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https://www.courtlistener.com/api/rest/v3/opinions/2857561/	FSB v. Dorst IN THE COURT OF APPEALS, THIRD DISTRICT OF TEXAS, AT AUSTIN NO. 3-92-109-CV FIRST STATE BANK, SUCCESSOR IN INTEREST TO COMMUNITY NATIONAL BANK, APPELLANT vs. RONALD L. DORST AND CLARICE DORST, APPELLEES FROM THE DISTRICT COURT OF TRAVIS COUNTY, 345TH JUDICIAL DISTRICT NO. 457,644, HONORABLE JAMES R. MEYERS, JUDGE PRESIDING This is a usury case. First State Bank ("FSB"), appellant, sued Ronald and Clarice Dorst, appellees, to recover the remaining balance on two promissory notes, each secured by a deed of trust, and to obtain judgment allowing judicial foreclosure of the property securing the notes. The Dorsts counterclaimed that the deeds of trust were usurious on their face. The case was tried to the court on stipulated facts. The trial court concluded that the two deeds of trust were usurious and rendered judgment that the notes and the liens securing them be canceled; that the Dorsts recover their attorney's fees; and that FSB take nothing by its claim. On appeal, FSB complains in a single point of error that the trial court erred in concluding that the deeds of trust were usurious and in rendering judgment that FSB take nothing. We will reverse the judgment of the trial court and render judgment that the Dorsts take nothing on their counterclaim. We will remand the portion of the cause requesting judicial foreclosure to the trial court for further proceedings. BACKGROUND FSB is the current owner and holder of two promissory notes executed by the Dorsts on July 12, 1982, and secured by two deeds of trust recorded in the real property records of Travis County, Texas. The notes provided for interest at the rate of 10.875%, with an increase to 11.875% on August 4, 1984. Both deeds of trust contained identical "sales clauses" whereby FSB was entitled to escalate the interest rate by not more than 2% if the property was sold during the term of the note. Neither property was ever sold. In addition, both deeds of trust contained identical "usury savings clauses" whereby FSB disclaimed any right to receive or collect interest in excess of the highest rate allowed by applicable law. The Dorsts defaulted in the performance of their obligations under the notes and deeds of trust, and the parties agree that as of August 2, 1989, the amount of unpaid principal and accrued interest on the notes was $62,776.79. FSB acknowledges in its brief to this Court that since FSB filed this suit, the Dorsts have filed Chapter 7 bankruptcy and been discharged from any personal liability under the notes. DISCUSSION In its only point of error, FSB complains that the trial court erred in concluding that the deeds of trust violated Texas usury statutes and in rendering judgment that FSB take nothing by its claim. See Tex. Rev. Civ. Stat. Ann. art. 5069-1.06 (West 1987). As reflected in its conclusions of law, the trial court concluded that the deeds of trust were usurious on their face and that the usury savings clauses did not cure such usury. The Dorsts successfully argued in the court below that the sales clause included in each deed of trust evidenced a contract for usurious interest and, as a result, the savings clause would not allow FSB to escape usury penalties by disclaiming an intention to do what it had contracted to do. In essence, the Dorsts argued that the sales clause must be viewed independently from the savings clause when determining whether the loan documents constitute a contract for usurious interest. The Dorsts' assertion that the deeds of trust are usurious on their face is based solely on the sales clause included in both deeds of trust, which states in pertinent part: "Grantor shall obtain Beneficiary's prior written approval of any sale of the real property herein described . . . and Beneficiary shall have the right to escalate the interest rate at not more than 2% per transaction . . . ." (Emphasis added.) The Dorsts rely on the general rule that a contract is usurious as a matter of law if there is any contingency by which the lender may receive more than the lawful rate of interest. See Smart v. Tower Land & Inv. Co., 597 S.W.2d 333, 341 (Tex. 1980); Dixon v. Brooks, 678 S.W.2d 728, 729 (Tex. App.--Houston [14th Dist.] 1984, writ ref'd n.r.e.). The Dorsts argue that the sales clause allowing the lender to escalate the contractual interest rate by up to 2% for each sale of the property could result in an interest rate greater than that allowed by law. Accordingly, they argue, the unlimited nature of this clause makes the deeds of trust usurious as a matter of law. As suggested by the Dorsts, it is true that if the properties were sold multiple times and if FSB increased the interest rate 2% each time, the interest rate could potentially exceed the rate allowed by applicable law. Thus, were we to view the sales clause in isolation and apply the general rule regarding contingencies, we might well determine that the deeds of trust were usurious based on this contingency provision. We conclude, however, that the sales clause cannot be viewed in isolation. Rather, we must consider the contract as a whole in deciding whether it is usurious: [W]hen the contract by its terms, construed as a whole, is doubtful, or even susceptible of more than one reasonable construction, the court will adopt the construction which comports with legality. It is presumed that in contracting parties intend to observe and obey the law. For this reason the court will not hold a contract to be in violation of the usury laws unless, upon fair and reasonable interpretation of all its terms, it is manifest that the intention was to exact more interest than allowed by law. Smart, 597 S.W.2d at 340-41 (quoting Walker v. Temple Trust Co., 80 S.W.2d 935 (Tex. 1935)) (emphasis added). In addition to the sales clause, the deeds of trust at issue in the present case also contain identical savings clauses, which expressly provide: Nothing herein or in said note contained shall ever entitle Beneficiary, upon the arising of any contingency whatsoever, to receive or collect interest in excess of the highest rate allowed by the applicable laws on the principal indebtedness hereby secured or on any money obligation hereunder and in no event shall Grantors be obligated to pay interest thereon in excess of such rate. (Emphasis added.) Texas courts, beginning with Nevels v. Harris, 102 S.W.2d 1046 (Tex. 1937), have repeatedly acknowledged the validity of usury savings clauses and have, in appropriate circumstances, enforced such clauses to avoid a violation of the usury laws. See Woodcrest Assoc. v. Commonwealth Mortgage Corp., 775 S.W.2d 434, 437-38 (Tex. App.--Dallas 1989, writ denied) (citing 49 years of case law supporting validity of savings clauses). The Dorsts acknowledge that Texas courts view savings clauses favorably. They contend, however, that the trial court's judgment is correct because the mere presence of a savings clause in a contract will not rescue a contract that is usurious by its explicit terms. Nevels, 102 S.W.2d at 1050; Woodcrest Assoc., 775 S.W.2d at 438. In analyzing the loan documents, the Dorsts argue that the deeds of trust are usurious by the explicit terms of the sales clause, because the operation of the clause is unlimited. In other words, there is no cap to the interest rates FSB may charge. Further, they argue that because the clause is usurious by its explicit terms, the savings clause cannot operate to cure such usury. The Dorsts' reasoning is circular. They claim that the deeds of trust are explicitly usurious because the savings clause may not be considered. A savings clause is ineffective, however, only if it is directly contrary to the explicit terms of the contract. In Nevels, the supreme court stated: Of course we do not mean to hold that a person may exact from a borrower a contract that is usurious under its terms, and then relieve himself of the pains and penalties visited by the law upon such an act by merely writing into the contract a disclaimer of any intention to do that which under his contract he has plainly done. Nevels, 102 S.W.2d at 1050. As a simple example, a creditor may not specifically contract for a 30% interest rate and then avoid the imposition of usury penalties by relying on a savings clause that declares an intention not to collect usurious interest. In contrast, under the facts of the present case, the savings clause is not directly contrary to the explicit terms of the sales clause; rather, the savings clause supplements and explains the intent of the parties in contracting for the sales clause by limiting its application to nonusurious charges of interest. The Texas Supreme Court has indicated that a savings clause may cure an open-ended contingency provision the operation of which may or may not result in a charge of usurious interest. Smart, 597 S.W.2d at 340-41. The Smart case involved a contract that was potentially usurious depending on the occurrence of a contingency--default in payment on a note. Under the terms of the note, the debtor had prepaid three years worth of interest. The creditor had specifically contracted for retention of unearned prepaid interest in the event of acceleration. Depending on when the default and acceleration occurred, such retention might or might not have resulted in the collection of usurious interest. In construing this contract, the court applied the general rule that a contract is usurious as a matter of law if there is any contingency by which the lender may receive more than the lawful rate of interest. However, rather than look at the clause that allowed the creditor to retain unearned interest in isolation, the court reviewed the contract as a whole. The court found the absence of a usury savings clause to be dispositive: Having affirmatively provided for the retention of unearned interest, [the creditor] was obliged to make further provisions ensuring that the retention of this interest would not result in a usurious transaction. Neither the note nor the deed of trust, nor any of the other documents contains any kind of usury savings clause whatever. In the absence of a savings clause, we find that [the creditor's] expressed authorization to retain excess unearned interest overcomes the presumption of legality accorded to allegedly usurious contracts. Smart, 597 S.W.2d at 341 (emphasis added) (citation omitted). This Court, too, has considered the validity of a usury savings clause in the context of a contingency-based usury claim. See Affiliated Capital Corp. v. Commercial Credit Bank, 834 S.W.2d 521 (Tex. App.--Austin 1992, no writ). In that case, the appellant claimed that a contingency that could possibly exact usurious interest made the contract usurious on its face and could not be cured by a savings clause. We rejected that claim, concluding that a savings clause will defeat a claim of usury where a contingency may or may not exact usurious interest. Id. at 526. Applying this same analysis to the present case, it is obvious that occurrence of the contingency (sale of the property) would not necessarily have resulted in a usurious interest rate. Indeed, numerous sales would have been required before a usurious rate could even have been possible. Because usury was not a necessary result of the occurrence of the contingency, it is appropriate to construe the sales clause in light of the savings clause. Doing so makes clear the parties' intention that FSB not have the right to charge usurious interest in the event of multiple sales of the property securing the deeds of trust. The savings clause has the effect of "capping" the potential interest rate chargeable under the sales clause. We do not believe that the Dorsts could prevail on their usury claim had the deeds of trust provided in a single sentence that "Beneficiary shall have the right to escalate the interest rate at not more than 2% per transaction; however, in no event shall Beneficiary be entitled to escalate the interest to a rate in excess of the highest rate allowed by the applicable law." Reading the sales clause and the usury savings clause together in the present case yields the same result. Usury statutes are penal in nature and, as a result, they must be strictly construed in such a way as to give the lender the benefit of the doubt. Steves Sash & Door Co. v. Ceco Corp., 751 S.W.2d 473, 476 (Tex. 1988); PJM, Inc. v. Walter Clark Advertising, Inc., 624 S.W.2d 282, 285-86 (Tex. App.--Dallas 1981, writ ref'd n.r.e.). Under this long-standing rule of construction, we refuse to interpret the usury statutes so broadly as to allow imposition of the harsh usury penalties where the creditor's only "error" was to place a limiting clause in a separate paragraph of the loan documents instead of immediately following the contingency provision. We conclude, therefore, that as a matter of law the deeds of trust in the present case are not usurious. We sustain FSB's point of error. We reverse that portion of the trial court's judgment cancelling the notes and deeds of trust and awarding the Dorsts attorney's fees and render judgment that the Dorsts take nothing by their counterclaim. We also reverse that portion of the trial court's judgment decreeing that FSB take nothing on its suit for judicial foreclosure; however, because of the paucity of information in this appellate record regarding the Dorsts' subsequent bankruptcy proceedings, we are reluctant to render judgment as to FSB's request for permission to judicially foreclose on the property securing the notes. Accordingly, we will, in the interest of justice, remand that portion of the cause to the trial court for further proceedings. See Tex. R. App. P. 81(c); U.S. Fire Ins. Co. v. Carter, 473 S.W.2d 2 (Tex. 1971). J. Woodfin Jones, Justice [Before Chief Justice Carroll, Justices Jones and Kidd] Reversed and Rendered in Part; Reversed and Remanded in Part Filed: December 23, 1992 [Publish]	01-03-2023	09-05-2015
