon.... (Emphasis added.) Shortly after trial, the parties requested findings. Because the parties had already initiated the requirement that findings be made, they did not need to be notified that the period for requesting findings had begun to run. Instead, the court should have entered judgment as mandated by Rule 52(a). Rule 52(a) states that "judgment shall be entered pursuant to Rule 58." According to V.R.C.P. 58, Subject to the provisions of Rule 54(b), upon the verdict of a jury, or upon a decision by the court granting or denying relief, the clerk, unless the Presiding Judge otherwise orders, shall forthwith prepare the judgment without awaiting any direction by the court. The Presiding Judge shall promptly approve and sign the judgment, and the clerk shall thereupon enter it. A judgment is effective only when entered as provided in Rule 79(a). Entry of the judgment shall not be delayed for the taxing of costs. Attorneys shall submit forms of judgment upon direction of the Presiding Judge. A form of judgment submitted in accordance with this rule shall be served upon all opposing parties, who shall file any objections to the judgment proposed within five days of service upon them unless the Presiding Judge orders such objections to be filed earlier. In this case, the correct procedure dictated that the husband's counsel prepare the judgment as instructed by the presiding judge. Instead, no proposed order was prepared and served until December 1, 1988, a month after the court's second notice of decision. Due to protracted legal wrangling, the judgment did not become effective until eighteen months after the final divorce hearing, though it should have been effective much earlier. In short, the court and the parties allowed what should have been a judgment entered within a reasonable time after the court's decision to become an unnecessarily protracted dispute without any apparent end in sight. Absent a judgment, all motions filed after the court's first (August 18, 1988) notice of decision were not authorized by the Rules of Civil Procedure. The parties' motions to amend pursuant to V.R.C.P. 52(b), seeking, in part, clarification of the maintenance order, were made without an entry of judgment. The wife's request for modification, which came in the form of a V.R.C.P. 60(b) motion filed six months after the notice of decision, was also directed to a nonexistent judgment. The court's request that the husband prepare a judgment, the parties' subsequent filing of post-judgment motions under Rules 52 and 60, and the court's reaction to those motions reflected an understanding that the first notice of decision was functionally a judgment of divorce. 802 Under the circumstances of this case, we will treat it as such. Treating the August 18th notice of decision as a final order is also consistent with our test that a judgment is final when "it makes a final disposition of the subject matter." Nevitt v. Nevitt, 155 Vt. 391, 396, 584 A.2d 1134, 1137 (1990). In Nevitt, we held an oral notice of decision was not final, and could be modified at the court's discretion, because the divorce court had made only a custody award and explicitly left all the remaining issues to a later hearing. Id. at 395-96, 584 A.2d at 1136-37. Here, the court's notice of decision, issued with findings of fact and conclusions of law, covered custody, child support, spousal maintenance, and property division. It made no mention of outstanding issues to be decided. The parties sought clarification of a few details, raised but not included in the order, by the appropriate post-judgment motion, a V.R.C.P. 52(b) request to amend the judgment. Amendments were made to the August 18th order with the misconception that the usual standards for modifying a judgment were inapplicable. 15 V.S.A. § 554, cited by the wife, was not authority to amend or for a new trial because it too requires a judgment. Although § 554 refers to a "decree" rather than a "judgment," the two terms are virtually interchangeable. See Black's Law Dictionary 369-70 (5th ed. 1979) (decree is a judgment entered by a court of equity and serves the same purposes; with the merger of law and equity and the adoption of the Rules of Civil Procedure, "judgment" has generally replaced "decree"). The 1990 amendment to § 554(b) acknowledges this interpretation: "A decree of divorce shall constitute a civil judgment under the Vermont Rules of Civil Procedure." The "Memorandum of Decision upon Further Hearing," filed September 6, 1989, also reflected the misconception that the usual standard for modifying judgments did not apply. It begins with "[e]vidence was reopened" and does not state any evidentiary standard of review except the one appropriate for the hearing on the merits. There is no recognition that the wife was seeking a modification of maintenance. We note also that certain factual determinations in the decision are puzzling. The court found that medical necessity did not cause the wife to quit her job at Medical Center Hospital of Vermont as she had claimed and that her earning capacity of $15,000 had not changed. Yet, the court increased her maintenance anyway on the apparent ground that her financial difficulties resulted from her mismanagement of money. The court also, "[a]s further property settlement," awarded the wife $10,000 in trust to purchase a home. Property settlements are not subject to modification except pursuant to Rule 60(b). The court misapprehended its authority and may have viewed the case differently had the proper procedures been followed. We, therefore, remand with directions that a final judgment of divorce be entered based on the notice of decision filed August 18, 1988. The parties may file any post-judgment motions as authorized by the Rules of Civil Procedure, and the timeliness of any motion is to be determined from the date judgment is entered. III. The husband claims the court abused its discretion in awarding the wife permanent health insurance at his expense. The procedural development of this issue makes review problematic. The wife's diabetic condition and related employment problems were explored at the merits hearing in May 1988, and in her initial request for findings she asked that the husband would "be responsible for covering [the wife] with health insurance for three years following divorce [the so-called COBRA period] at a combined cost of $61/month." In his post-trial requests, the husband stated that he had "no objection to making whatever arrangements are necessary to allow the [wife] to continue with the G.E. [General Electric, his employer's] health insurance plan, but feels that if she prefers to be on the G.E. plan versus the Medical Center Hospital Plan [her employer's 803 plan], she should pay the added cost of that coverage." The court's first notice of decision, however, made no provision for her health insurance. In her August 29, 1988 motion to amend the notice of decision, the wife requested that the husband be ordered to "continue to maintain and pay for health insurance for [the wife] for the three-year period following the divorce until [the wife] obtains health insurance coverage through her own employment." This motion, along with the husband's motion to amend, was argued on September 13, 1988. The court took no new evidence. The wife merely reiterated her request that her health insurance be covered "during the eligible three year period" and that the husband be responsible for the cost. The husband stated he would "make sure that she can stay on the plan if she chooses" but argued that she should pay the $60 per month out of her maintenance. The court asked if the wife would be eligible to remain on his health insurance, and he responded, "Yes,... for up to thirty-six months after the divorce is granted." This was the entire substance of the discussion on this issue. Subsequently, in its second notice of decision, filed November 2, 1988, the court ordered: The insurance shall continue not only for the three-year period requested but until she remarries, is covered by Medicaid or its equivalent, or regularly lives with another as a spouse. Neither party filed a motion objecting to this provision, but the matter did not end there. In December 1988, the husband submitted the proposed final order, incorporating this provision. On December 12, 1988, the wife filed objections to the proposed order, asking that the husband be instructed to provide health coverage for her even if he left his employment at General Electric. On February 22, 1989, the court held a status conference, and the health insurance problemwhether the wife could continue on GE's plan after three years and what the cost of such continued coverage would bewas raised for the first time. At the end of the discussion, the husband asked for an opportunity to discuss the matter further with the GE health insurance administrator and present the information at another hearing (on the wife's motion to reconsider maintenance). The court responded that "This [the health insurance issue] is a function of maintenance, so we ought to reconsider this." At the July 1989 hearing, the husband testified that coverage could be provided and the cost during the COBRA period would be $98 per month. He also stated that although the cost for continued coverage was unknown, he would agree to a $100 per month cap on health insurance coverage for the wife. In the final divorce order, the court ordered the husband "to provide on an uninterrupted basis health insurance, as additional maintenance, for [the wife] equal to that now provided through his General Electric employment, until such time as [the wife] remarries or is covered by Medicaid, or its equivalent, or regularly lives with a spouse." The husband asserts that the court did not have any evidence of the cost for health insurance beyond the three-year period. He argues that, when the cost of maintenance in the form of health insurance is unknown or cannot be determined, the maintenance award cannot be made. Despiteindeed because ofthe court's protracted treatment of this issue, we must remand. The trial court's manner of dealing with this issue illustrates why it is important to adhere to the procedural rules involving the rendering and amendment of judgments. To proceed without the mandated judgment order is to journey without a compass. First, in light of the procedural shortcomings already noted, we cannot simply review the end result, because we do not know how the court got there. Because we treat the court's first notice of decision as the final judgment, we could evaluate the wife's motion to amend that judgment as timely filed under V.R.C.P. 52(b) and V.R.C.P. 6(a), and evaluate the husband's argument as of that stage of the proceeding. But, the court did not treat the wife's motion that way. It treated everything before the final divorce order as interlocutory, issuing three notices of decision, 804 beginning with general statements and then making increasingly more specific orders, sometimes without any notice to the parties of what was coming. Everyonethe court, the lawyers, and the litigantsseemed to be operating under the assumption that the court's ruling on the motion to amend would have no more finality than any other interlocutory ruling, an assumption born out by the subsequent proceedings. The court treated health insurance as part of maintenance, and this issue must be addressed along with the other maintenance issues on remand in the context of post-judgment motions. IV. The husband claims the court used an erroneous so-called coverture fraction in calculating the proportion of his pension to go to the wife. The coverture fraction was first used in the September 1989 "Memorandum of Decision upon Further Hearing" in modifying the pension provision in the August 1988 notice of decision. It is, therefore, not part of the final judgment as we have defined it. Because the issue will likely recur on remand, we address it now. The parties agreed to distribute between them the husband's pension when it became due. In determining the shares, the court must apply a coverture fraction to reflect the proportion of the entire pension attributable to the marriage. McDermott v. McDermott, 150 Vt. 258, 261, 552 A.2d 786, 789 (1988). As stated in that case, "[t]he numerator of the fraction is the number of months or years that the employee participated in the plan during the marriage." Id. at 261, 552 A.2d at 789. The parties disagree upon what date the marriage should be deemed to have ended. The husband urges us to use the date of separation to measure the cutoff. Because the parties were married in December 1963 and separated in December 1986, the husband suggests 23 years is the proper numerator. The court used 25 years, reflecting a cutoff date after the first but before the second evidentiary hearing. Courts of other jurisdictions use the date of separation in calculating the coverture fraction. Huddleson v. Huddleson, 187 Cal. App. 3d 1564, 1571, 232 Cal. Rptr. 722, 726 (1986); King v. King, 332 Pa.Super. 526, 534, 481 A.2d 913, 917 (1984). We think that date is most reflective of the functional end of marriage and will be a relatively easy benchmark to determine. V. A final point is raised about the interpretation of a provision included in the November 1989 final divorce order, which reads: [M]aintenance obligations shall terminate... when [the wife] is receiving or eligible for both [the husband's] retirement benefits and social security benefits. The husband points out that this provision may be read to say that the wife will someday be eligible for some of the husband's social security benefits. The basis for the reference to social security in this provision is unclear, because it is not apparent how the wife will be eligible, if at all, for the husband's social security benefits. If this or a similar provision is included in an order on remand, it should be clarified. VI. The husband's objection to the requirement that he post a bond to compensate the wife for any adverse income tax treatment for failure to reinvest her share of the proceeds from the sale of the parties' residence is moot because he did not post the bond and the wife never pursued the point by moving for relief in the trial court. Reversed and remanded.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527622/	597 A.2d 321 (1991) David H. HANSEN and Miriam Klein-Hansen, Thomas Jensen v. TOWN OF CHARLESTON. No. 90-193. Supreme Court of Vermont. August 30, 1991. James M. Ritvo, Montpelier and Heather R. Wishik, Northfield, for plaintiffs-appellees. William Boyd Davies and Rachel A. Hexter of May, Davies, Franco & Hexter, Newport, for defendants-appellants. Glenn C. Howland of McKee, Giuliani & Cleveland, Montpelier, for amicus curiae Vermont League of Cities and Towns. Before ALLEN, C.J., and GIBSON, DOOLEY, MORSE and JOHNSON, JJ. DOOLEY, Justice. Defendant, Town of Charleston, appeals from an order of the Orleans Superior Court reclassifying a section of Town Highway No. 5 from class 4 to class 3. We affirm. Approximately twenty persons, including ten children, live in the five full-time residences along the section of Town Highway No. 5 involved in this case. On no other class 4 highway in the Town are there as many permanent residences. The road is 322 seasonably impassable and is gradually deteriorating. Because of the state of the road, the residences do not have year-round fire or police protection. The school bus cannot go up the road so that one disabled child, who lives on the road, must move elsewhere during the school year in order to get to school. The road section contains an old Town cemetery, and from it there are attractive scenic views. On September 5, 1988, at least five percent of the voters of the Town filed a petition asking that a one mile section of Town Highway No. 5 be reclassified from class 4 to class 3 so that it would be improved. The selectmen held a hearing on November 3, 1988 and on December 8, 1988 issued a decision denying the petition. The selectmen relied primarily on a reclassification policy adopted by the selectmen in 1981. That policy set as minimum requirements for a reclassification to class 3 that: (1) property improvements on land abutting the road have a grand list value of at least $200,000 per mile; (2) there be at least three year-round residences on the road; and (3) the cost of upgrading the road to class 3 standards must be borne by the persons seeking reclassification. The selectmen found that the first and third requirements were not met since the grand list value of the improvements was only $173,000 and the petitioners were willing to pay only $5,000 of the $50,000 cost to improve the road. They concluded that the "public good, necessity and convenience of the inhabitants of the town" did not require a reclassification. The petitioners appealed to the Orleans Superior Court, which appointed commissioners pursuant to 19 V.S.A. § 751. After a hearing, the commissioners issued a report supporting the decision of the selectmen. They found that the anticipated reappraised value of the buildings on the road would be $207,000. They also found that despite the presence of full-time residences on the road, the road was often impassable at times. They found, however, that these residences were constructed after 1973 when roads were classified in the Town and that the residents were unwilling to pay for the full cost of upgrading the road. Based on the 1981 policy and the unwillingness of the residents to provide the $50,000 to upgrade the road, they concluded that the public good, necessity and convenience of the citizens of the Town did not require the reclassification. The petitioners then entreated the court to reject the commissioners' report. After taking evidence, the court did so. It rejected the applicability of the 1981 reclassification policy and the determinative effect of the unwillingness of the petitioners to pay for upgrading the road, concluding that "fifty thousand is a standard expenditure for this town or any other small town in Vermont." It concluded that the "public good, necessity and convenience as demonstrated by the evidence and the facts found in these cases do require the reclassification of this segment from class 4 to class 3." Acting pursuant to 19 V.S.A. § 302(a)(3)(C), the court gave the selectmen five years to bring the road up to class 3 standards. The court did not require the petitioners to pay any of the cost of the upgrade. On appeal, the Town raises four arguments: (1) the court had no jurisdiction to reject the report of the commissioners; (2) the court erred in ordering reclassification without a finding that the Town had employed discriminatory standards; (3) the court erred in failing to apportion the costs of the upgrade between the petitioners and the Town; and (4) the finding that the $50,000 upgrade cost was a standard expenditure for the Town was clearly erroneous. The Town's first argument is that the court could not reject the commissioners' report. Although the argument was not raised below, the Town argues that the error is jurisdictional and can be raised for the first time on appeal. The trial court's jurisdiction is based primarily on 19 V.S.A. § 310(b), which provides that reclassification is subject to the "same procedures as for laying out highways." See Gilbert v. Town of Brookfield, 134 Vt. 251, 251, 356 A.2d 524, 525 (1976) 323 (jurisdiction in reclassification appeal based on 19 V.S.A. § 931(2) (now § 310(b)). That procedure includes an appeal from the selectmen's decision to the superior court. See 19 V.S.A. § 750. The matter must be referred to three disinterested commissioners "to inquire into the convenience and necessity" of the proposal and report to the court. See 19 V.S.A. §§ 753, 756. On receiving the report, the "court may reject or accept [it] in whole or in part" and render an order or decree with respect to the issue before it. 19 V.S.A. § 759. Although the statute clearly authorizes the court to reject the commissioners' report in whole or in part, the Town argues that the Legislature never intended to allow the court to reject a report that denies a reclassification. In making this argument, it relies primarily on Shattuck v. Town of Waterville, 27 Vt. 600, 602 (1855), where Justice Redfield held that another statute did not authorize the Supreme Court to reject the report of a committee that a road going through two counties should not be laid out absent a finding of "fraud or gross partiality." The wording of the statute involved in Shattuck allowed the Court to reject the report of the committee in whole or in part. Since Shattuck, we have defined more clearly the role of the court and the commissioners in road cases. In Ferguson v. Town of Sheffield, 52 Vt. 77, 81 (1879), this Court defined the superior court's role in these cases as follows: In so far as the courts have any duty or power devolved upon them in respect to laying out and discontinuing highways, it is derived from the statutes. This duty and power is of such character that it should be performed and exercised in a practical manner, not by technical rules. These highway petitions are, in view of the nature and purpose of the inquiry, addressed largely to the discretionary power of the court. They are based on an alleged public as well as individual necessity and convenience. They involve the imposition or relief of a public burden. In Gray v. Middletown, 56 Vt. 53, 55 (1884), the Court concluded that a "report of the commissioners is only prima facie evidence of the existence of a legal necessity [f]or the establishment of the highway." The Court added, "The commissioners are but agents or officers of the court in investigating the subject matter of the inquiry. The court is not bound by their action...." Id. at 57. The Court stated in Bolles v. City of Montpelier, 93 Vt. 513, 517, 108 A. 565, 567 (1920), that the issue is one of fact "which in the last resort is to be determined exclusively by the county court." See also Pillsbury v. Town of Wheelock, 130 Vt. 242, 244, 290 A.2d 42, 44 (1972). With the adoption of the Vermont Rules of Civil Procedure, we have employed the general term "master" to describe persons to whom a case is referred to take evidence. See V.R.C.P. 53(a). In cases where a reference is made pursuant to statute, the court must accept a master's findings of fact unless clearly erroneous, V.R.C.P. 53(e)(2)(ii), and the court "may adopt the report or may modify it or may reject it in whole or in part or may receive further evidence or may recommit it with instructions." V.R.C.P. 53(e)(2)(iii). Nothing in the rule suggests that the court's power to reject a master's report depends on the contents of the report. We believe that the limited standard of review of V.R.C.P. 53 addresses, in part, the major concern of the Court in Shattuck v. Town of Waterville that it was incapable of dealing with the factual issues if the master's report failed to resolve them because it recommended no action. As to fact finding, it puts the court in an appellate role with respect to the master. In view of (a) the final authority of the court over the matter before it, (b) the court's discretion in using its authority, and (c) the lack of any suggestion in the statute that the court's power depends on whether the commissioners recommend the proposed action, we conclude that the court can reject a commissioners' report recommending that a road not be reclassified. We also conclude that the court acted within its authority. While the ultimate 324 question is one of fact, see Cersosimo v. Town of Townshend, 139 Vt. 594, 597, 431 A.2d 496, 498 (1981), there is no factual dispute in this case. The court's disagreement with the commissioners' report involved a solely legal issuewhether the Town's 1981 reclassification policy controlled this petition. The court did not inappropriately disregard the commissioners' report. The Town's second argument is that the court could not order reclassification of the road without a finding that the Town acted discriminatorily or arbitrarily in refusing reclassification. The argument is based on Gilbert v. Town of Brookfield, 134 Vt. at 254, 356 A.2d at 525, and Catlin v. Town of Hartland, 138 Vt. 1, 2, 409 A.2d 596, 597 (1979), where this Court upheld reclassification orders based on superior court findings of discriminatory application of town policy. Neither case suggests, however, that a finding of discrimination is a prerequisite to reclassification by the superior court. In fact, in Catlin, we noted that an alternative ground for the trial court's decision was "compliance with statutory standards for reclassification, even in the absence of discrimination" and this alternative was sufficient to validate it. 138 Vt. at 2, 409 A.2d at 597. Moreover, the Legislature responded to Gilbert and Catlin by adding statutory language that a class 4 highway need not be reclassified to class 3 "because there exists within a town one or more class 3 highways with characteristics similar to the class 4 highway." 19 V.S.A. § 708(b), as added by 1979, No. 143 (Adj.Sess.), § 1 (adding 19 V.S.A. § 341(c), now recodified as § 708(b)). The ground used in those cases, and argued for here as a prerequisite, is no longer available as a basis for reclassification. The standard applicable in road reclassification cases is whether "the public good, necessity and convenience of the inhabitants of the municipality require the highway to be ... reclassified as claimed in the petition." 19 V.S.A. § 710. The trial court used this standard and concluded that reclassification was required. The Town has not attacked that conclusion directly. It is sufficient to support the order of the court. We are sensitive to the concerns raised by amicus curiae Vermont League of Cities and Towns that the selectmen are entrusted with the authority over town roads, see 19 V.S.A. § 303 (town highways are under "the general supervision and control of the selectmen of the town"), and we must minimize the encroachment on this authority. The statutes often give selectmen broad authority to manage town affairs. See, e.g., Kirchner v. Giebink, 150 Vt. 172, 175, 552 A.2d 372, 375 (1988). In this area, however, the Legislature has placed the selectmen in a quasi-judicial role to hear classification petitions, with appellate jurisdiction over their actions in the superior court. See, e.g., Dunn v. Town of Pownal, 65 Vt. 116, 119-20, 26 A. 484, 485 (1893) ("in laying out, altering and discontinuing highways, the functions of selectmen are more than administrative; they are largely judicial, and they proceed much after the manner of judicial bodies"). The selectmen can adopt policies to determine their action, like the reclassification policy involved in this case, but those policies do not bind the superior court in exercising its discretionary power "in a practical manner, [and] not by technical rules." Ferguson v. Town of Sheffield, 52 Vt. at 81. The Town's third argument is that the court erred in failing to order apportionment of the costs of the upgrade of the road to class 3 standards. The commissioners, and therefore the court, are authorized to require petitioners who "will be especially benefited" to pay part of the costs of road building which they order to be done. 19 V.S.A. § 755. The Town argues that such a payment order should have been made in this case. Whatever the merits of the Town's argument, we will not consider it because it is raised for the first time on appeal. See State v. Shure, 156 Vt. ___, ___, 592 A.2d 868, 870 (1991) (mem.). Throughout the proceedings before the commissioners and the superior court, the Town argued that reclassification should not be ordered. It never argued alternatively that the costs 325 should be apportioned. While the record might show some of the persons who were specially benefitted by the reclassification, there is no basis for determining an appropriate apportionment of costs. The issue has been waived. The Town's final argument is that the finding that the expenditure of $50,000 to upgrade the road is a standard expenditure for this town or other small towns in Vermont is unsupported by any evidence and is clearly erroneous. The court's decision was made orally on the record and did not distinguish clearly between findings of facts and conclusions of law. Neither party asked for written findings. See V.R.C.P. 52(a). The financial impact of the upgrade on the Town was clearly relevant to the determination of the public good, necessity and convenience, and the court had to consider it. See Whitcomb v. Town of Springfield, 123 Vt. 395, 399, 189 A.2d 550, 553 (1963). Although the Town has characterized the court's assessment of financial impact as a finding of fact, it should be viewed as a conclusion about the reasonableness of the expenditure for the Town. It reflected the balancing process that was at the heart of the court's decision-making. We find no error. Affirmed.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527627/	2 F. Supp. 462 (1932) RANDOLPH v. GREAT ATLANTIC & PACIFIC TEA CO.[] No. 6304. District Court, W. D. Pennsylvania. June 29, 1932. O. K. Eaton, of Pittsburgh, Pa., and Scott Fink, of Greensburg, Pa., for plaintiff. John A. Metz and W. C. McClure, both of Pittsburgh, Pa., for defendant. McVICAR, District Judge. Maggie V. Randolph, the plaintiff, Saturday evening, March 24, 1928, entered the grocery and meat store of the defendant, at Irwin, Pa., to make a purchase. Desiring to use the telephone, she walked on the way thereto near a meat block in the store. While doing so, she slipped and fell, and as a result was injured. She brought this action to recover damages on account of alleged negligence of defendant in maintaining the floor, where she fell, in a greasy, slippery, and unsafe condition. The jury returned a verdict in her favor in the sum of $7,382. The case is now before us on defendant's motion for a new trial. Defendant contends that the law applicable to the issue of negligence in this case is the law as laid down by the federal courts and not the law as laid down by the highest courts of Pennsylvania, the state in which the accident happened. R. S. 721 (28 U.S. C. § 725 [28 USCA § 725]) provides: "The laws of the several States, except where the Constitution, treaties, or statutes of the United States otherwise require or provide, shall be regarded as rules of decision in trials at common law, in the courts of the United States, in cases where they apply." Federal courts will not follow the state courts on questions of wide commercial interest, or of general jurisprudence. Swift v. Tyson, 16 Pet. 1, 10 L. Ed. 865. Federal courts will follow the state courts as to the duties which a master owes to his servant and his liability for negligence. Fillippon v. Albion Vein Slate Co., 250 U.S. 76, 39 S. Ct. 435, 63 L. Ed. 853. Federal courts will follow the state courts as to the presumption of ownership, etc., arising from the wearing of a uniform in a negligence case. Western Union Telegraph Co. v. Kirby, 37 F.(2d) 480 (C. C. A. 3). Federal courts will also follow the decisions of the highest state courts in all cases local in nature and character such as relate to the rights and duties of owners of real estate. In this case there is involved the rights and duties of the defendant as the owner and proprietor of a store. This question is local 463 in character, and the laws of Pennsylvania should control. The question, however, is immaterial, because there is no conflict between the federal decisions and the decisions of the Supreme Court of Pennsylvania on the issue involved. Defendant further contends that its point for binding instructions should have been affirmed; that there was no evidence from which the jury could find that defendant had actual or constructive notice of the unsafe condition of the floor at the time and place plaintiff was injured. "In determining a motion of either party for a peremptory instruction, the court assumes that the evidence of the opposing party proves all that it reasonably may be found sufficient to establish, and that from such facts there should be drawn in favor of the latter all the inferences that fairly are deducible from them." Gunning v. Cooley, 281 U.S. 90, 94, 50 S. Ct. 231, 233, 74 L. Ed. 720. There was evidence in this case that the customers of defendant made use of the pay telephone in defendant's store as they desired to do so, and therefore there was an inference that defendant had installed and maintained this telephone for the accommodation and convenience of its customers; there was evidence that plaintiff was given permission to use the telephone; that the floor upon which she walked was covered with sawdust, which was renewed and replaced each day; that new sawdust had been placed on the floor the day before the accident; that the floor was made of hardwood and was smooth; that scraps of meat and scrapings of bone were almost continuously on the floor near the meat block and on the way to the telephone; that this condition had existed for several months prior to the accident; that sticky and greasy materials had been seen on the floor at different times prior to the accident, which were removed by a rake; that for several months prior to the accident the floor was slippery; that the employees frequently skated or slid across the floor; that two persons had fallen thereon within three months before the accident in question, the last one being at noon the day of the accident, of which the employees had knowledge; that plaintiff slipped, fell, and was injured by slipping on the greasy floor; that grease was found on the heel of plaintiff's shoe after the accident; and at the time thereof there were quite a few scraps of meat on the floor. Was this evidence sufficient to visit defendant with notice of the condition of the floor at the time of the accident? In Markman v. Fred P. Bell Stores Co., 285 Pa. 378, 132 A. 178, 43 A. L. R. 862, plaintiff, the customer, fell and was injured while leaving defendant's store by reason of slipping on a step which was slippery by reason of fat meat and vegetables thereon. The Supreme Court of Pennsylvania, speaking by Mr. Justice Sadler said (page 382 of 285 Pa., 132 A. 178, 179, 43 A. L. R. 862): "To recover, it was essential to show a failure to exercise reasonable care for the safety of the customer, for this is the measure of responsibility where one comes by invitation, express or implied, for the purpose of inspecting or purchasing goods offered for sale. Bloomer v. Snellenburg, 221 Pa. 25, 69 A. 1124, 21 L. R. A. (N. S.) 464; Robb v. Niles-Bement-Pond Co., 269 Pa. 298, 112 A. 459; Spickernagle v. Woolworth, 236 Pa. 496, 84 A. 909, Ann. Cas. 1914A, 132; Woodruff v. Painter, 150 Pa. 91, 24 A. 621, 16 L. R. A. 451, 30 Am. St. Rep. 786. The proprietor must keep the portion of the premises permitted to be used by the prospective buyer in proper condition, and if it is shown that the injury was caused by a neglect to do so, a recovery of damages may be had for the resulting loss. Reid v. Linck, 206 Pa. 109, 55 A. 849; Polenske v. Lit Brothers, 18 Pa. Super. Ct. 474; Brown v. Milligan, 33 Pa. Super. Ct. 244. * * * "The mere presence of such refuse, as described, does not in itself show negligence, for this condition may temporarily arise in any store of this character, though the proprietor has exercised due care; and, if it appears that proper efforts are made to keep clean the passageways so they may be safely traversed, he is not to be held responsible if some one accidently slips and falls. Where, however, it is disclosed, as here, that the dangerous condition, arising from the same cause, was not a mere chance occurrence, but so often repeated as to call for frequent notices to the owner, and on one occasion to the police, and the same situation was shown to have existed when the customer was hurt, we cannot say the jury was not justified in finding defendant failed in his legal duty." This case was cited with approval by the same court in Gorman et ux. v. Simon Brahm's Sons, Inc., 298 Pa. 142, 148 A. 40. In Great Atlantic & Pacific Tea Co. v. Weber, 51 F.(2d) 1051 (C. C. A. 3), plaintiff was injured from a fall on a slippery floor. Circuit Judge Buffington, speaking for the court, said, page 1052 of 51 F.(2d): "The facts are the defendant kept a grocery and provision store, and plaintiff entered with 464 a view to buying lettuce. She inquired if they had lettuce, and, being told they had, she crossed the store and walked toward the lettuce counter. As she neared it, her right foot slipped forward, she fell, and between the fall and her effort to save herself she sustained injuries of so serious a character as to compel her to lie on her back for weeks in plaster casts enveloping her entire body, during which time she was unable to even turn. The proofs tended to show that in ordinary course lettuce was brought to the store daily packed in ice and put on the lettuce counter; that melting water dripped from time to time to the floor from which it had to be mopped. Moreover, there was proof that the floor had been recently oiled; that water accumulating on such oiled floor made the floor even more slippery. One witness testified the puddle was such that when she neared it she had to walk around it. It was also proved that when the plaintiff fell she laid in a puddle of water. In view of the duty of the defendant to keep its store floor in such condition as to be reasonably safe for customers to walk thereon, we think there was sufficient evidence of proof in this case to constrain the trial judge to submit to the jury the question whether the defendant was negligent." The evidence of the condition of the floor at the time of the accident, its slippery condition for several months prior thereto, that employees frequently skated across the same, and that two persons within three months had fallen thereon, was sufficient to submit to the jury on the question whether defendant had actual or constructive notice of the condition of the floor at the time of the accident. Defendant further contends that the court erred in admitting evidence of the condition of the floor prior to the date of the accident, for the reason that it was immaterial under the statement, and further because it admitted evidence of independent acts of negligence. The seven specific averments of negligence in the statement sufficiently averred that defendant had notice of the unsafe and dangerous condition of the floor at the time of the accident. There was evidence that the floor was slippery at the time of the accident by reason of fat and grease thereon, and that this condition had existed for several months prior thereto. This evidence was admissible to visit defendant with notice of the condition. If we should assume, as contended by defendant, that there was no evidence of a continuous slippery condition of the floor by reason of grease thereon, but that there was evidence that the slippery condition of the floor at the time of the accident had happened many times within the three or four months preceding, of which the employees and persons in charge of the store had notice, then this evidence was admissible under the authority of Markman v. Fred P. Bell Stores Co., 285 Pa. 378, 132 A. 178, 43 A. L. R. 862, and Great Atlantic & Pacific Tea Co. v. Weber (C. C. A.) 51 F.(2d) 1051, supra. The rule laid down in these cases is reasonable. Storekeepers who maintain unsafe floors for the use of their customers during business hours each day should be held liable to persons injured by their acts, although such floors were made safe by cleaning, or otherwise, each night. Defendant further contends that the duty owed to the plaintiff was the duty which it owed to a licensee and not the duty which it owed to an invitee. This contention was raised for the first time at the hearing of the motion for a new trial. Both parties tried the case on the theory that plaintiff was an invitee. The telephone of defendant was a telephone maintained for the use of its customers. The customers used it when they so desired. They were, therefore, invitees in the use thereof. At any rate, it was the duty of the defendant to exercise reasonable care for the safety of customers while going to and from the telephone. In Markman v. Fred P. Bell Stores Co., 285 Pa. 378, the court said (page 382, 132 A. 178, 180, 43 A. L. R. 862): "The proprietor must keep the portion of the premises permitted to be used by the prospective buyer in proper condition, and if it is shown that the injury was caused by a neglect to do so, a recovery of damages may be had for the resulting loss." Defendant further contends that the court erred in refusing its fourth, seventh, and eighth points. These points were covered in the general charge to which no exception was taken except as to what constituted constructive notice, which has already been discussed, and which was fully covered in the charge. The other reasons assigned in support of the motion for a new trial, which have not been discussed here, have been considered and found without merit. Some of them were not discussed in defendant's oral or written argument. The motion for a new trial is refused. NOTES [] For opinion affirming order, see 64 F.(2d) 247.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527625/	357 B.R. 782 (2006) In re Russell Glenn HURST, Debtor. Russell Glenn Hurst, Plaintiff, v. U.S. Bank, Defendant. Bankruptcy No. 6:06-bk-71571M. Adversary No. 6:06-ap-07138. United States Bankruptcy Court, W.D. Arkansas, Hot Springs Division. December 15, 2006. Kathy A. Cruz, The Cruz Law Firm, P.L.C., Hot Springs, AR, for Debtor. 783 MEMORANDUM OPINION JAMES G. MIXON, Bankruptcy Judge. On July 27, 2006, Russell Glenn Hurst ("Debtor") filed for relief under the provisions of Chapter 13 of the United States Bankruptcy Code. The schedules, prepared by Kathy A. Cruz, Attorney, list U.S. Bank as an unsecured, nonpriority creditor on Schedule F. The schedules state that U.S. Bank's claim, incurred in 2004, is a purchase money debt in the amount of $35,265.00. Under the heading "remarks" the schedules state that "[t]he approximate amount owed is listed as authorized by the U.S. Court's Administrative Office. Credit Service disputed as to the amount of late fees, over limit fees, interest fees, late charges, or any other additional fees or charges." On September 9, 2006, the Debtor commenced this adversary proceeding against U.S. Bank. The complaint alleges that U.S. Bank filed a proof of claim in the bankruptcy case on or about September 15, 2006, for $24,660.30, alleging that the claim was secured by a security interest in a 2005 Dodge truck. The complaint asks for "redress and damages" for U.S. Bank's violation of the automatic stay pursuant to 11 U.S.C. § 362, alleging U.S. Bank filed a claim that was false because "the collateral forming the basis of the secured allegation is in, or was in possession, of the creditor and did not become part of the bankruptcy estate. . . ." The complaint stated that the Debtor, as a result of the false claim, has suffered emotional distress, was deprived of his fresh start, and is entitled to actual damages of $5,000.00, costs and attorney's fees. The complaint also seeks an injunction against U.S. Bank from "attempting to take further actions to collect this debt as a secured debt." U.S. Bank filed a timely answer and, on October 18, 2006, filed a motion for summary judgment together with supporting exhibits and a brief. The Debtor timely responded to the motion for summary judgment and attached a supporting affidavit in opposition to the motion for summary judgment. A hearing on the motion for summary judgment was held in Hot Springs, Arkansas, on October 31, 2006, and the matter was taken under advisement. The proceeding before the Court is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(B), and the Court may enter a final judgment in this case. The following shall constitute the Court's findings of fact and conclusions of law pursuant to Federal Rule of Bankruptcy Procedure 7052. I. Facts U.S. Bank's affidavit in support of its motion for summary judgment explains the sequence of events leading to the filing of the adversary proceeding. These facts are not controverted by the Debtor in any coherent way. Prior to bankruptcy, a Dodge truck, U.S. Bank's collateral, was repossessed on June 26, 2006. The truck was sold by U.S. Bank on July 26, 2006 for $11,000.00, leaving a deficiency claim of $25,327.74 including expenses and attorney's fees. (Ex. B.) The Debtor filed his bankruptcy petition on July 27, 2006. On August 3, 2006, U.S. Bank sent a report of sale to the Debtor showing the proceeds of the sale and the balance due. (Ex. C.) U.S. Bank had no knowledge on August 3, 2006, that the Debtor had filed his petition for bankruptcy on July 27, 2006. (Ex. C.) U.S. Bank received notice of the filing of the bankruptcy sometime between August 4, 2006, and August 7, 2006. (Ex. A.) 784 The affidavit of Maria Thompson states that she filed a proof of claim in the Debtor's bankruptcy on September 5, 2006, erroneously designating the claim as secured. In her affidavit, she acknowledged the claim should have been listed as unsecured. (Ex. E.) U.S. Bank filed an amended claim on October 3, 2006. (Ex. D.) The amended claim is listed as unsecured and is in the amount of $25,237.74. (Ex. D.) The original claim is not part of the record and it is unclear whether the original claim and the amended claim were in the same amount. The Debtor attached an affidavit to his response to the motion for summary judgment, which does not dispute any of U.S. Bank's exhibits and affidavits. The Debtor acknowledges receiving a deficiency notice from U.S. Bank, but states that the amounts on U.S. Bank's claim do not match the amounts on the deficiency notice. The affidavit does not state how much the deficiency was. The Debtor's affidavit also does not mention any emotional damage. The Debtor offers no affidavit or other evidence of damages. The Debtor's affidavit concludes that he is confused by the' figures in the two proofs of claim, and he would like the bank to explain "how much I really owe the bank." II Summary Judgment Standard Summary judgment is appropriate when there is no genuine issue of material fact and the dispute may be decided solely on legal grounds. Iowa Coal Mining Co. v. Monroe County, 257 F.3d 846, 852 (8th Cir.2001); Fed.R.Civ.P. 56(c). The initial inquiry is whether there are genuine factual issues that can be properly resolved only by a finder of fact because they may reasonably be resolved in favor of either party. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986). The burden is on the moving party to set forth the basis of its motion. Donovan v. Harrah's Maryland Heights Corp., 289 F.3d 527, 529 (8th Cir.2002) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986)). The Court must view all facts and inferences in the light most favorable to the nonmoving party. Donovan, 289 F.3d at 529 (citing Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S. Ct. 1348, 89 L. Ed. 2d 538 (1986)). However, "[w]hen a motion for summary judgment is made and supported by affidavits, the party opposing the motion may not rest on the allegations in his pleadings but must resist the motion by setting forth specific facts that raise a genuine issue of fact for trial." Scherr Const. Co. v. Greater Huron Dev. Corp., 700 F.2d 463, 465 (8th Cir.1983) (quoting Burst v. Adolph Coors Co., 650 F.2d 930, 932 (8th Cir. 1981)). The party moving for summary judgment does not bear the burden of proof at trial; however, the party must demonstrate that there is an absence of evidence to support the nonmoving party's case. Buck v. F.D.I.C., 75 F.3d 1285, 1289 (8th Cir.1996) (quoting Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S. Ct. 2548, 91 L. Ed. 2d 265 (1986)). "If the moving party satisfies this requirement, the burden shifts to the non-movant who must set forth specific facts showing that there is a genuine issue for trial." Buck, 75 F.3d at 1289 (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250, 106 S. Ct. 2505, 91 L. Ed. 2d 202 (1986)). To establish a genuine issue of fact sufficient to warrant trial, the non-moving party "must do more than simply show that there is some metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co., 475 U.S. at 586, 106 S. Ct. 1348. Instead, the nonmoving party bears the burden *785 of setting forth specific facts showing there is a genuine issue for trial. Anderson, 477 U.S. at 248, 106 S. Ct. 2505. III Discussion The Debtor's argument set out in his response is difficult to follow. The first four pages of the response contain a diatribe about the recent amendments to the Bankruptcy Code. The response then states, "[a]n adversary complaint was warranted and necessary due to the unexplained discrepancies in the proof of claim," and a substantial portion of the response is addressed to this issue. The balance of the response is simply incoherent. It addresses various subjects such as the Debtor's fee agreement, debt relief agencies, use of after-hour recording devices, residency requirement for claiming homestead, Arkansas usury law, U.S. Bank's reservation in its pleadings to file a Rule 9011 complaint, and comments concerning the case of In re Dove-Nation, "which precludes counsel from filing an objection to a claim without concrete proof." 318 B.R. 147 (8th Cir. BAP 2004). In short, the response establishes beyond any reasonable doubt that the adversary proceeding is frivolous. The Debtor does not and cannot make a valid argument that the filing of a proof of claim, even when incorrect, violates the automatic stay set out in 11 U.S.C. § 362. Therefore, the motion for summary judgment is granted in favor of the U.S. Bank and the complaint is dismissed. A separate judgment consistent with this Memorandum Opinion will be entered pursuant to Federal Rule of Bankruptcy Procedure 7052. IT IS SO ORDERED.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527651/	618 S.W.2d 820 (1981) Leslie Ann Dours VALLONE, Appellant, v. Tony VALLONE, Appellee. No. 17787. Court of Civil Appeals of Texas, Houston (1st Dist.). May 14, 1981. Rehearing Denied June 11, 1981. 821 Boswell, O'Toole, Davis & Pickering, John Payne, Houston, for appellant. Baker & Botts, Robert J. Piro, Houston, for appellee. Before WARREN, DOYLE and EVANS, JJ. WARREN, Justice. This is an appeal from that part of a divorce judgment which divided the marital estate. Appellee has filed a motion to dismiss the appeal claiming that appellant has voluntarily accepted benefits under the judgment and therefore may not attack it. A review of the record shows that the acceptance of at least some of the benefits were out of practical necessity rather than a voluntary acceptance. Also it appears that there would be little problem in restoring the status quo without prejudice to appellee, therefore appellant is not estopped from pursuing this appeal. Appellant and appellee were married in 1966. At that time, appellee worked as an employee in a restaurant owned and operated by his father as a sole proprietorship. In January, 1969, the assets of the restaurant were transferred to appellee from his father. The restaurant continued to be operated as a sole proprietorship by appellee until August 1969, when it was incorporated as Tony's Restaurant, Inc. Since that time, the restaurant has prospered and has become one of the more fashionable restaurants in the Houston area. The records show that the corporation was capitalized by the exchange of $19,663.00 in assets belonging to appellee and/or appellant. There is some evidence that $9365.00 of the assets exchange for stock of the corporation consisted of the assets transferred to appellee by his father in January, 1969. The restaurant constituted by far the largest asset of the community, and its worth and division is the main source of contention between the parties. The court awarded the stock of the restaurant to appellee subject to a lien in favor of appellant to secure the payment of a 822 $300,000.00 promissory note payable to appellant in six equal annual installments of $50,000.00 each. Appellant contends that the trial court: (1) erred in finding that the transfer of assets to appellee by his father was a gift; (2) erred in finding that 47% of the stock in the restaurant was the separate property of appellee; (3) abused its discretion in awarding virtually all of the income producing property to appellee; (4) abused its discretion in dividing the estate, and (5) erred in its finding that Tony's Restaurant, Inc., was not the alter ego of appellee. Appellant's first and second points of error urge that the finding by the trial court that the transfer of assets in January 1969, to appellee from his father was a gift is not supported by sufficient evidence and, alternatively, that such finding is against the greater weight and preponderance of the evidence. Both appellee and his father testified that the transfer was a gift. The certified public accountant who set up the books for the business testified that the transfer was a gift and the attorney who drew the documents to effect the transfer testified that, to the best of his knowledge, no consideration was paid for the assets. Appellant testified that appellee told her he was buying the assets. Appellant's main contention regarding this point is that appellee's individual Federal Income Tax Return for the year 1969 shows that an investment credit was taken on these assets and that because such a credit is not allowable on property received by gift, as a matter of law, the transfer should be considered as a sale. We disagree. Although the fact that such a credit was taken is some evidence that there was a sale rather than a gift, such evidence would not constitute a judicial admission that the transfer was a sale. All the above testimony was available to the court to be given such weight as he considered appropriate. We cannot say that his finding was against the great weight and preponderance of the evidence. The next two points of error claim that the finding by the court that 47% of the stock in Tony's Restaurant, Inc., was the separate property of appellee is unsupported by sufficient evidence and, alternatively that such finding is against the great weight and preponderance of the evidence. The evidence, although scant, is undisputed that the same furniture, equipment and leasehold improvements which were transferred to appellee by his father in January, 1969, were later transferred by appellee to the corporation in August, 1969, in exchange for stock. If these assets were originally acquired by appellee as a gift, as found by the court, then appellee would be entitled to claim as his separate property, the stock received in exchange for the assets. Appellant contends that not only should appellee be required to prove that the original transfer was a gift but he should also be required to prove the specific property which was the subject of the gift, its value, the specific property exchanged for stock, and the exact ratio that the specifically proved property bore to the total value of the stock. In other words, she alleges that appellee must trace the assets that were claimed as a gift and show that they were directly converted into a certain percentage of the stock of the corporation. The only evidence offered as to the total value of property exchanged for the corporate stock shows this figure to be $19,663. There is other evidence to show that other assets were transferred into and used by the corporation, but there is no evidence to show that these assets were exchanged for capital stock. The individual income tax return filed for the year 1969 on behalf of appellant and appellee reflects that the furniture, equipment and leasehold improvements were transferred to appellee by his father. The corporate return for the year 1970 shows what purports to be the same assets. The C.P.A. who opened the books on the proprietorship and the corporation testified that these were the same assets and that the depreciated value of these assets ($9365) was conveyed to the corporation in exchange for capital stock. The value of these items was not disputed at trial. Appellee's duty to trace extended 823 no farther than to prove that his separate property was exchanged for a certain percentage of the total of the capital stock and to show that the stock had been held by him since the time of issuance. The finding that 47% of the corporate stock is the separate property of appellee was not against the great weight and preponderance of the evidence. Appellant next contends that the trial judge abused his discretion in awarding virtually all of the income producing property to appellee and in giving appellant a money judgment payable in six annual installments with interest at the rate of 9% per annum. Appellant cites Musick v. Musick, 590 S.W.2d 582 (Tex.Civ.App.-Tyler 1979, no writ) in support of her position and in many respects the case is remarkably similar to ours. In that case the husband received all of the income producing assets and almost all of the debts and gave judgment to the wife against the husband in an amount calculated to equalize the net amount each would receive. The court held that the division was manifestly unjust and unfair, apparently because of the likelihood that the wife would never receive at least some, if not the major, portion of the property awarded her. The risk of appellant not receiving the assets awarded her is much less in our case. The various appraisals of the restaurant's worth ranged from less than $600,000 to slightly under $2,000,000. These appraisals were made based on almost every conceivable assumption involving the availability or nonavailability of appellee and the presence or absence of a non-competition agreement. After considering all of the evidence concerning the evaluation of the restaurant by the court, we are of the opinion that the $1,000,000 valuation by the court was a fair one. In dividing a marital estate, in addition to the considerations mentioned, the trial court must, if it is to be at all practical, consider the nature of the assets to be divided and the utility of these assets to one or other of the parties, the value of the asset when awarded to one as opposed to the other and the ability to maintain or keep the asset. For example, in our case it would be have been ill advised for the court to award the restaurant to appellant and require her to pay appellant a large amount for his community share of the stock. Generally, the court awarded appellee the property which required a healthy cash flow to maintain while the assets awarded to appellant required little maintenance. Appellant's share tended toward liquidity more than the share awarded to appellee. We do not consider the manner of the division by the court to be unfair. Appellant next contends that the division of the property made by the court was so manifestly unfair as to amount to an abuse of discretion. A trial court has broad discretion in dividing the estate of the parties and this discretion will not be disturbed unless an abuse of discretion is shown. McKnight v. McKnight, 543 S.W.2d 863 (Tex.1976). In making the division, the court may consider the disparity of earnings powers, business opportunities, employment prospects, health of the parties, welfare of the children and the parties' separate property. Clay v. Clay, 550 S.W.2d 730 (Tex. Civ.App.-Houston [1st Dist.] 1977, no writ). Both of the parties are young, healthy and capable, although there is a great difference in their respective earning capacities ($200,000 vs. $9600). Appellee has worked in the restaurant business since his early teens and, according to the evidence, is one of the most knowledgable persons in all phases of the restaurant business. Appellant has limited business experience and at the time of trial was working as a secretary at a salary of about $800 per month. Appellee's separate property amounted to several times the value of that of appellant ($470,000 vs. $71,000). The business opportunities of appellee appear from the record to be much greater than those of appellant because he has worked in the business while appellant has been primarily occupied as a housewife. The above facts would tend to support an unequal division in favor of appellant, especially since the evidence clearly shows that the increase in the value of the stock separately owned by appellee was directly 824 attributable to the labors of one or both of the community partners. During the marriage, the value of the corporation's stock increased from approximately $20,000 to $1,000,000 and the value of that portion of the stock found to be separate property increased from $9,365 to $470,000. All of the increase is attributable to the labor and skill of one (and probably both) of the spouses. This situation is clearly distinguishable from that where one of the spouses held stock on a major exchange as his or her separate property which increased in value because of reasons other than the time and effort of one or both of the spouses. According to appellant's computations, which for the sake of argument were assumed by appellee to be true, appellee received in addition to the 47% of the stock set aside to him as his separate property, a net community estate equal to 48.6% while appellee received 51.4%. Had there been no large appreciation of the separate stock by reason of community labor, this division would not be unreasonable. Appellee was granted custody of the two minor children born of the marriage and is required to pay appellant the sum of $100 per day during the summer when the children are in her custody. Also, there are tax liabilities incidental to the property received by appellee which would reduce his net share. We are convinced that the court, in making a division of the estate, did not take into consideration the large increment to appellee's separate property by reason of community labor and as a result the division of the estate was manifestly unfair to appellant. This point of error is sustained. Appellant's last point of error contends that the finding of the court that Tony's Restaurant, Inc. is not the alter ego of Tony Vallone is against the great weight and preponderance of the evidence. There is little doubt that in many respects the financial and business end of the corporation is operated with great informality. Cash is taken from the business when it is needed for personal expenses; neither officer nor directors' meetings are held on a regular basis; and the corporation is run by appellee rather than by its officers or a board of directors. This is not uncommon in a closed corporation. Generally, the corporate form will be disregarded where: (1) the corporation is used as a means for perpetuating a fraud, (2) the corporation is organized and operating as a mere "tool" or "business conduit" of another corporation, (3) resort is made to the corporate fiction in order to avoid an existing legal obligation, (4) the corporate form is used to achieve or perpetuate a monopoly, (5) the corporate structure is used as a vehicle for circumventing a statute, or, (6) the fiction is invoked in order to protect crime or justify a wrong. Wolf v. Little John Corp. of Liberia, 585 S.W.2d 774 (Tex.Civ.App.-Houston [1st Dist.] 1979, no writ). Although many acts by appellee deviated from ideal management practices, there is no showing or indication that these acts were committed for the purpose of perpetrating a fraud on appellant or others or that in fact a fraud resulted as a result of the acts. This point is overruled. We affirm the judgment except as to that portion pertaining to the division of the estate of the parties; that part of the judgment is reversed and remanded.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527654/	292 B.R. 434 (2002) In re Bobby Joe TAYLOR, Jr., Debtor. Bobby Joe Taylor, Jr., Plaintiff, v. Steven Jacques d/b/a In-House Mortgage, Defendant. Bankruptcy No. 00-73753. Adversary No. 01-6311. United States Bankruptcy Court, N.D. Georgia, Atlanta Division. January 29, 2002. 435 Ralph Goldberg, Esq., Decatur, GA, for Plaintiff. Robert Michael Sheffield, Esq., Roswell, GA, for Defendant. ORDER JOYCE BIHARY, Bankruptcy Judge. This adversary proceeding is before the Court on defendant's motion to reconsider and amend the Court's Order entered on November 6, 2001, which denied defendant's motion to dismiss the complaint.[1] The complaint alleges that defendant's conduct violated the Georgia Fair Business Practices Act, and the defendant contends that the conduct at issue is exempt from the Act's coverage under GA. CODE ANN. § 10-1-396(1). The plaintiff Bobby Joe Taylor, Jr. filed a complaint on July 24, 2001, alleging that in November of 1999, defendant sent a flyer to the public marketing his residential mortgage company and misrepresenting that he was approved by the Department of Housing and Urban Development ("HUD"). Plaintiff responded to the flyer and applied for a loan. Plaintiff alleges that defendant misrepresented to him that his loan had been approved and that there would be a closing. The loan did not close and, based on defendant's representations, plaintiff alleges that he stopped paying his bills and, as a result, lost two leased vehicles and was forced to file bankruptcy. Defendant did not receive any monies from the plaintiff. The complaint is based solely on the Georgia Fair Business Practices Act (hereinafter "FBPA"). Defendant filed a motion to dismiss the complaint under FED. R. CIV. P. 12(b)(6) 436 made applicable to adversary proceedings by FED. R. BANKR. P. 7012(b). The essence of defendant's motion was that defendant's conduct is exempt from the FBPA because mortgage brokers are licensed and regulated. Plaintiff filed a response, and the defendant did not file any reply. The parties' briefs raised a number of questions, and the Court set the matter for a hearing on November 5, 2001. At the hearing, the Court asked counsel to consider the significance of GA. CODE ANN. § 7-1-1020, which is a section of the Georgia law governing the state licensing of mortgage brokers that provides that nothing in the statute should be construed as limiting in any manner the application of the FBPA. Neither party had addressed this provision in their briefs. After considering the oral arguments presented by counsel, the briefs that had been filed in the case, and the standards governing a 12(b)(6) motion, the Court advised the parties in an oral ruling that the motion to dismiss would be denied. The Court entered a brief written Order denying the motion on November 6, 2001, after which defendant filed the motion to reconsider now before the Court. The question presented by defendant's motion is whether the FBPA covers claims by a consumer against a mortgage broker for (1) misrepresenting the mortgage broker's relationship to HUD and (2) misrepresenting facts to a consumer in connection with the refinancing of a residential loan, or whether other regulations displace the FBPA. When considering a motion to dismiss, pursuant to FED. R. CIV. P. 12(b)(6), the Court must determine whether it appears beyond doubt that the plaintiff can prove no set of facts to support his claim and the Court considers all well-pleaded facts set forth in the plaintiff's complaint as true. GSW, Inc. v. Long County, 999 F.2d 1508 (11th Cir.1993), Brogdon v. Nat'l Healthcare Corp., 103 F. Supp. 2d 1322 (N.D.Ga.2000) (citing Hall v. Coram Healthcare Corp., 157 F.3d 1286, 1287 (11th Cir.1998)). Section 10-1-396 of the FBPA exempts two categories of actions from its coverage, one of which is relevant here.[2] That section provides, in pertinent part, as follows: 10-1-396. Acts exempt from part. Nothing in this part shall apply to: (1) Actions or transactions specifically authorized under laws administered by or rules and regulations promulgated by any regulatory agency of this state or the United States; . . . The Georgia Fair Business Practices Act became law in 1975. Two cases decided by the Georgia Court of Appeals address this exemption. Chancellor et al. v. Gateway Lincoln-Mercury, Inc. et al., 233 Ga.App. 38, 502 S.E.2d 799 (1998), Ferguson v. United Ins. Co. of Am., 163 Ga.App. 282, 293 S.E.2d 736 (1982). In both cases, the Court affirmed lower court determinations that dismissed claims brought under the FBPA. In Ferguson, the plaintiff brought a three count complaint against an insurance company, one of which alleged a violation of the FBPA. The Court concluded that insurance transactions were among those types of transactions which were exempt from the FBPA and stated "[t]his is especially true since the Insurance Code regulates unfair trade practices within the insurance industry . . . and specifically defines the activity alleged 437 in [the plaintiff's complaint] as an unfair or deceptive act or practice." Ferguson, 293 S.E.2d at 737. In reaching this conclusion, the Court found that insurance transactions in Georgia were authorized and regulated by the Georgia Insurance Code, that the Insurance Code created the Insurance Department and the Office of the Insurance Commissioner, that an insurer could not transact insurance except as authorized by the Insurance Commissioner, and that the Insurance Commissioner had full power and authority to make rules and regulations to effectuate provisions of the Insurance Code. In Chancellor, a group of automobile purchasers sued a dealer and a finance company alleging that the defendants were required to inform the buyers that the dealer gave the finance company a discount from the face value of the sales contracts when the contracts were sold by the dealer to the finance company. The trial court had granted summary judgment on the claim pled under the FBPA, finding that the transaction was "essentially private." The Georgia Court of Appeals agreed, holding that the transaction between the dealer and the finance company was not a consumer transaction, that there were no public advertisements or misrepresentations regarding the discount fees, and that there was no impact or injury on the consumer market. Chancellor, 502 S.E.2d at 804-06. Addressing the exemption in GA. CODE ANN. § 10-1-396(1), the Court stated: The General Assembly intended that the Georgia FBPA have a restricted application only to the unregulated consumer marketplace and that FBPA not apply in regulated areas of activity, because regulatory agencies provide protection or the ability to protect against the known evils in the area of the agency's expertise. O.C.G.A. § 10-1-396(1) provides that the FBPA shall not "apply to . . . actions or transactions specifically authorized under laws administered by or rules and regulations promulgated by any regulatory agency of this state or the United States." Chancellor, 502 S.E.2d at 805. After citing GA. CODE ANN. § 10-1-396(1), the Court held that the Truth in Lending Act provided for the determination, calculation, and disclosure of finance charges, and that the Federal Reserve Board had promulgated Regulation Z which regulated finance charges and disclosures. Thus, the Court concluded, "this area of finance charges, disclosure, and truth in lending falls outside the FBPA, except where expressly covered." Id. The parties cite two reported decisions by federal district judges in the Northern District of Georgia which address the significance of this exemption in the FBPA. Brogdon v. Nat'l Healthcare Corp., 103 F. Supp. 2d 1322 (N.D.Ga.2000), Taylor v. Bear Stearns & Co. et al., 572 F. Supp. 667 (N.D.Ga.1983). In Taylor v. Bear Stearns & Co., an investor sued brokerage firms and brokers, alleging that the defendants made unauthorized trades in the plaintiff's accounts in order to generate commissions. The Court considered the two possible interpretations of the exemption in § 10-1-396(1), stating as follows: The first interpretation would exempt from the Act conduct that was specifically authorized. The second interpretation would exempt conduct that is being regulated by an administrative agency . . . [T]he court perceives that an interpretation of section [10-1-396(1)] that would exempt conduct authorized specifically by an agency as anomalous, for what administrative agency would authorize an unfair trade practice? In light of the purpose of the FBPA as well as a judicial construction of 438 section [10-1-396(1)], the court reads the second interpretation as proper. Taylor, 572 F.Supp. at 674. The Taylor Court cited Ferguson for the proposition that the FBPA has no application when there is a remedy available to an injured consumer in a regulated industry, and relying on Ferguson, the Court held that the phrase "specifically authorized" in the exemption meant "specifically regulated." Id. at 675. The Court concluded that "where a consumer remedy exists, with no need to fill in a legal gap or create a consumer right, and where the industry which is the subject matter of the situation explicitly defines wrongful conduct or unfair and deceptive practices, the FBPA has no application." Id. The Court dismissed the claims under the FBPA, finding that the Securities and Exchange Act and the Commodities Exchange Act had a regulatory apparatus to prevent unfair practices that affect consumers and adequate remedies existed for the plaintiff. In Brogdon v. Nat'l Healthcare Corp., the plaintiffs, residents of a long-term health care facility, filed a twelve count complaint against certain health care facilities. The District Court dismissed the count alleging a claim under the FBPA, because the conduct was exempt from the FBPA under § 10-1-396(1). Citing Ferguson, Chancellor and Taylor, the Court concluded that "the FBPA does not apply in extensively regulated areas of the marketplace such as investment account transactions, finance charges and required disclosures by lenders, and insurance transactions." Brogdon, 103 F.Supp.2d at 1336. Since the defendant's long-term care facilities participated in the Medicare and Medicaid programs and the allegations of deficient care are "heavily regulated" by state and federal agencies, the Court concluded that the FBPA did not encompass the plaintiff's claims. Id. at 1337. Plaintiff argues that Taylor and Brogdon interpret Chancellor incorrectly and that the language in Chancellor is merely dicta. Plaintiff urges the Court to construe the exemption narrowly to exempt only conduct that is "specifically authorized," and not to exempt conduct that is "specifically regulated" as the Court did in Taylor. Unfortunately for the plaintiff, the case law in Georgia has not developed as he would have it. The reported cases, both in Georgia and in the federal courts applying the Georgia statute, have construed the exemption to cover conduct that is regulated, unless the FBPA or another statute provides otherwise.[3] Plaintiff cites four unreported district court decisions from this district, but none of these cases supports plaintiff's argument. Two of these unpublished orders were entered before the Georgia Court of Appeals decided Chancellor in 1998. Causey v. Central Adjustment Bureau, Inc. is an order from 1986 in which the Court deferred ruling on a motion to dismiss, expressing some reservation about the appropriate scope of § 10-1-396, and noting that the contours of the exemption may be fleshed out further by the Georgia courts. Causey v. Central Adjustment Bureau, Inc., No. 1:86-cv-1381 (N.D.Ga. Oct. 2, 1986). In the second case, Brooks v. Comprehensive Receivable Mgmt. Serv., Inc., the Court found that debt collection was not pervasively regulated by any agency of the state of federal government and that plaintiff's claim under the Fair Business 439 Practices Act should proceed. Brooks v. Comprehensive Receivable Mgmt. Serv., Inc., No. 1:92-cv-1604 (N.D.Ga. Sept. 21, 1993). The other two orders cited by plaintiff, one of which was also decided before Chancellor, contain no discussion of the exemption statute.