https://www.courtlistener.com/api/rest/v3/opinions/301934/	456 F.2d 514 UNITED STATES of Americav.Robert G. BLAIR, Appellant. No. 19452. United States Court of Appeals,Third Circuit. Argued Jan. 5, 1972.Decided Feb. 23, 1972. William J. Brady, Jr., Philadelphia, Pa., for appellant. Victor L. Schwartz, Asst. U. S. Atty., Philadelphia, Pa. (Louis C. Bechtle, U. S. Atty., Philadelphia, Pa., on the brief), for appellee. Before KALODNER, GANEY* and MAX ROSENN, Circuit Judges. OPINION OF THE COURT MAX ROSENN, Circuit Judge. 1 This is an appeal from a judgment of conviction in the District Court for the Eastern District of Pennsylvania for causing altered securities to be transported in interstate commerce in violation of 18 U.S.C. Sec. 2314 (1970).1 2 Appellant raises three main contentions on appeal: (1) there was insufficient evidence for the case to go to the jury on the theory that he was the principal who caused the Western Union money orders to be transported in interstate commerce; (2) there was prejudicial admission of hearsay testimony; and (3) the district judge's charge was confusing, inaccurate, and prejudicial. 3 We shall deal with the issues in that order. 4 (1) THE SUFFICIENCY OF THE EVIDENCE 5 Shur Kleen Co., Inc. was a small store located on West Allegheny Avenue, Philadelphia, Pa., containing three or four racks of clothing. Its manager identified himself as "Buddy Blair." On August 12, 1969, a checking account was opened in the name of the company with an initial deposit of $350. The signature card for the account specified the precise Allegheny Avenue address, named "Fred Blair" as company president and one of two persons authorized and required to sign checks on the account. The other person authorized to sign checks on the account was one Diane Sproul. 6 On November 18, twice on November 24 and once on November 28, 1969, Western Union money orders2 were deposited to the Shur Kleen Company account with the Girard Trust Bank. The orders were originally made out in the amounts of $10.00, $10.10, $10.05 and $20.00, but it was shown that each was raised to $20,000 prior to deposit. Three of the money orders were sent from 372 Central Park West in New York City. One was signed "Arthur Lang," one, "Jade, Inc.," and the third "Milton Elly." The fourth was sent from 3438 Central Avenue, Newark, New Jersey, although the sender was not identified. Three of the money orders included the following message: "Hope this payment brings all accounts up to date." 7 There was testimony that the money orders were received by Shur Kleen without having been altered, so that the change in the stated values would have had to occur between the delivery to Shur Kleen and the deposit at the bank. Once Girard accepted these money orders, it shipped them to the paying bank in New York City, creating the interstate transportation required by 18 U.S.C. Sec. 2314. There is no proof as to who deposited the altered money orders, although appellant's fingerprint was on one of them. 8 There is a great deal of proof that appellant Blair began drawing large checks shortly after the deposits began. On November 21st, three days after the first money order was deposited, Blair went to the bank to inquire about how he could prepare a payroll for his business. Between November 21st and 28th, appellant withdrew large sums from the Shur Kleen account. These withdrawal checks were for $8,000, $9,000, $4,000, $10,000, $10,000, $20,000, and $6,000. Several of the checks were payable to the order of Girard Trust Company with receipts on the reverse side by Fred Blair indicating that he received the cash, and at least two included notations that they were for Shur Kleen's payroll. A treasurer's check on the bank for $10,000 was issued to the order of Fred Blair and paid by Girard Trust Company on the endorsement of "Fred Blair." The Western Union orders were drawn on the Chase Manhattan Bank in New York City. It discovered the alterations and refused payment. 9 Appellant contends that the evidence was insufficient to go to the jury; that at best the judge should have given a charge on aiding and abetting under 18 U.S.C. Sec. 2 (1970). 10 On reviewing the motion for acquittal, "[t]he verdict of a jury must be sustained if there is substantial evidence, taking the view most favorable to the Government." Glasser v. United States, 315 U.S. 60, 80, 62 S. Ct. 457, 469, 86 L. Ed. 680 (1942); United States v. Provenzano, 334 F.2d 678, 683-684 (3d Cir.), cert. denied 379 U.S. 947, 85 S. Ct. 440, 13 L. Ed. 2d 544 (1964). The evidence need not exclude every other hypothesis interpreting the facts introduced at trial, provided that they do establish a case from which the jury can find the defendant guilty beyond a reasonable doubt. United States v. Boyle, 402 F.2d 757 (3d Cir. 1968), cert. denied 394 U.S. 934, 89 S. Ct. 1207, 22 L. Ed. 2d 464 (1969); United States v. Giuliano, 263 F.2d 582, 584 (3d Cir. 1959).3 11 In this case, the evidence, particularly when viewed in the light most favorable to the Government, presents an overwhelming case that the appellant is guilty beyond a reasonable doubt. The only piece missing is evidence that the appellant personally deposited the money orders at the Girard Bank. The question then becomes whether such actions can be inferred, and the circumstantial evidence strongly supports such inference. Blair was president of the company to which the money orders were sent, and he was one of the two people on the bank's signature card. His fingerprint was on one of the money orders. Three days after the first of the orders was deposited, he personally visited the bank and inquired about how to withdraw cash for payrolls. On the same day, and throughout the following week, he withdrew several large checks, some of which were marked for payrolls. However, as already indicated, Shur Kleen was a small store with very little in it. 12 Such circumstantial evidence would permit a finding that Blair was the principal involved in the bank transactions and that he carefully laid the plan to perpetrate the fraud on the bank. Were we to look upon this evidence charitably in favor of the appellant, it nonetheless leads to the conclusion that he was an aider and abettor. Such a distinction will not aid the appellant because proof of aiding and abetting will sustain an indictment charging the substantive offense. United States v. Heithaus, 377 F.2d 484, 485 n. 1 (3d Cir. 1967); United States v. Provenzano, supra, 334 F.2d at 690. 13 (2) HEARSAY TESTIMONY 14 FBI agent Berry testified at the trial that he had gone to 372 Central Park West, New York City, and determined that none of the alleged senders of the money orders lived at that address. The defense made an objection, contending that the "determination" was hearsay. Appellant contends that either tenants or the manager of the building should have been brought in to testify. 15 In spite of the Government's efforts to characterize the testimony as a determination made independently by the agent, Berry was merely repeating statements made by others about events not within his personal knowledge. The testimony was therefore hearsay. Paschal v. United States, 306 F.2d 398, 401-402 (5th Cir. 1962). There was competent evidence however, that the address of the sender of the fourth money order, 3438 Central Avenue, Newark, New Jersey, was wholly fictitious. While the admission of the hearsay was error, we find that it was harmless. Cf. Chambers v. Maroney, 399 U.S. 42, 53, 90 S. Ct. 1975, 26 L. Ed. 2d 419 (1970); Chapman v. California, 386 U.S. 18, 87 S. Ct. 824, 17 L. Ed. 2d 705 (1967). 16 The indictment charged the defendant in the conjunctive with causing to be transported in interstate commerce a security which he knew was falsely made and altered. The statute involved, 18 U.S.C. Sec. 2314, is in the disjunctive and requires only that the security be falsely made or altered. 17 Thus, the indictment charged more than the Government was required to prove to convict. The Government introduced overwhelming evidence showing that the money orders were altered. It adduced sufficient circumstantial evidence independent of the alleged hearsay to sustain a finding that the appellant knew of the alteration of all of the money orders.4 The proof pertaining to the fictitious senders was only relevant to show false making. Had the indictment conformed to the statute, no proof of the false making would have been necessary to convict. The inclusion of the second prohibited act is of no consequence because proof of either will sustain the conviction. Crain v. United States, 162 U.S. 625, 635, 16 S. Ct. 952, 40 L. Ed. 1097 (1896); United States v. Conti, 361 F.2d 153, 158 (2d Cir. 1966). Under these circumstances, the hearsay evidence was harmless. 18 (3) THE CHARGE TO THE JURY 19 Appellant raises several questions regarding the propriety of the district court's charge. Although the instructions to the jury may have been disjointed and may have lacked artistic formulation, none of the issues presented involve prejudicial error. 20 Early in the charge, the trial judge commented: 21 The charge there is that Mr. Blair did cause an altered security to be transported, and I don't want to comment on it, but I can't avoid saying that the money orders in question were altered. Now, you may find that they were not, I don't know, that is your province, but if you do find that they were altered and they were transported, then if it was done knowingly, with intent to defraud, that is a criminal act. (emphasis ours) 22 Trial counsel objected that the statement emphasized above usurped the role of the jury as the finder of fact. We need not decide whether it was prejudicial because we believe that the cautionary comment immediately thereafter corrected the error, if any. Moreover, the trial judge went further in assuring that the jurors understood it was their prerogative to find or not to find that the money orders were altered. After a side bar conference at which time counsel objected to the statement, the judge cautioned the jury: 23 Members of the jury, you will recall that earlier in my charge I stated that in my opinion these money orders were altered. Now, if you think they were not, you use your own judgment, because yours prevails, not mine. In other words, that is one of the facts you must determine: Were they altered? I said I thought they were, but no matter what I think, it is what you think that prevails. 24 Above and beyond the foregoing disclaimers, a federal district judge has the privilege of fairly commenting on the evidence, Quercia v. United States, 289 U.S. 466, 53 S. Ct. 698, 77 L. Ed. 1321 (1933); Patton v. United States, 281 U.S. 276, 288, 50 S. Ct. 253, 74 L. Ed. 854 (1930). He may also express his opinion upon the facts so long as "he makes it clear to the jury that all matters of fact are submitted to their determination." Quercia v. United States, supra, 289 U.S. at 469, 53 S. Ct. at 699. This comment of the trial judge was within the limits of judicial discretion. 25 Appellant also contends that it was improper for the judge to comment upon his counsel's statement in his closing remarks to the jury. Counsel argued that the failure of the Government to call the tellers from the Girard Bank created a reasonable doubt that the defendant had not in fact deposited the checks. The judge said: 26 It was argued to you-and it is a proper argument to make-that this witness didn't appear and that witness didn't appear. I think every witness the government could or should produce did appear, personally, and if you believe that Mr. Blair knew that these were altered certificates and that he took them to the bank in Philadelphia with the fraudulent intent, knowingly and wilfully, as I have said, to collect on them either through a deposit or directly or any other way, and that by his doing that they went through banking channels from Philadelphia to New York, why then he can be found guilty, it you so find that beyond a reasonable doubt. (emphasis ours) 27 Appellant contends that this statement destroyed the trial judge's impartiality and made him an advocate of the Government's cause. Besides specifically noting that the argument was a proper one for the defense to make, the judge again removed no material element from the case. Our reading of the instruction leaves us satisfied that the issue of the doubt created by the lack of evidence from the tellers was still before the jury, and that the comment was not beyond judicial discretion. United States v. Kravitz, 281 F.2d 581, 584 (3d Cir. 1960), cert. denied 364 U.S. 941, 81 S. Ct. 459, 5 L. Ed. 2d 372 (1961). 28 Additionally, appellant contends that the district court failed to give several instructions requested. Three of the requested instructions, numbers five, six and ten, dealt with the material elements of the crime. The trial judge gave adequate instructions on each point, but did not follow the language outlined by defense counsel. It is well settled that there is no error to refuse to instruct as counsel wishes if the charge to the jury is correct. United States v. Grunewald, 233 F.2d 556, 569 (2d Cir. 1956), rev'd on other grounds, 353 U.S. 391, 77 S. Ct. 963, 1 L. Ed. 2d 931 (1957). See also, United States v. Sacco, 436 F.2d 780, 783 (2d Cir. 1971); United States v. Alker, 260 F.2d 135, 152 (3d Cir. 1958), cert. denied 359 U.S. 906, 79 S. Ct. 579, 3 L. Ed. 2d 571 (1959). 29 The judge refused to charge on two other submitted instructions, numbers eight and nine, which dealt with defense theories. Instruction eight would have had the jury consider the withdrawal of $67,000 over a week's time from the Shur Kleen account rather than the full $80,000 at once as sufficient evidence that the scheme was not fraudulent. Instruction nine would have charged that even if the defendant had knowledge of the offense, that knowledge alone would not satisfy the requirement that the Government prove that the defendant transported or caused the transportation of the altered money orders. 30 These two requests presented a difficult problem for the judge. He was bound to give the substance of a requested instruction relating to any defense theory for which there was any foundation in the evidence. cf. Strauss v. United States, 376 F.2d 416, 419 (5th Cir. 1967). He also had to avoid diverting the jury by idle speculation and frivolous considerations. A confused jury can give as improper a verdict as one which has failed to receive some significant instruction. Therefore, the charge should direct and focus the jury's attention on the evidence given at trial, Williams v. United States, 76 U.S.App.D.C. 299, 131 F.2d 21, 23 (1942), not on far fetched and irrelated ideas that do not sustain a defense to the charges involved. In this case, neither instruction requested stated legally cognizable and valid defenses.5 At best, instruction nine was a statement of the obvious fact that the jury had to find something more than mere knowledge of the alterations to convict. The judge so charged. Instruction eight grasped at straws and bordered on the frivolous. 31 We have examined the appellant's remaining contentions pertaining to the charge and find no merit in them. 32 The judgment of the district court will be affirmed. * Judge Ganey participated in the argument and disposition of this case but died before this opinion was filed 1 18 U.S.C. Sec. 2314 (1970) reads in part: "Whoever, with unlawful or fraudulent intent, transports in interstate or foreign commerce any falsely made, forged, altered, or counterfeited securities or tax stamps, knowing the same to have been falsely made, forged, altered, or counterfeited . . . ." This paragraph does not specifically include "causing to be transported," as does the second paragraph of the section. Notwithstanding the difference, it has been held that it is sufficient if the defendant causes the securities to be transported in interstate commerce. Pereira v. United States, 347 U.S. 1, 7-9, 74 S. Ct. 358, 98 L. Ed. 435 (1954), United States v. Ackerman, 393 F.2d 121, 122 (7th Cir. 1968). 2 The money orders were apparently made out to Shur Kleen Company or Shur Klein Co. The misspelling is not material here 3 This test was adopted in United States v. Allard, 240 F.2d 840 (3d Cir. 1957), after the Supreme Court's decision in Holland v. United States, 348 U.S. 121, 135-136, 75 S. Ct. 127, 99 L. Ed. 150 (1954) called into question any further reliance on our earlier test announced in United States v. Russo, 123 F.2d 420, 423 (3d Cir. 1941), that the "directly proven circumstances be such as to exclude every reasonable hypothesis but that of guilt." 4 Appellant seems to urge that the trial judge confused the jury by interchanging the word "forgery" for the terms "false making and altering" that were charged in the indictment. This substitution was proper; forgery has been defined not only in terms of the falsity of execution of the document but also as its material alteration. Carr v. United States, 278 F.2d 702, 703 (6th Cir. 1960); Rowley v. United States, 191 F.2d 949, 950 (8th Cir., 1951) 5 E. g., in Strauss v. United States, 376 F.2d 416 (5th Cir. 1967), the requested charge that was not made involved a theory with some basis in the record that would have been a complete defense to the prosecution. The Ninth Circuit in Pratti v. United States, 389 F.2d 660 (1968), found that failure to charge as requested on the Government's burden of proof with regard to the defense of entrapment was error. Such cases involve material elements of the defense's arguments, and failure to charge on these points would amount to undermining the jury's ability to find the defense on these points. Neither instruction in our case is such a material element	01-03-2023	08-23-2011