[4] Plaintiff also argues that GA. CODE ANN. § 10-1-391(b) requires a finding that the exemption in § 10-1-396(1) cannot apply to claims against residential mortgage brokers. Section 10-1-391(b) provides that the FBPA should be "interpreted and construed consistently with the interpretations given by the Federal Trade Commission in the federal courts pursuant to Section 5(a)(1) of the Federal Trade Commission Act." Plaintiffs' argument appears to be that since the Federal Trade Commission can address unfair trade practices of residential mortgage lenders, then the FBPA must apply to the same practices. Plaintiff misreads § 10-1-391(b). Section 5(a)(1) of the FTCA[5] declares unfair and deceptive acts affecting commerce to be unlawful, and GA. CODE ANN. § 10-1-391(b) merely indicates that the Federal Trade Commission interpretations and constructions of what constitutes an "unfair" or "deceptive" practice should be used in construing the state law. See Donna S. Shapiro, Note, The Georgia Fair Business Practices Act: Business As Usual, 9 GA. ST. U.L. REV. 453, 461 (1993). There is simply no logical argument for construing § 10-1-391(b) to mean that any conduct or industry regulated by the Federal Trade Commission is not exempt under § 10-1-396(1), and none of the cases cited by plaintiff supports plaintiff's position. The issue here then is whether there is sufficient state or federal regulation of the defendant's alleged conduct so as to exempt the action from the FBPA. Defendant has a mortgage broker license issued by the Georgia Department of Banking and Finance. As a licensee, he is governed by the regulations of that agency and by the provisions of Georgia's Residential Mortgage Act found at GA. CODE ANN. §§ 7-1-1000 et seq. The direct mail advertisement referred to in plaintiff's complaint is governed by the rules and regulations of the Georgia Department of Banking and Finance, Chapter 80-11-1, which pertain to residential mortgage brokers and lenders. Regulation 80-11-1-.02(a) requires that advertisements for mortgage loans shall not be false, misleading or deceptive. GA. COMP. R. & REGS. r. 80-11-1-.02(a)(2001). Defendant argues that the conduct alleged in plaintiff's complaint is further regulated by the Georgia Residential Mortgage Act, and in particular § 7-1-1013 which prohibits any person transacting a mortgage business from misrepresenting the material facts or making false statements or promises likely to influence, persuade or induce an applicant for a mortgage loan. The state regulation applicable in this matter does not of itself cause the conduct alleged in the complaint to be exempt because of GA. CODE ANN. § 7-1-1020. This section appears in Article 13 of Chapter 1 of Title 7 of the Georgia Code, and Article 13 is entitled Licensing of Mortgage Lenders and Mortgage Brokers. Section 7-1-1020 provides that nothing in Article 13 limits any statutory or common law right of any person to bring any action in any court for any act involved in the mortgage 440 business or the right of the state to punish any person for any violation of any law. It also contains the following language: "Without limiting the generality of the foregoing, nothing in this article shall be construed as limiting in any manner the application of Part 2 of Article 15 of Chapter 1 of Title 10, the `Fair Business Practices Act of 1975.'" Section 7-1-1020 was enacted in 1993, eighteen years after the FBPA. It appears from a plain reading of § 7-1-1020 that the State Legislature did not intend to limit the FBPA's application as a result of the Georgia laws governing the mortgage lenders and brokers, and defendant's arguments that the provisions of Article 13 were intended to displace the FBPA are not persuasive. Defendant's argument regarding federal regulations, however, is not disputed by the plaintiff. When defendant first filed his motion to dismiss, the Court directed defendant's counsel to file a supplemental pleading outlining the specific regulations governing defendant's conduct. Defendant filed a supplemental pleading, but only referenced state statutes, and defendant did not refer to any federal statutes or regulations governing the conduct at issue in that pleading. In defendant's motion to reconsider, defendant argued that he is regulated by a "huge and complex body of federal law." The Court again directed defendant to file a supplemental pleading outlining the specific federal regulations or federal statutes governing defendant's conduct. On January 3, 2002, defendant filed a pleading, contending that his conduct generally, as well as the specific conduct alleged in this case, is regulated by the Consumer Credit Protection Act, 15 U.S.C. §§ 1601 et seq.; the Equal Credit Opportunity Act, 15 U.S.C. §§ 1691 to 1691f; Regulation B of the Federal Reserve Board, 12 C.F.R. §§ 202.1 et seq.; the Truth in Lending Act, Regulation Z, 12 C.F.R. §§ 226.1 et seq.; 18 U.S.C. § 709(a criminal statute dealing with misrepresentations of HUD association), the Federal Trade Commission; the Real Estate Settlement Procedures Act of 1974, 12 U.S.C. §§ 2601 et seq.; and Regulation X to that statute, 24 C.F.R. §§ 3500.1 et seq. Plaintiff has not filed any reply, and thus it does not appear that plaintiff contests defendant's assertion that his conduct is regulated by numerous federal statutes and regulations. Considering the case law in Georgia which construes the FBPA to exempt conduct in regulated areas of activity and the parties' apparent agreement that the conduct at issue is covered by the federal law now identified by the defendant, the Court concludes that the complaint under the FBPA must be dismissed. In conclusion, under Chancellor, Taylor and Brogdon, the FBPA does not apply in heavily regulated areas of activity, unless otherwise expressed in the state laws. While the Court concludes that the Georgia regulation of mortgage brokers alone would not displace the FBPA's applicability due to GA. CODE ANN. § 7-1-1020, the federal regulation of the conduct displaces FBPA coverage and bars the plaintiff's claim in this adversary proceeding under the FBPA. Since the complaint is based solely on the FBPA, defendant's motion to dismiss is hereby granted. A judgment will be issued for the defendant. NOTES [1] The defendant styled his motion as "defendant's motion to alter judgment", but the Court has not entered a judgment for either party in this matter. The Court did, however, enter an Order on November 6, 2001, denying the defendant's motion to dismiss. Thus, the Court construes the "motion to alter judgment" as a motion to reconsider the November 6, 2001 Order. [2] The other category of exempt conduct, described in GA. CODE ANN. § 10-1-396(2), protects the news media from the consequences of violations found in advertisements printed for others when the publisher is otherwise unaware of and uninvolved in the preparation of the false material. [3] For a discussion of the different state unfair and deceptive practices acts and the varied treatment of coverage and exemption issues that arise, see JONATHAN SHELDON & CAROLYN L. CARTER, NAT'L CONSUMER LAW CTR., UNFAIR AND DECEPTIVE ACTS AND PRACTICES § 2.3.3 (4th ed. 1997 & Supp.2000). [4] Falls v. Continental Central et al., No. 1:97-cv-1085 (N.D.Ga. Sept. 15, 1998); Converse v. Credit Claims and Collections et al., No. 1:92-cv-617 (N.D. Ga. June 5, 1992). [5] 15 U.S.C. § 45 (1994 & Supp.1996)	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527684/	982 F. Supp. 88 (1997) Marisol de Jesus PINEDA, Plaintiff, v. ALMACENES PITUSA, INC., et al., Defendants. No. CIV. 95-1884(SEC). United States District Court, D. Puerto Rico. May 6, 1997. 89 Jose Martinez Custodio, Utuado, PR, for Plaintiff. Maria Soledad Ramirez Becerra, Mercado & Soto, Old San Juan, PR, for Defendants. ORDER CASELLAS, District Judge. This sexual harassment, Title VII claim is before the Court on defendants' separate motions to dismiss (Dockets # 8, 9) which were duly opposed (Docket # 20). Defendant Almacenes Pitusa, Inc. essentially alleges that the complaint against it should be dismissed because (a) the named party is non-existent; (b) plaintiff's action was not brought within the 90-day statutory period; and (c) the action is time-barred. Co-defendants Domingo Vélez and Evelyn Lasalle plaintiff's supervisor and store manager, respectively assert that the complaint against them should be dismissed because (a) they are not employers as defined in Title VII of the Civil Rights Act, and (b) plaintiff failed to exhaust all administrative remedies. 90 On December 11, 1996, the forgoing motions were referred to Magistrate Justo Arenas for a report and recommendation (Docket # 27). In his thorough and well-reasoned report, which he rendered on April 11, 1997. Magistrate Arenas found "that Vélez and Lasalle were not `employers' within the definition of Title VII," for which reason he recommended that their motions to dismiss be granted, and that the supplemental claims against then be dismissed as well. On the other hand, Magistrate Arenas found that plaintiff had "a valid Title VII claim against Pitusa because she exhausted all administrative requirements, timely notified the defendant of the suit, and properly notified the correct defendant of the suit." (Docket # 28, at 21). Thus, he recommended that its motion to dismiss be denied, and that the state law claims against it be allowed to proceed as supplemental to the Title VII claim. The scope of our review of a Magistrate's recommendation is set forth in 28 U.S.C. 636(b)(1)(C). This section provides that "[a] judge of the [district] court shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made." However, no review is required of any issue that is not the subject of objection. Thomas v. Arn, 474 U.S. 140, 106 S. Ct. 466, 88 L. Ed. 2d 435 (1985), reh'g denied, 474 U.S. 1111, 106 S. Ct. 899, 88 L. Ed. 2d 933 (1986); Borden v. Secretary of Health & Human Services, 836 F.2d 4.6 (1st Cir.1987). In fact, failure to file any objections within ten days of the Magistrate Judge's Report and Recommendation waives the right to appeal this order. Henley Drilling Co. v. McGee, 36 F.3d 143, 150-151 (1st Cir.1994). See also Rule 510.2, Local Rules, District of Puerto Rico. The parties to this case failed to file any objections to the Magistrate Judge's report and recommendation within the allotted time period. Furthermore, this Court has examined Magistrate Arena's report and agrees with his conclusions and recommendations, for which reason we hereby APPROVE and ADOPT them as our own. WHEREFORE, for the reasons stated in Magistrate Arenas' report and recommendation, co-defendant Almacenes Pitusa, Inc.'s motion to dismiss (Docket # 9) is hereby DENIED; co-defendants Vélez and Lasalle's motions to dismiss (Docket # 8) are hereby GRANTED, and the federal and supplemental causes of action against them are therefore DISMISSED. Partial judgment will be entered accordingly SO ORDERED. MAGISTRATE'S REPORT AND RECOMMENDATION ARENAS, United States Magistrate Judge. On July 14, 1995, plaintiff Marisol de Jesús Pineda (hereinafter plaintiff or de Jesús) filed this Title VII claim against defendant "Empresas Koppel d/b/a Almacenes Pitusa" and co-defendants Domingo Vélez and Evelyn Lasalle (hereinafter co-defendants or Vélez and Lasalle), alleging that she had been sexually harassed by Domingo Vélez, her supervisor at the Utuado [Empresas Koppel d/b/a] Almacenes Pitusa store at which she worked from May 1992 until her discharge on May 7, 1994. Co-defendant Evelyn Lasalle was the store manager during this time. Jurisdiction of this court is invoked pursuant to the Civil Rights Act of 1991. 28 U.S.C. § 2000e-5. Pendent jurisdiction is invoked pursuant to 28 U.S.C. § 1367 for various state law claims.[1] Service of process was made on August 15, 1995 upon Brenda Martínez, a secretary at Almacenes Pitusa, authorized to receive summonses. On September 12, 1994, the defendant, referring to itself as "the wrongfully named ... `Empresas Koppel d/b/a Almacenes Pitusa,'" filed a motion "Requesting Extension of Time to Answer and/or Otherwise 91 Plead." An amended complaint was filed on September 20, 1995, in which "Almacenes Pitusa, Inc." was added as a party and "Empresas Koppel d/b/a Almacenes Pitusa" was eliminated as a party. On October 5, 1995, the defendant and co-defendants moved to dismiss the cause of action. Co-defendants Vélez and Lasalle claimed that the plaintiff has no cause of action against them because they are not employers under the definition of "employer" in Title VII and that the plaintiff failed to exhaust all administrative remedies. In its motion to dismiss, "Empresas Koppel d/b/a Almacenes" changed its status from "the wrongfully named co-defendant" to "the non-existing party" and argued that there can be no cause of action against it because it does not exist. Additionally, it claimed that the plaintiff had not brought a timely action within the 90-day statutory period. Finally, it contended that since the existing party, "Almacenes Pitusa, Inc.," had not yet been served with process on the date of the motion's filing, the action against it is time-barred.[2] If dismissals are granted, the supplemental claims must then follow. Plaintiff opposed the motion to dismiss on December 11, 1995, and a reply to the opposition was tendered on December 20, 1995, and later filed. In reviewing the dispositive motions, I accept the facts in the complaint as true, and if necessary draw all reasonable inferences in favor of the non-movant. See Conley v. Gibson, 355 U.S. 41, 45-46, 78 S. Ct. 99, 101-02, 2 L. Ed. 2d 80 (1957); Watterson v. Page, 987 F.2d 1, 3 (1st Cir.1993). I. BACKGROUND De Jesús worked as a store clerk at the Utuado branch of Almacenes Pitusa from May of 1992 until her dismissal on May 7, 1994. Throughout her term of employment, her performance was consistently rated as excellent by her supervisors. De Jesús alleges that in response to sexual harassment by her supervisor Domingo Vélez, she met co-defendant Lasalle at Lasalle's home and requested that she intervene and file a complaint against him. Lasalle refused, however, to do so, and warned that if de Jesus filed a complaint, she would be fired. Fearful of losing her job, de Jesús did not press the matter further, but the harassment continued. On May 7, 1995, de Jesús confronted Vélez and requested a meeting with the regional supervisor. In response, Vélez became angry and battered de Jesús, who proceeded to file a criminal charge of battery against him. After the criminal charge was filed, de Jesús was summarily dismissed from her job. On November 8, 1994, de Jesús filed charges of sex discrimination, sexual harassment, and retaliation with the E.E.O.C. and the Director of the Anti-Discrimination Unit of the Department of Labor and Human Resources of the Commonwealth of Puerto Rico. Conciliation was attempted and failed. The E.E.O.C. issued de Jesús a right to sue letter or April 18, 1995. The defendants raise several issues which I will address seriatim. II. DEFENSES BY CO-DEFENDANTS VELEZ AND LASALLE In their motion to dismiss, co-defendants Vélez and Lasalle claim that the plaintiff has no cause of action against them because 1) they are not employers under Title VII's definition of "employer" and 2) the plaintiff failed to exhaust the administrative requirements and failed to timely file administrative claims. For the reasons discussed below, I recommend dismissal of the complaint, including all supplemental claims against Vélez and Lasalle, because they are not employers within the statutory definition in Title VII. Notwithstanding my recommendation to dismiss, in evaluating the second defense, I would find that the plaintiff did exhaust all administrative requirements and timely filed her administrative claims. 92 A. Do Vélez and Lasalle Fall Within the Statutory Definition of "Employer?" Under Title VII, it is unlawful "for an employer (1) to fail or refuse to hire or to discharge any individual or otherwise to discriminate against any individual with respect to his compensation, terms, conditions, or privileges of employment, because of such individual's ... sex." 42 U.S.C. § 2000e-2(a)(1). Although the statute does not explicitly address the question of sexual harassment, it has been interpreted to prohibit such behavior. Marrero-Rivera v. Department of Justice, 800 F. Supp. 1024, 1027 (D.P.R.1992). Furthermore, since 1980, the regulations governing Title VII have explicitly prohibited sexual harassment. 29 C.F.R. § 1604.11. De Jesús may pursue her Title VII sexual harassment claim against co-defendants Vélez and Lasalle only if they were her "employers" within the meaning of Title VII. The statute defines an employer as "a person engaged in an industry affecting commerce who has fifteen or more employees ... and any agent of such a person." 42 U.S.C. § 2000e(b). Although the law is completely silent as to individual liability,[3] de Jesús argues that the co-defendants, as the plaintiff's supervisors, may be held personally liable under Title VII as agents of Almacenes Pitusa, Inc. Vélez and Lasalle contend that while supervisors may ordinarily be said to be agents of their corporate employer, this agency does not render them independent "employers" as defined in Title VII. The Court of Appeals for the First Circuit has never decided this issue.[4]See Morrison v. Carleton Woolen Mills, Inc., 108 F.3d 429, 443-44 (1st Cir.1997); Hernández v. Miranda Vélez, 1994 WL 394855, at 6 (D.P.R. 1994). However, the weight of judicial authority has construed the agency provision in the statutory definition as meant not to impose individual liability, but to incorporate respondent superior into the Act. In Hernández Torres v. Intercontinental Trading, Ltd., 1994 WL 752591, at 5 (D.P.R.1994), the court stated: Title VII's identification of an agent of the employer as the "employer" itself serves the sole purpose of binding the employer through its agency relationships to discriminatory acts undertaken by not merely the employer's employee's but also those who work for the employer outside the company. Said `employer' definition removes the possible defense of an employer who otherwise might attempt disowning responsibility for the acts of his employees or other agents. As such, the definition of `employer' which includes the employer's agents, serves not as a vehicle to impute liability upon said agent, but rather as a means to incorporate respondeat superior liability into the Act. Therefore, "including agents in the definition of `employer' simply allows `a plaintiff to recover ... by suing the employer, either by naming the supervisory employees as agents of the employer or by naming the employer directly." Quiron v. L.N. Violette Co., 897 F. Supp. 18, 20 (D.Me.1995) (quoting Busby v. Orlando, 931 F.2d 764, 772 (11th Cir.1991)). See also Sauers v. Salt Lake County, 1 F.3d 1122, 1125 (10th Cir.1993), erroneously relied on by the plaintiff. As the plaintiff correctly points out, the language of Title VII must be interpreted broadly to effectuate the Act's statutory goal of eliminating discrimination in the workplace. Virgo v. Riviera Beach Assocs., Ltd., 30 F.3d 1350, 1359 (11th Cir.1994). A liberal construction of Title VII does not, however, authorize judicial re-writing of the plain language of the statute. In Hernández 93 v. Wangen, 938 F. Supp. 1052, 1065 (D.P.R. 1996), the court explained that: [we] shall not stretch the definition of `employer' of Title VII and the Civil Rights Act of 1991 beyond Congress' intent in order to achieve a legislative goal. This court chooses to leave that role to Congress .... Title VII leaves to the corporate entities, which are held liable for the discriminatory acts of ... individuals, to deter the individuals' unlawful employment practices. Although it is true that individual liability would increase the number of potential defendants and therefore increase deterrence, the Seventh Circuit has recently noted that "Congress struck a balance between deterrence and societal cost." U.S. E.E.O.C. v. AIC Sec. Investigations, Ltd., 55 F.3d 1276, 1280 (7th Cir.1995). Other courts have emphasized that as a matter of policy, supervisors' discriminatory behavior is sufficiently curtailed through the imposition of liability on the supervisors' employers. As one court explained: "no employer will allow supervisory or other personnel to violate Title VII when the employer is liable for the Title VII violation. An employer that has incurred civil damages because one of its employees believes he can violate Title VII with impunity will quickly correct that employee's erroneous belief." Miller v. Maxwell's International Co., 991 F.2d 583, 588 (9th Cir.1993). De Jesús also relies on the amended damage provisions of Title VII to support her claim for the imposition of individual liability. Prior to the 1991 amendments to Title VII, the only remedy available under the statute was equitable relief, such as back pay and injunctive relief, relief not available from individual defendants. Hernández v. Miranda Vélez, 1994 WL 394855, at 6. Plaintiff argues that the 1991 amendments to Title VII allowing for recovery of compensatory and punitive damages evidences a Congressional intent to permit individual liability. See 42 U.S.C. § 1981a. The amendment notwithstanding, such an interpretation is inconsistent with the structure and logic of the statute. Title VII shields all defendants with fewer than fifteen employees from liability. 42 U.S.C. § 1981a(a)(3). Moreover, for defendants with more than fourteen employees, Congress limited the amount of compensatory and punitive damages as proportional to the size of the respondent employer. 42 U.S.C. § 1981a(b)(3)(A)-(D). Given that damages are proscribed according to the total number of employees, while there is no mention of the nature or extent of damages for individual liability, it is unlikely that Congress envisioned individual liability in the 1991 amended damage provisions. Tomka v. Seiler Corp., 66 F.3d at 1314-16. Indeed, it would be "bizarre if Congress placed such heightened emphasis and concern on limiting the damages recoverable against small corporate entities and, yet simultaneously, silently exposed all individual defendants to unlimited liability." Hernández v. Wangen, 938 F.Supp. at 1065. Thus, individual liability is inconsistent with Congress' explicit protection of small employers. For all of the above reasons, I find persuasive the reasoning of the majority position that Title VII does not impose individual liability on an employee's supervisors.[5] B. Did De Jesus Fail to Exhaust Administrative Remedies? "Title VII requires exhaustion of administrative remedies as a condition precedent to suit in federal district court." Jensen v. 94 Frank, 912 F.2d 517, 520 (1st Cir.1990). Under Title VII, a plaintiff must file an E.E.O.C. charge naming the defendant prior to bringing suit. 42 U.S.C. § 2000e-5(f)(1) ("a civil action may be brought against a respondent named in the charge"). Co-defendants Vélez and Lasalle maintain that because the plaintiff did not list them by name in the section of the E.E.O.C. charge in which the discriminatory party is to be "named,"[6] she is barred from bringing this case against them.[7] In response, the plaintiff contends that the sexual harassment by Vélez and Lasalle, both fellow employees at Pitusa, is alleged with particularity in the body of the charge. She further notes that the co-defendants were notified of this charge as part of the investigation by the Anti-discrimination Unit of the Department of Labor and participated in the ultimately unsuccessful attempt at conciliation. Although ordinarily a party not named in an E.E.O.C. charge may not be sued under Title VII, Schnellbaecher v. Baskin Clothing Co., 887 F.2d 124, 126 (7th Cir.1989), to accept the co-defendants' argument would be to elevate form over substance. The Supreme Court has emphasized that "technicalities are particularly inappropriate in a statutory scheme in which laymen, unassisted by trained lawyers, initiate the process." Love v. Pullman Co., 404 U.S. 522, 527, 92 S. Ct. 616, 619, 30 L. Ed. 2d 679 (1972). Thus, courts recognize that many complainants, including de Jesús here, file E.E.O.C. charges pro se. Johnson v. Palma, 931 F.2d 203, 209 (2d Cir.1991). Accordingly, Title VII's procedural requirements should be liberally construed in favor of the complainant, both in order to accomplish the purposes of the Act and in recognition that such complaints are written by laymen "not versed either in the technicalities of pleading or the [procedural] requirements of the Act. Romero v. Union Pac. R.R., 615 F.2d 1303, 1311 (10th Cir. 1980). Thus, parties sufficiently named or alluded to in the factual statement are to be joined." Eggleston v. Chicago Journeymen Plumbers' Local Union No. 130, 657 F.2d 890, 906 (7th Cir.1981). This principle is reflected in the regulation cited by the plaintiff, stating that: [A] charge is sufficient when the Commission receives from the person making the charge a written statement sufficiently precise to identify the parties, and to describe generally the action or practices complained of. 29 C.F.R. § 1601.12(b). The naming requirement serves to notify the charged party of the allegations and allows the party an opportunity to participate in conciliation and voluntarily comply with the requirements of Title VII. Schnellbaecher v. Baskin Clothing Co., 887 F.2d at 126. Clearly these aims were met here. Vélez was named both in the caption and body of the charge, and although the right to sue letter did not mention his name, it was sent with a copy of the charge to his employer. Although Lasalle was not identified in the caption, specific allegations of sexual harassment by her were described with particularity in the body of the charge.[8] Given the preceding analysis, I follow those courts that have held that the failure to name a supervisor in the caption of the charge is not fatal to the bringing of a Title VII case in federal court where the body of the administrative charge specifically names the supervisor and describes his challenged actions with 95 particularity.[9] Here, both co-defendants were adequately notified of the charge. Thus, I conclude that de Jesús adequately exhausted the administrative requirements and timely filed administrative claims against both Vélez and Lasalle. III. DEFENSES BY ALMACENES PITUSA, INC. In their motion to dismiss, Almacenes Pitusa, Inc., claims that the plaintiff has no cause of action against it because 1) she failed to exhaust administrative requirements, 2) she failed to timely notify the defendant of the suit, and 3) she failed to properly notify the correct defendant of the suit within the statutory time limit. The threshold questions are whether Almacenes Pitusa, Inc., had adequate notice of the charge filed with the E.E.O.C., whether de Jesús complied with the applicable statutory and procedural time limits, and whether her amended complaint may relate back to the original complaint under the provisions of Fed.R.Civ.P. Rule 15(c)(3). The answers to these questions are yes. A. Did de Jesús Exhaust Administrative Remedies and File a Timely Action? As discussed above, under Title VII a plaintiff must file an E.E.O.C. charge naming the defendant prior to bringing suit. Almacenes Pitusa, Inc., maintains that dismissal of the complaint is warranted because de Jesús named "Almacenes Pitusa," a non-existing party, in the charge. In light of the policy rationale behind the filing of a charge with the E.E.O.C., such a contention can not stand. The purpose of the requirement of filing a charge before the E.E.O.C. is twofold. First, it serves to notify the charged party of the alleged violation. Second, it gives the E.E.O.C. an opportunity for conciliation, which effectuates Title VII's primary goal of securing voluntary compliance with its mandates. Schnellbaecher v. Baskin Clothing Co., 887 F.2d at 126. See also Hayes v. Henri Bendel, Inc., 945 F. Supp. 374, 378-79 (D.Mass. 1996). With these twin purposes in mind, courts have recognized an exception to the general rule that parties not named in the E.E.O.C. charge are not subject to suit in a private civil action. This exception exists when a party has been given adequate notice of the charge and the opportunity to participate in conciliation proceedings aimed at voluntary compliance. Eggleston v. Chicago Journeymen Plumbers' Local Union, 657 F.2d at 905. See also Cook v. Arrowsmith Shelburne, Inc., 69 F.3d 1235, 1241-42 (2d Cir.1995); Virgo v. Riviera Beach Assocs., Ltd., 30 F.3d 1350, 1358-59 (11th Cir.1994); and Babrocky v. Jewel Food Co., 773 F.2d 857, 864 (7th Cir.1985); Hayes v. Henri Bendel, Inc., 945 F.Supp. at 378; The E.E.O.C. charge in this case, if technically imperfect, nonetheless fulfilled these aims. The charge referred to "Almacenes Pitusa" instead of "Almacenes Pitusa, Inc.," was filed by one of its former employees, and included allegations against two of its current employees. Additionally, Almacenes Pitusa answered the charge and participated in conciliation proceedings. This combination of facts clearly was sufficient to put Almacenes Pitusa, Inc., on notice that their actions were being scrutinized by the E.E.O.C. 96 B. Did de Jesús Timely Notify the Defendant of her Suit? On August 15, 1995, thirty (30) days after the ninety (90) day statutory limit to file case 42 U.S.C. § 2000e-5(f)(1) expired, de Jesús executed service on nonexisting party "Empresas Koppel d/b/a Almacenes Pitusa." In arguing that notice of the suit was untimely, the defendant confuses the statutory limitations period with the time limit for service provided for in the Federal Rules of Civil Procedure. The defendant acknowledges that the plaintiff filed her complaint eighty-nine (89) days after E.E.O.C. issued her a right to sue letter, which is within the ninety (90) day statutory limit proscribed in 42 U.S.C. § 2000e-5(f)(1). Nonetheless, Pitusa proceeds to argue that because service of process to the defendant occurred thirty (30) days later, the plaintiff failed to timely notify it of the suit. However, notice is governed not by statutory time limitation of ninety (90) days, but by Rule 4(m) of the Federal Rules of Civil Procedure, which provides that service of the summons and the complaint be "made upon the defendant within 120 days after the filing of the complaint...." Here, plaintiff instituted a civil action against the non-existing party on July 14, 1995, and served process on it on August 15, 1995. This is well within the one hundred and twenty (120) day limit in Rule 4(m). Given that the plaintiff complied with both the statutory and procedural time limits, the defendant's timeliness argument is without merit. C. Did de Jesús Properly Notify the Correct Party of the Suit? On September 19, 1995, the plaintiff filed an amended complaint against the correctly named defendant, "Almacenes Pitusa, Inc." The defendant correctly notes that the amended complaint was filed 156 days after the E.E.O.C. issued de Jesús a right to sue letter, far in excess of the ninety (90) day limit imposed by 42 U.S.C. § 2000e-5(f)(1). Accordingly it prays for a dismissal of the claim. In response, the plaintiff contends that Rule 15(c)(3) dictates that the amended complaint correctly naming "Almacenes Pitusa, Inc." as the defendant relates back to the original complaint that was filed within the 90 day statutory period in accordance with 42 U.S.C. § 2000e-5(f)(1). Rule 15(c) of the Federal Rules of Civil Procedure, as amended in 1991, states in pertinent part that: (c) Relation Back of Amendments. An amendment of a pleading relates back to the date of the original pleading when (1) ... (2) the claim or defense asserted in the amended pleading arose out of the conduct, transaction, or occurrence set forth or attempted to be set forth in the original pleading, or (3) the amendment changes the party or the naming of the party against whom a claim is asserted if the foregoing provision (2) is satisfied and, within the period provided by Rule 4(m) for service of the summons and complaint, the party to be brought in by amendment (A) has received such notice of the institution of the action that the party will not be prejudiced in maintaining a defense on the merits, and (B) knew or should have known that, but for a mistake concerning the identity of the proper party, the action would have been brought against the party. Rule 15(c) requires the plaintiff to prove three things: first, that the amended complaint arose out of the same facts as the original complaint; second, that within 120 days of filing the complaint (or longer for good cause shown) the proposed defendant had notice of the proposed action; and third that within that same time period the proposed defendant knew or should have known that but for a mistake in the identity of the party the action would have been brought against the proper party. Ocasio Ortiz v. Betancourt Lebrón, 146 F.R.D. 34, 37 (D.P.R. 1992). 1. The Defendant Had the Requisite Notice of the Plaintiff's Action. There is no dispute that the first requirement is met. However, the defendant asserts that Almacenes Pitusa, Inc., did not 97 have notice of the plaintiff's suit until proper summons was served on it on November 30, 1995, well after the 120 day procedural limit to serve notice on the original complaint of July 14, 1995 had expired. Defendant's implicit assumption that the notice of the action required must be the notice provided by the proper service of summons is mistaken. Instead, notice, not service, is the determining factor. Montgomery v. United States Postal Serv., 867 F.2d 900, 904 (5th Cir.1989). See also the Advisory Committee Notes to the 1966 Amendments ("The notice need not be formal."). Here Almacenes Pitusa evidenced knowledge that the original complaint was directed against it. For example, a summons in the name of the non-existing party was not rejected by Ms. Brenda Martínez, a Pitusa employee authorized to receive summonses. Also, Pitusa employed counsel to file a motion on September 12, 1995, requesting more time to answer or otherwise plead. By referring to itself as the "wrongfully named ... `Empresas Koppel d/b/a Almacenes Pitusa,'" it recognized that but for a misnomer, it was the intended defendant in the case. Courts have recognized many of the specific types of notice that Almacenes Pitusa had as sufficient notice of the action. See Marks v. Prattco, Inc., 607 F.2d 1153, 1155 (5th Cir.1979) (Participation in E.E.O.C. hearings, filing an answer) and Barkins v. International Inns, Inc., 825 F.2d 905, 907 (5th Cir.1987) (counsel representation and receiving copies of right-to-sue letters). In sum, the judicial principle behind Rule 15(c) "`is to ensure that the statute of limitations is not used mechanically to prevent adjudication of claims where a real party in interest was sufficiently alerted to the proceedings, or was involved in them in a practical sense from an early stage.'" Ayala Serrano v. Collazo Torres, 650 F. Supp. 722, 726 (D.P.R.1986) (quoting Hampton v. Hanrahan, 522 F. Supp. 140, 145 (N.D.Ill.1981)). Almacenes Pitusa's responses to the original complaint makes it clear that it was aware of the lawsuit long before the procedural time limit of one hundred and twenty (120) days expired. Relying on Hernández Jiménez v. Calero Toledo, 604 F.2d 99, 102-03 (1st Cir.1979), plaintiffs argue that Empresas Koppel d/b/a Almacenes Pitusa and Almacenes Pitusa, Inc., are so closely related that notice to the former constitutes notice to the latter. This concept is called sharing an `identity of interests,' and has been described as the judicial gloss on Rule 15(c). Reliance on this concept, however, is both misplaced and unnecessary. The court explained that the "identity of interests" principle is applied in circumstances where a new party is added to the complaint, such as in the instance of a "parent corporation and its wholly owned subsidiary, two related corporations whose officers, directors, or shareholders are substantially identical and ... have similar names or share office space ... or co-executors of an estate." Hernández Jiménez v. Calero Toledo, 604 F.2d at 103. Here, in contrast, the amended complaint seeks not to bring in a separate closely related entity, but the same entity under its proper name.[10] Ironically, the defendant claims that the purported lack of notice prejudiced 98 its ability to maintain a defense. Specifically, the defendant claims that a lack of notice prevented it from making a timely investigation of the plaintiff's allegations. This contention, however, is clearly contradicted by the record. In response to the charge filed by de Jesús, in late April Almacenes Pitusa, Inc., undertook its own intensive investigation, including interviewing witnesses. See Exhibit 5. Under these circumstances, I am unable to perceive any prejudice to the defendant, and thus find the notice requirement to have been satisfied. 2. The Defendant Knew or Should Have Known That But For a Mistake Concerning Its Identity, the Original Action Would Have Been Brought Against It. This final prong of Rule 15(c)(3) is most often implicated in circumstances where the defendant could reasonably believe that they were not named as a party in the original complaint for tactical reasons, or because the plaintiff lacked sufficient evidence of their alleged liability. Ocasio Ortiz v. Betancourt Lebrón, 146 F.R.D. at 41. In this case, neither circumstance exists. De Jesús simply mistakenly named "Empresas Koppel d/b/a Almacenes Pitusa" in her original complaint instead of the intended "Almacenes Pitusa, Inc." For the reasons discussed above, Almacenes Pitusa was not surprised when the amended complaint was filed against it in its proper corporate name. Based on their participation in the resulting administrative investigation, I find that, within the period prescribed by Rule 15(c)(3), Almacenes Pitusa, Inc., knew or should have known of its potential liability as a defendant. IV. CONCLUSION Finding that Vélez and Lasalle are not "employers" within the definition of Title VII, I recommend that their motion for dismissal be granted. I further recommend that the supplemental claims against them be dismissed as the only issue conferring federal question jurisdiction has been dismissed. However, I recommend that defendant Almacenes Pitusa, Inc.'s motion to dismiss be denied. De Jesús has a valid Title VII claim against Pitusa because she exhausted all administrative requirements, timely notified the defendant of the suit, and properly notified the correct defendant of the suit. Accordingly, I further recommend that the plaintiff's state law claims against Pitusa be allowed to proceed as supplemental to De Jesús' Title VII claim. Under the provisions of Rule 510.2, Local Rules, District of Puerto Rico, any party who objects to this report and recommendation must file a written objection thereto with the Clerk of this Court within ten (10) days of the party's receipt of this report and recommendation. The written objections must specifically identify the portion of the recommendation, or report to which objection is made and the basis for such objections. Failure to comply with this rule precludes further appellate review. See Thomas v. Arn, 474 U.S. 140, 106 S. Ct. 466, 88 L. Ed. 2d 435 (1985); Paterson-Leitch v. Massachusetts Municipal Wholesale Elec., 840 F.2d 985 (1st Cir.1988); Borden v. Secretary of Health & Human Servs., 836 F.2d 4, 6 (1st Cir.1987); Scott v. Schweiker, 702 F.2d 13, 14 (1st Cir.1983); United States v. Vega, 678 F.2d 376, 378-79 (1st Cir.1982); Park Motor Mart, Inc. v. Ford Motor Co., 616 F.2d 603 (1st Cir.1980). At San Juan, Puerto Rico, this 11th day of April, 1997. NOTES [1] Supplemental jurisdiction is invoked for claims arising under the following state statutes: (a) the Puerto Rico Sexual Harassment Statute, Act No. 17 of April 22, 1988, P.R. Laws Ann. tit. 29, § 155; (b) Employment Discrimination Statute, Act No. 100 of June 30, 1959, as amended, P.R. Laws Ann. tit. 29, § 146 et. seq.; and (c) Articles 1802 and 1803 of the Puerto Rico Civil Code, P.R. Laws Ann. tit. 31, §§ 5141 and 5142. [2] Subsequently, proper service of process to "Almacenes Pitusa, Inc." was made upon Ms. Martínez on November 28, 1995. [3] Note further that "there is a noticeable absence of any mention of agent liability in the floor debates over § 2000e(b)." Tomka v. Seiler Corp., 66 F.3d 1295, 1314 (2d Cir.1995). [4] Admittedly, within First Circuit, district courts are split. See Miller v. CBC Cos., Inc., 908 F. Supp. 1054, 1065 (D.N.H.1995) (dismissing claims for individual liability); Flamand v. American Int'l Group, Inc., 876 F. Supp. 356, 361-64 (D.P.R.1994); and Torres Hernández v. Intercontinental Trading, Ltd., 1994 WL 752591, at 5-6; but see Rivera de Torres v. Telefónica de P.R., 913 F. Supp. 81, 87 (D.P.R.1995) and Ruffino v. State St. Bank & Trust Co., 908 F. Supp. 1019, 1047-48 (D.Mass.1995). [5] The majority of circuits have rejected individual supervisory liability. See Haynes v. Williams, 88 F.3d 898, 900-01 (10th Cir.1996); Tomka v. Seiler Corp., 66 F.3d at 1313-17; Gary v. Long, 59 F.3d 1391, 1399 (D.C.Cir.), cert. denied, ___ U.S. ___, 116 S. Ct. 569, 133 L. Ed. 2d 493 (1995); U.S. E.E.O.C. v. AIC Sec. Investigations, Ltd., 55 F.3d at 1281; Cross v. Alabama, 49 F.3d 1490, 1504 (11th Cir.1995); Grant v. Lone Star, 21 F.3d 649, 653 (5th Cir.), cert. denied, 513 U.S. 1015, 115 S. Ct. 574, 130 L. Ed. 2d 491 (1994); Miller v. Maxwell's International, Inc., 991 F.2d at 587-88; and Harvey v. Blake, 913 F.2d 226, 227-28 (5th Cir.1990). In addition to the First Circuit, the Third, Sixth and Eighth Circuits have not yet decided the issue. Hernández v. Wangen, 938 F.Supp. at 1063. The Fourth Circuit is ambivalent. Cf. Birkbeck v. Marvel Lighting Corp., 30 F.3d 507, 510 (4th Cir.), cert. denied, 513 U.S. 1058, 115 S. Ct. 666, 130 L. Ed. 2d 600 (1994) with Paroline v. Unisys Corp., 879 F.2d 100, 104 (4th Cir.1989). [6] The E.E.O.C. "Charge of Discrimination" form requires the complainant to fill in a section in the caption entitled "NAMED IS THE EMPLOYER, LABOR ORGANIZATION, EMPLOYMENT AGENCY, APPRENTICESHIP COMMITTEE, STATE OR LOCAL GOVERNMENT AGENCY WHO DISCRIMINATED AGAINST ME" (capitalized in the original). [7] Vélez, in addition to "Almacenes Pitusa," was in fact named in the caption of the E.E.O.C. charge. However, the right to sue letter was issued only against Almacenes Pitusa. [8] The following advice from the Fourth Circuit is particularly relevant today: "A suit at law is not a children's game, but a serious effort on the part of adult human beings to administer justice; and the purpose of process is to bring the parties into court. If it names them in such terms that every intelligent person understands who is meant, as is the case here, it has fulfilled its purpose; and courts should not put themselves in the position of failing to recognize what is apparent to everyone else." United States v. A.H. Fischer Lumber Co., 162 F.2d 872, 873 (4th Cir.1947). [9] In addition to Dreisbach v. Cummins Diesel Engines, Inc., 848 F. Supp. 593, 597 (E.D.Pa. 1994), cited by plaintiff; see also Romero v. Union Pac. R.R., 615 F.2d at 1311-12; Shehadeh v. Chesapeake & Potomac Telephone Co., 595 F.2d 711, 727-29 (D.C.Cir.1978) (assertion contained in the body of the E.E.O.C. charge held to be sufficient against defendant as it "plainly implicated" him in the violation); Kaplan v. International Alliance of Theatrical, 525 F.2d 1354, 1359 (9th Cir.1975) (noting that "the crucial element of the charge of discrimination is the factual statement contained therein."); Kramer v. Windsor Park Nursing Home, Inc., 943 F. Supp. 844, 851 (S.D.Oh.1996); Sandom v. Travelers Mortgage Servs., Inc., 752 F. Supp. 1240, 1248-49 (D.N.J.1990); Kinnally v. Bell of Pennsylvania, 748 F. Supp. 1136, 1140 (E.D.Pa.1990); Diem v. City & County of San Francisco, 686 F. Supp. 806, 811 (N.D.Cal.1988); and Acampora v. Boise Cascade Corp., 635 F. Supp. 66, 71 (D.N.J.1986). [10] Although not briefed by either party, some courts have held that the requirements of Rule 15(c)(3) do not apply when the amended complaint merely corrects a misnomer of the proper defendant already before the court. Instead, courts follow the general rule permitting an amendment to relate back in order to correct misnomer of the proper defendant. Wilson v. United States, 23 F.3d 559, 563 (1st Cir.1994) (citing Worthington v. Wilson, 8 F.3d 1253, 1256 (7th Cir.1993)) and Wood v. Worachek, 618 F.2d 1225, 1229 (7th Cir.1980). See also Marks v. Prattco, Inc., 607 F.2d 1153, 1156 (5th Cir.1979). This general rule is in accordance with the intended interpretation of the amended Rule 15. The Advisory Committee Notes relating to the 1991 amendment of Rule 15 states: "The rule has been revised to prevent parties against whom claims are made from taking unjust advantage of otherwise inconsequential pleading errors to sustain a limitations defense." Specific to the issue at bar, the Advisory Committee Notes continue that as long as the notice requirement of Rule 4(m) is met, "a complaint may be amended at any time to correct a formal defect such as a misnomer or misidentification." While there is no doubt that a corporation has a right to be sued in its correct name, it is also true that the 1991 amendment was enacted precisely to avoid what the now correctly named defendant is attempting to secure, a dismissal.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527732/	89 Md. App. 104 (1991) 597 A.2d 987 TERRENCE LEE GOINES v. STATE OF MARYLAND. No. 1822, September Term, 1990. Court of Special Appeals of Maryland. October 31, 1991. Certiorari Denied February 12, 1992. Melissa M. Moore, Asst. Public Defender (Stephen E. Harris, Public Defender, on the brief), Baltimore, for appellant. David P. Kennedy, Asst. Atty. Gen. (J. Joseph Curran, Jr., Atty. Gen., Baltimore, and Alexander Williams, Jr., State's Atty., for Prince George's County of Upper Marlboro, on the brief), for appellee. Submitted before GARRITY, ALPERT and WENNER, JJ. ALPERT, Judge. This appeal reaches us as a result of an aborted attempt to steal a dishwasher from a dwelling. The State of Maryland charged appellant Terrence Lee Goines by criminal indictment with: 1. storehouse breaking with intent to steal goods valued at $300.00 or more; 2. storehouse breaking and stealing goods valued at $5.00 or more; 3. theft over $300.00; 4. attempted theft over $300.00; 5. theft under $300.00; and 6. attempted theft under $300.00. A Prince George's County jury, on August 21, 1989, convicted appellant of storehouse breaking and stealing goods valued at $5.00 or more, theft under $300.00, and attempted theft under $300.00. Circuit Court Judge Joseph S. Casula sentenced Goines on October 30, 1990. The court merged the attempted theft conviction into the theft conviction, and imposed concurrent sentences of ten years for the storehouse breaking and stealing and eighteen months for the theft under $300.00. Goines appeals his conviction to this court, raising the following issues: I. Was there sufficient evidence below to sustain appellant Mr. Goines's convictions for storehouse breaking and stealing and theft under $300.00? II. Did the lower court err by not taking corrective measures in response to the prosecutor's allegedly improper closing argument? III. Does appellant Mr. Goines's conviction for theft under $300.00 merge with his conviction for storehouse breaking and stealing? FACTS Trooper Gregory C. Taylor, of the Maryland State Police, was working "secondary employment" at the Palmer Woods development on November 12, 1989. Palmer Woods is a townhouse development on Countrywood Court in Seat Pleasant, Maryland. Capital Homes of Maryland, Inc. (CHM) is the developer. On the night of the 12th, residents occupied forty units. Six completed units stood vacant, and CHM was still working on others. Mr. Robert Donovan, of CHM, was the site superintendent for the Palmer Woods project. Mr. Donovan was responsible for locking and securing each vacant, completed unit. He testified that on November 12, 1989, at approximately 6:00 p.m., he secured 1796 Countrywood Court. This entailed locking all the doors and windows and turning on the lights. Early on the morning of the 13th, at approximately 1:00 a.m., Trooper Taylor, who was out of uniform but in his marked cruiser, noticed a ten thousand pound gross weight Hertz truck parked in front of 1796 Countrywood Court.[1] A black female sat in the passenger side of the truck. Trooper Taylor got out of his cruiser, walked by the female passenger, and approached 1796 Countrywood Court. Upon reaching the living room window to 1796 Trooper Taylor looked in and saw the appellant Goines in the kitchen "pulling on a dishwasher." Trooper Taylor testified that the kitchen and upstairs of the unit were well lit. Appellant Mr. Goines was "pulling the dishwasher trying to remove it from it's [sic] place." He was unsuccessful in pulling out the dishwasher. The installation crew had hooked up the dishwasher to a hose that was connected through a wall to presumably plumbing in the wall. Nevertheless, Goines successfully moved the dishwasher to the middle of the floor before he stopped his activities. After observing the appellant's behavior for about four minutes, Trooper Taylor went to his cruiser and radioed for assistance. He then returned to the window where Goines turned around and made eye contact with him. Goines immediately exited the townhouse through a sliding glass door. Mr. Goines had some quick words with his compatriot before Trooper Taylor detained him at gunpoint. A short while later, several county police officers arrived and apprehended Goines. As the officers placed him under arrest he said "[y]ou [Trooper Taylor] didn't see me in there."[2] Later that day, November 13, 1989, Trooper Taylor accompanied Detective Tony Lee Camp, of the Prince George's County Police, to the Prince George's County Detention Center. As Detective Camp was reading Goines his rights, he "blurted" out "[y]ou got me on the one last night. Tell the man who owns the property I'll pay him back, I don't have anything else to say." Meanwhile, at 7:00 a.m. Mr. Donovan arrived at 1796 Countrywood Court. He discovered a broken kitchen window above the sink, and the dishwasher[3] in the middle of the floor. The police investigators and technicians recovered several fingerprints from the relevant areas in 1796 Countrywood Court. None matched up with appellant's prints. Mr. Donovan testified that approximately five individuals put in the dishwasher, two put in the window above the kitchen sink, and that around six prospective purchasers had inspected that particular unit. He did admit, however, to the possibility that the cleaning crew had cleaned the interior of the unit after the construction crew completed the unit around three weeks prior. I. First, we note the standard of review for sufficiency of the evidence. Our standard of review is "whether, after viewing the evidence in the light most favorable to the prosecution, any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt." Jackson v. Virginia, 443 U.S. 307, 319, 99 S. Ct. 2781, 2789, 61 L. Ed. 2d 560 (1979) (emphasis in the original) (quoted in State v. Rusk, 289 Md. 230, 240, 424 A.2d 720) (1981)). With the Jackson test in mind we now consider the parties' arguments. The jury convicted Goines of storehouse breaking and stealing under 3A Md. Ann. Code article 27, § 33 (1987 repl. vol.), theft under $300.00, and attempted theft under $300.00. As appellant points out, the State must prove a breaking and a stealing beyond a reasonable doubt to sustain a conviction under § 33. He specifically takes issue with the elements of stealing, of which theft is one. Warfield v. State, 315 Md. 474, 494-95, 554 A.2d 1238 (1989). The Code defines theft in § 342. For purposes of this appeal we examine the language of § 342(a). (a) Obtaining or exerting unauthorized control. A person commits the offense of theft when he willfully or knowingly obtains control which is unauthorized or exerts control which is unauthorized over property of the owner, and: (1) He has the purpose of depriving the owner of the property; or (2) Willfully or knowingly uses, conceals, or abandons the property in such manner as to deprive the owner of the property; or (3) Uses, conceals, or abandons the property knowing the use, concealment, or abandonment probably will deprive the owner of the property. 3A Md. Ann. Code art. 27, § 342(a) (1987 repl. vol.). Appellant argues that he never obtained or exerted control over the dishwasher because it was connected to the kitchen wall. The Code states that: (d) "Exerts control" includes but is not limited to the taking, carrying away, appropriating to one's own use or sale, conveyance, transfer of title to, interest in, or possession of property. The term "exerts control" does not include trespassing on the land of another or occupying without authorization the land of another. Id. § 340(d). And the Code defines "obtains" as follows: (f) "Obtain" means: (1) In relation to property, to bring about a transfer of interest or possession, whether to the offender or to another; and (2) In relation to services, to secure the performance thereof. Id. § 340(f). The State argues that appellant Mr. Goines exerted control over the dishwasher. We consider that argument. The Legislature wrote § 342(a) in the disjunctive. That is, one commits a theft by either willfully or knowingly obtaining unauthorized control over another's property OR willfully or knowingly exerting unauthorized control over another's property. Maryland is not the only state with such a theft statute. In fact, it derived its theft statute from Illinois and other states. Revision of Maryland Theft Laws and Bad Check Laws 32-33 (1978). An examination of Illinois's theft statute confirms that fact. § 16-1. Theft A person commits theft when he knowingly: (a) Obtains or exerts unauthorized control over property of the owner; or (b) Obtains by deception control over property of the owner; or (c) Obtains by threat control over property of the owner; or (d) Obtains control over stolen property knowing the property to have been stolen by another or under such circumstances as would reasonably induce him to believe that the property was stolen, and (1) Intends to deprive the owner permanently of the use or benefit of the property; or (2) Knowingly uses, conceals or abandons the property in such manner as to deprive the owner permanently of such use or benefit; or (3) Uses, conceals, or abandons the property knowing such use, concealment or abandonment probably will deprive the owner permanently of such use or benefit. ..... Ill. Ann. Stat. ch. 38, para. 16-1 (Smith-Hurd 1977). Looking to the courts of that state, we find a decision that is germane to our discussion in the instant case. In People v. Poliak, 124 Ill. App. 3d 550, 79 Ill. Dec. 706, 464 N.E.2d 304 (1984), cert. denied, [Ill.Sup.Ct.], the Appellate Court of Illinois faced the issue of whether obtaining and exerting control constituted different theories of prosecution under Illinois statute 16-1(a)1. The court determined that "[t]he terms `obtain' and `exert' are indistinguishable means of accomplishing the proscribed conduct of unauthorized control. Therefore, the terms are not different as they relate to the substantive elements of the offense of theft." Id. The Illinois court's discussion is persuasive. In Maryland, the Court of Appeals has defined the word "control" as it pertained to Md. Ann. Code article 27, § 277 (1957) (controlled dangerous substances). "We must give them [the words "control" and "possession"] their ordinary meanings. According to Webster's Third New International Dictionary, Unabridged (1961), `control' is defined as `to exercise restraining or directing influence over.' It has also been defined to relate to authority over what is not in one's physical possession." Bryant v. State, 229 Md. 531, 537, 185 A.2d 190 (1962). Looking to the most current edition of The Oxford English Dictionary, we find that one definition of control means "[t]o exercise restraint or direction upon the free action of; to hold sway over, exercise power or authority over; to dominate, command." III The Oxford English Dictionary 853 (2d ed. 1989). The State is correct to point out that the Joint Subcommittee on Theft Related Offenses (Subcommittee) stated that article 27, § 340(d) "is not a strict definition of the words `exerts control'. [sic] It is an illustration of what the phrase `includes, but is not limited to'. [sic] It is, therefore, a guide to assist in providing meaning to these words." Revision of Maryland Theft Laws and Bad Check Laws 13 (1978). The dishwasher is an immobile object (subject to slight movement from vibration). Absent an outside force acting upon it, it will not move on its own. Trooper Taylor testified that he watched appellant Mr. Goines "[i]n the kitchen, pumping on the dishwasher. It was like a panelled area for the refrigerator, dishwasher, and stove unit, and he was pulling on the dishwasher trying to remove it from it's [sic] place." In fact, Goines successfully moved the dishwasher till it was "in the center of the floor." Interpreting the words "exerts control" in the manner the Subcommittee intended, we hold that Goines did exert control over the dishwasher within the acceptable import of those words. Thus, the evidence at issue was sufficient under the Jackson test to establish "stealing" and theft. II. The prosecution cannot comment on the defendant's failure to testify: that is forbidden. Griffin v. California, 380 U.S. 609, 85 S. Ct. 1229, 14 L. Ed. 2d 106 (1965); Veney v. State, 251 Md. 159, 246 A.2d 608 (1968), cert. denied, 394 U.S. 948, 89 S. Ct. 1284, 22 L. Ed. 2d 482 (1969), aff'd, 312 Md. 122 (1988); Md.Decl.Rights art. 22; Md.Cts. & Jud.Proc. Code Ann. § 9-107 (1989). Abuse of discretion is the standard of review we employ for this issue. Booth v. State, 306 Md. 172, 210-11, 507 A.2d 1098 (1986), vacated in part, 482 U.S. 496, 107 S. Ct. 2529, 96 L. Ed. 2d 440 (1987). Mr. Goines complains of certain remarks made by the prosecutor, Mr. Smathers. You've heard a lot from me, and the State's witnesses in this case. And I'm sure, like me you may be a little confused about the evidence that the defense put on, in light of all the evidence the State put on against him. After hearing all the State's witnesses, and seeing all the State's Exhibits, the only evidence the defense chose to put on are these three pieces of evidence which are basically shots of the same area that was shown to you earlier. MR. DREOS [Defense Counsel]: Your Honor, may we approach the bench here? THE COURT: Yes. (At the Bench) MR. DREOS: I think what Mr. Smathers [Prosecutor] is suggesting here is, that the defendant failed to testify. And I would THE COURT: I didn't hear that. MR. DREOS: He didn't say it in so many words, but the implication to me was that. THE COURT: I didn't hear that. Read it back what he said. (Prior statement read back by the Reporter) THE COURT: I think he's just commenting on the evidence. Stay away from that in the future. MR. SMATHERS: All right. THE COURT: I think he was just commenting on the evidence. In Hutchinson v. State, 41 Md. App. 569, 398 A.2d 451 (1979), aff'd, 287 Md. 198, 411 A.2d 1035 (1980), this court noted that although it is not proper for the State to comment on the defendant's failure to testify, "this does not mean that every neutral or indirect reference that the State makes which implicitly refers to a defendant's silence is improper comment." Id. 41 Md. App. at 572-73, 398 A.2d 451. Furthermore, "the rule does not apply, where, as here, the thrust of the remark is directed toward the lack of evidence rather than pointed directly at the failure of the accused to testify." Grace v. State, 6 Md. App. 520, 522, 252 A.2d 297, cert. denied, 256 Md. 745 (1969). The prosecutor directed the thrust of his remarks toward the lack of evidence. Therefore, the lower court did not commit reversible error because the prosecutor's remarks were not improper. III. The State wisely concedes that Goines's conviction for theft under $300.00 merges with his conviction for storehouse breaking and stealing. Young v. State, 220 Md. 95, 100-101, 151 A.2d 140 (1959), cert. denied, 363 U.S. 853, 80 S. Ct. 1634, 4 L. Ed. 2d 1735 (1960). We affirm the lower court on issues I and II, and order that Goines's conviction for theft under $300.00 merge with his conviction for storehouse breaking and stealing and the sentence thereon be vacated. SENTENCE ON THEFT UNDER $300 VACATED; CONVICTION THEREON MERGED WITH CONVICTION FOR STOREHOUSE BREAKING; JUDGMENT ON STOREHOUSE BREAKING AFFIRMED; COSTS TO BE PAID 2/3 BY APPELLANT AND 1/3 BY PRINCE GEORGE'S COUNTY. NOTES [1] In addition to regular parking lot lights, CHM had installed a generator with two temporary quartz lights which lit up the parking lot. [2] Mr. Goines also gave the officers at least two different aliases. [3] Mr. Donovan valued the dishwasher at $287.00.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527760/	597 A.2d 1 (1991) In the Matter of the Petition of the STATE of Delaware for a Writ of Mandamus. Supreme Court of Delaware. Submitted: September 27, 1991. Decided: September 27, 1991. Richard E. Fairbanks, Jr. (argued), Chief of Appeals Div., and Loren C. Meyers, Deputy Atty. Gen., Dept. of Justice, Wilmington. Nancy Jane Perillo (argued), and John H. McDonald, Asst. Public Defenders, Public Defender's Office, Wilmington. Before CHRISTIE, C.J., WALSH and HOLLAND, JJ. PER CURIAM: The Court has before it a petition that seeks to invoke its original jurisdiction for the purpose of issuing an extraordinary writ. Del.Const. Art. IV, Sec. 11; Supr. Ct.R. 43. The petition was filed by the State of Delaware and requests that this Court issue a writ of mandamus to the Superior Court. The underlying matter that gave rise to the present proceedings is a trial, which is currently in progress, in State of Delaware v. James E. Harris, Jr., ("Harris") Cr.A. Nos. IN90-08-0497 and 0498. Two days ago, on September 25, 1991 a jury convicted Harris of Murder in the First Degree. The penalty phase of that trial is now scheduled to begin on September 30, 1991. The penalty phase of the Harris trial was postponed so that this Court could consider the State's petition for a writ of mandamus. This matter has proceeded on an expedited basis. Counsel have exchanged legal memoranda and this Court heard oral argument today. The State indicated at the commencement of the Harris trial that, if Harris was convicted of murder in the first degree, it would seek to have the death penalty imposed. In anticipation of a penalty hearing for Harris, the State represented to the Superior Court that it intended to put into evidence "certain information regarding the effects this crime has had on the victim's children and on her surviving family members." Harris' attorney filed a motion to exclude such evidence. The Superior Court granted that motion and held that "victim impact evidence, unknown to or not reasonably foreseeable by the defendant, is not admissible in any penalty hearing" under Delaware's capital punishment statute. 11 Del.C. § 4209. The State contends that the Superior Court has misconstrued the Delaware capital punishment statute. 2 The peremptory writ of mandamus traditionally has been used only to confine a trial court "to a lawful exercise of its prescribed jurisdiction or to compel it to exercise its authority when it is its duty to do so." In re Bordley, Del.Supr., 545 A.2d 619, 620 (1988) (quoting Roche v. Evaporated Milk Ass'n, 319 U.S. 21, 26, 63 S. Ct. 938, 941, 87 L. Ed. 1185 (1943)). A writ of mandamus may issue from an appellate court to compel the performance of a statutory duty. In re Pitt, Del.Supr., 541 A.2d 554, 556 (1988). The State submits that the Superior Court's refusal to consider the merits of the admissibility of evidence relating to the impact of this crime on the victim's family is a refusal to perform a required statutory duty. See id. The jurisdictional question presented to this Court is whether the Delaware capital punishment statute requires the Superior Court to consider the merits of admitting "victim impact" evidence during the penalty phase of a first degree murder trial. This is an important legal question of first impression. This Court has a unique role pursuant to the Delaware capital punishment statute, 11 Del.C. § 4209. This Court has previously considered a construction of the duty to act pursuant to that statute by the Superior Court, in the context of a mandamus proceeding, following a conviction of murder in the first degree and prior to a penalty hearing. See In re Petition of State, Del.Supr., 433 A.2d 325 (1981). Before June 27, 1991, the answer to the question presented by the State's petition would have been in the negative, because the admission of "victim impact" evidence was precluded by the United States Constitution. See Booth v. Maryland, 482 U.S. 496, 107 S. Ct. 2529, 96 L. Ed. 2d 440 (1987); South Carolina v. Gathers, 490 U.S. 805, 109 S. Ct. 2207, 104 L. Ed. 2d 876 (1989). On that date, however, the United States Supreme Court held that the introduction of "victim impact" evidence at a penalty hearing, following a conviction of murder in the first degree, does not violate the Eighth Amendment of the United States Constitution. Payne v. Tennessee, ___ U.S. ___, 111 S. Ct. 2597, 115 L. Ed. 2d 720 (1991). Nevertheless, the Court did not mandate the introduction of such evidence. Id. The Court held that "if the State chooses to permit the admission of victim impact evidence and prosecutorial argument on that subject, the Eighth Amendment erects no per se bar." Id. at 2609. Consequently, the question presented by the State's petition for a writ of mandamus is, now that "victim impact" evidence is no longer barred from a penalty hearing as a matter of federal constitutional law, whether the Delaware capital punishment statute permits its admission. If it does, the merits of the admissibility of such evidence must be ruled upon by the Superior Court. The Delaware death penalty statute provides, in part, that at the penalty hearing "evidence may be presented as to any matter that the Court deems relevant and admissible to the penalty to be imposed." 11 Del.C. § 4209(c)(1) (emphasis added). Delaware's capital punishment statute also requires that the jury "[u]nanimously recommend[], after weighing all relevant evidence in aggravation or mitigation which bears upon the particular circumstances or details of the commission of the offense and the character and propensities of the offender, that a sentence of death be imposed." 11 Del.C. § 4209(d)(1)b (emphasis added). The Delaware capital punishment statute has been construed by this Court on many prior occasions. Thirteen years ago, this Court held that the Delaware capital punishment statute "permits consideration of any aggravating factors but it requires at least one statutory aggravating factor to be found by the sentencing authority as a condition for imposing the death penalty." State v. White, Del.Supr., 395 A.2d 1082, 1088-89 (1978) (emphasis in original). This Court then went on to hold that there was no constitutional defect in the statutory procedure of allowing consideration of other aggravating circumstances. Such a procedure encourages attention to all specific circumstances of the crime and the defendant. Id. at 1089. More recently this Court held that "jurors were correctly permitted 3 to consider any factors that they determined were relevant to the sentencing stage, even if such factor had been deemed to be too vague to be used as a statutory aggravating circumstance." Deputy v. State, Del.Supr., 500 A.2d 581, 601 (1985) (emphasis added). Delaware has enacted a statutory scheme that expressly recognizes the relevancy of the impact of the crime upon the victim to the sentencing authority even in matters that proceed to immediate sentencing. 11 Del.C. § 4331. The United States Supreme Court now has held that "[v]ictim impact evidence is simply another form or method of informing the sentencing authority about the specific harm caused by the crime in question, evidence of a general type long considered by sentencing authorities." Payne v. Tennessee, 111 S.Ct. at 2608. The Court also has held that the Booth Court was wrong in stating that "victim impact" evidence leads to the arbitrary imposition of the death penalty, because in the majority of cases, "victim impact" evidence serves legitimate purposes. Id. at 2609. The United States Supreme Court has found that there is nothing unfair in allowing a jury to bear in mind the harm caused by the victim's death as an aggravating circumstance, at the same time that it considers the mitigating evidence introduced by the defendant. Id. at 2608-09. The Court's specific holding in Payne was that: if the State chooses to permit the admission of victim impact evidence and prosecutorial argument on that subject, the Eighth Amendment erects no per se bar. A State may legitimately conclude that evidence about the victim and about the impact of the murder on the victim's family is relevant to the jury's decision as to whether or not the death penalty should be imposed. There is no reason to treat such evidence differently than other relevant evidence is treated. Id. at 2609. The prior decisions of this Court clearly reflect a literal construction of the broad language in the Delaware death penalty statute that permits the presentation of evidence "as to any matter that the Court deems relevant and admissible to the penalty to be imposed." 11 Del.C. § 4209(c). See Dawson v. State, Del.Supr., 581 A.2d 1078, 1103 (1990); Deputy v. State, Del. Supr., 500 A.2d 581, 601 (1985); State v. White, Del.Supr., 395 A.2d 1082, 1088-89 (1978). "Victim impact" evidence has not been admitted into evidence in any court prior to Payne because of the federal constitutional bar. That bar has now been removed. Under the Delaware death penalty statute, there is no reason to treat victim impact evidence any differently than other relevant evidence is treated. Payne v. Tennessee, 111 S.Ct. at 2609. In the absence of a federal constitutional bar, the Delaware capital punishment statute requires the Superior Court to consider the merits of admitting such evidence. Although the Delaware death penalty statute requires "victim impact" evidence to be considered by the Superior Court upon the merits, it does not require such evidence to be admitted into evidence at the penalty hearing. In fact, as the United States Supreme Court said, "[i]f, in a particular case, a witness' testimony or a prosecutor's remark so infects the sentencing proceeding as to render it fundamentally unfair, the defendant may seek appropriate relief under the Due Process Clause of the Fourteenth Amendment." Id. at 2612 (O'Connor, J., concurring). We have concluded that the Superior Court's decision not to consider the merits of the admissibility of "victim impact" evidence during the penalty phase of the Harris trial was clearly erroneous. It is appropriate to issue a writ of mandamus to compel the Superior Court to perform its duty to consider such evidence, as required by the Delaware death penalty statute. Therefore, the State's petition for relief in the form of mandamus is GRANTED. The Superior Court is directed to consider, on the merits, the admissibility at the Harris penalty hearing of evidence of the impact of the killing upon the victim's family, as aggravating evidence relating to the circumstances of the offense. 11 Del.C. § 4209. See Deputy v. State, 500 A.2d at 601; State v. White, 395 A.2d at 1088-90. *4 That consideration must be made by the Superior Court in accordance with the Delaware death penalty statute, the applicable rules of evidence, and any relevant state or federal constitutional requirements. We wish to emphasize that our ruling today is made on a limited record without benefit of the precise "victim impact" testimony the State intends to offer. In directing the Superior Court to consider the merits of such testimony, we do not intend to foreclose the Superior Court from defining the relevancy of such testimony, or to foreclose, in any way, further review by this Court in any appeal. The mandate shall issue forthwith.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1528204/	719 A.2d 1074 (1998) Wanda S. HENNINGER, Appellant, v. STATE FARM INSURANCE CO., Appellee. Superior Court of Pennsylvania. Argued September 23, 1998. Filed November 6, 1998. 1075 Thomas P. Lang, York, for appellant. Lauralee B. Baker-Starr, Harrisburg, for appellee. Before JOHNSON, HUDOCK and HESTER, JJ. HUDOCK, Judge: This is an appeal from the trial court's entry of summary judgment in favor of State Farm Insurance Company (State Farm). We reverse. The facts and procedural history can be summarized as follows: On November 12, 1992, Wanda S. Henninger (Henninger) was injured in an automobile accident. Because Henninger was insured pursuant to a motor vehicle insurance policy issued by State Farm, she presented it with claims for first-party medical and wage loss benefits. State Farm denied these claims. Consequently, on October 18, 1994, Henninger filed a complaint alleging that State Farm improperly denied her claims. She later amended the complaint, alleging that State Farm's denial of benefits had been made in bad faith. Thereafter, on December 20, 1996, State Farm filed a motion for summary judgment with the trial court. Henninger responded with a brief in opposition to summary judgment on January 17, 1997. The trial court granted summary judgment with respect to all of Henninger's claims on January 18, 1998. In her opinion, the trial judge indicated that Henninger had identified a genuine issue of material fact with respect to the question of whether her treatment had been medically reasonable or necessary. Trial Court Opinion, 1/22/98, at 5. She granted State Farm's motion, however, because Henninger "failed to identify evidence in the record which supports her assertion." Id. In order to preserve her appellate rights, Henninger filed both a motion for reconsideration with the trial court and a direct appeal to this Court. Along with her motion for reconsideration, Henninger provided the trial court with excerpts from the deposition transcripts of her treating physicians. She also requested the York County Prothonotary to file these transcripts as of record. The trial court did not act on the motion for reconsideration.[1] In her appeal, Henninger alleges that the trial court erred as a matter of law when it granted summary judgment in favor of State Farm with respect to her claim for 1076 first-party medical benefits.[2] Summary judgment in Pennsylvania is controlled by Rule of Civil Procedure 1035. In pertinent part, that rule provides: After the relevant pleadings are closed, but within such time as not to unreasonably delay trial, any party may move for summary judgment in whole or in part as a matter of law (1) whenever there is no genuine issue of any material fact as to a necessary element of the cause of action or defense which could be established by additional discovery or expert report[.] Pa.R.C.P. 1035.2(1). Even where there are genuine material issues of fact, however, Rule 1035.3 provides that (a) The adverse party may not rest upon the mere allegations or denials of the pleadings but must file a response within thirty days after service of the motion identifying (1) one or more issues of fact arising from evidence in the record controverting the evidence cited in support of the motion or from a challenge to the credibility of one or more witnesses testifying in support of the motion[.] Rule 1035.3(a)(1) (emphasis added). When presented with a challenge to an order granting summary judgment, we consider the record in the light most favorable to the non-moving party, resolving all doubts as to the existence of a genuine issue of material fact against the moving party. Borden, Inc. v. Advent Ink Co., 701 A.2d 255, 258 (Pa.Super.1997). Our scope of review is plenary. Id. Instantly, the trial judge noted that Henninger had identified a material issue of fact but concluded that Henninger had not supported it with citations to evidence in the record. Conversely, Henninger claims that she established and supported a material issue of fact. Henninger advances her argument on two different fronts.[3] She first argues that the deposition transcripts of her treating physicians, Drs. Earl J. Wenner and Gary Czulada, which she attached to the motion for reconsideration, support her claim that the medical treatment she received was reasonable and necessary. Rule 1035.3 is clear; a party opposing a motion for summary judgment cannot rely upon her pleadings. In order to avoid summary judgment, the rule indicates that the party opposing the motion must identify record evidence supporting an assertion of a material issue of fact in a timely fashion. Pa.R.C.P. 1035.3(a)(1). Here, State Farm filed its motion for summary judgment on December 20, 1996. As of that date, Henninger had thirty days during which she could have brought to the trial court's attention any evidence supporting her brief in opposition to State Farm's motion for summary judgment. Pa.R.C.P. 1035.3(a). Our careful review of the record demonstrates that Henninger did not avail herself of the opportunity to present such evidence in the thirty days following the filing of State Farm's motion. Thus, it is clear that Henninger failed to adequately support her opposition brief with additional evidence. The fact that Henninger later attached the deposition transcripts of Drs. Wenner and Czulada to her motion for reconsideration or that she filed them with the York County Prothonotary on January 26, 1998, does not change our conclusion. The depositions of Drs. Wenner and Czulada took place on June 11 and November 21, 1996, respectively. There is no record evidence indicating that the transcripts of these depositions were unavailable to Henninger when State Farm filed its summary judgment motion on December 20, 1996. Because Henninger filed 1077 the deposition transcripts after the thirty-day window that Rule 1035.3 provides had closed, they were filed in an untimely manner. Consequently, the deposition transcripts cannot be considered with reference to whether Henninger adequately supported her opposition brief. Second, Henninger claims that she established a material issue of fact by impugning the credibility of State Farm's witnesses. State Farm's motion for summary judgment with respect to Henninger's claim for medical benefits solely relied upon the evaluation of two doctors. The reports of these doctors indicated that Henninger's care and treatment was unreasonable and unnecessary. See Motion of Defendant, State Farm Mutual Automobile Insurance Company, for Summary Judgment, filed 12/20/96, at 10-13. Henninger notes, however, that these two doctors were associated with a Peer Review Organization (PRO) retained by State Farm pursuant to Section 1797(b)(1) of the Vehicle Code. The Pennsylvania Supreme Court, in Terminato v. Pennsylvania Nat'l. Ins. Co., 538 Pa. 60, 67, 645 A.2d 1287, 1291 (1994), has explained that a "PRO does not accept and review conflicting medical evidence proffered by an insured or provider.... Only the insurer participates in the peer review process." Moreover, the Court added, "[t]he detachment and neutrality required of a fact-finder is conspicuously absent in the contractual relationship between a PRO and an insurer." Id. Finally, it continued: "A PRO is not a neutral body. While a PRO cannot be owned by or be otherwise affiliated with the insurance company ... the law provides for the insurance company to select the PRO that will review the claim. The insurance company initially pays the PRO for its services. The insured plays no role in the selection process. Obviously, PROs have a strong financial incentive to appear fair in the eyes of the insurance company. Otherwise, the insurance company will take its business elsewhere. On the other hand, the PRO is not concerned with how the insured views the PRO because this will not affect its future business." Id. (quoting Harcourt v. General Accident Insurance Company, 419 Pa.Super. 155, 615 A.2d 71, 78 (Pa.Super.1992) (emphasis added)). Under Pennsylvania law, only the jury is empowered to pass on matters of credibility. Consequently, summary judgment should not be granted where it requires the unquestioned acceptance of the testimony of the moving party's witnesses. Pennsylvania Gas & Water Co. v. Nenna & Frain, Inc., 320 Pa.Super. 291, 467 A.2d 330, 334 (Pa.Super.1983) (citing Nanty-Glo Borough v. American Surety Co., 309 Pa. 236, 163 A. 523 (1932); Ritmanich v. Jonnel Enters., Inc., 219 Pa.Super. 198, 280 A.2d 570 (Pa.Super.1971)). Moreover, due to the credibility of their makers, even uncontradicted affidavits of the moving party or its witnesses cannot support a grant of summary judgment. Godlewski v. Pars Mfg. Co., 408 Pa.Super. 425, 597 A.2d 106, 110 (Pa.Super.1991). Henninger acknowledges that the precise issue presented by this case was not before the Terminato Court. However, she contends that the essential holding ofTerminato, that PROs have an inherent bias in favor of the insurer, applies equally to the instant case. Moreover, she claims that this fact, which was brought to the trial court's attention, supports a conclusion that she identified "one or more issues of fact arising ... from a challenge to the credibility of one or more witnesses testifying in support of the motion." See Plaintiff's Brief in Opposition to Defendant's Motion for Summary Judgment, filed 1/17/97, at 6-7; Pa.R.C.P. 1035.3(a)(1). After a careful review of the record, we agree and, accordingly, reverse the trial court's entry of summary judgment in favor of State Farm. The holding of our Supreme Court in Terminato clearly establishes that PROs are not neutral factfinding bodies. As a result, the reliability of conclusions drawn by doctors retained by PROs may be suspect. Consequently, the trial court erred in concluding that summary judgment was proper. The credibility of the PRO doctors is a factual issue that should be decided, under Pennsylvania law, by a jury. 1078 We emphasize that our holding today is strictly limited to the facts of the instant case. Here, with regard to Henninger's claim for first-party medical benefits, State Farm solely relied upon the PRO reports in support of its summary judgment motion. While the two PRO doctors are not, strictly speaking, witnesses of State Farm, they are not independent witnesses either. Consequently, we believe that Terminato requires us to accord PRO doctors a status akin to that of the insurer's own witnesses. Given that conclusion, the credibility of the doctors presents a genuine issue of material fact that Henninger should have been allowed to develop at trial. Order reversed. Case remanded for proceedings consistent with this memorandum. Jurisdiction relinquished. NOTES [1] Despite the trial court's failure to act on the motion for reconsideration, this appeal is properly before us. When a party files both a motion for reconsideration with the trial court and a notice of appeal with this Court, the trial court has thirty days to act on the motion. After that time, the trial court is divested of jurisdiction. See Pa.R.A.P. 903, 1701; Triffin v. Interstate Funding Co., 391 Pa.Super. 