https://www.courtlistener.com/api/rest/v3/opinions/1532284/	305 B.R. 240 (2003) In re Charlotte PRICE, Debtor. LaSalle National Bank c/o Wilshire Credit Corporation, Movant, v. Charlotte Price, Margaret Jenkins, Respondents. No. 02-24804PM. United States Bankruptcy Court, D. Maryland, at Greenbelt. March 6, 2003. 241 Richard J. Link, for debtor Charlotte Price. Gene Jung, for Movant, LaSalle National Bank, c/o Wilshire Credit Corporation. MEMORANDUM OF DECISION PAUL MANNES, Bankruptcy Judge. This case comes before the court on a Motion for Relief from Stay filed by LaSalle National Bank as Trustee for the registered holders of Salomon Brothers Mortgage Securities VII, Inc., Series 1997-HUD2. The issue involved is whether a foreclosure sale in Maryland is complete for the purposes of § 1322(c)(1) of the Bankruptcy Code at the time the sale is conducted and the auctioneer's gavel falls, or, in the alternative, whether the sale is completed only after the final order of ratification of the sale. This bankruptcy case under Chapter 13 was filed December 27, 2002, some ten (10) days after Jo-Lo, Inc., a third party, purchased the Debtor's residence at foreclosure. The court will grant the relief sought for the reasons previously stated by this court in such cases as In re Denny, 242 B.R. 593 (Bankr.Md.1999); In re De Souza, 135 B.R. 793 (Bankr.Md.1992); In re Edwards, 62 B.R. 609 (Bankr.Md.1986); In re Ali, 2001 WL 1739144 (Bankr.Md.2001). As Judge Keir points in the Denny case, the debtor's right to cure a mortgage default in Maryland ends on the date of the actual sale. After the foreclosure sale, the purchaser at foreclosure has the equitable interest in the land commensurate with that conveyed by the deed of trust and is entitled to legal title upon the final ratification of the sale by the Circuit Court and upon the payment of the purchase price. The trustees under the deed of trust hold the legal title in trust for Jo-Lo, Inc., for the completion of the sale. Completion is marked by ratification by the Circuit Court, the satisfaction of the purchase price, and the delivery of the deed. The purchaser's equitable interest is subject to the Trustee's right to enforce the payment of any of the purchase-money by a resale at the risk and expense of Jo-Lo, Inc. "In short, after the sale, equity regarded the property in the land as in the buyer, and the property or the price as in the assignee and mortgagor. It is true that the sale is incomplete until ratified by the court, and that the purchaser's title is an inchoate and equitable one from 242 the day of sale until the final ratification, which, however, retroacts so that the purchaser is regarded by relation as the equitable owner from the time of the sale, and entitled to all the intermediate rents and profits of the estate. Although he thus becomes the substantial owner from the time of the sale and the property is at his gain if it appreciate and at his risk in case of loss by fire or through depreciation, yet, notwithstanding the purchase money be paid, the legal title of the purchaser does not vest until the deed to him is delivered, but upon its delivery, this deed is not effective merely from the date of its execution, but vests the property in the purchaser from the day of sale. It follows that, after the day of sale, the mortgagor's equity of redemption generally ceases to exist as an interest in land." Union Trust Co. v. Biggs, 153 Md. 50, 55-56, 137 A. 509, 512 (1927). As Justice Stevens explained for a unanimous Court, questions as to real property should be resolved by reference to state law. Butner v. United States, 440 U.S. 48, 99 S.Ct. 914, 59 L.Ed.2d 136 (1979). Thus, Maryland law is controlling. Indeed, as the Court of Special Appeals recently pointed out in the case of GE Capital Mortgage Services, Inc. v. Edwards, 144 Md.App. 449, 798 A.2d 1187 (2002), a motion for possession following a foreclosure but before ratification of the sale is not always premature. See also, Huffman v. Maryland National Bank, 989 F.2d 493, 1993 WL 83359 (CA4 1993) (unpublished); IA Construction Corporation v. Carney, 341 Md. 703, 710-11, 672 A.2d 650, 654-55 (1996) (The day of the sale marks the close of the period in which any creditor could acquire a lien upon the mortgagor's interest in the mortgage, land or equity redemption by simply obtaining a judgment against the mortgagor.). Debtor cites two cases in support of her argument challenging the Denny reasoning. The first, In re Clark, 738 F.2d 869 (C.A.7 1984), applied Wisconsin law. However, a Wisconsin foreclosure does little more than determine that the mortgagor is in default, the amount of principal and interest unpaid and the amounts due to the plaintiff-mortgagee. The court did not reach the question whether the same result obtains in a state in which the effect of a judgment of foreclosure is different. Id. at 874. Another case cited by Debtor is In re Barham, 193 B.R. 229, 232 (Bankr.E.D.N.C.1996), that was decided under North Carolina law. That state has an upset bid procedure whereby any person may purchase real property after a foreclosure sale by bidding a minimum of 10% more than the sale price or the last upset bid, provided that the bid is made prior to the close of business on the 10th day after the sale or the last upset bid. As the court explained in Barham, Indeed, North Carolina cases interpreting the foreclosure statutes have stated that the final and highest bidder at a foreclosure sale is merely a "proposed purchaser" who has no rights, or entirely voidable rights, to the property until the upset bid period terminates. Cherry v. Gilliam, 195 N.C. 233, 141 S.E. 594 (1928). Another case held that a foreclosure sale "cannot be consummated" until the expiration of the upset bid period. Shelby Bldg. & Loan Ass'n v. Black, 215 N.C. 400, 2 S.E.2d 6 (1939). Id. at 232, 141 S.E. 594. An appropriate order will entered.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532308/	305 B.R. 67 (2003) In re Dona H. SLY Joann E. Sly, Debtors. Dona H. Sly Joann E. Sly, Plaintiffs, v. United States of America, (Treasury Department, Internal Revenue Service Division), Defendant. Bankruptcy No. 90-04377, Adversary No. 01-80025. United States Bankruptcy Court, N.D. Florida, Pensacola Division. October 3, 2003. 68 James L. Chase, Pensacola, Florida, for Dona and Joann Sly. Rebeccah L. Bower, Washington, D.C., for United States of America. 69 ORDER DENYING PLAINTIFFS' MOTION TO STRIKE, DENYING DEFENDANT SUMMARY JUDGMENT ON ITS LACHES DEFENSE AND GRANTING DEFENDANT SUMMARY JUDGMENT ON ITS POSTPETITION ASSESSMENT OF 1983 TAXES DEFENSE MARGARET A. MAHONEY Bankruptcy Judge. This case is before the Court on the defendant's summary judgment motion alleging that the plaintiffs' federal income taxes were not discharged in their chapter 7 bankruptcy case. This Court has jurisdiction to hear this matter pursuant to 28 U.S.C. §§ 157 and 1334 and the Order of Reference of the District Court. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2) and the Court has the authority to enter a final order. For the reasons given below, the Court finds that Dona and Joann Sly's motion to strike is denied and the Internal Revenue Service's summary judgment motion is denied in part and granted in part. FACTS The debtors, Dona and Joann Sly, filed a chapter 11 bankruptcy case in this Court on April 30, 1990. It was subsequently converted to a chapter 7 case and the debtors received a discharge on March 3, 1993. In 1995, the IRS informed the Slys of its position that their 1980 through 1983 tax liabilities were not affected by the discharge.[1] The Slys replied shortly thereafter that it was their position that their taxes were discharged. Neither party filed a dischargeability action at that time. The Slys filed an adversary proceeding seeking to determine the dischargeability of their federal income tax debt to the Internal Revenue Service ("IRS") on June 7, 2001. They argued that their 1980 through 1983 tax liabilities were discharged by their chapter 7 bankruptcy case. The IRS argued that the Slys' tax liabilities were not discharged because the Slys filed fraudulent tax returns. Both parties filed motions for summary judgment based on collateral estoppel grounds. The Court denied both motions and its findings are incorporated by reference. The IRS has filed a second motion for summary judgment. This time, the IRS argues that the Slys are barred by laches from pursuing a dischargeability action regarding their 1980 through 1983 tax liabilities. It asserts that laches should be applied to bar the Slys from now bringing their complaint because the government destroyed most of the records pertaining to the Slys's tax liabilities when the Slys did not attempt to discharge them during their bankruptcy case. The IRS further argues that the Slys' 1983 tax liabilities are excepted from discharge pursuant to §§ 523(a)(1)(A) and 507(a)(8)(A)(iii) of the Bankruptcy Code. The Slys filed a motion to strike the IRS' summary judgment motion because it was filed with the Court four days after the deadline set for dispositive motions to be filed. They also filed affidavits in response to the IRS' second summary judgment motion. In their affidavits, the Slys state that they believed their tax liabilities were already discharged in their chapter 7 bankruptcy case; therefore, they did not pursue a dischargeability action against the IRS until the IRS recently claimed taxes were still owing for 1980 through 1983. They argue that the government's laches defense should not bar them from bringing their complaint because the government is to blame for the destruction of 70 records relating to their tax liabilities. The Slys further argue that, at the very least, laches is a fact intensive defense that is not appropriately raised in a summary judgment motion. LAW The Slys filed a motion to strike the IRS' summary judgment motion because it was filed beyond the Court's deadline for dispositive motions. The Court concludes that the IRS' summary judgment motion should be allowed because its defenses, if not dealt with now, will merely be delayed until trial. There is no reason to wait to determine these issues. Moreover, the Court offered the Slys additional time to respond to the IRS' late filed motion but they declined. Therefore, the Court will now consider the IRS' summary judgment motion. A motion for summary judgment should be granted if the moving party can 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." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986). As the party seeking summary judgment, the IRS has the burden of demonstrating that no genuine issue as to any material fact exists, and that it is entitled to judgment as a matter of law. Celotex Corp. v. Catrett, 477 U.S. 317, 323, 106 S.Ct. 2548, 91 L.Ed.2d 265 (1986). The Court must view the underlying facts, and all reasonable inferences drawn therefrom, in the light most favorable to the Slys, the non-moving party. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986). A. The first argument made by the IRS in its summary judgment motion is that the Slys' dischargeability complaint should be barred by laches because it is untimely. The Bankruptcy Rules provide that a complaint to determine the dischargeability of a debt, with exceptions not applicable in this case, "may be filed at any time." Fed. R. Bankr.P. 4007(b). Due to the conflict of the laches doctrine with Rule 4007(b), the Court must consider whether laches is applicable to dischargeability actions governed by Rule 4007(b). Based upon this Court's research, this is a case of first impression in this Circuit. However, in Beaty v. Selinger (In re Beaty), 306 F.3d 914 (9th Cir.2002), the Ninth Circuit Court of Appeals thoroughly addressed an analogous dischargeability action under § 523(a)(3)(B) of the Bankruptcy Code in which the defendant invoked laches. The Beaty court held that laches is available as a defense in a § 523(a)(3)(B) dischargeability action involving a debt not listed or scheduled by a creditor. Beaty at 923. The Ninth Circuit Court of Appeals enumerated four reasons that laches is available as a defense in a § 523(a)(3)(B) action: (1) Congress "intended laches to act as a constraint" in other similar bankruptcy actions; (2) the "at any time" language of Rule 4007(b) is not found in § 523(a)(3)(B) itself; (3) laches is "primarily concerned with prejudice" and does not solely focus on timing; and (4) "the absence of a laches defense would lead to injustice." Beaty at 923-26. However, the Court of Appeals did give a caveat to its application of laches. It held that although the "best reading of § 523(a)(3)(B) and Rule 4007(b) is that laches is available as a defense" in bankruptcy cases, "those provisions . . . direct[] bankruptcy courts to be especially solicitous to § 523(a)(3)(B) claimants when laches is invoked, and to refuse to bar an action without a particularized 71 showing of demonstrable prejudicial delay." Id. at 926. The Beaty court acknowledged that courts considering "at any time" language in other non-bankruptcy statutes have held that laches is not applicable to such actions. See Marshak v. Treadwell, 240 F.3d 184, 193 n. 2 (3rd Cir.2001) (holding that a laches defense is precluded under a section of the Lanham Act providing for cancellation "at any time"); Heflin v. United States, 358 U.S. 415, 420, 79 S.Ct. 451, 3 L.Ed.2d 407 (1959) (holding that a laches defense is inapplicable to a statute providing that a motion to vacate