551, 571 A.2d 1053, 1054 (Pa.Super.1990). [2] Henninger does not challenge summary judgment with respect to her claims for first-party wage loss benefits and bad-faith damages. See Henninger's Brief at 5. [3] Henninger additionally asserts that State Farm had a responsibility to produce the deposition transcripts of Drs. Wenner and Czulada when it filed its motion for summary judgment. As State Farm properly notes, such an argument has no basis in either our Rules of Civil Procedure or case law. See Pa.R.C.P. 1035.2(2); Ertel v. Patriot-News Co., 544 Pa. 93, 674 A.2d 1038 (1996) (stating that Rule 1035 does not require that the moving party introduce evidence on an issue on which it does not bear the burden of proof). Therefore, this assertion will not be considered instantly.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/8304127/	Mr. Justice Holmes delivered the opinion of the Court. The plaintiffs in error, hereinafter referred to as defendants, were convicted of the offense of hunting during the closed season. Each defendant was fined $50.00 and •costs by the Trial Judge, who heard the case without the intervention of a jury. Defendants’ motions for new trial were overruled by the Trial Judge and they have perfected their appeals to this Court. Since assignments of error 1 and 2 relate to the evidence, it is necessary briefly to review the facts. The record shows that on the evening of August 9, 1963. State Game & Fish officers went into the Walland and Townsend area of Blount County. When they arrived at the Laurel Late property, which belongs to the State and is used as a youth camp, they found two trucks parked thére with a dog chained in the back of one of the trucks. Officers remained in the vicinity of these trucks all night. While there, they “heard dogs back in towards the mountains, in behind Laurel Lake, barking and running”. The next morning between eight and nine o’clock the two de138fendants and two other men came out of the woods towards the trucks leading dogs. The defendant Key was carrying his fully loaded 30-30 rifle. One of the officers went back up the trail from which the men had come and found another 30-30 rifle, which the defendant Holland admitted was his. When asked what they were hunting, the defendants stated they were hunting feral hogs. The top of-the mountain where the defendants stated they camped during the night, according to the testimony of the defendant Holland, is about two miles from the boundary of the Smoky Mountain National Park. The record shows that Russian boar are found in Smoky Mountain National Park as well as in the Tellico Wildlife Area and that the Russian boar in the National Park “come out of the park quite a bit” in the vicinity where defendants were hunting. When asked how he could tell the difference between, a Russian boar and a feral hog, the defendant Holland testified: “The general way, most general way, is color. That’s one. And generally the Russian hog is either black or brindled colored or gray. Once in a while they will be mixed enough to where there will be some white in them, at Tellico.” This defendant testified a feral hog may be any color. He further stated that a feral hog will: “just be fat and ugly. * * He don’t have any streamlined form to him at all like a Russian hog does.” This defendant admitted that the tracks made by a Russian boar and those made by a feral hog are the same. He further testified that the bay or bark of the dogs was 139the same whether they were pursuing Russian boar or feral hogs. This defendant, in his testimony, contended there is a difference in the rooting habits of Russian boar and feral hogs, that a feral hog will only root in damp, soft earth, but a Russian boar will root in any kind of earth. When asked what a domestic hog would do in a turnip patch, he responded that a turnip patch would be a soft, damp place. When apprehended on the Laurel Lake State property, the defendants were allowed to remain there sufficient time to recover their dogs, some of which had become lost from them during the night, and were instructed to then report to the proper authorities, which they did. The record does not show that the defendants killed any game of any sort on this occasion. “Hunting” is defined by T.C.A. sec. 51-403, as follows: “Hunting includes pursuing, shooting, killing, capturing, and trapping wild animals, wild fowl, wild birds, and all lesser acts such as disturbing, harrying or worrying, or placing, setting, drawing or using any device used to take wild animals, wild fowl, wild birds, whether they result in taking or not, and includes every act of assistance to any person in taking or attempting to take wild animals, wild fowl, or wild birds.” There can be no doubt defendants were hunting on this occasion. They contend they were hunting feral hogs and that feral hogs are not protected by the laws of this State and that, therefore, they had a legal right to hunt feral hogs at any time and at any place other than in wildlife management areas or on State owned property. They deny they did any hunting on the Laurel Lake State 140property, but asserted they were beyond its limits while hunting. While we, as did the Trial Judge, find it difficult to understand how the defendants could know their dogs were on the trail of a. feral hog- and not a Russian boar, we will follow the reasoning of the Trial Judge when hé stated: “I suppose if they,say they, were hunting feral hogs, they were hunting feral hogs, as far as I’m concerned.” .This leaves the question of whether or not there was a-closed season on ferahhogs ;at thk time- -and place defendants; WeréCxunting ón this occasion. By T.C.A. secs. 51-401 .and 51-402, “ [t]he ownership of and title to all forms of wildlife within the jurisdiction of the state, as are not individual property under the laws of the land, is hereby declared to be in the state ’ ’ and wildlife is defined “to be all wild animals,■ wild birds, wild fowl, fish,"frogs and other aquatic animal life.” T.C.Á. sec. 51-408 provides: “There"is hereby declared a closed season upon all hunting and fishing in the state of Tennessee upon all game and fish protected by the laws of the state.” By T.C.A. sec. 51-409, upon a determination by the State Came & Fish Commission that the supply of game in a given area is adequate .to allow the taking thereof without danger .of extinction or undue' depletion, the Commission is authorized to announce such fact by proclamation, in which the'Commission is required to state the' species of game which- may be taken and announce the dates between which such game may- be taken. Upon 141such announcement by the Commission, it is made lawful for any person within the area designated by the Commission to take game or fish of the species mentioned by the Commission. Under these statutes the season for hunting all game protected by the laws of the State is closed except as the season on certain species of game may be declared open in a given area at a given time by proclamation of the Game & Fish Commission issued pursuant to T.C.A. sec. 51-409. The defendants contend that feral hogs are not wildlife or game within the meaning of these statutes. Webster’s Unabridged Dictionary, 1950 Edition, defines the word “feral” as follows: ■“a. (From L. ferns, wild) 1. A term applied to wild animals descended from tame stocks, or to animals having become wild from a state of domestication, or plants from a state of cultivation; as, feral pigs. 2. Wild by nature; untamed; savage; ferine; existing in a state of nature.” In this- same work, among the definitions of the word “game” are the following: “Animals which are pursued or killed in the chase or "in the sports of the field, either for the use of man, or for pastime; as the northern forests are rich in game. * * Pertaining to such animals and birds as are hunted either for the use of man or for the sport of the hunt.” In 3.8 C.J.S. Game sec. 1, it is stated: “The term ‘game’ is generally defined as birds and beasts of a wild nature obtained by fowling and hunting, and, in the absence of a statutory definition, the 142term is to be understood in its ordinary signification, . and includes all game birds, game fowl, and game animals; but ordinarily it does not include domesticated animals or birds. Within the meaning of the game laws, however, the term primarily refers to game fit ...for food, although under some statutes it applies also to animals valuable for their fur or otherwise. ’ ’ ' Independent of any statute: “The wild animals within its borders are, so far as capable of ownership, owned by the state in its sovereign capacity for the common benefit of all of its people.- Because of such ownership, and in the exercise of its police power, the state may regulate and control the taking, subsequent use, and property rights that may be acquired therein.” State v. Hall, 164 Tenn. 548, 551, 51 S.W.2d 851, 852. See also State v. Ashman, 123 Tenn. 654, 657, 135 S.W. 325. By their very definition, feral hogs are wild animals and not domesticated animals; therefore, both by statute and by the common law, the .ownership of the title to feral hogs is in the State. On the trial of this case, the defendants placed upon the witness stand the Supervisor of the Second Administrative District of the Game & Fish Commission. This District includes Blount County. He testified upon direct examination that eight or ten years ago for one year feral hogs were proclaimed as a nonprotected species, but that since that time and during the summer of 1963 that was not the case. Further, the. defendants introduced in evidence as their Exhibit Number'!, the 1963-64 Small Game Buies & Regu143lations, regulating the hunting of dove, squirrel, rabbit, grouse, quail, fox, feral hog, raccoon-opossum and water fowl in certain wildlife management areas in the state, which shows that feral hogs may be taken in the Ocoee 'Wildlife Management Area on squirrel and grouse hunts between sunrise and sunset on certain dates. The State introduced Proclamation Number. 080 of the Tennessee Game & Fish Commission fixing hunting regulations for the 1963-64 season, which shows it was filed on the 10th day of July, 1963 with the County Court Clerk of Blount County, pursuant to T.C.A. sec. 51-409. This exhibit of the State contains the same information with reference to an open season on feral hogs in the Ocoee Wildlife Management Area as that stated above, and further shows that the season on feral hogs was open in the Pickett Wildlife Management Area from November 18th to November 30th. It does not show any open season on feral hogs other than in certain wildlife management areas. T.C.A. sec. 51-409', as amended, further provides: “that the game and fish commission shall annually publish a list of such wildlife as are deemed destructive and/or not to be protected by law.” Under this provision of the statute all wildlife in the State, except that of a species so published by the Game & Fish Commission, is wildlife protected by law. The regulations of the Game & Fish Commission introduced in evidence do not list feral hogs as being destructive and/or not to be protected by law. We, therefore, conclude that feral hogs, which by definition are wild, existing in a state of nature, are game protected by the laws of the State. 144We have read with’ interest authorities-cited in the brief of plaintiffs in error from other jurisdictions, none of which deals with the status of feral hogs. The principal case relied upon by plaintiffs in error is The King v. Manu, 4 Hawaii 409 (1881). A copy of the opinion in that case is attached to the brief of plaintiffs in error. The defendant in that case was found guilty of the larceny of certain turkeys which roamed wild. These turkeys were taken by the defendant while on the property of the prosecutor. While the Court in its opinion did state that these turkeys are not properly speaking animals ferae naturae, the Court stated: “These birds are now in a wild state, afraid of man, breeding in the unfrequented parts of the mountain and bush country and have been hunted down and caught by devices, precisely as if they were ferae naturae. ’ ’ The Court reversed the conviction of the defendant and held that these turkeys were not the property of the owner of the land on which they were roaming when taken and could not be the subject of larceny. We find that Webster’s Unabridged Dictionary, 1950 Edition, defines the phrase “ferae naturae’’, as follows: “ (L. of a wild nature) Wild; not tamed or not tamable; applied in law to animals living in a wild state. ” It is unnecessary to review other cases mentioned in the brief of plaintiffs in error. We find none of these cases determinative in arriving at the proper construction of our game and fish laws. The uncontradicted evidence shows the defendants were hunting feral hogs in Blount County on August 10, .1963. The season on feral hogs had not been declared open at that time and place 145by proclamation of the Tennessee Game & Fish Commission in conformity with the statute. Feral hogs are wildlife protected by the laws of the State, and, both by common law and by the statute, are the property of the State, the hunting of which the State has a right to regulate or prohibit. The Ti'ial Judge, was. correct in finding the defendants guilty of hunting during the closed season. Certain assignments of error complain of the action of the Trial Judge in sustaining objections to certain testimony offered by the plaintiffs in error with reference to oral statements allegedly made by employees of the Game & Fish Commission. Under the game and fish statutes, as we construe them, this evidence was irrelevant and immaterial. We find no reversible error in the record. The assignments of error are overruled and the judgment of the Trial Court is affirmed.	01-03-2023	10-17-2022
https://www.courtlistener.com/api/rest/v3/opinions/1527935/	292 B.R. 821 (2003) In re Alfreda JOHNSON, Debtor. Alfreda JOHNSON, Plaintiff, v. Margo ROBINSON, a/k/a Robinson Financial Group, d/b/a Robinson Financial Services, and Pioneer Agency, and Equicredit Corporation, and First American Title Insurance Company, and Fairbanks Capital Corporation, Defendants. Bankruptcy No. 02-34686-SR. Adversary No. 02-1427. United States Bankruptcy Court, E.D. Pennsylvania. May 15, 2003. 822 823 Sarah Pugh, Becket & Lee LLP, Malvern, PA, for eCast Settlement Co., assignee of Chase Manhattan Bank USA, NA. Leslie J. Rase, Lansdowne, PA, for Bank of New York. David Wolf, Philadelphia, PA, for Alfreda Johnson. OPINION STEPHEN RASLAVICH, Bankruptcy Judge. Introduction. Before the Court is the Motion of Defendants First American Title Insurance Company ("First American") and the Pioneer Agency ("Pioneer") to Dismiss Debtor, Alfreda Johnson's Amended Complaint under F.R.C.P. 12(b)(6), or in the alternative for an Order compelling a more definite statement of her pleading under F.R.C.P. 12(e). An answer in opposition to the Motion was filed in which the Debtor requested that the Motion be denied, or in the alternative that she be permitted to file a second amended complaint. Oral argument was heard on April 1, 2003. For the reasons which follow the Motion will be granted and the Complaint as to the Movants will be dismissed. Background. On December 2, 2002, the Debtor filed a complaint alleging that she had been victimized by a "predatory lending" scheme when she refinanced an existing mortgage and took out a home improvement loan. The mortgage broker, the original mortgage lender, the title insurance agency and the title insurance company that were involved in the transaction were all named as defendants, as was the present holder of the mortgage. On January 22, 2003, the title insurance company, First American and the title insurance agency, Pioneer filed a Motion identical to the instant Motion; that is, to dismiss or for a more definite statement. That Motion was rendered on moot on January 10, 2003 when the Debtor filed her Amended Complaint. The Amended Complaint contains six counts, however, claims against First American and Pioneer are stated in only two of them; specifically, Count II Common Law Fraud and Count III Pennsylvania Unfair Trade Practices and Consumer Protection Law[1] (UDAP). First American and Pioneer renew their Motion at this juncture, arguing that the Amended 824 Complaint still fails to plead allegations of fraud with the degree of specificity required under the Rules of Civil Procedure, and that the Amended Complaint, even when viewed in its best light, fails to state claims upon which relief may be granted. The factual underpinnings of the Debtor's Motion are set forth in rich detail in the Debtor's rather lengthy Amended Complaint. The Debtor is a 51 year old teacher's aid employed by the Philadelphia School District. She owns a home at 1953 73rd Street, Philadelphia, Pennsylvania, which is alleged to be badly in need of repair. The Debtor alleges that she was solicited by Defendant Margo Robinson and induced to enter into a home improvement loan transaction. Robinson is a mortgage broker who apparently operates as such through the Defendant entities Robinson Financial Services, and Robinson Financial Group. A $71,250 loan transaction was subsequently arranged with Defendant EquiCredit Corporation. The transaction contemplated the payoff of Johnson's existing mortgage of approximately $32,000.00. From the balance of the new borrowing, approximately $5,700 was to be paid to Robinson, and approximately $1,000 was to be disbursed to Johnson. The remaining funds, of approximately $32,500.00, were to be paid to a contractor Robinson had allegedly retained to perform improvements to the Johnson residence. Johnson alleges that no improvements were ever made to her home, but her grievances extend well past this obvious dilemma. Johnson alleges that Robinson never intended to arrange for any improvements to her home, but instead planned from the start to steal her money. Johnson also alleges that the violation of various consumer lending statutes occurred in the course of the transaction, and that the entire transaction was the product of fraudulent conduct on the part of all of the defendants. In the latter respect, Johnson alleges that material terms of the transaction were concealed from her and that the financial terms of the transaction were patently unaffordable given her economic circumstances, such that it was inevitable that she would default on the loan and face the loss of her home. In this regard, Johnson alleges that no one ever explained to her the true cost of the loan she was taking, or the risks she faced given her income level and what was to become her new debt service obligation. Johnson's amended complaint thus breaks down as follows: ---------------------------------------------------------------------------------------- Count Defendant(s) ITruth and Lending Act Violations Robinson, Robinson Financial Services, Robinson Financial Group, EquiCredit Corporation, and Fairbanks Capital Corporation IICommon Law Fraud All Defendants IIIUDAP Violations All Defendants IVRacketeering Influenced Corrupt Organizations Robinson Act ("RICO") Violations VReal Estate Settlement Procedures Act (RESPA) EquiCredit and Robinson Violations VIEqual Credit Opportunity Act (ECOA) Violations EquiCredit ---------------------------------------------------------------------------------------- 825 Johnson's original complaint contained literally no allegations of specific misconduct on the part of the movants, a fact which no doubt led to their request for its dismissal. As to the Movants, Johnson's Amended Complaint differs in only one material respect from her original complaint. Specifically, in her amended Complaint Johnson has added a new paragraph (# 18) wherein she alleges that ". . . each Defendant was acting as an agent, principal, employee, employer, subsidiary, and/or owner of one or more of the other defendants." Consistent with this theory, Johnson's amended Complaint also now recites at various points that the multiple defendants acted in concert with one another in the alleged scheme to defraud her. On a similar note, in both her original and amended complaint, Johnson asserts that because of their sophistication and experience in lending transactions, and her own lack thereof, all of the defendants stood in a fiduciary or quasi-fiduciary relationship to her, and as a consequence they had a duty to inform and/or advise her that entering into the loan transaction was an unwise decision on her part. Legal Standard. In considering a Rule 12(b)(6)[2] motion to dismiss, a court must accept all allegations in the complaint, and all reasonable inferences that can be drawn therefrom, as true and view them in the light most favorable to the non-moving party. See Rocks v. City of Philadelphia, 868 F.2d 644, 645 (3rd Cir.1989) (citations omitted); Angelastro v. Prudential-Bache Securities, Inc., 764 F.2d 939, 944 (3rd Cir.) cert. denied, 474 U.S. 935, 106 S.Ct. 267, 88 L.Ed.2d 274 (1985). A complaint must not be dismissed for failing to state a claim unless it appears beyond reasonable doubt that the plaintiff can prove no set of facts in support of her claim that would entitle her to relief. See City of Philadelphia v. Lead Industries Ass'n, Inc., 994 F.2d 112, 118 (3rd Cir.1993) (citing Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957)). Discussion. The Debtor's claims against First American and Pioneer are essentially similar in nature. In Count II, the Debtor alleges common law fraud on their part. In Count III the Debtor alleges their violation of paragraph (xxi) of UDAP § 201-2(4). This paragraph of the statute is commonly referred to as its "catch all" provision and, as construed by numerous courts, it has been held to require a finding of fraudulent conduct; which is to say that in order to prevail the Debtor must demonstrate the same elements as are necessary in connection with her count for common law fraud. DiLucido v. Terminix International, Inc., 450 Pa.Super. 393, 401, 676 A.2d 1237, 1241 (1996); Prime Meats, Inc. v. Yochim, 422 Pa.Super. 460, 469, 619 A.2d 769, 773 (1993). A cause of action for common law fraud consists of the following elements: (1) a false representation of an existing fact or a non-privileged failure to disclose; (2) materiality, unless misrepresentation is intentional or involves a non-privileged failure to disclose; (3) scienter, which may either be actual knowledge or reckless indifference to the truth; (4) justifiable reliance on the misrepresentation, so that the exercise of common prudence or diligence could not have ascertained the truth; and (5) damage as a proximate result. 826 Dawson v. Dovenmuehle Mortgage, Inc., 2002 WL 501499 at 6 (citing Wittekamp v. Gulf & Western, Inc., 991 F.2d 1137, 1142 (3d Cir.1993), cert. denied, 510 U.S. 917, 114 S.Ct. 309, 126 L.Ed.2d 256 (1993)). First American and Pioneer argue that the Debtor's amended Complaint fails to allege the necessary elements of common law fraud against them. In this respect the Movants point out that they are hardly mentioned anywhere in the Amended Complaint, the particularized allegations of wrongdoing in which go entirely to the conduct of Robinson and Equicredit. More specifically, the Movants stress that with but one exception there is nowhere in the Complaint to be found an allegation that First American or Pioneer made any oral or written representations to the Debtor.[3] There is nothing, they say, even alleged to have emanated from them upon which the Debtor could conceivably have relied. The Court agrees. The gravamen of the Amended Complaint involves the conduct of the loan broker, Robinson, and the alleged predatory lender, Equicredit. The numerous allegations as to these defendants are specific and clear and would certainly withstand a Motion to Dismiss. The same cannot be said as to the Movant defendants. The Debtor seeks to affirmatively link the title agent and the title insurance company to the scheme alleged in her Amended Complaint, but despite two opportunities to plead, the Debtor has failed to identify a single material representation that either of the movant defendants made to her. Other things being equal, therefore, the Movant's dismissal Motion would be granted summarily. As noted, however, in an effort to address the rather glaring shortcomings of her original complaint the Debtor, in her amended complaint, has added the allegations of agency and concerted action previously described. Her causes of action against First American and Pioneer at this juncture are thus predicated on two separate bases. The first of these is her allegation that all of the defendants were agents of one another, presumably such that the acts and omissions of each may be attributed to the entire group. The second basis for the Debtor's cause of action is that First American and Pioneer stood in a fiduciary relationship to the Debtor, such that they had a duty to step forward and provide her with information and advice which should otherwise have been provided to her by the loan broker and/or the lender. As stated, neither of the Debtor's legal theories pass muster. As to the first, the Court finds that under principles of applicable law the Debtor's allegations of fraud as to First American and Pioneer are still not articulated with sufficient particularity to survive the present dismissal motion. In this respect, the Court finds the minimal, strategic alterations to the original Complaint unavailing. On the latter score, the Court finds that the Debtor's fiduciary relationship theory of liability fails as a matter of law. The Amended Complaint will accordingly be dismissed as to the Movants. 827 In reaching its conclusion the Court notes that in the context of a motion to dismiss for failure to plead fraud with particularity, F.R.C.P. 9(b) requires that the plaintiff's allegations be taken as true. O'Brien v. National Property Analysts Partners, 719 F.Supp. 222, 225 (S.D.N.Y.1989) citing Luce v. Edelstein, 802 F.2d 49, 52 (2d Cir.1986). The Court also observes, however, that Fed.R.Civ.P. 9(b) specifically states, concerning allegations of fraud or mistake, that, "the circumstances constituting fraud or mistake shall be stated with particularity." F.R.C.P. 9(b). Fraud must normally therefore be pled with specifics concerning time, place, speaker, and at times even the content of the alleged misrepresentation. Luce, 802 F.2d at 54. The purpose of such specificity is to give the defendants "a reasonable opportunity to answer the complaint," Ross v. A.H. Robins Co., 607 F.2d 545, 557-58 (2d Cir.1979), cert. denied, 446 U.S. 946, 100 S.Ct. 2175, 64 L.Ed.2d 802 (1980), to "place defendants on notice of the precise misconduct with which they are charged, and to safeguard defendants against spurious charges of immoral and fraudulent behavior." Seville Indus. Machinery v. Southmost Machinery Corp., 742 F.2d 786, 791 (3d Cir.1984), cert. denied, 469 U.S. 1211, 105 S.Ct. 1179, 84 L.Ed.2d 327 (1985). See also DiVittorio v. Equidyne Extractive Industries, Inc., 822 F.2d 1242, 1247 (2d Cir.1987) (listing fair notice, protection of reputation, and reduction of number of strike suits as purposes for Rule 9(b)). The Court recognizes and numerous courts have held that allegations of date, place, time, speaker, etc. fulfill the function of providing the necessary particulars of alleged fraudulent behavior, but that nothing in the rule necessarily requires them. A Plaintiff is free to use alternative means of injecting precision and some measure of substantiation into allegations of fraud. Seville, supra at 791. Indeed, Courts are directed to be "sensitive" to the fact that the application of Rule 9(b) prior to discovery "may permit sophisticated defrauders to successfully conceal the details of their fraud." Shapiro v. UJB Fin. Corp., 964 F.2d 272, 284 (3d Cir.1992) The rules, however, do not permit a complaint as utterly bereft of detail as the present one. The Debtor's Amended Complaint alleges no specifics whatever with respect to the Movants. Rather, it simply labels them liable by virtue of their association to the transaction. This is insufficient. With respect to the Debtor's "group action" theory, it has been recognized that where allegations of fraud are leveled against multiple defendants it is not sufficient to simply allege fraudulent conduct on the part of a group of defendants generally. Rather, each defendant is entitled to notice of the particular misrepresentations alleged on its part Sandvik AB v. Advent International Corp., 83 F.Supp.2d 442, 448 (D.Del.1999); Cinalli v. Kane, 191 F.Supp.2d 601, 609 (E.D.Pa.2002);[4] Again, the Debtor's Amended Complaint is conspicuously deficient in this regard, as there are no misrepresentations attributed to either of the movants. At oral argument the Debtor gave no indication as to how this shortcoming might be 828 remedied in a repleading. Given that the Debtor was on notice of this precise deficiency in her original pleading by reason of the Movant's earlier Motion to Dismiss, and has been unable to correct the problem despite ample time to do so, the court declines to afford her yet another opportunity to amend her pleading. Accordingly, the Amended Complaint, insofar as it is based on common law fraud and violation of UDAP, will be dismissed as to the Movants. The Court, as noted, likewise rejects the Debtor's fiduciary relationship theory of liability. In this respect, the Debtor alleges that by virtue of their superior knowledge and resources the Movants established a quasi-fiduciary relationship of confidence and trust with her that gave rise to a duty of care and disclosure. To succeed on a claim of breach of fiduciary duty a plaintiff must first show that a fiduciary relationship exists in that "one person has reposed a special confidence in another to the extent that the parties do not deal with each other on equal terms, either because of an overmastering dominance on one side or weakness, dependence or justifiable trust, on the other." Destefano & Associates, Inc. v. Cohen, 2002 WL 1472340 3 (Pa.Com.Pl.) quoting Commonwealth Dept. of Transp. v. E-Z Parks, Inc., 153 Pa.Cmwlth. 258, 268, 620 A.2d 712, 717 (1993). After establishing that a fiduciary duty exists then the plaintiff must then show that a subsequent breach occurred. Id. Against these principles, the Debtor's complaints fails in all respects. In the first place, the Debtor cites no authority for the proposition that in the abstract a borrower stands in a fiduciary relationship to the title insurer and closing agent in a loan transaction. Pennsylvania, in particular, has never heretofore recognized such a relationship. In an analogous context, however, Pennsylvania courts have held that a lender is not a fiduciary of a borrower. Grace v. Moll, 285 Pa. 353, 355, 132 A. 171 (1926); Federal Land Bank of Baltimore v. Fetner, 269 Pa.Super. 455, 461, 410 A.2d 344, 348 (1979), cert. denied, 446 U.S. 918, 100 S.Ct. 1853, 64 L.Ed.2d 273 (1980). A fiduciary relationship may nevertheless arise if the lender gains substantial control over the borrower's business affairs. Blue Line Coal Company, Inc. v. Equibank, 683 F.Supp. 493, 496 (E.D.Pa.1988) quoting Stainton v. Tarantino, 637 F.Supp. 1051, 1066 (E.D.Pa.1986) Control over the borrower is demonstrated when there is evidence that the lender was involved in the actual day-to-day management and operations of the borrower or that the lender had the ability to compel the borrower to engage in unusual transactions. Blue Line Coal Co., supra at 496 quoting NCNB Nat. Bank v. Tiller, 814 F.2d 931, 936 (4th Cir.1987). The mere monitoring of the borrower's operations and the proffering of management advice by lenders, without more, does not constitute control. Cosoff v. Rodman, 699 F.2d 599, 610-611 (2d Cir.1983) See also Krivo Indus. Supply Co. v. Nat. Distillers & Chemical Corp., 483 F.2d 1098, 1105 (5th Cir.1973) ("Merely taking active part in the management of the debtor corporation does not automatically constitute control"); James E. McFadden, Inc. v. Baltimore Contractors, Inc., 609 F.Supp. 1102, 1105 (E.D.Pa.1985) (holding that creditor must assume absolute and total control not just take steps to minimize risk). The Debtor herein has alleged no special or unusual facts to support her theory as to the creation of a fiduciary relationship between First American and/or Pioneer and her. She simply declares there to have been one because, being in the title insurance business, First 829 American and/or Pioneer have been involved in many loan closings, whereas she has not been. This hardly suffices. The usual capacity of a title insurance company in a loan transaction is simply to insure the lender's lien position. It is otherwise essentially neutral as to both parties to a transaction. There is no allegation that First American performed any role other than is customary in this transaction. If Pennsylvania law does not automatically recognize a fiduciary relationship between a borrower and a lender, then the Court deems it most unlikely that, without more, it would recognize one between a title insurance company and a borrower, the relationship between which is even more attenuated. In short, assuming the truth of the Debtor's allegations, there is nothing in the complaint which either specifically or generally suggests how First American established a relationship of trust with the Plaintiff which would give rise to the fiduciary duty she asserts. Pioneer Agency was somewhat closer to the transaction, at least geographically, because it conducted the actual loan closing. The Court's research regarding the duty of a title agency, however, fails to reveal the existence of duties such as the Debtor maintains in this context either. One particular case aptly described the limits of an individual performing a closing: "[closer], as agent for American Title did not have a duty to disclose to River City, the lender and policy holder, irregularities, illegalities or acts of fraud in the loan transaction." Resolution Trust Corp. v. American Title Insur. Co., 901 F.Supp. 1122, 1124 (M.D.La.1995). The Debtor obviously disagrees with this notion. On this score, at the hearing on the Motion to Dismiss the Debtor argued that the title agent which performed the closing had a duty not only to look out for her best interests, but an affirmative obligation to advise her not to enter into the transaction. The Court flatly rejects this proposition; it is simply not within the ambit of services undertaken by title agencies. Title agencies are intermediaries who perform essentially ministerial, administrative tasks associated with documenting the transactions which lenders and borrowers bring to them. They are neither the counselor to the borrower nor the lender. The law imposes no duty of advice and disclosure on a closing agent. Indeed, the request to impose the onerous, impractical and amorphous duties which the Debtor demands upon the title clerk who conducts a loan closing seems patently unreasonable. In sum, the Debtor's Complaint 1) fails to plead allegations of fraud with the requisite degree of particularity, and 2) fails to state a cause of action on which relief can be granted insofar as the alleged existence of a fiduciary relationship between herself and the Movants. The present Motion to Dismiss will therefore be granted in its entirety. An appropriate Order follows. ORDER AND NOW, upon consideration of the Motion of Defendants First American Title Insurance Company and the Pioneer Agency to Dismiss Debtor's Amended Complaint under F.R.C.P. 12(b)(6), or in the alternative for an Order compelling a more definite statement of her pleading under F.R.C.P. 12(e) (the "Motion"), the Answer of the Debtor in opposition thereto, and after hearing thereon April 1, 2003, it is hereby: ORDERED, that for the reasons stated in the accompanying Opinion, the Motion shall be and hereby is granted; the Complaint as to the Movants, First American *830 Title Insurance Company and Pioneer Agency shall be and hereby is Dismissed. NOTES [1] 73 Pa.C.S.A. § 201-1 et seq. [2] Bankruptcy Rule 7012(b) makes this rule applicable to adversary proceedings. [3] The exception in question relates to the Debtor's allegation that Pioneer misrepresented that the money to be disbursed to the Debtor from the loan proceeds ($966.20) was actually paid to her. The Debtor concedes, however, that a check payable to the Debtor for this amount was cut by the title agent at the closing table. The Debtor thereafter, and allegedly at Robinson's insistence, signed the check over to Robinson. The Court cannot discern in these circumstances any indicia of actionable fraud on the part of Pioneer, which points out, moreover, that the signing over of the check occurred post closing such that there could be no reliance on the part of the Debtor on this "representation" in deciding whether to enter into the loan transaction. [4] If a claim involves multiple defending parties, a claimant usually may not group all wrongdoers together in a single set of allegations. Rather, the claimant is required to make specific and separate allegations against each defendant. Therefore, an allegation that misrepresentations were made "at the direction, under the supervision, or with the knowledge and consent of all the defendants" will fail because it does not promote the purposes of Rule 9(b), to provide fair notice and to lessen the number of meritless fraud claims. 2 Moore's Federal Practice, § 9.03[1][f] (Matthew Bender 3d).	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527767/	597 A.2d 14 (1991) John E. JOSEPH, Appellant, v. UNITED STATES, Appellee. No. 88-1139. District of Columbia Court of Appeals. Argued October 18, 1989. Decided September 13, 1991. Calvin Steinmetz, appointed by this court, with whom Anita Isicson, Washington, D.C., was on the brief, for appellant. Joyce J. Bang, Asst. U.S. Atty., with whom Jay B. Stephens, U.S. Atty., Michael W. Farrell, Asst. U.S. Atty. at the time the brief was filed, and Elizabeth Trosman and J. Edward Agee, Asst. U.S. Attys., Washington, D.C., were on the brief, for appellee. Gerald W. Heller, Asst. U.S. Atty., Washington, D.C., also entered an appearance for appellee. 15 Before TERRY and STEADMAN, Associate Judges, and PRYOR, Senior Judge. TERRY, Associate Judge: Appellant Joseph was indicted on charges of assault with intent to kill while armed[1] and carrying a pistol without a license.[2] After a jury trial, he was convicted of assault with a dangerous weapon[3] (as a lesser included offense of assault with intent to kill while armed) and carrying a pistol without a license.[4] On appeal Joseph contends that the government constructively amended the first count of the indictment in such a way that he was convicted of an offense with which he had not been charged by the grand jury. He also argues that the trial court erred in denying his motion for new trial based on claims of ineffective assistance of counsel and newly discovered evidence. We agree that there was a constructive amendment, but we find it harmless because it did not relate to the offense of which the jury actually found Joseph guilty. We find no other error, and accordingly we affirm the judgment of conviction. I The evidence at trial established that on October 21, 1986, shortly after midnight, a gunfight occurred at the Baseball Club,[5] a bar on Eleventh Street, N.W. A few minutes earlier, appellant Joseph and Anthony Dickey, both of whom were seen with guns in the club that night, became embroiled in a heated argument. Joseph threatened to kill Dickey,[6] pulled out a gun, and told everyone to "get out." The other customers quickly fled. Dickey also started to leave, but just as he went out the door, Joseph fired a shot at him from inside the club. Dickey fell wounded in the front yard of a nearby church. As Joseph kept shooting, bullets from his gun struck Pamela Swann and then James Richardson, both of whom were just outside the front door.[7] At the same time, Morris Yarborough fired a gun toward the club from the outside. Both Joseph and Yarborough were wounded in the melee, along with Richardson, Swann, and Dickey. Richardson's injuries, however, were the most serious; one of the two bullets that hit him left him a paraplegic. The police found a total of nine empty shells at various places inside and outside the club. The first count of the indictment read as follows: On or about October 21, 1986, within the District of Columbia, John E. Joseph, while armed with and having readily available a pistol, assaulted another with the intent to kill him. While there were multiple victims and the indictment charged only one assault without naming a victim, defense counsel did not request a bill of particulars before trial because the prosecutor had told her that the case would be tried as an assault on James Richardson with the intent to kill Anthony Dickey, on a theory of transferred intent.[8] Richardson, the most seriously wounded of the victims, would be the sole 16 complainant.[9] At trial the government did indeed present evidence tending to prove an assault on Richardson with the intent to kill Dickey. After the close of all the evidence, the trial court sua sponte raised a question about the unusual wording of the indictmenti.e., its failure to name a specific victimand its effect on the jury instructions: And here is my Fifth Amendment problem. If I simply put in the names of complainants, that is, instruct them as a matter of law that they must ... find beyond a reasonable doubt that with respect to Mr. Joseph, did he have the specific intent to kill Mr. Anthony [Dickey], or the specific intent to kill Mr. Richardson, or specific intent to kill Pamela Ms. Swann, it seems to me that I am coming fairly close to invading the province of the grand jury. Because I don't know on what theory the government presented these cases and whether or not the grand jury, in fact, thought those victims were the ones whom Mr. Joseph intended to kill, or they found the probable cause to believe it was one of those enumerated victims. After further discussion with counsel, the court decided to deal with the ambiguous nature of the indictment in its instructions to the jury. The court later charged the jury as follows: [T]he offense of assault with intent to kill [while] armed ... necessarily includes the lesser offense of assault with a dangerous weapon. * * * * * * You should first consider whether or not the defendant in this case, Mr. Joseph, is guilty of a greater offense, that is, of assault with intent to kill while armed. That is the ... assault on Mr. James Richardson with the specific intent to kill Mr. Dickey. That's the greater offense. * * * * * If you find that the government has not proven each and every element of the greater offense ... then and only then, you are to then go on and separately consider whether or not the defendant is guilty of the lesser offense of assault with a dangerous weapon, the elements of which I have already defined to you. [Emphasis added.] The jury found Joseph guilty of assault with a dangerous weapon and carrying a pistol without a license. II The Grand Jury Clause of the Fifth Amendment states: "No person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury." To safeguard this right, the courts have held that an indictment must provide every defendant with three basic protections. "First, it must apprise the accused of the charges against him so that he may adequately prepare his defense, and second, it must describe the crime with sufficient specificity to enable him to protect against future jeopardy of the same offense.... [Third, by] guaranteeing the right to be tried only on charges made by the indictment, the [Grand Jury Clause] also protects against oppressive actions of the prosecutor or a court, who may alter the charge to fit the proof." Scutchings v. United States, 509 A.2d 634, 636 (D.C.1986) (citations omitted). Joseph argues that these protections were not afforded to him in this case, in that he was tried for and convicted of a crime different from that for which he was indicted. We conclude that he was so tried, but not that he was so convicted. It is settled beyond all doubt that an indictment, once it has been returned, cannot be broadened or materially altered except by the grand jury itself. Ex parte Bain, 121 U.S. 1, 7 S. Ct. 781, 30 L. Ed. 849 (1887). There are two basic types of alteration of an indictment: An amendment of the indictment occurs when the charging terms of the indictment are altered, either literally or in effect, by prosecutor or court after the 17 grand jury has last passed upon them. A variance occurs when the charging terms of the indictment are left unaltered, but the evidence at trial proves facts materially different from those alleged in the indictment. Gaither v. United States, 134 U.S.App. D.C. 154, 164, 413 F.2d 1061, 1071 (1969) (emphasis in original; footnotes omitted), quoted in Scutchings, supra, 509 A.2d at 636. In Stirone v. United States, 361 U.S. 212, 80 S. Ct. 270, 4 L. Ed. 2d 252 (1960), the Supreme Court identified what has come to be known as a constructive amendment of an indictment. The defendant in Stirone was convicted of interfering with interstate commerce by extortion, in violation of the Hobbs Act. The only interstate commerce mentioned in the indictment was the importation of sand into Pennsylvania, but the evidence at trial also showed interference with the exportation of steel from Pennsylvania. The judge instructed the jury that it could base a conviction upon interference with either the importation of sand or the exportation of steel. The Supreme Court, without making any inquiry into prejudice, unanimously held that the divergence between the indictment and the evidence at trial was a violation of the defendant's Fifth Amendment right to an indictment by a grand jury. Explaining why this divergence was more substantial than a simple variance, the Court said: While there was a variance in the sense of a variation between pleading and proof, that variation here destroyed the defendant's substantial right to be tried only on charges presented in an indictment returned by a grand jury. Id. at 217, 80 S.Ct. at 273. Since Stirone, this court and others have held that a variance "becomes a constructive amendment when facts introduced at trial go to an essential element of the offense charged, and the facts are different from the facts that would support the offense charged in the indictment." Giles v. United States, 472 A.2d 881, 883 (D.C.1984) (emphasis in original), citing Stirone. Our decision in Scutchings, moreover, makes clear that, for the purpose of determining whether there has been a constructive amendment, the identity of the victim is an "essential element."[10] Appellant Joseph was convicted of assault with a dangerous weapon as a lesser included offense of assault with intent to kill while armed, as charged in the first count of the indictment. That count alleged that Joseph had "assaulted another with intent to kill him." As a matter of basic grammar and syntax, the words "another" and "him" must refer to the same person. The word "him," being a pronoun, must have an antecedent, and the only possible antecedent in this entire count is "another." Thus the person whom Joseph allegedly intended to kill was necessarily the same person whom he assaulted. Given the evidence of record, the grand jury must have found either (1) that Joseph, while armed with a dangerous weapon, assaulted Anthony Dickey with the intent to kill Anthony Dickey, or (2) that, while so armed, he assaulted James Richardson with the intent to kill James Richardson.[11] 18 But that is not what the government proved at trial. At the beginning of the trial, defense counsel, after questioning the ambiguous wording of the indictment, was assured that the government was proceeding on a theory that Joseph assaulted Richardson with the intent to kill Dickey. During the trial, the prosecutor placed great emphasis on the fight between Joseph and Dickey in order to establish that Joseph intended to kill Dickey; the shooting of Richardson was portrayed as a mere byproduct of that intent. In his summation the prosecutor said that "defendant Joseph is charged with ... assault on James Richardson with the intent to kill Anthony Dickey, the specific intent to kill Anthony Dickey." He then asked a rhetorical question, "Well, who do you think Joseph [was] trying to kill?" and answered it, "He intended to kill Anthony Dickey ...." Finally, the trial judge, in his instructions quoted at page 16, supra, directed the jury to consider whether Joseph assaulted Richardson with the specific intent to kill Dickey. On this record we can come to only one conclusion: that the government's evidence at trial constructively amended the indictment, in violation of the Supreme Court's holding in Stirone v. United States, supra. The grand jury necessarily alleged in count one that Joseph intended to kill the person whom he assaulted, but that is not what the government proved at trial. What happened here was a violation of Joseph's Fifth Amendment right to an indictment by a grand jury, contrary to an unwavering line of precedents going back more than one hundred years to the Supreme Court's unanimous decision in Ex parte Bain. "The Bain case, which has never been disapproved, stands for the rule that a court cannot permit a defendant to be tried on charges that are not made in the indictment against him." Stirone v. United States, supra, 361 U.S. at 217, 80 S.Ct. at 273 (citations omitted); see Ingram v. United States, 592 A.2d 992, 1005 (D.C.1991) (amendment of indictment "changes its charging terms ... and is per se reversible error," citing Bain). What saves this conviction from reversal, however, is the fact that Joseph was convicted of only a lesser included offense. In United States v. Miller, 471 U.S. 130, 105 S. Ct. 1811, 85 L. Ed. 2d 99 (1985), the Supreme Court held that despite a variance between the language in the indictment and the actual proof at trial, the defendant's conviction should be affirmed because the offense of which he was actually convicted was properly alleged in the indictment. As long as the crime and the elements of the offense that sustain the conviction are fully and clearly set out in the indictment, the right to a grand jury is not normally violated by the fact that the indictment alleges more crimes or other means of committing the same crime.... Convictions generally have been sustained as long as the proof upon which they are based corresponds to an offense that was clearly set out in the indictment. Id. at 136, 105 S.Ct. at 1815 (citations omitted). Applying Miller to the instant case, we note that Joseph, although indicted for assault with intent to kill while armed, was actually convicted of assault with a dangerous weapon (ADW). Under Miller, the phrase "with intent to kill him" was thus "unnecessary to and independent of the allegations of the offense proved [ADW]" and may be disregarded as "surplusage." Id. at 136-137, 105 S.Ct. at 1815, citing Ford v. United States, 273 U.S. 593, 602, 47 S. Ct. 531, 534, 71 L. Ed. 793 (1927). Since the constructive amendment that occurred in this case affected only the identity of the "him" in "with intent to kill him," we see no way in which it could have infringed Joseph's constitutional rights with respect to the crime of which he was in fact convicted. There can be no doubt that the government proved at trial that Joseph assaulted Richardson with a dangerous weapon, nor does Joseph contend otherwise. Here, as in Miller, there is no Fifth Amendment bar to conviction of an offense actually alleged in the indictment 19 assault with a dangerous weapon[12]and proved at trial. We note, finally and with regret, that the error in this case, although harmless, could have been avoided entirely if the person or persons who drafted the indictment had been more careful in doing so. If the first count had stated explicitly that Joseph had assaulted Richardson with the intent to kill Dickey, this case would have presented no constitutional issue. Instead, because of someone's haste or inattention at the drafting stage, the government ran the risk of our reversing the conviction of a man who inflicted a grave injury on a bystander who had no apparent connection with the quarrel that led to the shooting. The jury's ADW verdict, though not what the government sought, turned out to be the lucky break that staved off a reversal. To the best of our recollection, we have never before seen an assault count in an indictment or information that fails to identify the victim by name. We trust that, after today, we shall never see another. III About three months after trial, but before sentencing (which had been twice postponed at Joseph's request), Joseph filed a pro se motion for a new trial.[13] In it Joseph claimed that his trial counsel had been ineffective for having failed to elicit allegedly exculpatory testimony from Anthony Dickey, a witness never called at trial, and Joseph Belton, a witness who was discovered during trial. He also asserted that his counsel had failed adequately to investigate and prepare the case[14] and had erred in failing to move for a bill of particulars. In addition, Joseph proffered as newly discovered evidence the affidavit of a witness, James Cuthbertson, whom he had discovered in prison. In this affidavit Cuthbertson stated that he had been across the street from the club when he saw a man wearing a red hat[15] kneeling on the sidewalk and shooting toward the front door of the club at the same time Richardson got shot. Cuthbertson did not see Joseph at that time. At the hearing on the motion, Joseph's trial counsel, an attorney from the Public Defender Service, testified that she and Joseph had their first formal meeting on February 4, 1987, after Joseph had been released on bond. From talking to Joseph and examining the police forms, she obtained the names of Anthony Dickey, James Richardson, Pamela Swann, and Morris Yarborough. The attorney or one of her investigators interviewed Dickey, Richardson, Swann, and Richard Joseph[16] about the incident, and she herself tried to locate other persons who were in the club that night. In addition, after the trial began and counsel learned of Matthew Miller's identity through the Jencks material, she subpoenaed him and spoke with him. She also learned of Joseph Belton's identity in the course of the trial, and after the trial she sent an investigator to locate and interview him; she concluded, however, that Belton's testimony would not be sufficient to entitle Joseph to a new trial. Counsel 20 obtained and reviewed the medical records of everyone who had been injured in the melee at the Baseball Club, but she did not obtain x-rays of any of the victims to see if bullets were still lodged inside their bodies. Nor did she obtain any evidence relating to ballistics, since there were no bullet fragments available which a firearms expert could examine to ascertain what caliber of bullet had inflicted the injuries. Counsel and client together developed and agreed to employ a defense theory of misidentification. Once counsel learned that the prosecutor was planning to call the people who were shot as government witnesses, she decided that the best defense strategy would be to try to undermine the government's case through cross-examination. During the trial, counsel used the Jencks material in an effort to persuade the jury that Joseph was an innocent patron of the club, cross-examined the witnesses to show that they were biased, and highlighted the fact that Mr. Richardson was not as positive of Joseph's identity as he claimed to be. She advised Joseph that it would not be a good idea for him to testify, given his prior criminal record. She did not call Dickey as a witness, both because she believed his testimony would not be helpful to Joseph and because he would probably have a Fifth Amendment privilege in light of his possession of a gun that night. Even though there were multiple victims and the indictment charged only one assault without naming a victim, counsel did not feel the need to request a bill of particulars before trial because she and counsel for Yarborough, the co-defendant, had been told by the prosecutor that the complainant in the first count of the indictment was James Richardson. She also knew that the government would be proceeding on a theory of transferred intent, i.e., that Joseph fired at Dickey, intending to kill him, but hit Richardson instead because he happened to be in the line of fire. The prosecutor had said that he was going to seek a superseding indictment and had obtained a continuance for that purpose. In hindsight counsel acknowledged that it was "sloppy" of her "not to nail [it] down in writing" and that she should have requested a bill of particulars, but she reiterated that the prosecutor's representations had given her actual notice of the identity of the victim. She discussed with Joseph the government's allegation that he had shot several victims, including Richardson. Counsel did not believe that her defense was hampered in any way by not having requested a bill of particulars, although she was "embarrassed that [she] hadn't done it." She did not become concerned about the wording of the indictment until the judge raised the issue at trial, but she became confident during the courtroom discussions that the judge was on top of the issue and would adequately deal with it. She was satisfied that the judge's ruling about how the charge would be submitted to the jury resolved any possible double jeopardy or unanimity problems. In support of his post-trial motion, Joseph called five witnesses, including himself. The first witness, Joseph Belton, who lived above the Baseball Club, testified that he heard the shots just as he was going to bed. He got dressed, went downstairs, and saw Joseph stumble into the club and head toward the kitchen. Before he could reach it, however, Joseph fell to the floor, where he lay "begging for help." He had been shot in the leg and, to the best of Belton's knowledge, did not have a gun on him. Belton did not know who fired the shots. Morris Yarborough, Joseph's co-defendant who had been acquitted, testified that he saw Richardson in front of the club that night snorting cocaine and smoking "love-boat" with a woman named Mary Allen.[17] When Richardson went into the club, two men came looking for him, but Yarborough did not see where they went. He heard some gunshots but did not see anyone "doing any shooting." When Yarborough ran to hide behind some cars, he saw Dickey lying near a church and Richardson leaning against a fence. James Cuthbertson, whom Joseph met in jail, admitted that he was selling Dilaudid 21 in the neighborhood that night. From a distance of about thirty feet, he saw a man shooting in the direction of the club, and then saw another man jerk and fall across a fence about seventy feet away. He did not hear any shots coming from inside the club, but he did hear more than one gun fired. Then the man he had seen firing the gun, who was wearing a baseball cap, picked something up out of a tree box and started back across the street. Cuthbertson did not tell the police what he saw and heard because he had drugs in his possession at the time and did not want to get involved. Joseph Wright, a close friend of appellant Joseph, was also selling Dilaudid on the street. When he heard some shots, he hid behind a car and saw a man with a red cap walking across the street towards the club, shooting and waving a pistol. Another man, who appeared to be injured, was leaning on a fence. During this time Wright was at least 300 feet away from the man with the gun. He knew that Joseph had been charged with the shooting, but he did not go to the police and said nothing until Joseph approached him in jail about testifying. Joseph testified that his attorney did not review any reports or documents with him until after he had been found guilty. He said he was puzzled about the indictment because it did not bear the name of the person whom he assaulted; however, his counsel told him not to worry about it because the government was going to seek a superseding indictment. Joseph did not know any of the witnesses and was not familiar with the neighborhood, but he suggested to counsel that she call Dickey to testify even though he did not know whether Dickey would be a good witness for his case. Counsel suggested to Joseph that they proceed on a misidentification theory, but she did not discuss with him any of the evidence to be presented at the trial. Joseph wanted to obtain a ballistics report from an expert regarding Richardson's injuries. He also wanted to testify at trial, but he never discussed the contents of his anticipated testimony with his attorney. In rejecting Joseph's claim of ineffective assistance of counsel, the court found that the performance of Joseph's trial attorney more than adequately satisfied the standards set forth in Strickland v. Washington, 466 U.S. 668, 104 S. Ct. 2052, 80 L. Ed. 2d 674 (1984). First, with respect to Joseph's assertion that counsel failed to present "available exculpatory testimony" from Dickey that Joseph "did not shoot Mr. Dickey or anyone else in the club," the court noted that no evidence had ever been presented, either by testimony at the hearing or by affidavit, to show that Dickey would have so testified. Counsel, the court said, had no reason to believe that Dickey would exonerate Joseph and correctly recognized that Dickey, who had been carrying a gun that evening, might well have had a valid Fifth Amendment privilege against self-incrimination. In addition, she knew that if Dickey had testified, the prosecutor would have impeached him with his Jencks statement on cross-examination. Regarding counsel's failure to call Joseph Belton after learning of his identity during the trial, the court concluded that Belton's post-trial testimony was not helpful to Joseph and that counsel's failure to call him therefore did not prejudice the defense. Belton was not an eyewitness to the exchange of gunfire and did not even have his glasses on when he first went downstairs to see what the shooting was all about. At most, the court found, his testimony would have been cumulative of that of the proprietor of the club, Richard Joseph. As for Joseph's assertion that counsel failed to investigate the case adequately, the court found that this assertion was contradicted not only by counsel's testimony at the hearing but by that of Joseph himself. Counsel met with Joseph several times to discuss the case, sent investigators to visit the scene, located and interviewed witnesses, reviewed all the important documents, developed a sound defense strategy, and showed good judgment in not following up on ballistics reports and in advising Joseph not to testify. 22 Finally, the court held that counsel's failure to request a bill of particulars did not amount to ineffective assistance. Joseph was not prejudiced because, despite the vagueness of the charging language in the indictment, both he and his counsel had received actual noticeboth during discovery and at trialthat the government's case would be based only upon the assault on Richardson. Joseph was thus "apprised of the nature of the allegations against him with the requisite degree of constitutional particularity to prepare his defense and to plead a bar of double jeopardy to any subsequent prosecution relating to his use of a weapon inside the [Baseball] Club on the date in question." As to the remainder of Joseph's motion, the court ruled that none of the newly discovered evidence warranted a new trial. Yarborough's version of the events was not corroborated by any other witness, nor was Yarborough able to see whether anyone fired from inside the club. Cuthbertson also was not in a position to see Joseph during the shooting. Moreover, the inconsistencies between his testimony at the hearing and his affidavit, as well as his friendship with Joseph, made it difficult for the court to credit his testimony; "but even if I did," the court said, "that [testimony] in no way would affect the verdict in this case." The court also found Wright's testimony incredible. In particular, it questioned why Wright, a very close friend of Joseph, would have taken so long to come forward if in fact he had seen what he claimed he saw. In addition, his version of events was inconsistent with those of Yarborough and Cuthbertson. In sum, the court found that the testimony of these three witnesses could not have affected the verdict because none of them elucidated the critical issue: whether or not Joseph fired at Richardson from inside the club. IV Claims of ineffective assistance of counsel must be evaluated under the standards set forth by the Supreme Court in Strickland v. Washington, supra, which this court adopted in White v. United States, 484 A.2d 553, 558 (D.C.1984). The Strickland test has two components: First, the defendant must show that counsel's performance was deficient. This requires showing that counsel made errors so serious that counsel was not functioning as the "counsel" guaranteed the defendant by the Sixth Amendment. Second, the defendant must show that the deficient performance prejudiced the defense. This requires showing that counsel's errors were so serious as to deprive the defendant of a fair trial, a trial whose result is reliable. Strickland, supra, 466 U.S. at 687, 104 S.Ct. at 2064. The Court went on to define "the appropriate test for prejudice": The 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. A reasonable probability is a probability sufficient to undermine confidence in the outcome. Id. at 694, 104 S.Ct. at 2068. There is, moreover, "a strong presumption," which the defendant must overcome, "that counsel's conduct falls within the wide range of reasonable professional assistance ...." Id. at 689, 104 S.Ct. at 2065. In this case, while it is true that defense counsel did not move for a bill of particulars and did not offer the testimony of Mr. Belton, we agree with the trial court that neither omission, analyzed under Strickland, warrants reversal of Joseph's conviction. The purpose of a bill of particulars is to inform the defendant of the specifics of a charge so that he or she may prepare a proper defense and avoid surprise. Davis v. United States, 315 A.2d 157, 161 (D.C.1974). That purpose was achieved in this case, even though there was no actual bill of particulars. Defense counsel had consulted before trial with the prosecutor, who assured her that the government intended to try Joseph only for the assault on Richardson. While counsel herself admitted that it would have been better to "nail down" such an arrangement in writing, her testimony was emphatic *23 that the lack of a bill of particulars in no way compromised the defense of her client. Furthermore, the evidence at trial and the jury instructions made clear that Joseph was tried only for the assault on Richardson, despite the failure of the indictment to identify a victim by name. Since the lack of a bill of particulars in no way prejudiced Joseph's defense, we agree with the trial court that counsel's failure to move for one falls far short of ineffective assistance. Likewise, the failure to call Mr. Belton as a witness at trial did not rise to the level of a Sixth Amendment violation. As the trial court found, Belton's testimony would not have provided any new evidence helpful to appellant. He was not an eyewitness to any of the shootings, and when he did arrive on the scene, he did not have his glasses with him. Furthermore, the testimony he presumably would have given, that he did not see Joseph with a gun when he came downstairs, was cumulative of similar testimony given by Richard Joseph, which counsel knew from reviewing the Jencks material. There is no support here for Joseph's claim of ineffective assistance. Finally, Joseph's claim of newly discovered evidence was based on the proffered testimony of Yarborough, Cuthberson, and Wright, each of whom was allegedly "discovered" either at the end of the trial or after trial. The five-part standard for assessing such claims has been settled in this jurisdiction for over forty years: To obtain a new trial because of newly discovered evidence (1) the evidence must have been discovered since the trial; (2) the party seeking the new trial must show diligence in the attempt to procure the newly discovered evidence; (3) the evidence relied on must not be merely cumulative or impeaching; (4) it must be material to the issues involved; and (5) of such nature that in a new trial it would probably produce an acquittal. Thompson v. United States, 88 U.S.App. D.C. 235, 236, 188 F.2d 652, 653 (1951) (citations omitted), adopted in Heard v. United States, 245 A.2d 125, 126 (D.C.1968); accord, e.g., Smith v. United States, 466 A.2d 429, 432-433 (D.C.1983). The trial court, without considering the first, second, and fourth elements of the test, ruled that the proffered evidence did not meet the third and fifth elements. We find no error in that ruling. Yarborough's testimony was, at best, cumulative of that given at trial by Matthew Miller, a government witness.[18] Yarborough was some distance outside the club and could not see anyone shooting from within; he could not offer any evidence to show that Joseph had not done the shooting.[19] Cuthbertson's and Wright's testimony fails the Thompson test for similar reasons. Neither was in a position to see whether Joseph fired at Richardson from inside the club, and thus the evidence added nothing to what the jury heard. Moreover, the trial court was within its discretion in questioning the credibility of both Cuthbertson and Wright because of their close friendship with Joseph and the belated nature of their testimony. The government's evidence at trial was strong and persuasive. On the record before us, we can find no abuse of discretion by the trial court in its rejection of Joseph's newly discovered evidence. Smith v. United States, supra, 466 A.2d at 432. V For the foregoing reasons, the judgment of conviction is Affirmed. NOTES [1] D.C.Code §§ 22-501 and 22-3202 (1989). [2] D.C.Code § 22-3204 (1989). [3] D.C.Code § 22-502 (1989). [4] A co-defendant, Morris Yarborough, was separately charged in the same indictment with the same two offenses. Yarborough was tried with Joseph and acquitted of all charges. [5] The name of the club is variously stated in the record as the Baseball Club, the Ball Park Club, the Ball Club, and the Indian Athletic Ball Club. We have no way of knowing which is correct, but "Baseball Club" and "Ball Club" are the names most often used in the testimony. We shall refer to the establishment as the Baseball Club throughout this opinion. [6] Joseph was heard to tell Dickey, "If you say another word, I'll blow your goddamn head off." [7] Swann, who was shot in the leg, testified that she did not see who shot her. Richardson, however, testified that he was shot by the same man who had shot Dickey and Swann. He identified Joseph as that man, both from a photographic array and in open court. [8] See O'Connor v. United States, 399 A.2d 21, 24-26 (D.C.1979). [9] Dickey did not testify at trial. [10] In Scutchings the defendant was indicted for obstruction of justice after allegedly threatening Michael Dobbins, a government witness in a case against him. At trial, however, the government attempted to prove the obstruction of justice through evidence that the defendant had attempted to bribe Patricia Dobbins, Michael's mother. We reversed the conviction, holding that the presentation of this evidence amounted to a constructive amendment of the indictment: Where, as in this case, a grand jury specifically charges essential elements of a crime, such as means and party, and the government, bolstered by the trial court's instructions, proves entirely different elements, the disparities constitute a constructive amendment of an indictment. Scutchings v. United States, supra, 509 A.2d at 638. [11] James Richardson and Anthony Dickey are the only possible victims to whom this count of the indictment could apply. There is no evidence that Joseph intended to kill either Pamela Swann or Morris Yarborough. In fact, it is difficult even to say that an intent to kill was established as to Richardson, since the evidence at trial established that Joseph had harsh words only with Dickey and that Dickey was the true target for his gunshots. We assume, however, for the purpose of this discussion, that the prosecutor could have shown such intent as to Richardson had he chosen to do so. [12] Although the indictment is not specific in identifying the person whom Joseph intended to kill, it does sufficiently "articulate the essential elements of the offense" of assault with a dangerous weapon. Cain v. United States, 532 A.2d 1001, 1005 (D.C.1987). [13] The motion was captioned as a motion for relief under D.C.Code § 23-110 (1989). That statute, however, applies only to motions to vacate sentence. Since Joseph had not yet been sentenced when he filed his motion, there was no sentence to vacate; consequently, we treat it (as the trial court did) as a motion for new trial under Super.Ct.Crim.R. 33. [14] In particular, Joseph claimed that his counsel did not obtain "crucial and decisive Medical Reports, specifically, Radiology Reports and Police Ballistic Reports that could have possibly identified the caliber (diameter) of the bullet still contained in the body of key government witness, Mr. James Richardson, in relation to the shells found on the street ... to the exculpation of the defendant." [15] This was apparently Yarborough, whom Pamela Swann described as wearing a burgundy baseball cap. [16] Richard Joseph, the eighty-one-year-old owner of the Baseball Club, was one of the government's witnesses at trial. He was not related to appellant John Joseph. [17] Allen testified as a government witness at trial. [18] Miller, who was driving past the Baseball Club on the way to work when the shootings occurred, testified that he saw a man in a red baseball cap standing on the sidewalk, shooting in the direction of the club. Miller did not see any shots coming from inside the club, but he had "an idea" that shots were being fired from inside. [19] The trial court noted that Yarborough's statement that two men came looking for Richardson, implying that they were responsible for the shooting, was inconsistent with the remaining evidence and was uncorroborated by the testimony of any other witness.