a sentence "may be made at any time"). However, the Beaty court disagreed with these holding on the basis that the courts reached their conclusion "with virtually no analysis as to why such language would eliminate the application of the equitable doctrine, instead simply assuming that the absence of a time limitation also results in the absence of a laches limitation." Beaty at 922-23. This Court finds that the reasoning of Beaty should apply to the Slys' § 523(a)(1) dischargeability action. It is especially mindful of the third reason listed by the Court of Appeals in Beaty, that laches is more concerned more with prejudice than it is with timing. Beaty. at 924. Like the court in Beaty, this Court finds that "[t]here is nothing inherently contradictory about saying that an action that may be brought `at any time' is nonetheless subject to an equitable limitation based on prejudicial delay." Id. "This fact is implicitly recognized in the doctrine that a claim may be barred by laches even if the statute of limitations for the claim has not expired." Id. at 924-25 (citing numerous supporting cases). Therefore, the Court will consider the IRS' laches defense. The Eleventh Circuit Court of Appeals has held that "[t]o establish laches, a defendant must demonstrate 1) a delay in asserting a right or a claim, 2) that the delay was not excusable, and 3) that there was undue prejudice to the party against whom the claim is asserted." AmBrit, Inc. v. Kraft, Inc., 812 F.2d 1531, 1545 (11th Cir.1986). With regard to the third factor, undue prejudice, a defendant must demonstrate with particularity the prejudice it will suffer if laches is not applied. Beaty at 926. Finally, where the defendant asserts its laches defense in a summary judgment motion, it must prove that there is no genuine issue as to any material fact and that it is entitled to judgment as a matter of law. Anderson at 247, 106 S.Ct. 2505. The Court will not consider each of three factors the IRS must establish to invoke laches at this time because it finds that the IRS has failed to prove that there is no genuine issue as to any material fact in this case and that it is entitled to a judgment as a matter of law. The Court concludes that the IRS has not yet established that the prejudice to it was "undue." The Slys' affidavits raise factual issues about IRS actions that may have been prejudicial to the Slys. While the Slys delayed bringing this action for approximately eight years after getting their chapter 7 discharge, nothing precluded the IRS from bringing an action in 1995 when it knew that the Slys asserted their taxes were discharged in their bankruptcy case. Additionally, the IRS may have prejudiced the Slys by destroying documents important to the Slys' complaint. The actions of both parties contributed to the delay in this case. They may both suffer some prejudice by having to try this case without access to documents that would have been available if either party had pursued a dischargeability action at an earlier date. However, granting summary judgment to the IRS on its laches defense *72 is not an appropriate remedy to this situation. The Court will decide if laches applies in this case only after the facts are more fully presented at trial. B. The second argument made by the IRS in its summary judgment motion is that the Slys' 1983 federal tax liabilities are excepted from discharge pursuant to §§ 523(a)(1)(A) and 507(a)(8)(A)(iii) of the Bankruptcy Code because their 1983 taxes were assessable after the Slys filed their bankruptcy case. The Slys do not contest that the Court should grant summary judgment to the IRS regarding their 1983 tax liabilities. Therefore, the Court finds that the Slys' 1983 tax liabilities were not discharged in their chapter 7 bankruptcy case. CONCLUSION For the reasons stated above, the Court has concluded that the Internal Revenue Service's motion for summary judgment is due to denied in part and granted in part. Dona and Joann Sly's motion to strike is due to be denied. IT IS ORDERED that Dona and Joann Sly's motion to strike is DENIED and the motion of the Internal Revenue Service for summary judgment is DENIED on its laches defense and GRANTED on its postpetition assessment of 1983 taxes defense. NOTES [1] The years 1980 through 1983 refer to tax years, not calendar years.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/2857571/	Greene v. Empire Fire IN THE COURT OF APPEALS, THIRD DISTRICT OF TEXAS, AT AUSTIN NO. 3-92-037-CV ORAN GREENE, APPELLANT vs. EMPIRE FIRE AND MARINE INSURANCE COMPANY AND NGC COUNTY MUTUAL INSURANCE COMPANY, APPELLEES FROM THE DISTRICT COURT OF TRAVIS COUNTY, 147TH JUDICIAL DISTRICT NO. 493,705, HONORABLE PAUL R. DAVIS, JR., PRESIDING JUDGE This is a suit on an insurance policy. Oran Greene, appellant, sued NGC County Mutual Insurance Company ("NGC") and Empire Fire and Marine Insurance Company ("Empire"), to enforce a judgment rendered against Michael Chinn, an erstwhile insured of NGC. Empire was NGC's authorized agent to adjust claims made against Chinn's policy. The cause arose from injuries Greene sustained in an accident while Chinn was driving. The insurance companies denied liability on the ground that, at the time of the accident, Chinn's policy was no longer in effect. The parties submitted the case to the district court on an agreed record, pursuant to Rule 263 of the Texas Rules of Civil Procedure. The district court rendered judgment that Greene recover nothing from the insurance companies. We will affirm that judgment. BACKGROUND The facts of this case are stipulated. NGC issued an automobile insurance policy to Chinn, the policy period to run from December 30, 1989, through December 30, 1990. On or about March 20, 1990, NGC canceled the policy for non-payment of premiums. On April 9, 1990, Chinn and his passenger, Greene, were involved in the accident that forms the basis of this suit. Chinn filed a claim with Empire, which assigned the claim to a local adjuster, Littleton Claims ("Littleton"). Empire authorized Littleton to settle property damage and bodily injury claims. An agent of Littleton, Holly Whatley, contacted the involved parties and extended a settlement offer to at least one of the injured parties. In the course of attempting to settle the claim and responding to requests for insurance coverage information, Empire discovered that NGC had canceled Chinn's policy. On July 19, 1990, Empire denied coverage to Chinn due to the cancellation of his policy with NGC. In Greene's subsequent suit against Chinn, both NGC and Empire refused to defend because Chinn had forfeited coverage by non-payment of premiums. Chinn suffered a default judgment for $21,000. Greene sought to enforce this judgment against NGC and Empire on the theory that the insurance companies had waived the cancellation of Chinn's policy or were estopped to deny coverage. The district court, on the basis of the agreed record, denied Greene any recovery against NGC and Empire. On appeal, Greene brings two points of error challenging the legal and factual sufficiency of the evidence to support the judgment, first contending that the record shows a waiver of forfeiture as a matter of law, and next urging that the judgment is against the great weight and preponderance of the evidence. DISCUSSION A case submitted to the trial court on an agreed stipulation of facts under Rule 263 is in the nature of a special verdict and is a request by the litigants for judgment in accordance with the applicable law. State Bar of Tex. v. Faubion, 821 S.W.2d 203, 205 (Tex. App.--Houston [14th Dist.] 1991, writ denied). The court's judgment must declare only the law necessarily arising from the stipulated facts. Gibson v. Drew Mortgage Co., 696 S.W.2d 211, 213 (Tex. App.--Houston [14th Dist.] 1985, writ ref'd n.r.e.). The trial court may not, unless provided otherwise in the agreed statement, find any facts not conforming to the agreed statement. Henry S. Miller Co. v. Wood, 584 S.W.2d 302, 303-04 (Tex. Civ. App.--Texarkana 1979), aff'd, 597 S.W.2d 332 (Tex. 1980). The question on appeal is limited to whether the trial court correctly applied the law to the admitted facts. Faubion, 821 S.W.2d at 205. Greene contends that the trial court erred in rendering judgment against him because, by their actions in investigating the accident and authorizing the settlement of claims, appellees have waived the cancellation of Chinn's policy. Texas courts address renewal, or reinstatement, of a lapsed policy in terms of "waiver of forfeiture." Preferred Risk Mut. Ins. Co. v. Rabun, 561 S.W.2d 239, 242 (Tex. Civ. App.--Austin 1978, writ dism'd w.o.j.). A claim of waiver of forfeiture relating to a lapsed policy typically arises in the context of the insured's attempts to renew coverage by late-payment of premiums. The paradigmatic case involves (1) a policy lapsed through non-payment of premiums, (2) an effort by the insured to pay the premium and reinstate the policy, (3) acceptance of the late payment by the insurance company, (4) a loss concurrent with or soon after the late payment, and (5) denial of coverage by the insurer. See, e.g., Bailey v. Sovereign Camp, W.O.W., 286 S.W. 456 (Tex. 1926); Equitable Life Assurance Soc'y v. Ellis, 152 S.W. 625 (Tex. 1913); Sovereign Camp W.O.W. v. Cameron, 41 S.W.2d 283 (Tex. Civ. App.--Austin 1931, writ ref'd); Preferred Risk Mut. Ins. Co. v. Rabun, 561 S.W.2d 239. The Texas Supreme Court gracefully articulated the principle underlying the theory of waiver of forfeiture in the lapsed policy context in Bailey v. Sovereign Camp: The time has not come in this state when an insurance company . . . can, with knowledge that a policy holder has forfeited his right of protection, voluntarily accept and retain the premium which the insured has paid, as was done in this instance, without also keeping in full force and effect the liability of said insurance company under said policy. Particularly is this true where the premium is retained with the knowledge of facts constituting a forfeiture and returned only after the death of the insured. One who places his bets after the dice are thrown is sure to win. It is too evident for words that, had Bailey [the insured] lived, no forfeiture would have been claimed or sought. But Bailey died, and the premiums were returned. Insurance companies cannot so gamble on the lives of their policy-holders. Having accepted the wager in accepting the premium, the [insurer] was bound by the consequences. Bailey, 286 S.W. at 458. This principle, intended to prevent insurers from retaining premiums only as convenient, is doubtless as vital today as it was in 1926, but we do not believe it applies to this case. There is no record evidence showing that Chinn made any effort at all to reinstate his coverage by paying his premiums. Thus, it cannot be said that the appellees were in any way gambling with the well-being of their former policy holder. We decline to hold that the appellees revived Chinn's lapsed policy, where he made no effort to reinstate it, simply because they began to investigate a claim as though the policy were still in force. Such a holding would do nothing to advance the protection of insureds from "bet-hedging" insurers, but would punish the insurer for promptly processing claims. To support his claim of waiver, Greene relies heavily on Equitable Life Assurance Society v. Ellis, 147 S.W. 1152 (Tex. 1912), aff'd on rehearing, 152 S.W. 625 (Tex. 1913). The supreme court there explained, [A] waiver of the forfeiture of the policy will result, in absence of any agreements to that effect, from negotiations or transactions with the insured, after knowledge of the forfeiture, by which the insurer recognizes the continued validity of the policy or does acts based thereon. Id. at 1156 (emphasis added). Ellis, by failing to pay annual premiums timely, had forfeited two life insurance policies. Rather than lose Ellis's business, however, the insurer offered to lend Ellis the money needed to pay the premiums, taking as security the underlying policies. Id. at 1155. The supreme court determined that, despite its awareness of the forfeiture, the insurer had, through its loan negotiations with Ellis, evinced its clear intent to treat the lapsed policies as valid. Id. at 1158. The insurer was therefore held to have waived its defense of non-coverage. Unlike Ellis's insurer, Empire acted without knowledge that Chinn's policy had lapsed. The stipulated facts in the instant case reveal that Empire discovered the cancellation while investigating Chinn's claim and that Empire's prompt response to Chinn's claim ended when it learned that the policy had lapsed. NGC and Empire thereafter refused to defend Chinn from Greene's suit. We cannot conclude from this evidence that either Empire or NGC manifested any express or implied intention, as did the insurer in Ellis, to waive the defense of non-coverage. Neither the facts nor the policy undergirding Ellis controls the instant case. We overrule Greene's points of error because (1) the evidence does not show that the insurance companies waived Chinn's forfeiture as a matter of law and (2) the judgment is not against the great weight and preponderance of the evidence. Although Greene does not bring a point of error specifically raising the matter of estoppel, we will briefly discuss estoppel due to its potential applicability to the facts of this case. We pause to note that waiver and estoppel, though related and oft-confused concepts, are separate and distinct. The supreme court has explained the difference between the two: "Waiver presupposes full knowledge of existing right, while estoppel arises where by fault of one, another has been induced to change his position for the worse." Massachusetts Bonding & Ins. Co. v. Orkin Exterminating Co., 416 S.W.2d 396, 401 (Tex. 1967) (citing New Amsterdam Casualty Co. v. Hamblen, 190 S.W.2d 56 (Tex. 1945)). Though Empire's conduct in investigating and authorizing settlement of injury claims does not constitute a waiver on the facts of this case, we note that similar conduct could give rise to an estoppel against the insurer, where an insurer induces detrimental reliance by a third party. Here, however, Greene has not shown estoppel. Any party seeking to establish an estoppel must prove (1) a false representation or concealment of material facts, (2) made with knowledge, actual or constructive, of those facts, (3) with the intention that it should be acted on, (4) to a party without knowledge or the means of knowledge of those facts, (5) who detrimentally relied upon the misrepresentation. Schroeder v. Texas Iron Works, Inc., 813 S.W.2d 483, 489 (Tex. 1991). Assuming, without deciding, that Greene proved all the other elements, we are unable to find an estoppel since there is no proof of detrimental reliance. Because all of Greene's physical injuries occurred before any misrepresentations by Whatley, the only way that Greene could possibly have relied to his detriment would have been if he had incurred greater medical expenses based on Whatley's assurances of coverage than he would have incurred had Whatley not indicated coverage. The sole record evidence bearing on this issue appears in an excerpt from Greene's deposition contained in the agreed record. Greene explained that he "doubt[ed] . . . very seriously" that he would have sought any medical care beyond the ambulance trip and the emergency room physician had Whatley not indicated that "there was coverage somewhere." The record, however, is bereft of any additional evidence that Greene did seek additional medical care. We therefore have no way to determine whether Greene's reliance on Whatley's assurances caused him any damage or detriment. Consequently, Greene has failed to prove an essential element of a claim of estoppel. We conclude that the district court properly denied Greene recovery. CONCLUSION For the foregoing reasons, we affirm the judgment of the district court that Greene take nothing. Bea Ann Smith, Justice [Before Justices Powers, Aboussie and B. A. Smith] Affirmed Filed: December 9, 1992 [Do Not Publish]	01-03-2023	09-05-2015
https://www.courtlistener.com/api/rest/v3/opinions/1532215/	872 A.2d 901 (2005) 88 Conn.App. 459 George L. KREGOS v. Mark P. STONE. No. 24852. Appellate Court of Connecticut. Argued January 14, 2005. Decided April 12, 2005. 903 Geoffrey S. Brandner, with whom, on the brief, was John Lino Ponzini, Stamford, for the appellant (defendant). Jeffrey W. Keim, with whom, on the brief, was Eric M. Gross, Bridgeport, for the appellee (plaintiff). PELLEGRINO, FLYNN and WEST, Js. FLYNN, J. The appeal before us involves a number of claims regarding the propriety of one of the trial court's evidentiary rulings, its charge to the jury and acceptance of the verdict. The plaintiff, George L. Kregos, brought a two count complaint sounding in legal malpractice against the defendant, Mark P. Stone, seeking damages. The defendant counterclaimed for legal fees owed by the plaintiff. After a trial, the jury awarded the plaintiff $206,576.40 on his complaint and the defendant $36,815.76 on his counterclaim. The trial court rendered judgment on the verdict and the defendant appealed. We affirm the judgment of the trial court. On appeal, the defendant claims that the court improperly: (1) instructed the jury on legal malpractice, (2) instructed the jury that the offer of judgment statute permits interest to be calculated on the amount of compensatory damages as well as on punitive damages received by the plaintiff in the underlying federal court proceeding, (3) accepted an inconsistent verdict, (4) failed to admit testimony from the plaintiff about whether he had filed an offer of judgment in the legal malpractice case despite both documentation that he had not done so and inconsistent deposition testimony and (5) failed to set aside the verdict. The jury reasonably could have found the following facts. The plaintiff, then doing business as American Sportswire, engaged the defendant, a lawyer who specialized in patent, trademark and intellectual property matters, in connection with a dispute with a company known as The Latest Line, Inc. (Latest Line), its principals, Susan McCarthy and Jolene McCarthy, and Tribune Media Services, Inc. (Tribune). The plaintiff sought damages against Latest Line and the McCarthys for breach of contract, and against Tribune for tortious inference with the contract that he had with Latest Line. The McCarthys owned Latest Line and had engaged the plaintiff's expertise to provide data for use in Tribune publications. At some point, Tribune demanded that the plaintiff cease doing similar work for other newspapers, despite the fact that the plaintiff had no contract with Tribune and the plaintiff was not barred from doing so by his contract with Latest Line. On the plaintiff's behalf, the defendant brought an action in the United States District Court for the District of Connecticut against Latest Line, the McCarthys and Tribune. The defendant did not file an offer of judgment in the federal action. General Statutes § 52-192a(a) and (b) provide for a procedure whereby a plaintiff may file an offer of judgment with the 904 clerk of the court, offering to settle the claim and may stipulate judgment for a sum certain. Under that statutory procedure, if a defendant declines to accept the offer and the judgment the plaintiff eventually recovers is equal in amount to or in excess of the amount for which the plaintiff offered to settle, the court is required to add interest at the rate of 12 percent per annum on the amount of the judgment from the date of the offer or, if the offer was filed within eighteen months of the date of the complaint, from the date of the complaint. While the litigation was proceeding, the plaintiff inquired whether an offer of judgment could have been filed in the federal action and was advised by the defendant that it could not.[1] The plaintiff nonetheless offered to settle the litigation for $280,000, which was accomplished by letter from the defendant to opposing counsel without filing any formal "offer of judgment" with the federal court clerk. The defendant finally withdrew as the plaintiff's counsel when the plaintiff was unable to pay in a timely manner monthly legal fees he owed to the defendant. New counsel represented the plaintiff in the trial of the federal case and recovered a judgment of $286,911.72 plus taxable costs. The plaintiff claimed in this legal malpractice action that because of the negligence of the defendant, he lost additional prejudgment interest which he might have been able to recover if the offer of judgment formally had been filed by the defendant with the clerk of the United States District Court in the underlying action against Latest Line and the other defendants in the underlying action. I The defendant first alleges that the trial court failed to mention in its charge the defendant's position that he did not file an offer of judgment on the plaintiff's behalf because the plaintiff did not want to settle his case. The defendant claims that the court's failure to do so did not present the case fairly so that no injustice was done. The defendant further claims that he had offered evidence that he did not file an offer of judgment in the underlying federal action against Latest Line and the other defendants because the plaintiff did not want to be bound to any settlement sum offered and authorized only a letter of demand rather than a statutory offer of judgment filed with the clerk, which, by statute, would be irrevocable for thirty days. "The standard of review concerning claims of error in jury instructions is well settled.... We must review the charge as a whole to determine whether it was correct in law and [whether it] sufficiently guided the jury on the issues presented at trial.... [T]he trial court must correctly adapt the law to the case in question and must provide the jury with sufficient guidance in reaching a correct verdict." (Internal quotation marks omitted.) Mariculture Products Ltd. v. Certain Underwriters at Lloyd's of London, 84 Conn.App. 688, 702-703, 854 A.2d 1100, 905 cert. denied, 272 Conn. 905, 863 A.2d 698 (2004). The challenged portion of the jury charge on legal malpractice stated that "to prove causation and damages, the plaintiff must establish that the defendant's failure to make an offer of judgment in accordance with § 52-192a of the Connecticut General Statutes caused him harm because he was entitled to interest on his judgment from July 9, 1992, to September 14, 1998." Although, viewed in isolation, this part of the charge would not suffice to guide the jury correctly, charges are not examined microscopically, but are read as a whole. Sevigny v. Dibble Hollow Condominium Assn., Inc., 76 Conn.App. 306, 311, 819 A.2d 844 (2003). We conclude that the charge, as a whole, reasonably guided the jury in reaching a verdict. The charge emphasized the elements of a prima facie case: "One. The defendant must have a duty to conform to a particular standard of conduct for the plaintiff's protection. Two. The defendant must have failed to measure up to that standard. Three. The plaintiff must suffer actual injury, and, four, the defendant's conduct must be the cause of the plaintiff's injury."[2] The court then reiterated: "To succeed in a legal malpractice action, the plaintiff must produce testimony, one, that a breach of the professional standard of care has occurred and, two, that the breach was a proximate cause of the injury suffered by the plaintiff. Expert testimony and circumstantial evidence can both be used in establishing legal malpractice.... If you have decided that the defendant was negligent and that the plaintiff suffered injury, then you must consider whether the negligence was the proximate cause of the injury." The court emphasized that there was evidence in conflict: "There is conflicting factual evidence as to whether certain conduct of the plaintiff and the defendant occurred." The court also instructed the jury that it is "not to single out any sentence or individual point or instruction ... and ignore others. You are to consider all the instructions as a whole and regard each in light of all the others." The test is not whether jury instructions are perfect or technically accurate but, rather, when viewed in their entirety, 906 whether the instructions are correct in the law and provide sufficient guidance to the jury. Matthiessen v. Vanech, 266 Conn. 822, 831-32, 836 A.2d 394 (2003). Here, the instructions correctly stated the elements of legal malpractice that the plaintiff was required to prove, and the charge gave the jury sufficient guidance. II We next address the defendant's claim that the court improperly instructed the jury that § 52-192a(a) and (b), the offer of judgment statute, permitted interest to be calculated not just on the compensatory damages awarded to the plaintiff, but also on the punitive damages. During jury deliberations, the jury questioned whether, with a properly filed offer of judgment, interest may be calculated on both the compensatory and punitive damages. The defendant specifically claims that the court improperly instructed the jury that interest could be calculated on "the whole amount recovered in the federal action, which included money allocated to the defendant's legal fees," which the plaintiff had refused to pay. The plaintiff had admitted in his testimony that he probably owed the defendant $20,000 for legal fees that had not been paid. Our review of this issue requires us to interpret § 52-192a(a) and (b). Review of questions requiring interpretation of a statute is plenary. Commissioner of Social Services v. Smith, 265 Conn. 723, 734, 830 A.2d 228 (2003). The defendant first avers that "[t]he analysis of the offer of judgment statute used as such on a federal court verdict may not be correct." He cites no authority for this claim. We disagree and agree with the court's analysis of the statute. In Gionfriddo v. Avis Rent A Car System, Inc., 192 Conn. 301, 472 A.2d 316 (1984), our Supreme Court ruled that § 52-192a did not except punitive damages from the comparison of the verdict to the offer contemplated by the statute which triggers interest if a verdict is equal to or exceeds an unaccepted "offer of judgment." The pertinent statutory language of § 52-192a(b) mandates that "[i]f the court ascertains from the record that the plaintiff has recovered an amount equal to or greater than the sum certain stated in the plaintiff's `offer of judgment', the court shall add to the amount so recovered twelve per cent annual interest on said amount" contained in such offer. (Emphasis added.) The court properly interpreted the word "recovered" to include the entire verdict, both punitive and compensatory damages, and the United States District Court for the District of Connecticut has adopted and applied this same reasoning. See Boulevard Associates v. Sovereign Hotels, Inc., 861 F. Supp. 1132 (D.Conn.1994), rev'd on other grounds, 72 F.3d 1029 (2d Cir.1995). The defendant also claims that this court should intervene to prevent an inequity. Specifically, he claims that the plaintiff "cannot have it both ways" by claiming that the benefit of the $20,000 he owed to the defendant as an item he recovered in the federal court action was subject to offer of judgment interest in the legal malpractice action he brought against the defendant in state court. He claims that if the attorney's fees in the underlying action are excluded from the amount recovered, damages in the federal action would have been less than the $280,000, which was the amount the jury had to find he would have made an "offer of judgment" on had he not been wrongly advised by the defendant. Damages in the form of bills not yet paid properly are included as damages as long as they were incurred in as a result of a defendant's negligence. The short answer to the defendant's claim is that the attorney's 907 fees incurred by the plaintiff in the underlying federal action were a form of punitive damages that both Gionfriddo and Boulevard Associates have held properly are included in the calculus made to determine if a verdict equals or exceeds an offer of judgment. We therefore reject this argument. III The defendant next claims that the court improperly denied his motion to set aside an inconsistent jury verdict. We do not agree. Verdicts cannot be inconsistent, either internally or with other verdicts rendered in the same case. Our Supreme Court found an internal inconsistency that justified the trial court's setting aside of the verdict in Ginsberg v. Fusaro, 225 Conn. 420, 623 A.2d 1014 (1993). In Ginsberg, the trial court found "in light of its instructions, that the verdict finding the issues of negligence, causation and damages in favor of Fusaro, but awarding zero damages, was inconsistent." Id., at 425, 623 A.2d 1014. Our Supreme Court agreed and held that the trial court did not abuse its discretion in setting aside the verdict. Citing its prior decision in Malmberg v. Lopez, 208 Conn. 675, 546 A.2d 264 (1988), the court held that a verdict finding the issues for the party seeking to recover damages but awarding zero damages was inherently ambiguous. Ginsberg v. Fusaro, supra, at 425, 623 A.2d 1014. In the present case, the defendant maintains, not that the verdict is internally ambiguous, but that the award of damages to the plaintiff on his complaint for legal malpractice was inconsistent with the jury's award to the defendant on his counterclaim for attorney's fees owed by the plaintiff. In ruling on a motion to set aside a jury verdict, the court was required to view the evidence at trial in the light most favorable to sustaining the verdict. Gaudio v. Griffin Health Services Corp., 249 Conn. 523, 534, 733 A.2d 197 (1999). Our standard of review on motions to set aside a verdict requires us to review the actions of the trial court and to leave its ruling undisturbed unless we conclude that there was some broad abuse of the discretion vested in the court. Madsen v. Gates, 85 Conn.App. 383, 391, 857 A.2d 412, cert. denied, 272 Conn. 902, 863 A.2d 695 (2004). After carefully