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1527960/	306 S.W.2d 390 (1957) Henry G. KOTHE et al., Appellants, v. HARRIS COUNTY FLOOD CONTROL DISTRICT, Appellee. No. 13134. Court of Civil Appeals of Texas, Houston. October 24, 1957. Rehearing Denied November 14, 1957. John A. Black, Jr., Houston, for appellants. Joe Resweber, County Atty., and W. R. Ellis, Asst. Co. Atty., Houston, for appellee. WERLEIN, Justice. This is a suit in trespass-to-try-title and for an injunction and damages brought by 391 Henry G. Kothe, Nelson Schwartz, LeRoy B. Eddy, J. K. Deason, Glenn F. Fletcher, and Ross Camperi, against Harris County Flood Control District. Defendant filed a plea of general denial and not guilty, and also filed a cross-action setting out its claimed easement, and alleging its powers of eminent domain as provided in Article 8280-120, Sec. 10 and Articles 3264-3271, inclusive, of Vernon's Ann.Civ.St. The case was submitted for determination by the trial court on the following stipulation: "That the following named parties are now except for the rights and interest set out below in Paragraph 2, the true and lawful owners of the following described Lots, the number of which said lot respectively owned by each said party is set opposite the name of each said owner, said lots being lots in Willow Creek Estates, Section 1, an addition in Harris County, Texas, according to Replat of said addition recorded in Volume 17, Page 67 of the Map Records of Harris County, Texas, to-wit: Ross Camperi Lot No. 20 Glenn F. Fletcher and wife, Mattie O. Fletcher Lot No. 21 J. K. Deason and wife, ____________ Deason Lot No. 22 Henry G. Kothe and wife, Beverly A. Kothe Lot No. 23 LeRoy B. Eddy and wife, Mildred Eddy Lot No. 24 Nelson E. Schwartz and wife, Viola Schwartz Lot No. 25, less the West 60 ft. thereof; subject, however, to the following, to-wit: "1. Any and all liens which may exist against said Lots to secure the payment of indebtedness incurred by or assumed by the said owners respectively; "2. Any rights which the County of Harris, Texas, or the Harris County Flood Control District may have acquired by any instrument or condemnation proceedings of record prior to the acquisition of title by the respective owners or by any instrument or condemnation proceeding executed or had subsequent to the acquisition of title by said owners respectively and to which the said owners were respectively parties. "It is further stipulated by and between the respective parties that the sole question involved herein is a question of law and is the determination by declaratory Judgment as to whether the instrument executed by Joseph F. Meyer, Jr., et al. to Harris County, Texas, recorded in Volume 1009 at Page 446 of the Deed Records of Harris County, Texas, attached hereto as Exhibit `A' (all rights thereunder being subsequently quit-claimed to Harris County Flood Control District by Commissioners Court Order dated November 3, 1955) grants an unconditional perpetual easement or a Restricted Perpetual easement? "It is further stipulated and agreed by all parties that such instrument (Exhibit `A') describes all property lying between the North line of that certain 15 foot strip across the northern portion of said lots now in condemnation and the centerline of Willow Water Hole Bayou generally agreed to be and concern a 35 foot strip of land, as 392 shown by a map of such area attached hereto as Exhibit `B', which all parties agree and stipulate is substantially accurate and represents the area; and all parties further agree that such map may be considered as part of this stipulation without further proof. "It is further stipulated and agreed that the shaded area as shown on Lots 20 through 25 is a strip of land 15 foot in width and is the subject property in condemnation proceedings in the County Court at Law of Harris County, Texas, in Consolidated Cause No. 78,738, and adjoins on the immediate south, the 35 foot strip of land, lying between the centerline of the bayou and the 15 foot in condemnation and is the property now before the Court described in the deed from Meyer to Harris County, Texas. "It is further stipulated and agreed that in the event this Court holds the instrument above referred to as Exhibit `A' did not convey an unconditional perpetual easement to the land between the North line of said 15 foot strip of land above described and the center line of said Willow Water Hole Bayou; then, in that event, the Harris County Flood District will amend the condemnation pleadings, without objections from Plaintiffs herein to condemn a 50 foot strip instead of a 15 foot strip across the north end of said property. "But, in the event this Court finds such instrument (Exhibit `A') conveys an unconditional perpetual easement to Harris County to the land here in controversy; then, in that event, Plaintiffs herein will take nothing by this action and a declaratory Judgment to that effect shall be entered and the condemnation action above referred to will continue to concern only the 15 foot strip described in said condemnation suits. "It is further agreed and stipulated by all parties that in the event any party is dissatisfied with the judgment of the Court such party retains all his rights of appeal." Upon the foregoing stipulation, the trial judge entered judgment as a matter of law for the defendant, decreeing and declaring that a perpetual easement for drainage purposes was vested in the defendant, Harris County Flood Control District, to a full 35 feet on each side of the center line of Willow Water Hole Bayou. The court further decreed that plaintiffs be divested of any rights, titles, interests or claims interfering with defendant's full use and enjoyment of such perpetual easement, and that plaintiffs take nothing by their suit, and that the defendant go hence without day with its costs. The plaintiffs seasonably perfected their appeal and the case is now properly before this Court for review. The sole question here, as was the case in the District Court, is whether the deed from Joseph F. Meyer, Jr., et al., to Harris County, Texas, known as Exhibit "A", conveyed an unconditional perpetual easement to the land between the north line of the 15 foot strip of land described in the stipulation and the center line of said Willow Water Hole Bayou, or whether such deed conveyed a restricted perpetual easement to Harris County. The answer to this question lies in the proper interpretation of the deed from Joseph F. Meyer, Jr., et al., to Harris County, dated March 23, 1936, and particularly of the language used in the following parts thereof: 1. The consideration as recited in the first paragraph of the deed as follows: "For and in consideration of the sum of ten dollars ($10.00) cash to said Grantors in hand paid by Harris County a duly organized County of the State of Texas, the receipt whereof is hereby acknowledged and confessed, and the further consideration of the agreement on the part of said County to 393 deepen, widen, straighten and grub Willow Water Hole Bayou, or to cause or to procure the deepening, widening, straightening and grubbing of said Willow Water Hole Bayou, all to be done in accordance with the plans and specifications for such work now on file with Charles R. Raile, County Engineer of Harris County, Texas, and here referred to for certainty, and in consideration of the benefits to accrue to the parties Grantor herein by reason of the drainage of their lands adjacent to said Willow Water Hole Bayou, in the vicinity of the right-of-way hereinafter described, to result from such widening, deepening, straightening and grubbing of said Willow Water Hole Bayou * ." 2. The granting clause, reading: " * * have bargained, sold and conveyed, and by these presents do bargain, sell and convey unto said Harris County a perpetual easement and right-of-way in, upon and over the following described tract of land in Harris County, Texas, to-wit: * * "; and, 3. The habendum clause in said deed, reading: "To have and to hold the same unto said Harris County to be used by said County as a drainage channel, together with the right of ingress and egress at all times to and from said hereinbefore described tract of land, for the purpose of opening, deepening, widening, straightening, and grubbing said Willow Water Hole Bayou, in accordance with said plans and specifications, and for the purpose of maintaining the same thereafter as a drainage channel, and doing any and all acts and things necessary for its maintenance as such." In determining the issue involved herein, consideration must be given to certain general rules of construction applicable to deeds, easements and other written instruments. The intention of the parties is of primary importance. As stated in Texas Jurisprudence, Vol. 14-B, at page 584, paragraph 135: "In order to ascertain the intention of the parties, all of the provisions of the deed in controversy are considered; and every part of the deed is given effect where this can be done." Quoting further from this authority: "The intention is not gotten from an isolated clause or paragraph, but gathered from a fair construction of the entire instrument. Each clause or paragraph must be construed with reference to every other paragraph, and the effect of one paragraph upon the other determined." In Woods v. Sims, Tex., 273 S.W.2d 617, 620, in construing a deed, the court stated: "There being no allegation of fraud, accident or mistake and no attempt by the parties to reform the mineral deeds, the court will give effect to the intention of the parties as expressed by the terms and provisions of the instruments. Generally the parties to an instrument intend every clause to have some effect and in some measure to evidence their agreement, and this purpose should not be thwarted except in the plainest case of necessary repugnance. Even where different parts of the instrument appear to be contradictory and inconsistent with each other, the court will, if possible, harmonize the parts and construe the instrument in such way that all parts may stand and will not strike down any portion unless there is some irreconcilable conflict, wherein one part of the instrument destroys in effect another part. Associated Oil Co. v. Hart, Tex.Com. App., 277 S.W. 1043; Benge v. Scharbauer, [152 Tex. 447], 259 S.W.2d 166, and cases cited therein." This rule has been applied many times. In Dallas Joint Stock Land Bank of Dallas v. Harrison, 138 Tex. 84, 156 S.W.2d 963, 967, the court had this to say: "This court has repeatedly held that the dominant purpose in construing a 394 deed is to ascertain the intention of the parties as expressed in the deed itself, and such intention expressed therein is a controlling factor. It is a rule that the intention of the parties must be gathered from the entire instrument, and not from some isolated clause or paragraph. Bumpass v. Bond, 131 Tex. 266, 114 S.W.2d 1172; Totton v. Smith, 131 Tex. 219, 113 S.W.2d 517; 14 Tex. Jur., p. 919 et seq., § 140 et seq. "In the case of Berry v. Spivey, 44 Tex.Civ.App., 18, 97 S.W. 511, the rule was clearly stated in the following language: `The intention of the grantor may be expressed in the habendum clause, or anywhere else in the instrument, and when it may be ascertained from the instrument it should be given effect, without regard to technical rules of construction.'" In Shugart v. Shugart, Tex.Com.App., 248 S.W. 328, 331, the court stated: "The courts always give effect to every part of a deed, if it is possible, consistent with the rules of law. The rule of law is that a deed must be construed, if possible, so that no part shall be rejected. If this cannot be done they then examine and see if there is enough of the consistent and intelligible portions of the same to give effect to the intention of the parties; and, if so, they reject what is repugnant to the general intention of the deed, or to any particular intention of the party." In this case the plans and specifications referred to in the deed were not introduced in evidence, and this Court has no means of knowing what they provided. These plans and specifications, however, whatever they might be, were incorporated by reference into the deed from Joseph F. Meyer, Jr., et al., to the County of Harris, in the first paragraph thereof, where it is recited that a part of the consideration for the deed was the agreement on the part of the County to deepen, widen, straighten and grub Willow Water Hole Bayou in accordance with the plans and specifications for such work on file with Charles R. Haile, County Engineer of Harris County, Texas, which plans and specifications were referred to "for certainty." The plans and specifications were on file with a county officer and were, therefore, open to inspection as public documents. The reference to them was sufficiently definite for them to be read into the deed in question. In the same paragraph it is stated that the deed was also executed "in consideration of the benefits to accrue to the parties grantor by reason of the drainage of their lands resulting from such widening, deepening, straightening and grubbing of said Willow Water Hole Bayou." (Emphasis ours.) The word "such as used here can only refer to the widening, etc., in accordance with said plans and specifications. The granting clause of the deed merely grants a perpetual easement and right-of-way 70 feet wide in, upon, and over certain tracts of land, the center line of such 70 foot strip being the center line of Willow Water Hole Bayou. The habendum provision, "To have and to hold the same unto said Harris County to be used by said County as a drainage channel" is followed by this significant language: "together with the right of ingress and egress at all times to and from said hereinbefore described tract of land, for the purpose of opening, deepening, widening, straightening and grubbing said Willow Water Hole Bayou, in accordance with said plans and specifications, and for the purpose of maintaining the same thereafter as a drainage channel, and doing any and all acts and things necessary for its maintenance as such." (Emphasis ours.) "Contracts must be construed and given effect with reference to the intention of the parties at the time of entering into the contract * * ." 17 C.J.S. Contracts § 295, p. 694; Dallas Hotel Co. v. McCue, 395 Tex.Civ.App., 25 S.W.2d 902, no writ history. It would seem reasonable that the repeated reference to the plans and specifications on file with the county engineer would not have been inserted in the deed if it had not been the intention of the parties at the time the deed was executed in 1936 that the drainage ditch in question was to be constructed and maintained in accordance with such plans and specifications. It is well stated in Am.Jur., Vol. 17-A, Sec. 115: "A person granting an easement may limit the grant in any way he chooses, and the grantee takes subject to the restrictions imposed." Where an easement exists by express grant, as in this case, its use must be confined to the terms and purposes of the grant. 28 C.J.S., Easements, § 87, p. 765. The rules of construction applicable to deeds and to easements are generally the same. The court stated, however, in the case of Magnolia Petroleum Co. v. Thompson, 8 Cir., 106 F.2d 217, 224, certiorari denied 308 U.S. 613, 60 S. Ct. 180, 84 L. Ed. 513: "Words, therefore, which, if used in a deed granting a fee, may be regarded as surplusage, if used in a deed granting an easement, may constitute the essential description of the thing intended to be conveyed." Surely the repeated reference to the plans and specifications in question can't be regarded as mere meaningless surplusage. While it is true that if there is an irreconcilable conflict between the granting clause of a deed and the habendum, the granting clause will prevail, it is equally true that if the two can be construed so as to stand together, by limiting the estate without contradicting the grant, the court will give that construction in order to give effect to both. Moore v. City of Waco, 85 Tex. 206, 20 S.W. 61; Lectures on Real Estate, by Judge Yancy Lewis, p. 161. In the instant case although the granting clause is in general unrestricted terms, the habendum very clearly defines the use to be made of the property, and limits the right of ingress and egress at all times to work done in accordance with said plans and specifications. There is nothing repugnant here between the granting clause and the habendum. The strip of land is to be used for drainage purposes, but the work done thereon was in the first instance and at all times thereafter to be performed in accordance with the plans and specifications specifically referred to in the instrument. Appellee asserts that the reference to the plans and specifications applies to only the initial work of construction, and quotes the following language from the habendum: "for the purpose of opening, depending, widening, straightening and grubbing said Willow Water Hole Bayou in accordance with said plans and specifications, and for the purpose of maintaining the same thereafter as a drainage channel, and doing any and all acts and things necessary for its maintenance as such." Appellee contends that after the initial construction the property is to be used as a drainage channel and that the grantee can do any and all acts and things necessary for its maintenance as such. Of course, the whole purpose of the easement was to provide for a drainage channel. We see no contradiction between the provision in the habendum "together with the right of ingress and egress at all times to and from said hereinbefore described tract of land, for the purpose of opening, deepening, widening, straightening and grubbing said Willow Water Hole Bayou, in accordance with said plans and specifications * * " and the provision " * * and doing any and all acts and things necessary for its maintenance as such." The last clause is general and not specific. It was held in Reynolds v. McMan Oil & Gas Co., 11 S.W.2d 778, at page 782, by the Texas Commission of Appeals, 1928, that, "The principle that specific language of an instrument will control general terms is well known, and is at the very foundation *396 of the rule allowing exceptions and reservations." 17 C.J.S., § 313. We find no conflict between said clauses, but if there were a conflict, as contended by appellee, then the specific language would control the more general terms. Moreover, as held in Osburn v. Smart, Tex. Civ.App., Fort Worth, 58 S.W.2d 1073, at page 1078 (error dismissed): "If there is an irreconcilable conflict between clauses of the contract, by reason of which the meaning is obscured or rendered doubtful, the expression in the clause first appearing will control. 10 Tex.Jurisprudence, page 311, Sec. 179, and cases there cited." The clause "doing any and all acts and things necessary for its maintenance as such." is not repugnant to the provision requiring that the work be done in accordance with the plans and specifications. We think the true meaning is that the grantee may do any and all acts and things necessary in maintaining the drainage channel in accordance with said plans and specifications which limit the opening, deepening, widening, straightening and grubbing of said Willow Water Hole Bayou. We are of the opinion that the provisions of the deed in question can be harmonized without destroying any of them, and that the references to the plans and specifications are applicable to both the initial work and to any work thereafter, and cannot be written out of the instrument without disregarding the intention of the parties who executed the deed and who undoubtedly had their reasons for insisting that not only the initial work be done in accordance with the plans and specifications on file but that any future work for which they gave ingress and egress to the property should also be in accordance with said plans and specifications. Robison v. Murrell, Tex. Civ.App., 184 S.W.2d 529, error refused. We have concluded, therefore, and so declare, that under the deed from Joseph F. Meyer, Jr., et al., to Harris County, the County and its successor, the appellee, acquired only a restricted perpetual easement to the strip of land in question. The judgment of the trial court is reversed and judgment is rendered for the appellants.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1528103/	306 S.W.2d 588 (1957) Chester C. McKENZIE (Plaintiff), Appellant, v. Constance M. McKENZIE (Defendant), Respondent. Nos. 29739, 29801. St. Louis Court of Appeals. Missouri. November 5, 1957. 589 Lawrence J. McKim, Samuel J. Kevrick, St. Louis, for appellant. Claude W. McElwee, Frank P. Motherway, St. Louis, for respondent. WOLFE, Commissioner. This is an action for divorce. The husband, plaintiff, prevailed below but the defendant, wife, was awarded the custody of their two daughters, and the plaintiff has appealed. There was an allowance of attorney's fees to the defendant for defending a writ of prohibition hereinafter mentioned and there was also an allowance of attorney's fees for the defense of this appeal. From these, after trial orders, the plaintiff has appealed. Both of these appeals were argued and submitted together and both are herein considered. The petition in this cause was filed in April, 1954. The plaintiff charged his wife with general indignities and habitual drunkenness. The defendant answered with a charge of abandonment and sought separate maintenance and the custody of their two daughters, seven and five years of age respectively, at the time the petition was filed. The cause came on for hearing on November 8, 1954, and the plaintiff pressed none of his charges except that of habitual drunkenness. The evidence to support this was that for at least two years prior to the date of filing the petition the defendant drank to excess. Both the husband and friends of the couple testified that the defendant drank to such excesses that at times she could not stand. The husband said that she drank about a fifth of a gallon of whiskey a day and that when he came home from his work she would be "glassyeyed" and incoherent. At one time he was 590 asked to take her home from a party because she was drunk and disorderly. On another occasion she had to be carried to their car. A maid who had been in their employ testified that the defendant hid whiskey in various places about the house and that there were frequent deliveries of it from the drugstore. There was testimony that the children had been found outside after dark in the late fall of the year and taken into their home by a passing motorist who found the mother asleep on the kitchen floor. There was also testimony that at one time the older child was beaten by her mother during the early hours of the morning because of some hallucination that the mother had about the child's behavior. The plaintiff prevailed upon the defendant to have medical attention and in 1953 Dr. Luten arranged to have her sent to St. Vincent's Hospital. She remained there for ten days and after her return she was sober for three months. In August of that year she again started drinking and in December she was again hospitalized for a few days but was released for the Christmas holidays on a promise not to drink any more. During the holidays she again took to drink and was almost continually intoxicated. Plaintiff left and took the two children with him in April, 1954. He lived thereafter in an apartment with his daughters and employed the same maid that had worked for him while he was living with his wife. The defendant at the time of the trial was living with her aunt. Upon the foregoing evidence the court found in favor of the plaintiff and awarded him the custody of his two daughters with the right of temporary periods of custody in the mother. A motion for a new trial was filed and without objection the defendant testified at a hearing on the motion that she had moved to an apartment of her own and that she would be a good mother to the children. The court, without ruling upon her motion for a new trial, set aside the decree as it related to the custody of the children and reset the cause for January 3, 1955, for further hearing. On January 3, 1955, the court re-entered the decree of divorce which it had never of record set aside and again gave custody to the plaintiff with certain periods of temporary custody in the defendant, and decreed that such custodial provisions should only remain in force until May 2, 1955, at which time a further hearing was to be held. The defendant after an unavailing motion for a new trial filed a notice of appeal to this court which appeal was withdrawn on March 21, 1955. Thereafter, on May 2, 1955, a further hearing was had. Two priests testified that they had seen Mrs. McKenzie on several occasions and had been in her home and that they were both under the impression that she had fully recovered from alcoholism. One stated that he was present in her home when the children were there and that both she and the children displayed normal affection toward each other. A relative who had seen Mrs. McKenzie on a number of occasions since January, 1955, had noted a great change for the better. She said that defendant is a very capable person. She visited defendant on Easter when the children were with her and she said that the children were very affectionate toward their mother. This witness also testified that she knew Mrs. McKenzie had been an alcoholic and that Mrs. McKenzie had joined Alcoholics Anonymous since her separation from her husband. A member of that organization testified that Mrs. McKenzie was a member and had been awarded a card indicating that she had not had an alcoholic drink for six months. A neighbor in the apartment building to which the defendant had moved stated that she had been in close contact with Mrs. McKenzie since her move and that she had never seen her take a drink. She said that she had offered her a drink not knowing of her difficulty and that Mrs. McKenzie had refused it. 591 The defendant testified that she was currently living in a five-room apartment and had been employed since January as a secretary by a life insurance company. Her salary was $250 a month. She testified that she was a member of Alcoholics Anonymous and that on June 9 she would have abstained from alcohol for a period of one year. She attended weekly meetings of the organization. The rest of the testimony at the hearing had to do with plaintiff's earnings and the cost of maintaining the children. No point having been raised in regard to the allowance of support money, this need not be set out. At the conclusion of this hearing the the court awarded custody to the defendant with temporary periods of custody in the plaintiff. It then ordered that such provisions remain in force until September 8, 1955, setting that date as a time for a "conference between the court and attorneys". The plaintiff then filed an unavailing motion for a new trial and appealed to this court. On September 22, the trial court indicated its intention to make permanent the award of custody in the defendant and the plaintiff sought a writ of prohibition here. We issued our preliminary rule in prohibition but on October 5, 1956, the preliminary rule was discharged. See State ex rel. McKenzie v. LaDriere, Mo.App., 294 S.W.2d 610. After our mandate was sent down the court entered a decree awarding custody to the mother with support money for the children and temporary periods of custody in the father. The plaintiff again filed a motion for a new trial, which was overruled on November 9, 1956. The plaintiff again appealed. The defendant filed a motion for attorney's fees for work done by her attorneys in the prohibition suit and also for fees and expenses to defend the appeal. Both of these were allowed by the court and this was also appealed. It is first contended that the court erred in considering the evidence of things that had occurred since the filing of the suit. We considered the same question in the prohibition action, State ex rel. McKenzie v. LaDriere, supra, and held, and properly so, that the court was acting within its jurisdiction. We did, however, in that case express approval of the procedure employed by the court. Upon a review of the entire transcript, we feel that the procedure employed does not merit the approval that we accorded it. The court should decide cases upon the evidence presented at the trial of the issues and not continue and drag a case along in the hope, however well founded, that future events may alter the present facts. Divorce is a statutory action and the statute takes care of future changes by permitting a modification of decrees upon a proper showing. Sections 452.070, 452.110 RSMo 1949, V.A.M.S. This does not mean that the plaintiff's point is now well taken. The facts indicate that the court and all parties were aware that the only reason that the mother was not given custody of her two daughters was her addiction to drink. The parties offered no objections to the numerous temporary dispositions and resettings of the case nor to the testimony as to the conditions arising subsequent to the trial. Therefore they cannot now be heard to complain. It is next contended that the court erred in awarding custody to the mother in that the father prevailed in the divorce case. The fact that either party prevails in a divorce case is not the determining factor in awarding the custody of the children involved. The custody of children should never be awarded as a means of punishing one parent or rewarding the other. The determinative factor in awarding custody is the welfare of the child. Green v. Perr, Mo.App., 238 S.W.2d 924; Ballew v. Ballew, Mo.App., 288 S.W.2d 24. It is quite naturally considered that very young children and particularly girls should be in the custody of their mother unless she is demonstrably unfit to assume their proper care. Davis v. Davis, Mo. App., 254 S.W.2d 270; Armstrong v. Armstrong, 592 Mo.App., 185 S.W.2d 845. We cannot therefor hold that the court erred in awarding custody to the mother, for the evidence upon which the case was decided showed that she had fully rehabilitated herself and was capable of caring for the children. The points raised as to the allowance of attorney's fees by the court are, first, that the defendant had sufficient means to meet the expenses herself. We are cited to Rutledge v. Rutledge, 177 Mo. App. 469, 119 S.W. 489. That case and many later cases, such as Baer v. Baer, Mo.App., 51 S.W.2d 873, and Price v. Price, Mo.App., 281 S.W.2d 307, have held that if a wife is possessed of sufficient means of her own to prosecute a divorce suit, then there is no reason for requiring the husband to finance her side of the litigation. In order to bring himself within this rule the plaintiff states that the defendant received $11,800 in 1954 as her share of the proceeds realized on the sale of a house that the parties owned as tenants by the entirety. The motions for fees were sustained in 1957, over two years later, and there is no showing of record as to what her financial condition was at that time. Plaintiff was in the trucking business from which he drew a salary of $800 a month and he owned 80% of the capital stock. The company was capitalized for $60,000. Under that state of facts, and since he is the appellant here, it does not appear that the court erred for the reason urged in making the allowance of attorney's fees for the appeal. The second point for which the appellant contends is that the court erred in awarding fees for the attorney's services in defending the prohibition suit, in that the matters therein litigated did not arise out of the marital relations. There appears, however, to be present a question of the court's jurisdiction to rule upon the motion. On October 9, 1956, the court entered its final decree. On October 17 the motion for a new trial was filed by the plaintiff. On October 23, 1956, the motion for attorney's fees for services that had been performed prior to the decree in connection with the prohibition suit was filed by the defendant. On January 7, 1957, the court sustained the motion for fees for the services in the prohibition suit. If the defendant was entitled to fees for her counsel's services in the collateral action, the motion for such fees should have been filed before the final decree in the divorce case was entered and the award made a part of the decree. The decree was conclusive not only as to all issues tried but also as to all issues that might have been litigated. Noll v. Noll, Mo.App., 286 S.W.2d 58. The court was therefore without jurisdiction to enter a judgment for attorney's fees for the services rendered during the pendency of the divorce suit after the suit had been finally determined. Beckler v. Beckler, 227 Mo.App. 761, 57 S.W.2d 687; Shepard v. Shepard, Mo.App., 194 S.W.2d 319, loc. cit. 328; Coons v. Coons, Mo.App., 236 S.W. 364; Creasey v. Creasey, 175 Mo.App. 237, loc. cit. 243, 157 S.W. 862. For the reasons stated, it is the recommendation of the Commissioner that the decree of the court be affirmed and that the order allowing attorney's fees and expenses on this appeal be affirmed, and that the order allowing attorney's fees for the defense of the prohibition proceeding be reversed. PER CURIAM. The foregoing opinion of WOLFE, C., is adopted as the opinion of the court. The decree of the circuit court is accordingly affirmed and the order allowing attorney's fees and expenses on this appeal is affirmed and the order allowing attorney's fees for the defense of the prohibition proceeding is reversed. RUDDY, P. J., and MATTHES and ANDERSON, JJ., concur.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1528141/	528 Pa. 320 (1991) 597 A.2d 1137 Mark S. LOVE, Appellant, v. BOROUGH OF STROUDSBURG, Appellee. Supreme Court of Pennsylvania. Argued April 9, 1991. Decided October 7, 1991. 321 Mark S. Love, pro se. Ralph A. Matergia, Stroudsburg, for appellee. Before NIX, C.J., and LARSEN, FLAHERTY, McDERMOTT, ZAPPALA, PAPADAKOS and CAPPY, JJ. OPINION OF THE COURT CAPPY[], Justice. The issues presented in this appeal are, whether a borough ordinance creating a restrictive residential parking scheme is a valid exercise of police power; and whether the ordinance, if valid under the police power, violates the equal protection provisions of the Pennsylvania Constitution. For 322 the reasons that follow we find the ordinance withstands both challenges as made by the appellant. On May 21, 1987, the Borough of Stroudsburg adopted ordinance No. 636 authorizing the future establishment of residential parking districts and detailing the manner in which such districts were to be so designated. In compliance with the procedures set forth in ordinance No. 636, ordinance No. 638 was enacted on August 4, 1987. Ordinance No. 638 designated a certain geographic area known as the "Hill District" as a residential parking district. The impact of ordinance No. 638 was to restrict parking by non-residents within the "Hill District," by issuing parking permits to residents while limiting the time non-residents were permitted to park within the area. The portion of ordinance No. 638 containing the specific restrictions as to non-residents, provides as follows: The residential parking district restrictions for the Hill District shall be in effect Monday through Saturday, inclusive, from 8 A.M. to 6 P.M., prevailing time. Motor vehicles not displaying a valid residential parking district permit may not be parked on the streets of the Hill District for more than one (1) hour, with the exception of metered parking spaces on Sarah Street. The parking restrictions set forth in this subsection shall not apply on the following holidays: New Years Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day, and Christmas. The permit term for the Hill District shall commence on October 1 and expire two (2) years later on September 30. Subsequent to the passage of these two ordinances, on October 4, 1988, the appellant, a non-resident of the Hill District, parked his automobile within the district for a period in excess of one hour. As a result, he received a ticket indicating that he had violated ordinance No. 638 of the Borough of Stroudsburg, thus, subjecting him to a fifteen dollar ($15) fine. On October 6, 1988 appellant filed an action for declaratory relief in the Court of Common Pleas of Monroe County, 323 requesting that ordinances No. 636 and No. 638 be declared invalid. The Borough did not file an answer, thus the facts as pled are uncontested. Argument in the nature of crossmotions for judgment on the pleadings was heard on February 6, 1989. The action for declaratory relief was dismissed by the trial court on March 21, 1989. The Commonwealth Court affirmed the decision of the trial court on January 25, 1990. 131 Pa.Cmwlth. 11, 569 A.2d 389. As this case presents a question of first impression in the Commonwealth, this Court granted the petition for allowance of appeal. 525 Pa. 661, 582 A.2d 326. We must first address appellant's argument that the ordinances in question constitute an invalid exercise of the Borough's police power. There can be no question as to the authority of the Borough to regulate parking within its borders. As this Court stated in William Laubach & Sons v. City of Easton, 347 Pa. 542, 32 A.2d 881 (1943), "[w]e deem it to be the law that the state has the same right to regulate parking that it has to limit the speed of automobiles, so long as the regulations are not oppressive or unreasonable." Id., 347 Pa. at 547, 32 A.2d at 884.[1] The question then becomes, are the parking restrictions of the Borough of Stroudsburg oppressive or unreasonable? The specific ordinance involved in this case restricts parking by non-residents to one hour, Mondays through Saturdays, inclusive, between 8 a.m. and 6 p.m., subject to specific exceptions, within a primarily residential district.[2] Ordinance No. 638 was enacted pursuant to an enabling ordinance, No. 636 of May 21, 1987, which sets forth strict guidelines that have to be met before a restricted 324 parking district could be established. The purpose of designating certain districts for restricted parking is set forth in the preamble of the enabling ordinance: WHEREAS, the use of streets within residential areas for the parking of vehicles by persons using adjacent governmental, commercial, industrial, educational, and transit areas result in hazardous traffic conditions, the over-burdening of existing streets and roads, and the inability of residents of certain areas to obtain adequate parking adjacent to or close by their places of residence; and WHEREAS, the Stroudsburg Borough Council believes that the creation of residential parking districts will reduce the conditions described above and will promote the safety and welfare of the residents of the Borough. The procedure for designating an area for restricted parking provides that upon petition of the residents, and after a traffic study and public hearing, if it is determined that the area in question is overburdened by 30% with non-resident parking, within a primarily residential area, the parking restrictions of ordinance No. 638 are to apply. Such an exercise of the police power is not oppressive or unreasonable. Neither the stated purpose of the ordinance, nor its application, reveals a tyrannical abuse of authority with no logical intention. As we find the ordinances encompass a valid exercise of the police power of the Borough of Stroudsburg, we must now address appellant's claim that the ordinances violate the equal protection provisions of the Pennsylvania Constitution. The Pennsylvania Constitution specifically provides at Article I Sections 1 and 26: Section 1. Inherent rights of mankind All men are born equally free and independent, and have certain inherent and indefeasible rights, among which are those of enjoying and defending life and liberty, of acquiring, possessing and protecting property and reputation, and of pursuing their own happiness. 325 Section 26. No discrimination by Commonwealth and its political subdivisions Neither the Commonwealth nor any political subdivision thereof shall deny to any person the enjoyment of any civil right, nor discriminate against any person in the exercise of any civil right. The equal protection provisions of the Pennsylvania Constitution are analyzed by this Court under the same standards used by the United States Supreme Court when reviewing equal protection claims under the Fourteenth Amendment to the United States Constitution. James v. Southeastern Pennsylvania Transportation Authority, 505 Pa. 137, 477 A.2d 1302 (1984). As was stated in James, analysis of an equal protection claim must begin with a determination of the type of interest at issue. Under a typical fourteenth amendment analysis of governmental classifications, there are three different types of classifications calling for three different standards of judicial review. The first type classifications implicating neither suspect classes nor fundamental rights will be sustained if it meets a "rational basis" test. In the second type of cases, where a suspect classification has been made or a fundamental right has been burdened, another standard of review is applied: that of strict scrutiny. Finally, in the third type of cases, if "important," though not fundamental rights are affected by the classification, or if "sensitive" classifications have been made, the United States Supreme Court has employed what may be called an intermediate standard of review, or a heightened standard of review. Id., 505 Pa. at 145, 477 A.2d at 1305-1306 [citations omitted]. Obviously, parking restrictions such as the ordinances at issue, involve "neither suspect classes nor fundamental rights." Id. Thus, the appropriate standard to be applied is the "rational basis" test. The criteria for meeting the "rational basis" test was recently, and succinctly, stated in Fischer v. Department of Public Welfare, 509 Pa. 293, 502 A.2d 114 (1985). "Thus, in order for the classification 326 to sustain constitutional attack it need only be directed at the accomplishment of a legitimate governmental interest, and to do so in a manner which is not arbitrary or unreasonable." Id., 509 Pa. at 310, 502 A.2d at 123. The classification at issue grants a preference to residents of a given district to park their own automobiles near their homes, while limiting the amount of time that non-residents may park within the area. The purpose for the instant classification is to "promote the safety and welfare of the residents of the Borough, reduce hazardous traffic conditions and the overburdening of existing streets and roads, and to [enable] residents of certain areas to obtain adequate parking adjacent to or close by their places of residence." See, Ordinance 636. These are legitimate governmental interests. Achieving these interests by limiting time allotted to non-residents to park within the area is not an arbitrary or unreasonable method of obtaining the governmental interest involved.