reviewing the evidence, the charge to the jury and both the plaintiff's verdict on the complaint for legal malpractice and the verdict in favor of the defendant on the counterclaim, we conclude there is nothing inconsistent in the jury's awards. From the considerable evidence before it, the jury reasonably could have credited the plaintiff's version of events that he erroneously had been advised by the defendant that a formal offer of judgment could not be filed with the clerk of the federal court, resulting in a loss of interest to the plaintiff. But for that error, the jury reasonably could have found that the total judgment would have been higher, but that nonetheless the defendant's skill and efforts in investigating the case, filing it in federal court and conducting discovery assisted in bringing about the judgment that the plaintiff obtained in the United States District Court, thus entitling the defendant to judgment against the plaintiff for his unpaid attorney's fees. We therefore conclude that this claim is without merit. IV The defendant next claims that the court improperly refused to admit evidence about whether the plaintiff ever had made an offer of judgment in this malpractice case. He contends that the evidence was relevant to the plaintiff's credibility 908 because he had testified inconsistently on this collateral issue in a prior deposition. The defendant has not provided this court with an adequate record to review this evidentiary claim. The defendant did not submit a copy of the deposition transcript to this court. "It is well established that [i]t is the responsibility of the appellant to provide an adequate record for review as provided in [Practice Book §] 61-10." (Internal quotation marks omitted.) Calo-Turner v. Turner, 83 Conn. App. 53, 56, 847 A.2d 1085 (2004). Our rules of practice provide in relevant part that "the term `record' . . . includes all trial court decisions, documents and exhibits necessary and appropriate for appellate review of any claimed impropriety." Practice Book § 61-10. We do not have an adequate record from which to determine whether the court abused its discretion or to determine whether the exclusion of the evidence was harmful. Therefore, we decline to review the defendant's claim. V Finally, the defendant contends that the court improperly refused to set aside the verdict on the basis of those claims which we have already addressed. We disagree. Our Supreme Court has set forth our standard of review. It has often stated that "[t]he decision to set aside a verdict entails the exercise of a broad legal discretion that, in the absence of clear abuse, we shall not disturb. O'Brien v. Seyer, [183 Conn. 199, 208, 439 A.2d 292 (1981)]." Palomba v. Gray, 208 Conn. 21, 24, 543 A.2d 1331 (1988); see also American National Fire Ins. Co. v. Schuss, 221 Conn. 768, 774, 607 A.2d 418 (1992); State v. Hammond, 221 Conn. 264, 270, 604 A.2d 793 (1992). In our review of the exercise of this discretion, we accord great weight to the trial court's decision. Labatt v. Grunewald, 182 Conn. 236, 240, 438 A.2d 85 (1980); see also Ginsberg v. Fusaro, supra, 225 Conn. at 425, 623 A.2d 1014. A verdict may be set aside if it is contrary to law. However, we have concluded that the defendant's challenges to the instructions to the jury are without merit. A verdict that is inconsistent or ambiguous should be set aside. Ginsberg v. Fusaro, supra, 225 Conn. at 425-26, 623 A.2d 1014. However, for the reasons already set forth, we see nothing inconsistent in the jury's award of damages to the plaintiff on his complaint and legal fees to the defendant on his counterclaim. Despite the defendant's claim to the contrary, the plaintiff was entitled to seek damages against the defendants in the underlying federal action for attorney's fees earned by the defendant in prosecuting the underlying federal action on the plaintiff's behalf, which the plaintiff owed to the defendant but had not yet paid. These attorney's fees were in the nature of punitive damages awarded in the federal action. Both compensatory and punitive damages are included in the amount recovered for the purpose of the comparison required by the offer of judgment statute. Finally, the absence of a deposition record does not permit review of the defendant's evidentiary claim that the court deprived him of an opportunity to impeach the credibility of the plaintiff. For all of these reasons, we conclude that the court did not abuse its discretion in denying the motion to set aside the verdict. The judgment is affirmed. In this opinion the other judges concurred. NOTES [1] Under Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S. Ct. 817, 82 L. Ed. 1188 (1938), a federal court in a diversity case is required to apply the substantive law of the state in which it is sitting. In Boulevard Associates, Inc. v. Sovereign Hotels, 861 F. Supp. 1132 (D.Conn. 1994), rev'd on other grounds, 72 F.3d 1029 (2d Cir.1995), the United States District Court for the District of Connecticut applied Connecticut's offer of judgment statute, General Statutes § 52-192a (b), to its judgment and thereby awarded prejudgment interest to the prevailing party. Although rule 68 of the Federal Rules of Civil Procedure provides for a defendant, or a plaintiff defending against a counterclaim, to make an offer of judgment, there apparently is no similar rule in the Federal Rules of Civil Procedure to permit a plaintiff to make an offer of judgment. [2] In explaining proximate cause, the court stated: "If you have decided that the defendant was negligent and that the plaintiff suffered injury, then you must consider whether the negligence was the proximate cause of the injury. That is, was the negligence a substantial factor in bringing about the injury that was suffered? Only if you decide that the lawyer's negligence was the proximate cause of the plaintiff's injury should you then make a determination as to the amount of money or damages to be awarded to compensate ... the plaintiff for his injury. "Let me explain the concept of proximate cause further, proximate cause generally. The plaintiff in this case must prove that the defendant's act was a proximate cause of the injury sustained by the plaintiff. Proximate cause means there must be a sufficient causal connection between the act or omission and any injury or damage sustained by the plaintiff. An act or omission is a proximate cause if it was a substantial factor in bringing about or actually causing the injury, that is, if the injury or damage was a reasonably foreseeable consequence of the act or omission, if an injury was a direct result or ... proximately caused by such an act or omission. In other words, if the defendant's act or omission had such an effect in producing the injury that reasonable persons would regard it as being a cause of the injury, then the act or omission is a proximate cause. In order to recover damages for any injury, the plaintiff must show by a preponderance of the evidence that such injury would not have occurred without the conduct of the defendant.... If you find that the plaintiff complains about an injury which would have occurred even in the absence of the defendant's conduct, you must find that the defendant did not proximately cause the plaintiff's injury. There is conflicting factual evidence as to whether certain conduct of the plaintiff and the defendant occurred."	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532187/	872 A.2d 800 (2005) 377 N.J. Super. 267 Christine THOMSEN, Plaintiff, v. Janice D. MERCER-CHARLES, Caring, Inc., Caring House Projects, Inc., Caring Medical Day Services, Inc., Caring Fellowship Center, Inc., and Coastal Support Services, Inc., Defendants. Alice Brown, as Administrator ad Prosequendum for the Heirs-at-Law of Alice F. Watts, Deceased, and as Administrator of the Estate of Alice F. Watts, Deceased, Plaintiffs, v. Janice D. Mercer-charles, Caring, Inc., Caring House Projects, Inc., Caring Medical Day Services, Inc., Caring Fellowship Center, Inc., Coastal Support Services, Inc., Christine D. Thomsen, Irene McMichael, R.C. Maxwell Co., Atlantic City Electric Co., Bell Atlantic-New Jersey, Inc., Defendants, and Bell Atlantic-NJ, Inc., Third Party Plaintiff, v. County of Atlantic, Third Party Defendant, and Irene McMichael, Third Party Plaintiff, v. Philadelphia Indemnities Insurance Company, Reliance Insurance Company and New Jersey Property-Liability Insurance Guaranty Association, Third Party Defendants. Larry Spell, by his Guardian ad Litem, Patricia Lynch, Plaintiff-Respondent, v. Janice D. Mercer, Caring Inc., Caring House Projects, Inc., Caring Medical Day Services, Caring Fellowship Center, Inc., Coastal Support Services, Inc., Christine D. Thomsen, and Irene McMichael, Defendants, and Irene McMichael, Third Party Plaintiff, v. Philadelphia Indemnities Insurance Company and Reliance Insurance Company, Third Party Defendants, v. New Jersey Property-Liability Insurance Guarantee Association, Third Party Defendant-Appellant. Janice Mercer-Charles and Dexter Charles, her husband, Plaintiffs, v. Christine D. Thomsen, Defendant, v. Bell Atlantic-NJ, Third Party Plaintiff, v. County of Atlantic, Third Party Defendant, and Irene McMichael, Third Party Plaintiff, v. Philadelphia Indemnities Insurance Company, Reliance Insurance Company, and New Jersey Property-Liability Insurance Guaranty Association, Third Party Defendants. Larry Spell, by his Guardian ad litem, Patricia Lynch, Plaintiff, v. R.C. Maxwell Co., Atlantic City Electric Company, Bell Atlantic-NJ, Inc., West 801 Jersey Health Systems Paramedics Unit, Galloway Township Volunteer Ambulance Squad West Division, Egg Harbor City Rescue Squad, William B. Kessler Memorial Hospital, Eugene M. Mlynarczyk, M.D., Lisa Rasom, RN, L. DeFrancisco, RN, Defendants, v. Bell Atlantic-NJ, Third Party Plaintiff, v. County of Atlantic, Third Party Defendant, and Irene McMichael, Third Party Plaintiff, v. Philadelphia Indemnities Insurance Company, Reliance Insurance Company and New Jersey Property-Liability Insurance Guarantee Association, Third Party Defendants. Superior Court of New Jersey, Appellate Division. Argued September 13, 2004. Decided April 28, 2005. 802 Mark M. Tallmadge, New York City, argued the cause for appellant New Jersey Property-Liability Insurance Guaranty Association (Bressler, Amery & Ross, attorneys; Mr. Tallmadge, on the brief). Mark S. Levy, Philadelphia, PA, argued the cause for respondent Larry Spell (Levy, Angstreich, Finney, Baldante, Rubenstein & Coren, attorneys; Melissa T. Herskowitz and Mr. Levy, on the brief). Before Judges A.A. RODRÍGUEZ, WEISSBARD and HOENS. The opinion of the court is delivered by: RODRÍGUEZ, A.A., P.J.A.D. This appeal was brought by the New Jersey Property-Liability Insurance Guaranty Association (the Association) concerning interpretation of the exhaustion and setoff provision (N.J.S.A. 17:30A-12b) of the New Jersey Property-Liability Insurance Guaranty Act (the Act).[1] The specific issue presented is whether the Act's setoff provision operates to reduce the amount payable on a covered claim by the amount of coverage available from a solvent insurer, even when the claim far exceeds the coverage limits of the solvent insurer's policy. The setoff provision provides in pertinent part: [a]ny person having a claim against an insurer, whether or not the insurer is a member insurer, under any provision in an insurance policy other than a policy of an insolvent insurer which is also a covered claim, shall be required to exhaust first his right under that other policy. An amount payable on a covered claim . . . shall be reduced by the amount of recovery under any such insurance policy. [N.J.S.A. 17:30A-12b.] We hold that the Association is entitled to a setoff of the full amount paid by a solvent insurer. In other words, when there is coverage by two policies and the exhaustion of the solvent insurer's policy does not completely recompense the claimant's damages, the Association is still entitled to the setoff. Thus, the Association's obligation is extinguished if the setoff equals or exceeds the $300,000 statutory cap for covered claims. I The facts are undisputed. On September 5, 1996, Larry Spell, then thirty-eight years old, was a passenger in a 1994 803 Dodge para-transit van owned by Caring, Inc. and leased to Caring Medical Day Services, Inc. (collectively "Caring") and operated by Janice Mercer-Charles, an employee of Caring. There was a collision between the van and a vehicle operated by Christine Thomsen. As a result of the impact, the van crashed into a telephone pole. Spell suffered a fractured neck and was rendered a quadriplegic. Alice F. Watts, another passenger in the van, died as a result of the accident. Lawsuits were filed by Spell, the Estate of Watts, Thomsen and Mercer-Charles against various parties. At the time of the accident, Caring was insured pursuant to a business automobile policy issued by Philadelphia Insurance Company (PIC). The PIC policy provided liability coverage in the amount of $1 million for any one accident. Caring was also insured pursuant to a commercial insurance policy issued by Reliance Insurance Company (Reliance). The Reliance policy provided liability coverage in the amount of $1 million for any one accident. Spell offered to settle his claims against Mercer-Charles and Caring for $2 million. The offer was eventually accepted by Caring's insurers, PIC and Reliance. A consent order was entered permitting PIC and Reliance to deposit their respective policy limits into court, pending an allocation hearing. PIC deposited its $1 million. However, before Reliance deposited its limit, it was declared insolvent and ordered into liquidation by a Pennsylvania court. As a result, the Association moved successfully to intervene in the litigation and assumed responsibility for claims against Reliance's insured. The Association moved for a declaration that its $300,000 per claim statutory obligation must be reduced by any amount received from PIC, the solvent insurer. Spell opposed this motion. For purposes of the motion, the parties agreed that Spell's damages exceeded $2 million. In a written opinion, the judge denied the Association's motion, ruling that it is not entitled to any setoff. The judge interpreted the language of the setoff provision to mean that the setoff only applies to insurance proceeds payable as a direct result of insolvency. II The Association appeals contending that pursuant to the setoff provision, its obligation to pay statutory benefits to Spell is reduced to zero. We agree. We begin our analysis by restating certain core principles of the Act's legislative scheme. First, the Association is not an insurer. It is a private, non-profit, unincorporated legal entity. N.J.S.A. 17:30A-6; Am. Employers' Ins. Co. v. Elf Atochem N. Am., Inc., 157 N.J. 580, 586-87, 725 A.2d 1093, 1096-97 (1999). It depends upon revenue received through statutory assessments levied upon its members, who are insurers writing defined types of direct insurance. Johnson v. Braddy, 376 N.J.Super. 215, 218, 869 A.2d 964 (App.Div.2005); Harrow Stores, Inc. v. Hanover Ins. Co., 315 N.J.Super. 547, 719 A.2d 196 (App.Div.1998). Those assessments are ultimately recouped through policy surcharges imposed upon policyholders, who hold policies embraced within the scope of the Act. N.J.S.A. 17:30A-8a(3); N.J.A.C. 11:1-6.3. The statutory mandate requires the Association to administer and pay "covered claims" that are asserted against insolvent insurers and their policyholders. The Association's purpose is "to provide a mechanism for the payment of covered claims under certain insurance policies, to avoid excessive delay in payment, [and] to avoid financial loss to claimants or policyholders because of the insolvency of an insurer . . ." N.J.S.A. 804 17:30A-2a. The Act is to be construed liberally to effect its purposes. Carpenter Tech. Corp. v. Admiral Ins. Co., 172 N.J. 504, 516-17, 800 A.2d 54, 61-62 (2002) (citing Am. Employers' Ins. Co., supra, 157 N.J. at 590, 725 A.2d at 1098-99 and N.J. Guar. Ass'n. on Behalf of the Midland Ins. Co. v. Ciani, 242 N.J.Super. 164, 169, 576 A.2d 300, 303 (App.Div.1990)). The Legislature sought "to conserve limited Association resources to better assure their availability to serve core purposes." Ibid. Second, the Legislature created the Association to provide "a measure of relief for policyholders and claimants in the case of insurer insolvency." Ciani, supra, 242 N.J.Super. at 169, 576 A.2d at 303 (emphasis added). It did not intend to "substitute the Association for the defunct insurer so as to prevent all loss to affected parties." Ibid. (emphasis added); see also Carpenter Tech. Corp., supra, 172 N.J. at 515, 800 A.2d at 60-61; Am. Employers' Ins. Co., supra, 157 N.J. at 590, 725 A.2d at 1098-99. In short, the Association is a limited safety net. It was not designed to put a claimant in the same position as if there had been no insolvency. Third, the Association does not pay an injured party's entire loss. Instead, it pays only those losses qualifying as "covered claims" pursuant to the terms of the Act. See Carpenter Tech. Corp., supra, 172 N.J. at 508-09, 800 A.2d at 56-57. A "covered claim" is defined as an unpaid claim within the purview of a policy issued by an insurer, which became insolvent after January 1, 1974 and: (1) the claimant or insured is a resident of New Jersey at the time of the insured event; or (2) the property from which the claim arises is permanently located in New Jersey. N.J.S.A. 17:30A-5d. Moreover, "`covered claim' shall not include any amount due any . . . insurer . . . as subrogation recoveries or otherwise." Ibid.; Carpenter Tech. Corp., supra, 172 N.J. at 516, 800 A.2d at 61; Primus v. Alfred Sanzari Enter., 372 N.J.Super. 392, 402, 859 A.2d 452, 458 (App.Div.2004). There is a $300,000 statutory ceiling or cap on a covered claim set by N.J.S.A. 17:30A-8a(1). This ceiling applies regardless of whether or not a claimant's policy exceeds that amount. Ibid. Fourth, where a claim is covered by numerous policies, some issued by solvent insurers and some by insolvent insurers, the Act expressly sets a priority for coverage. N.J.S.A. 17:30A-12b sets the priority of claims between the Association and solvent insurers.[2]Jendrzejewski v. Allstate Ins. Co., 341 N.J.Super. 460, 463, 775 A.2d 583, 584 (App.Div.2001). The purpose of the setoff provision "was to conserve the assets of the [Association's fund] by shielding it from liability for the obligations of insolvent insurers where there is other insurance covering the same claim that is covered by the insolvent insurer's policy." Id. at 464, 775 A.2d at 585. A claimant must first exhaust the solvent insurer's policy limits. N.J.S.A. 17:30A-12b. The covered claim is thus reduced by the amount recovered from a solvent insurer. Ibid. This statutory priority and setoff trumps traditional principles of priority of coverage, such as primary, excess and co-equal. This is so because the Legislature has created a remedy, albeit a limited one, in a situation where claimants previously had little recourse against an insolvent insurer. 805 Summarizing, based on the language and the intent of the Act, it is clear that the Association was designed to spread the loss incurred by a claimant due to insolvency. It insures that such a claimant receives damages from some source, including the Association, up to a cap or ceiling of $300,000. If the claimant receives from a solvent insurer an amount equal to or greater than $300,000, the Association's obligation to provide statutory benefits is exhausted. Thus, the Association's funds are preserved in order to provide a measure of relief to other potential claimants. III Applying those principles here, we conclude that Spell must first exhaust the coverage afforded by the PIC policy. He may then seek recovery from the Association, subject to the $300,000 cap and a setoff in the amount recovered from PIC. See Harrow Stores, Inc., supra, 315 N.J.Super. at 554-55, 719 A.2d at 200-01; Sayre v. Ins. Co. of N. Am., 305 N.J.Super. 209, 215, 701 A.2d 1311, 1314 (App.Div.1997). Thus, here the Association's obligation to Spell is exhausted or reduced to zero by virtue of the setoff provision. We reject the argument advanced by Spell and accepted by the judge that the setoff provision applies only to insurance proceeds payable as a direct result of the insolvency of a insurer. Other than uninsured motorist coverage, we cannot identify any type of coverage payable directly as a result of the insolvency of a insurer. Moreover, the setoff provision applies in situations where there is "overlapping coverage of a solvent and insolvent insurer during the same period of time." Sayre, supra, 305 N.J.Super. at 214, 701 A.2d at 1314. We also reject the argument that the setoff should be reduced from the total amount of the claimant's losses, not from the $300,000 "covered claim" ceiling. The express and unambiguous language of the Act mandates that the setoff be deducted from a "covered claim." By definition, a "covered claim" is the amount that the Association is potentially obligated to pay, not the full extent of the damages suffered by the claimant. See Carpenter Tech. Corp., supra, 172 N.J. at 526, 800 A.2d at 67 (holding that a setoff for amounts recoverable from a foreign state's insurance guaranty association should be deducted from any amount recoverable from the Association). The Law Division judge relied on several cases from other states to support his decision. However, these cases are distinguishable. In Ariz. Prop. & Cas. Ins. Guar. Fund v. Herder, 156 Ariz. 203, 751 P.2d 519 (1988), a passenger was injured when the automobile in which he was traveling was hit by an uninsured motorist. The parties stipulated that the passenger's damages exceeded $30,000. Id. at 520. The passenger was covered by two uninsured motorists (UM) policies, his own and that of his host driver. Ibid. Both policies had $15,000 per person limits. Ibid. The passenger recovered UM benefits in the amount of $15,000 from the host driver's insurance. Ibid. However, his own insurer had become insolvent. Ibid. The passenger sought recovery from APCIGF, Arizona's equivalent of the Association.[3] APCIGF refused payment, arguing that pursuant to A.R.S. § 20-673C (2005), it was required to pay the $15,000 limits of the policy issued by the insolvent insurer, and this was reduced by the amount recovered from the host driver's insurer. Id. at 521. The Supreme Court of Arizona held 806 that the passenger could recover the additional $15,000 from APCIGF. Id. at 524. Herder dealt with a different situation than the one presented here. The Arizona statute deems a policy issued by an insolvent insurer to be "excess coverage." A.R.S. § 20-673C (2005). New Jersey does not employ such a provision. Thus, in New Jersey, an insolvent insurer's policy is not deemed excess coverage. Rather, the Association's benefits are to be reached only after all solvent insurers' policies are exhausted. This is significantly different than creating a level of excess coverage where none had existed. The judge also relied on Wash. Ins. Guar. Ass'n v. McKinstry Co., 56 Wash.App. 545, 784 P.2d 190 (1990). The case is factually distinguishable. There, an insured was sued on a negligence claim exceeding $1 million. Id. at 191. The insured's primary insurance carrier tendered its policy limit of $500,000. Ibid. However, the excess carrier became insolvent. Ibid. WIGA, Washington's equivalent of the Association,[4] refused to pay the remaining $500,000, arguing that the amount payable should be reduced by the amount of any recovery under the primary insurer's policy. Ibid. The Court of Appeals of Washington held that WIGA could not offset payments by a primary insurer when it is standing in the shoes of an insolvent excess insurer. Id. at 194. Therefore, McKinstry Co. is distinguishable because it dealt with different types of insurers: primary and excess. Finally, the judge relied on CD Inv. Co. et al. v. Cal. Ins. Guar. Ass'n, 84 Cal.App.4th 1410, 101 Cal.Rptr.2d 806 (2000). That holding is distinguishable because it concerned policies issued to cover five successive periods. Id. at 1417, 101 Cal.Rptr.2d 806. There, the insureds became insolvent. Ibid. Their obligations were assumed by CIGA, California's equivalent to the Association. Ibid. CIGA denied the claims, arguing that the solvent insurers had already paid $1.5 million, which exceeded CIGA's statutory cap of $500,000. Ibid. The California Court of Appeals held: (1) the statutory cap applies separately to each covered claim; and (2) each policy issued for a specific period of time gives rise to a separate covered claim. Id. at 1429, 101 Cal.Rptr.2d 806. Thus, the CD case is distinguishable because we are not dealing with coverage for separate or successive periods, but with two policies covering the same loss. Accordingly, the order denying the Association's motion is reversed. The matter is remanded to the Law Division, Atlantic County, for the entry of a judgment declaring that the Association's obligation to pay Spell's covered claim has been eliminated by PIC's payment. Reversed and remanded. WEISSBARD, J.A.D., dissenting. I conclude that where, as here, a person is grievously injured in an accident for which there is liability coverage under two insurance policies, one with a carrier that becomes insolvent, the individual is not precluded by N.J.S.A. 17:30A-12b from recovering the maximum amount available from the New Jersey Property-Liability Guaranty Association (PLIGA) by virtue of having recovered a greater amount from the solvent carrier, where the individual's damages are not satisfied by the amount received from the solvent carrier. Accordingly, I respectfully dissent for the reasons expressed by Judge Perskie in his careful, exhaustive and, in my view, persuasive written opinion which states, in pertinent part, as follows: 807 The dispute in this matter turns on the meaning to be ascribed to the phrase "an amount payable on a covered claim . . . shall be reduced by the amount of recovery" in Section 12(b). As Plaintiffs interpret this language, and in particular the reference to "covered claim," it means that NJPLIGA is entitled to a credit against its obligation only for those insurance proceeds available to Plaintiffs arising out of and attributable to the insolvency of Reliance. Because the PIC proceeds are available irrespective of Reliance's insolvency and payment from NJPLIGA would therefore not be a "double recovery" or a "windfall," Plaintiffs insist that the offset provision of Section 12(b) has no application to their claim. NJPLIGA, on the other hand, argues that Section 12(b) was designed to protect the Fund by limiting its liability whenever a claimant has recourse to other insurance that applies to the claim, whether or not that other coverage "arises out of" the insolvency of an insurer, and that no payment from the Fund is required if Plaintiffs have available coverage in excess of NJPLIGA's statutory limit of $300,000. There is no reported opinion in New Jersey that directly addresses the issue here presented. There are, however, two New Jersey decisions that discuss the provisions of Section 12 and a number of decisions in other jurisdictions, dealing with substantively identical statutory language, that provide assistance in interpreting the Act and applying it to the facts of this case. In Harrow Stores, Inc. v. Hanover Ins. Co., 315 N.J.Super. 547[, 719 A.2d 196] (App.Div.1998), the court dealt with the issue of "Primary" and "secondary" coverages in the context of NJPLIGA's obligations under the Act. In Harrow, the claimant sued both the manufacturer and the distributor of a chair on which she was injured. The products liability insurer for the manufacturer was insolvent and the distributor's solvent insurer provided coverage for the plaintiffs claim. NJPLIGA was standing in the place of the insolvent carrier. Reversing a trial court ruling that had determined that NJPLIGA's obligations and those of the solvent insurer were "both primary," the Appellate Division observed that "the evident purpose of that provision [Section 12(b)] was to conserve the assets of the Property Liability Insurance Guaranty Fund by shielding it from liability for the obligations of insolvent insurers where there is other insurance covering the same claim that is covered by the insolvent insurer's policy." Harrow, supra, 315 N.J.Super. at 554[, 719 A.2d at 199]. The court held that "where the same covered claim is covered both by a solvent insurer's policy and an insolvent insurer's policy, the insolvent insurer's policy, irrespective of any `other insurance' clause in the policy, cannot be resorted to by the claimant until the policy limits under the solvent insurer's policy are exhausted. Therefore, until such exhaustion, the Association, as the `deemed' insurer under the insolvent insurer's policy, has no obligation." Id. at 555[, 719 A.2d at 200]. The Harrow court did not reach the issue here presented, however, because in Harrow the value of the claim did not exceed the coverage limits available from the solvent insurer. There was, therefore, no opportunity in that case to evaluate NJPLIGA's responsibility for any payments after the solvent insurer's policy limits were exceeded. Carpenter Tech. Corp. v. Admiral Ins. Co., 172 N.J. 504[, 800 A.2d 54] (2002), involved claims for environmental cleanup in which NJPLIGA and its Pennsylvania counterpart were both appearing 808 on behalf of several insurers that were insolvent. The Pennsylvania fund was primarily liable (the claimant was a corporate resident of Pennsylvania), and the claimant settled each covered claim with the Pennsylvania Fund for less than the maximum amount$299,900 than the Pennsylvania Fund was authorized to pay under the Pennsylvania version of the Act. The issue before the Supreme Court was the amount of the credit to which NJPLIGA was entitled, under Section 12(a), by reason of the payments from the Pennsylvania Fund. The trial court had concluded that NJPLIGA was entitled to a credit for each covered claim of $299,900. The Appellate Division had rejected that conclusion, holding that NJPLIGA was entitled only to a credit for the amount that the Pennsylvania fund actually paid to the claimant in settlement of each covered claim. The Supreme Court concluded that the Appellate Division's holding contravened the Legislature's intent in creating NJPLIGA and reinstated the trial court's ruling. While the Carpenter case dealt solely with Section 12(a) of the Act and not with Section 12(b), and the issue presented in the motion before me was not implicated or discussed in that decision, the analysis of the statute undertaken by the Supreme Court is instructive. The Court first determined that the specific language of Section 12(a) was ambiguous, and therefore that "because different interpretations of the statute are arguable, we are obligated to look beyond its language, to discover the `spirit of the law.'" Carpenter, supra, 172 N.J. at 514[, 800 A.2d at 60]. Noting that the language of the Act had been adopted by states throughout the country in an attempt to establish a nationwide network of individual insurance guaranty association statutes designed to spread equitably the risk of insurer insolvency among the states, the Court concluded that the network "should result in [an] as equitable as possible allocation of the inevitable loss where `everyone makes some concessions to the common necessity and no one suffers too much.'" Id. at 515[, 800 A.2d at 60]. The Court went on to observe: The Legislature did not give NJPLIGA unfettered discretion to accommodate all claimants for any claims. The conservation of resources is a major goal. The Legislature signaled the need for restraint and caution in the payment of claims, and did so in a myriad of ways. Illustratively, NJPLIGA does not pay prejudgment interest on covered claims. N.J.S.A. 17:30A-5d. It is not liable for counsel fees incurred by a successful party in a declaratory judgment coverage action against NJPLIGA. N.J.S.A. 17:30A-5d; New Jersey Guar. Assn. v. Ciani, 242 N.J.Super. 