[3] Therefore, the ordinances in question being a valid exercise of the police power, and not violative of the equal protection provisions of the Pennsylvania Constitution, the decision of the Commonwealth Court is affirmed. LARSEN, J., filed a dissenting opinion in which FLAHERTY, J., joined. LARSEN, Justice, dissenting. I dissent. 327 The issue raised by this appeal is whether appellee, the Borough of Stroudsburg, properly exercised its police power in establishing residential parking districts that limit the access of nonresidents to on-street parking in designated residential areas, in order to reduce traffic congestion and hazards and to enable the residents of such parking districts to park their vehicles without limitation on the streets near their homes.[1] The majority of this Court errs in finding that appellee Borough did properly exercise its police power in this case, and, in fact, overrules the well settled law of this Commonwealth. It has long been the law of this Commonwealth that municipalities may enact rules and regulations controlling public streets. Livingston v. Wolf, 136 Pa. 519, 20 A. 551 (1890). In doing so, however, municipalities may not grant rights and privileges to a favored few at the expense of the many. Reimer's Appeal, 100 Pa. 182, 45 A. 373 (1882); see also William Laubach & Sons v. Easton, 347 Pa. 542, 32 A.2d 881 (1943) (municipalities may regulate the use of highways in the interest of the whole public in so far as the regulations are not unreasonable or oppressive). In fact, our courts have consistently held that purely private uses of public highways with no reasonable benefit to the public are not permissible. See, e.g., 46 South 52nd Street Corporation v. Manlin, 398 Pa. 304, 157 A.2d 381 (1960) (newsstand on public sidewalk is private use which can be enjoined by abutting landowner). The municipality may authorize certain uses of public thoroughfares, but only for public services, travel and commerce. Id. Landowners whose property abuts public streets, roads, and highways retain some rights of ownership in the highway, including a right of access to their property. Breinig v. Allegheny County, 332 Pa. 474, 2 A.2d 842 (1938). The rights of ownership retained are not without limit, however, 328 as neither the abutting landowners nor others may restrict the use of the public thoroughfares by the public for transit. This right of transit includes the right to stop as necessary due to the ordinary exigencies of travel. Id. The Borough of Stroudsburg, in enacting ordinances which provide for the designation of residential parking districts herein, has, by stated purpose, created private parking zones on specified public streets for the sole benefit of the residents who live in homes located on those streets, at the expense of the general commuting public. This is not a proper exercise of the Borough's police power, in that municipalities may not take for private use that which belongs to the public. Reimer's Appeal, supra. The other stated purpose of the ordinances in question herein is to alleviate "hazardous traffic conditions and the overburdening of existing streets and roads." Borough of Stroudsburg Ordinance No. 636. Where a municipality exercises its police power "the means which it employs must have a real and substantial relation to the objects sought to be obtained." Lutz v. Armour, 395 Pa. 576, 579, 151 A.2d 108, 110 (1959) (ordinance forbidding landfill operators from accepting garbage originating outside of township had no substantial relation to goal of regulating garbage disposal areas). The Borough of Stroudsburg is declaring, in effect, that the motor vehicles of nonresidents create hazardous traffic conditions in residential parking districts, if they are allowed to park all day in those districts during business hours, but that the motor vehicles of residents with permits do not create hazardous traffic conditions under the same circumstances. This is a distinction that is both artificial and clearly without merit. The provisions of Ordinances No. 636 and No. 638 of the Borough of Stroudsburg which distinguish between the motor vehicles of residents and those of nonresidents and which are intended to alleviate hazardous traffic conditions do not have a "real and substantial relation to the objects sought to be obtained." 329 In addition, this Court has held that regulations which do not operate on all alike cannot be justified under the police power. White's Appeal, 287 Pa. 259, 134 A. 409 (1926). Because the ordinances in question do not extend the same parking privileges to all, and because they penalize some for conduct that others may engage in with impunity, there is no justification for these ordinances under the police power; thus, I would find that they are invalid. Accordingly, I would reverse the order of the Commonwealth Court which affirmed the order of the Court of Common Pleas of Monroe County. FLAHERTY, J., joins this dissenting opinion. NOTES [*] Reassigned to writer on July 10, 1991. [1] See, 53 Pa.S. § 46202 of the Borough Code, granting Boroughs within this Commonwealth the specific power to regulate parking within their borders. See also, 75 Pa.C.S. § 6109 of the Motor Vehicle Code enumerating the specific police powers of local authorities. [2] The specific ordinance at issue is No. 638 of the Borough of Stroudsburg, Monroe County, Commonwealth of Pennsylvania, enacted August 4, 1987. Ordinance No. 636 enacted on May 21, 1987 is also at issue, as it is the enabling authority for the specific restrictions found in ordinance No. 638. [3] Recently the United States Supreme Court issued a per curiam opinion refusing certiorari to review a parking restriction very similar to the one at issue. The parking ordinance in Arlington County Board v. Richards, 434 U.S. 5, 98 S. Ct. 24, 54 L. Ed. 2d 4 reh'g denied 434 U.S. 976, 98 S. Ct. 535, 54 L. Ed. 2d 468 (1977), also limited non-resident parking. Although the preamble to the ordinance offered additional reasons for the restrictions than those offered in the ordinance at issue, the basic purpose for the restrictions and the method of accomplishing that purpose are the same. In Richards, the equal protection argument was denied by the Court, which stated: "The Equal Protection Clause requires only that the distinction drawn by an ordinance like Arlington's rationally promote the regulation's objectives." Id. 434 U.S. at 7, 98 S.Ct. at 26. [1] The stated purpose of Ordinance No. 636 of the Borough of Stroudsburg is to alleviate "hazardous traffic conditions, the over-burdening of existing streets and roads, and the inability of residents of certain areas to obtain adequate parking adjacent to or close by their places of residence." Reproduced Record at 6a.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1528160/	409 Pa. Super. 184 (1991) 597 A.2d 1156 COMMONWEALTH of Pennsylvania, v. Daniel CARTER, Appellant. Superior Court of Pennsylvania. Submitted May 28, 1991. Filed October 1, 1991. 185 Mitchell S. Strutin, Philadelphia, for appellant. Donna G. Zucker, Asst. Dist. Atty., Philadelphia, for the Com., appellee. Before WIEAND, OLSZEWSKI and MONTGOMERY, JJ. 186 WIEAND, Judge: On February 29, 1980, following trial by jury, Daniel Carter was found guilty of rape, involuntary deviate sexual intercourse, robbery (seven counts), burglary and conspiracy because of his participation in a robbery of United Vending Services in Philadelphia on August 5, 1975. During the robbery, two female employees were sexually assaulted. Post-trial motions were denied following an evidentiary hearing, and Carter was sentenced to serve terms of imprisonment which, in the aggregate, were for not less than sixteen (16) years nor more than seventy (70) years. A timely direct appeal was dismissed for failure of counsel to file a brief. Pursuant to a subsequent P.C.H.A. petition, however, Carter was granted leave to file another appeal. In that nunc pro tunc appeal, defense counsel filed an Anders[1] brief asserting that the issues advanced by Carter were lacking in merit. The Superior Court affirmed the judgment of sentence by memorandum decision. Carter then filed a petition for a writ of habeas corpus in the United States District Court for the Eastern District of Pennsylvania. On July 18, 1990, habeas corpus relief was granted, and it was ordered that Carter's appeal in the Superior Court be reinstated within ninety (90) days or that, alternatively, a new trial be granted. On August 31, 1990, the Superior Court ordered that Carter's appeal be reinstated upon petition of the Commonwealth. In this reinstated appeal, Carter raises the following issues: I. Whether prior appellate counsel rendered ineffective assistance of counsel when he failed to raise the issue in the prior appeal of trial counsel's ineffectiveness for failing to object to the trial court's alibi instruction which neglected to inform the jury that it should acquit if the defendant's alibi evidence, even if not wholly believed, raised a reasonable doubt of his guilt. 187 II. Whether prior appellate counsel rendered ineffective assistance of counsel when he failed to raise the issue in the prior appeal of trial counsel's ineffectiveness for failing to object to the Commonwealth's presentation of evidence concerning the defendant's failure to appear at a court hearing and the trial court's instruction to the jury regarding same. III. Whether prior appellate counsel rendered ineffective assistance of counsel when he failed to raise the issue in the prior appeal of trial counsel's ineffectiveness for failing to present character testimony on behalf of the defendant at trial. Because there is arguable merit in the third of appellant's contentions, we are constrained to vacate the judgment of sentence and remand this case for an evidentiary hearing. The standard we employ to evaluate claims of ineffective assistance of counsel has been stated by the Pennsylvania Supreme Court in the following manner: The threshold inquiry in such claims is whether the issue/argument/tactic which counsel has foregone and which forms the basis for the assertion of ineffectiveness is of arguable merit; for counsel cannot be considered ineffective for failing to assert a meritless claim. Commonwealth v. Pursell, 508 Pa. 212, 495 A.2d 183 (1985). If this threshold is met, it must next be established that the particular course chosen by counsel had no reasonable basis designed to effectuate his client's interests. Commonwealth ex rel. Washington v. Maroney, 427 Pa. 599, 235 A.2d 349 (1967). Finally, we require that the defendant establish how counsel's commission or omission prejudiced him. Commonwealth v. Pierce, 515 Pa. 153, 527 A.2d 973 (1987). Commonwealth v. Durst, 522 Pa. 2, 4-5, 559 A.2d 504, 505 (1989). See also: Commonwealth v. Rollins, 525 Pa. 335, 344, 580 A.2d 744, 748 (1990); Commonwealth v. Davis, 518 Pa. 77, 83, 541 A.2d 315, 318 (1988). To establish prejudice under this standard "requires [a] showing that counsel's errors were so serious as to deprive the defendant of a fair 188 trial, a trial whose result is reliable." Strickland v. Washington, 466 U.S. 668, 687, 104 S. Ct. 2052, 2064, 80 L. Ed. 2d 674, 693 (1984). See also: Commonwealth v. Pierce, 515 Pa. 153, 157-158, 527 A.2d 973, 974-975 (1987); Commonwealth v. Gainer, 397 Pa.Super. 348, 352, 580 A.2d 333, 335 (1990) (en banc). Additionally, "[b]ecause the law presumes that counsel is effective, the burden of establishing ineffectiveness rests with appellant." Commonwealth v. House, 371 Pa.Super. 23, 28, 537 A.2d 361, 363 (1988). See also: Commonwealth v. Floyd, 506 Pa. 85, 90, 484 A.2d 365, 367 (1984); Commonwealth v. McKendrick, 356 Pa.Super. 64, 71, 514 A.2d 144, 148 (1986). At trial, appellant presented an alibi defense in which he asserted that he had been at school during the commission of the robbery. The trial court instructed the jury with respect to his alibi defense as follows: The defense in this case is that the defendant was not present at the scene of the alleged crime. We refer to the nature of the defense as an alibi; that's the legal term for a defense that he was not there. Obviously, a defendant cannot be guilty in a crime charged unless he's at the scene of a crime especially in the nature of this. The defendant, therefore, has offered himself and the circumstantial evidence or other evidence that he was at another place at the time when the incidents were said to have occurred. Among the things that you consider when you come to evaluate this evidence, you must consider whether or not the evidence of an alibi covers the entire time when the offense is shown to have been committed, and whether it precludes the possibility of the defendant's presence at the scene of the crime. You should consider this evidence along with other evidence in the case in determining whether the Commonwealth has met its burden of proving guilt beyond a reasonable doubt, that the crime has been committed and that the defendant committed the crime. The defendant's alibi evidence that he was not present may in and of itself work as an acquittal, or it together 189 with other evidence may be sufficient to raise a reasonable doubt in your minds which would operate also as an acquittal. When you come to consider then this alibi testimony, you will have not only to consider it in the context of other evidence in this case, but also in conjunction with the testimony of the two young ladies who testified that the defendant was the person that assailed them. The law clearly is that if a jury finds the testimony of these two eyewitnesses believable and also believes that their testimony and identification was positive and unqualified and based on opportunity to observe, then the identification testimony may be sufficient to convict the defendant, although there were three or four other witnesses who gave testimony intending to show that he was elsewhere at the time of the incident. There was physical evidence in this case, photographs of physical evidence. You will also consider that as circumstantial evidence when you come to determine the effect of the evidence. Appellant contends that the trial court's alibi instruction was inadequate and that counsel should have objected because the jury was not specifically told that its verdict should be one of acquittal if the alibi evidence, "even if not wholly believed," raised a reasonable doubt as to his presence at the scene of the crime. See: Commonwealth v. Pounds, 490 Pa. 621, 417 A.2d 597 (1980) and Commonwealth v. Willis, 520 Pa. 289, 553 A.2d 959 (1989). The precise argument which appellant now advances in support of his claim that counsel was ineffective has been rejected by the Superior Court on no less than seven occasions. In Commonwealth v. Jones, 386 Pa.Super. 467, 563 A.2d 161 (1989), allocatur granted, 525 Pa. 632, 578 A.2d 926 (1990), the Court, sitting en banc, reasoned as follows: Jones argues here that the "even if not wholly believed" language articulated in Pounds must be incorporated into an alibi charge, and that trial counsel was ineffective for failing to object to the court's charge at bar. Jones's argument directly contravenes established case law of this court. In Commonwealth v. Johnson, 190 336 Pa.Super. 1, 485 A.2d 397 (1984), this court specifically stated that "we do not interpret Pounds as creating standard language for an alibi instruction. So long as the trial judge makes it clear that the defendant's failure to prove an alibi is not tantamount to guilt, the Pounds safeguards are preserved." Johnson, 336 Pa.Super. at 18, 485 A.2d 397. In Commonwealth v. Bright, 361 Pa.Super. 261, 522 A.2d 573 (1987), a panel of this court again considered an appellant's argument that the "even if not wholly believed" language of Pounds must be used in an alibi instruction. Like the Johnson court before it, the Bright court rejected this argument, stating, "appellant is merely contesting the form of the instruction rather than its substance." Bright, 361 Pa.Super. at 267, 522 A.2d 573. Most recently, in Commonwealth v. Quarles, 361 Pa.Super. 272, 522 A.2d 579 (1987), the appellant argued that the trial court's charge was defective because it did not specifically tell the jury that the alibi testimony offered by the appellant's witness "did not have to be totally accepted to acquit" the appellant. Quarles, 361 Pa.Super. at 280, 522 A.2d 579. As did the Superior Court panels in Johnson and Bright, the Quarles court found the appellant's contention meritless. The court stated: The trial judge in his charge to the jury regarding appellant's alibi stated: "The defense evidence to the effect that he was not present either by itself or together with other evidence may be sufficient to raise a reasonable doubt of his guilt in your minds." ... Appellant's trial counsel, consequently, did not render ineffective assistance of counsel by failing to object to the trial court's alibi charge since the judge's alibi charge informed the jury that the alibi, by itself or with other evidence, may be sufficient to raise reasonable doubts in the jurors' minds about appellant's guilt. Quarles, 361 Pa.Super. at 280, 522 A.2d 579 (emphasis in original). 191 Clearly, a trial court alibi charge will not per se be deemed erroneous for failing to parrot the language of the Pounds Court. Rather, what is required of the trial court is that it make clear to the jury that the defendant's failure to prove alibi is not tantamount to guilt. Here, the court told the members of the jury that they should consider Jones's alibi testimony, in conjunction with the other evidence offered, to determine whether the Commonwealth met its burden of proving beyond a reasonable doubt that the crime was committed by Jones. Furthermore, the court at bar, like the trial court in Quarles, told the jury that Jones's alibi evidence, either by itself or together with other evidence, may be sufficient to raise a reasonable doubt of Jones's guilt and acquit him. Accordingly, after evaluating the trial court's charge as a whole, we find that the trial court's alibi charge was proper here. See Commonwealth v. Riggins, 374 Pa.Super. 243, 542 A.2d 1004 (1988). Because counsel will not be deemed ineffective for failing to pursue a meritless claim, we find that trial counsel and post-verdict motions counsel were not ineffective for failing to object to the trial court's charge. See Commonwealth v. Blagman, 350 Pa.Super. 367, 504 A.2d 883 (1986). Id., 386 Pa.Superior Ct. at 471-472, 563 A.2d at 163. See also: Commonwealth v. Woods, 394 Pa.Super. 223, 575 A.2d 601 (1990); Commonwealth v. Lott, 392 Pa.Super. 371, 572 A.2d 1279 (1990); Commonwealth v. Payne, 385 Pa.Super. 9, 559 A.2d 951 (1989); Commonwealth v. Quarles, 361 Pa.Super. 272, 522 A.2d 579 (1987), allocatur denied, 517 Pa. 592, 535 A.2d 82 (1987); Commonwealth v. Bright, 361 Pa.Super. 261, 522 A.2d 573 (1987), allocatur denied, 517 Pa. 597, 535 A.2d 1056 (1987); Commonwealth v. Johnson, 336 Pa.Super. 1, 485 A.2d 397 (1984). Instantly, we have evaluated the alibi charge given at appellant's trial in light of the requirements set forth in Commonwealth v. Jones, supra, and other Superior Court decisions and conclude that the trial court's alibi instruction 192 was correct and did not imply that appellant's failure to prove alibi would be tantamount to guilt. Appellant contends, however, that the Superior Court cases, which have held that the "even if not wholly believed" language is not required in all alibi instructions, are in direct contravention of the Supreme Court decisions in Pounds and Willis and, therefore, were incorrectly decided. As a three judge panel, however, we are bound to follow the precedent established by the Court en banc in Commonwealth v. Jones, supra. Moreover and in any event, the trial in this case was completed before the Supreme Court decided Pounds on July 3, 1980. The Supreme Court, in Commonwealth v. Triplett, 476 Pa. 83, 381 A.2d 877 (1977), has said: We cannot impose upon trial counsel the qualities of a seer.... For this reason, we examine counsel's stewardship under the standards as they existed at the time of his action, ... and counsel will not be deemed ineffective for failing to predict future developments in the law. Id., 476 Pa. at 89-90, 381 A.2d at 881 (footnote and citations omitted). Consequently, it has become a well settled principle in this Commonwealth that "counsel will not be deemed ineffective for failing to predict a change in the law." Commonwealth v. Davis, supra. See also: Commonwealth v. Yarris, 519 Pa. 571, 606, 549 A.2d 513, 531 (1988), cert. denied, 491 U.S. 910, 109 S. Ct. 3201, 105 L. Ed. 2d 708 (1989); Commonwealth v. Johnson, 516 Pa. 407, 418, 532 A.2d 796, 802 (1987); Commonwealth v. Garrity, 509 Pa. 46, 55, 500 A.2d 1106, 1111 (1985). Appellant's trial counsel did not have the benefit of the decision in Pounds, and, as such, may not be held accountable for failing to object to the trial court's jury instruction on grounds that it did not comply precisely with the language of that decision. Appellant next argues that counsel should have objected when the Commonwealth introduced evidence of his failure to appear at a prior trial listing, and, again, when 193 the trial court instructed the jury that such a failure would permit an inference that appellant was conscious of guilt. Appellant argues that the mere failure to appear for trial is not enough to create an inference of flight or consciousness of guilt. He contends, therefore, that trial counsel was ineffective for failing to object to the evidence of appellant's failure to appear at the prior trial date and the jury instruction thereon. Appellant's argument is based upon a decision by the Superior Court in Commonwealth v. Babbs, 346 Pa.Super. 498, 499 A.2d 1111 (1985). There, the Court held that the mere failure of a defendant to appear for trial, without evidence of flight or concealment, was insufficient to permit the factfinder to infer a consciousness of guilt. The Babbs Court reasoned as follows: The rule of law in this Commonwealth is that "[w]hen a person commits a crime, knows that he is wanted therefor, and flees or conceals himself, such conduct is evidence of consciousness of guilt, and may form the basis in connection with other proof from which guilt may be inferred." Commonwealth v. Coyle, 415 Pa. 379, 393, 203 A.2d 782, 789 (1964). Accord: Commonwealth v. Whack, 482 Pa. 137, 142-143, 393 A.2d 417, 419-420 (1978); Commonwealth v. Tinsley, 465 Pa. 329, 333, 350 A.2d 791, 792-793 (1976). This rule has not heretofore been expanded to permit an inference of guilt merely because a defendant has failed to appear for trial. A failure to appear on the day set for trial does not have the same connotation as pre-arrest flight or concealment and cannot be said to point unerringly to consciousness of guilt. Id., 346 Pa.Superior Ct. at 502, 499 A.2d at 1113. See also: Commonwealth v. Barnes, 406 Pa.Super. 58, 593 A.2d 868 (1991) (following Babbs and holding that trial counsel's failure to object to jury instruction that defendant's failure to appear at preliminary hearing permitted inference of consciousness of guilt was arguably ineffective assistance and required remand for evidentiary hearing). 194 A review of the record in this case, however, discloses that appellant's reliance upon the decision in Commonwealth v. Babbs, is misplaced. The Commonwealth's evidence was not limited merely to appellant's failure to appear when the case was called for trial. Rather, the Commonwealth's evidence was that appellant had failed to appear for a scheduled trial date on July 5, 1978, that a bench warrant had been issued for his arrest, and that he had not been apprehended until July 20, 1979. On that date, moreover, appellant attempted to avoid apprehension by giving police a false name. This evidence was sufficient to permit an inference that appellant had fled, and/or concealed his whereabouts to avoid prosecution. On this basis, the trial court could properly instruct the jury that an adverse inference could be drawn. See and compare: Commonwealth v. Knox, 290 Pa.Super. 104, 108 n. 3, 434 A.2d 151, 153 n. 3 (1981) (evidence of defendant's failure to appear for trial and eventual apprehension four months later properly received to establish consciousness of guilt); Commonwealth v. Smith, 250 Pa.Super. 460, 467-468, 378 A.2d 1239, 1243 (1977) (defendant's flight from jurisdiction after posting bond was properly received as evidence of consciousness of guilt); Commonwealth v. Myers, 131 Pa.Super. 258, 264-265, 200 A. 143, 146 (1938) (evidence of defendant's failure to appear for trial, issuance of bench warrant for his arrest, efforts of police to locate him and his apprehension approximately six months later was properly received as evidence of consciousness of guilt; "flight" includes not only leaving the jurisdiction, but also any concealment to avoid arrest or prosecution). Because evidence of appellant's consciousness of guilt was properly received and because the jury was properly instructed with respect thereto, neither appellant's trial counsel nor his first appellate counsel will be deemed ineffective for failing to assert the same. The claim was wholly lacking in merit. Appellant's final contention is that trial counsel was ineffective for failing to present character testimony on his behalf. More specifically, appellant asserts that counsel 195 failed to inform him of his right to call character witnesses and that, if he had been informed of this right, he could have given trial counsel the names of several witnesses who would have been available to testify that he had a good reputation for being an honest and law abiding citizen. In support of this claim, appellant has appended to his brief the affidavits of four individuals who have stated that they were aware of appellant's good reputation in the community and would have been available to testify at appellant's trial if they had been contacted by defense counsel. In Commonwealth v. Luther, 317 Pa.Super. 41, 463 A.2d 1073 (1983), the defendant asserted that trial counsel had been ineffective during his trial for rape by failing to present character testimony at trial and by failing to fully advise the defendant prior to trial regarding the importance of obtaining character witnesses. The Superior Court agreed that counsel had been ineffective, concluding that: [T]he decision of counsel to forego the presentation of character testimony at the trial: (1) was ill advised; (2) was a decision made without adequately informing his client of the value of such evidence; and (3) was principally defective by a failure to adequately prepare for the presentation of such testimony. Id., 317 Pa.Superior Ct. at 54, 463 A.2d at 1080. See also: Commonwealth v. Simler, 320 Pa.Super. 342, 467 A.2d 355 (1983). Cf. Commonwealth v. Schultz, 335 Pa.Super. 306, 484 A.2d 146 (1984) (counsel ineffective for failing to request or object to absence of jury instruction that character evidence, standing alone, is sufficient to raise reasonable doubt). In finding that trial counsel was ineffective for failing to call character witnesses, the Luther Court stressed the importance of character testimony when it said: It has long been the law in Pennsylvania that an individual on trial for an offense against the criminal law is permitted to introduce evidence of his good reputation in any respect which has "proper relation to the subject matter" of the charge at issue. Commonwealth v. Castellana, 277 Pa. 117, 122, 121 A. 50, 51 (1923) (quoting 196 Cathcart v. Commonwealth, 37 Pa. 108, 111 (1860)). See Commonwealth v. Stefanowicz, 118 Pa.Super. 79, 81, 179 A. 770, 771 (1935). Such evidence has been allowed on a theory that general reputation reflects the character of the individual and a defendant in a criminal case is permitted to prove his good character in order to negate his participation in the offense charged. See McCormick on Evidence, § 191, p. 454 (2d ed. 1972). Commonwealth v. Sampson, 445 Pa. 558, 285 A.2d 480 (1972). The rationale for the admission of character testimony is that an accused may not be able to produce any other evidence to exculpate himself from the charge he faces except his own oath and evidence of good character. Commonwealth v. Castellana, supra. It is clearly established that evidence of good character is to be regarded as evidence of substantive fact just as any other evidence tending to establish innocence and may be considered by the jury in connection with all of the evidence presented in the case on the general issue of guilt or innocence. See Commonwealth v. Holland, 480 Pa. 202, 389 A.2d 1026 (1978); Commonwealth v. Stoner, 265 Pa. 139, 108 A. 624 (1919). "Evidence of good character is substantive and positive evidence, not a mere make weight to be considered in a doubtful case, and, ... is an independent factor which may of itself engender reasonable doubt or produce a conclusion of innocence." Commonwealth v. Gaines, 167 Pa.Super. 485, 492, 75 A.2d 617, 620 (1950) (quoting Commonwealth v. Padden, 160 Pa.Super. 269, 275, 50 A.2d 722, 725 (1947)). See Commonwealth v. Cleary, 135 Pa. 64, 19 A. 1017 (1890); Commonwealth v. Goodman, 182 Pa.Super. 205, 126 A.2d 763 (1956); Commonwealth v. Kohl, 164 Pa.Super. 630, 67 A.2d 451 (1949). . . . . This court has made clear that "[i]n a case ... where intent and credibility are decisive factors leading to either acquittal or conviction, the accused's reputation is of 197 paramount importance. Indeed, evidence of good character may, in spite of all evidence to the contrary, raise a reasonable doubt in the minds of the jury." Commonwealth v. Shapiro, 223 Pa.Super. 15, 19-20, 297 A.2d 161, 163 (1972). Accord, Commonwealth v. Stoner, supra; Commonwealth v. Holland, supra. See State v. Gambutti, 36 N.J.Super. 219, 232, 115 A.2d 136, 143 (1955). (The court stated, in prosecution for sex offense, that where there are two direct witnesses involved, complainant and defendant, reputation evidence may well take on significance beyond that which a jury might accord it in an ordinary criminal trial). Commonwealth v. Luther, supra 317 Pa.Super. at 49-51, 463 A.2d at 1077-1078. See also: Commonwealth v. Neely, 522 Pa. 236, 561 A.2d 1 (1989); Commonwealth v. Giovanetti, 341 Pa. 345, 19 A.2d 119 (1941); Commonwealth v. Aston, 227 Pa. 106, 75 A. 1017 (1910). The Commonwealth argues that appellant is precluded from relief because he did not provide counsel with the names of potential character witnesses prior to trial. We cannot agree. In meeting the obligation to provide competent representation, a lawyer "must keep the accused fully informed of all options throughout the proceedings." Commonwealth v. Saxton, 516 Pa. 196, 200-201, 532 A.2d 352, 354 (1987), citing American Bar Association Standards for Criminal Justice 4-3.1(a), 4-3.1(b), 4-3.8, 4-6.2(a). It follows that "counsel's failure to investigate potentially meritorious defenses ... can constitute ineffective assistance of counsel if no reasonable basis otherwise exists for counsel's failure." Commonwealth v. Anderson, 501 Pa. 275, 287, 461 A.2d 208, 214 (1983). See also: Commonwealth v. Mabie, 467 Pa. 464, 359 A.2d 369 (1976). Thus, counsel has a duty to consider possible defense strategies and to discuss with his client options which are available. Counsel should inform a defendant of the right to present character witnesses and should discuss with the client whether such witnesses would be advisable under the circumstances of the evidence and defenses available. A criminal defendant cannot 198 be expected to offer to counsel potential character witnesses if counsel has not discussed with him the possible use of such evidence. Cf. Commonwealth v. Luther, supra (finding of ineffectiveness based in part upon counsel's failure to inform defendant adequately of the need for character testimony). We do not hold that counsel's failure to discuss all strategic options with a defendant is per se ineffective assistance. "A decision by counsel not to take a particular action does not constitute ineffective assistance if that decision was reasonably based, and was not the result of sloth or ignorance of available alternatives." Commonwealth v. Collins, 519 Pa. 58, 65, 545 A.2d 882, 886 (1988). See also: Commonwealth v. Christy, 511 Pa. 490, 501, 515 A.2d 832, 837 (1986), cert. denied, 481 U.S. 1059, 107 S. Ct. 2202, 95 L. Ed. 2d 857 (1987); Commonwealth v. Twiggs, 460 Pa. 105, 110-111, 331 A.2d 440, 443 (1975). "`[S]trategic choices made after thorough investigation of law and facts relevant to plausible options are virtually unchallengeable, and strategic choices made after less than complete investigation are reasonable precisely to the extent that reasonable professional judgments support the limitations on investigation.'" Commonwealth v. Lee, 401 Pa.Super. 591, 600-601, 585 A.2d 1084, 1089 (1991), quoting Strickland v. Washington, supra, 466 U.S. at 690-691, 104 S.Ct. at 2068, 80 L.Ed.2d at 695. The relevant inquiry in cases such as this is whether counsel's failure to pursue a particular defense theory was reasonable. See: Commonwealth v. Blair, 491 Pa. 499, 506, 421 A.2d 656, 660 (1980) ("The decision not to present a particular defense is a tactical one and will not be deemed ineffective stewardship if there is a reasonable basis for that position."), e.g. Commonwealth v. Davenport, 494 Pa. 532, 431 A.2d 982 (1981) (counsel's choice of self-defense theory over that of voluntary intoxication was reasonable); Commonwealth v. Garcia, 370 Pa.Super. 132, 535 A.2d 1186 (1988) (strategy seeking acquittal rather than one seeking verdict of manslaughter was effective assistance of counsel). 199 Instantly, appellant's contention that trial counsel failed to advise him of the option of calling character witnesses has at least arguable merit. Such evidence would not have been inconsistent with the trial strategy of alibi which counsel pursued at trial and, indeed, may have bolstered appellant's alibi defense. If, as appellant has alleged, character witnesses could have been obtained for his trial, then trial counsel's failure to inform appellant of that option may have deprived appellant of an available defense having substantial potential for success. Therefore, we cannot summarily dismiss appellant's allegation that he was denied the effective assistance of counsel. Because there has not yet been an evidentiary hearing to determine whether trial counsel explored with appellant the possibility of presenting character witnesses or whether counsel had a reasonable basis for not doing so, we cannot determine on the present state of the record whether appellant was denied effective assistance of counsel.[2] "When an arguable claim of ineffective assistance of counsel has been made, and there has been no evidentiary hearing in the [trial court] to permit the defendant to develop evidence on the record to support the claim, and to provide the Commonwealth an opportunity to rebut the claim, [the Superior] Court will remand for such a hearing." Commonwealth v. Petras, 368 Pa.Super. 372, 377, 534 A.2d 483, 485 (1987). See also: Commonwealth v. McBride, 391 Pa.Super. 113, 200 121, 570 A.2d 539, 543 (1990); Commonwealth v. Copeland, 381 Pa.Super. 382, 397, 554 A.2d 54, 61 (1988). The judgment of sentence is vacated, at least for the time being, and the case is remanded for an evidentiary hearing to determine whether trial counsel and prior appellate counsel were ineffective with respect to appellant's claim that he was deprived of the use of character evidence at his trial. If counsel are found to have been ineffective, a new trial must be granted. If counsel were not ineffective, however, the judgment of sentence may be reimposed. Jurisdiction is not retained. OLSZEWSKI, J., files a concurring and dissenting opinion. OLSZEWSKI, Judge, concurring and dissenting. For the reasons articulated by the majority, I concur as to the disposition of the first two issues. I respectfully dissent as to the disposition of the third issue and recommend that the appeal be dismissed and judgment of sentence be affirmed. Appellant asserts that his prior appellate counsel was ineffective for failing to raise, in the previous appeal, the issue of trial counsel's ineffectiveness for failing to call witnesses to testify as to appellant's character. The proper inquiry is "whether the disputed action or omission by [appellant's trial] counsel was of questionable legal soundness. If so, we ask whether counsel had any reasonable basis for the questionable action or omission which was designed to effectuate his client's interest. If he did, our inquiry ends." Commonwealth v. Davis, 518 Pa. 77, 83, 541 A.2d 315, 318 (1988). Both appellant and the majority rely upon Commonwealth v. Luther, 317 Pa.Super. 41, 463 A.2d 1073 (1983) to take them through the inquiry. The present case is quite distinct from Luther. When questioning the legal soundness of trial counsel's decision not to offer character testimony, the Luther Court stressed the importance of character testimony when an *201 accused is unable to produce evidence other than his own oath and evidence of others attesting to his character. Id., 463 A.2d at 1077. The current appellant's defense was alibi. He offered alibi witnesses at trial and, thus, was not limited, like the defendant in Luther, to offering evidence of good character. In Luther, the accused's defense to rape charges was consent of the alleged victim. The credibility of the parties was the central issue at trial. The majority misapplies Luther which stated, "In a case where virtually the only issue is the credibility of the witness for the Commonwealth versus that of the defendant, failure to explore all available alternatives to assure that the jury heard the testimony of a known witness who might be capable of casting doubt upon the truthfulness of the Commonwealth witness is ineffective assistance of counsel." Id., 463 A.2d at 1080 (emphasis added). Such was not the case here. The credibility of the prosecution's witnesses, victims of armed robbery and sexual assault, was not an issue at trial and it is likely that appellant's trial counsel soundly believed that character witnesses would not have cast doubt upon the victims' identification testimony. Because it is not unsound, as a matter of advocacy, to chose an alibi defense over character defense, appellant's trial counsel did not render ineffective assistance under the Davis standards. In turn, appellant's prior appellate counsel did not render ineffective assistance for failing to raise trial counsel's ineffectiveness on appeal. For the foregoing reasons, I would dismiss the appeal and affirm the judgment of sentence. NOTES [1] Anders v. California, 386 U.S. 738, 87 S. Ct. 1396, 18 L. Ed. 2d 493 (1967). [2] The Commonwealth has suggested that trial counsel acted reasonably in relying upon the pre-trial investigation of another attorney who had originally been retained to represent appellant, and who eventually died some time in 1979. The record reveals, however, that trial counsel was first appointed on a standby basis in May, 1978 because of the poor health of appellant's retained counsel. This was over one and one-half years prior to commencement of appellant's trial. Without any evidence as to trial counsel's actions during this time, we will not assume that he acted reasonably by relying solely upon the work done by prior counsel without making further inquiry or investigation regarding the trial strategies available to appellant. Counsel at least had an obligation to inquire as to the advice given by prior counsel regarding the options available. On the record now before this court, however, such a determination is not possible.	01-03-2023	10-30-2013

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