164, 169[, 576 A.2d 300, 303] (App.Div.1990). The Act specifically excludes insurer subrogation claims from the definition of a covered claim. N.J.S.A. 17:30A-5d. Recovery against NJPLIGA is limited to unpaid claims that are either asserted by insureds or claimants who are residents of the State, or concern property permanently located in New Jersey. N.J.S.A. 17:30A-5. NJPLIGA is not responsible for "assessments or charges for failure of [the] insolvent insurer to have expeditiously settled claims." N.J.S.A. 17:30A-5d. Further, where a claim is covered both by a solvent insurer's policy and an insolvent insurer's policy, a policyholder first must exhaust his or her policy with the solvent insurer before NJPLIGA has any statutory obligation to pay the. policyholder. 809 "Therefore, until such exhaustion[,] [NJPLIGA], as the `deemed' insurer under the insolvent insurer's policy, has no obligation." N.J.S.A. 17:30A-12b; Harrow Stores, Inc. v. Hanover Ins. Co., 315 N.J.Super. 547, 555[, 719 A.2d 196, 200] (App.Div.1998). Finally, the Act's limitation of recovery at $300,000 per covered claim applies regardless of whether a claimant's policy limit exceeds that amount. N.J.S.A. 17:30A-8a(l). Id. at 515-6[, 800 A.2d at 61] (emphasis added) Although the scope of relief under the Act is to be construed liberally to effect its purposes, clearly one concern of the Legislature is "to conserve limited Association resources to better assure their availability to serve core purposes." Id. at 516-7[, 800 A.2d at 61], citing American Employers' Ins. Co. v. Elf Atochem North America, Inc., 157 N.J. 580, 590[, 725 A.2d 1093, 1099] (1999) and New Jersey Guar. Ass'n. v. Ciani, 242 N.J.Super. 164, 169[, 576 A.2d at 303] (App.Div.1990). As noted, Carpenter is not controlling here, both because it did not deal with the specific statutory provision that is applicable to this case and because the facts of the two cases are not analogous or even similar. However, Sections 12(a) and 12(b) are parallel in their respective provisions that require that NJPLIGA's liability be "reduced by the amount of recovery" from other specified sources, and Carpenter's emphasis on the "conservation of resources" as a "major goal" of the Act and the "need for restraint and caution in the payment of claims" provides a relevant analytic frame of reference to an examination of cases from other jurisdictions that deal more directly with the issue to be determined here. Plaintiffs refer the court to several decisions of the Pennsylvania Superior Court. In Sands v. Pennsylvania Ins. Guar. Ass'n., 283 Pa.Super. 217, 423 A.2d 1224 (1980), a passenger was injured in a two-car accident. The passenger's driver was insured and the other driver was not. The passenger recovered his medical expenses and then settled an uninsured motorist claim with the driver's carrier for $10,000. He then claimed against his own carrier, under uninsured motorist coverage, for an additional $10,000. The total claim exceeded $26,000. The passenger's insurer was insolvent and the Pennsylvania equivalent of NJPLIGA refused payment. The court held that the passenger was required to credit the Pennsylvania Fund not with the sum that he could have received from the driver's carrier, but rather only the amount that he actually did receive. The court reasoned that any additional sums theoretically recoverable against the driver were dependent upon a showing of the driver's fault, and that had never been established. This conclusion is inconsistent with the rationale, although not of course the actual holding of our Supreme Court in Carpenter, supra, which limited NJPLIGA's liability by crediting it with the maximum amount recoverable from the Pennsylvania Fund rather than the amounts received by the claimants through a negotiated settlement. Of more immediate relevance to the issue at bar, however, is the fact that the Sands court also rejected the Fund's argument that the passenger's recovery from other sources of more than the Fund's maximum exposure of $9,900 for each covered claim eliminated any liability of the Fund. The court reasoned that the amount recovered by the passenger under the driver's uninsured motorist coverage did not constitute a 810 "covered claim" because it did not result from the insolvency of an insurer, and therefore did not create the possibility of the duplication of recovery that 40 P.S. § 1701.503(a) ("Sec. 503(a)"), Pennsylvania's equivalent of Section 12(b), was designed to prevent. Sands, supra, 283 Pa.Super. at 225, 423 A.2d at 1227-8. In Bullock v. Pariser, 311 Pa.Super. 487, 457 A.2d 1287 (1983), the claimant was bitten by a dog at a commercial property. The business had liability insurance of $10,000 for each claim but the insurer was insolvent. The court rejected the Fund's position that the disability benefits that the claimant had received from her own insurer should be credited against the Fund's obligation under Section 503(a), applying the same theory that the Sands court had used in defining a "covered claim." Bullock supra, 311 Pa.Super. at 494, 457 A.2d at 1290. Together, then, Sands and Bullock stand for the proposition that sums otherwise received by a claimant regardless of the insolvency of an insurer are not to be credited against the liability of the Pennsylvania Fund pursuant to Section 503(a). Blackwell v. Pennsylvania Ins. Guar. Ass'n., 390 Pa.Super. 31, 567 A.2d 1103 (1989) involved a passenger injured in a two-vehicle accident. The other driver's insurance carrier was insolvent and thus, under Pennsylvania law, the other driver was deemed "uninsured" by reason of the insolvency. Id. at 33, 567 A.2d at 1104. The claimant recovered $40,000 from her driver's uninsured motorist coverage and $25,000 from her own uninsured motorist coverage. Her total claim was in excess of $365,000. The court held that Section 503(a) required the claimant to credit the Fund with the $65,000 that she had received, limiting the Fund's exposure on her claim to $234,900 because the $65,000 had been "received by the claimant due to the insolvency of an insurer." Id. at 35, 567 A.2d at 1105. Significantly, the court stated: We recognize that the Sands decision clearly stands for the proposition that a claimant will never be placed in a better position by virtue of the existence of PIGA, than he would have been in had the insurance company not become insolvent. However, it is equally clear that the Legislature did not intend, in enacting the Insurance Guaranty Act, that in all cases a claimant would be placed in the same position he would have been in had the insurance company remained solvent. Even with the existence of PIGA, it was anticipated by the Legislature that some claimants would suffer some amount of financial loss due to the insolvency of an insurer, because PIGA's obligation to a claimant is limited to $300,000 less the $100 deductible. Blackwell, supra, 390 Pa.Super. at 37, 567 A.2d at 1106 (emphasis in original) From these Pennsylvania decisions, Plaintiffs extract the principle that Section 12(b) requires a credit against NJPLIGA's obligation only for those sums recoverable by Plaintiffs as a result of the insolvency of an insurer. Because the amounts recoverable by Plaintiffs from PIC would be payable irrespective of Reliance's insolvency status, and because the total value of the claims exceeds the combined liability of PIC and NJPLIGA, Plaintiffs argue that there is no possibility of a "double recovery" or a "windfall" and that, subject to the exhaustion of the other available insurance proceeds, NJPLIGA should not be entitled to any credit, under Section 12(b), against any remaining 811 balance of the claims for the amounts that Plaintiffs will receive from PIC. Several cases from other jurisdictions support Plaintiffs' argument. In Arizona Prop. & Cas. Ins. Guar. Fund v. Herder, 156 Ariz. 203, 751 P.2d 519 (1988), a decision cited by our Supreme Court in Carpenter, supra, 172 N.J. at [514, 800 A.2d at 60], as illustrative of the "ambiguity" of Section 12(b), the claimant was a passenger who was injured in a collision with an uninsured driver. His damages exceeded $30,000. The claimant recovered $15,000 from his driver's uninsured motorist coverage but his own insurer became insolvent. When the claimant sought recovery from Arizona's equivalent of NJPLIGA for the $15,000 that he would have received from his own insurer, the Arizona Fund refused payment pursuant to the Arizona equivalent of Section 12(b). The Arizona Supreme Court ruled that the statute was "intended to reduce an insurer's liability and prevent double recovery by an insured when there is another policy covering the same loss." Herder, supra, 156 Ariz. at 205, 751 P.2d at 521. Following the same rationale as was employed by our Appellate Division in Harrow Stores, Inc. v. Hanover Ins. Co., 315 N.J.Super. 547, 719 A.2d 196 (App.Div.1998), the Arizona court utilized an "other insurance" analysis and ruled that the Fund's liability would be secondary rather than primary. Id. at 207, 751 P.2d at 523. The court determined, however, that the Fund would be liable for that portion of the claim that exceeded the coverage available from the claimant's own insurer, ruling that the statutory reference to "any amount payable on a covered claim shall be reduced" referred only to a reduction in the amount of the damage claim, not to a reduction in the amount payable by the Fund. "This construction furthers the statutory purpose of preventing duplication in damage payments to the claimant and preventing the claimant from attempting to invoke the collateral source rule." Id. at 207-8, 751 P.2d at 523-4. The Washington Court of Appeals reached a similar conclusion in Washington Ins. Guar. Ass'n. v. McKinstry Co., 56 Wash.App. 545, 784 P.2d 190 (1990). In that case, the insured was sued for negligence in a claim with a value in excess of $1 million. The insured's primary carrier paid the claimant its full policy, in the amount of $500,000. The insured's excess carrier was insolvent. Washington's equivalent of NJPLIGA refused to pay on a claim against it, arguing that the recovery of the $500,000 by the claimant exceeded the $299,900 statutory limit on the Washington Fund's liability. Again, the statutory language was equivalent to Section 12(b). The claimant argued that the statute was designed only to prevent duplicative recovery. The Fund argued, as does NJPLIGA here, that the statute was designed to bar a recovery from the Fund whenever another source of recovery is available which is at least equal to the Fund's limit of obligation. The court ruled that the Fund was liable up to its statutory limit, without any credit for the sums received by the claimant pursuant to the primary coverage. "Thus, the statute provides for a reduction of [the fund's] statutory obligation only where a claimant, has another source of recovery for the claim against the insolvent insurer, not where a claimant has any other source of recovery." Id. at 550, 784 P.2d at 192 (emphasis in original). This rationale, of course, parallels that of Plaintiffs' construction of the results of the Pennsylvania cases above referenced. 812 In CD Investment Co., et al. v. California Ins. Guar. Assn., 84 Cal.App.4th 1410, 101 Cal.Rptr.2d 806 (2000), the claimant settled litigation against it by agreeing to pay a total of $2,375,000, together with attorneys' fees and costs. Each of three solvent insurers that had provided coverage to the claimant paid $500,000 toward the settlement. Two additional insurers became insolvent and their obligations were assumed by CIGA, California's version of NJPLIGA, whose liability, under California's version of the Act, was limited to $500,000 for each covered claim. CIGA declined payment, arguing, as does NJPLIGA here, that the claimant's receipt, from the solvent insurers, of more than the limit of CIGA's liability released it from any exposure. The Court of Appeal reversed a lower court ruling in favor of CIGA, stating: In our view, the "other insurance" provision simply ensures that CIGA is the insurer of last resort. If other insurance of a "covered class" is available on a covered claim, CIGA is responsible only for the amount, if any, exceeding that coverage, up to a maximum of $500,000 (citation omitted). But, as the plain language of the statute indicates, the "other insurance" limitation applies separately to each covered claim. Here, CD Investment has a separate covered claim under each of the insolvent insurers' policies, none of which were covered by any other insurance. Given the lack of other insurance, CIGA's $500,000 cap has not been met on any of those claims. Second, CIGA's contention is flawed because it improperly uses the payments by the solvent insurers to offset (and in this case, eliminate) CIGA's own obligation to make payments on behalf of the insolvent insurers. On this issue, we do not write on a clean slate. The courts of other states, in applying their own insurance guarantee laws, have soundly rejected CIGA's interpretation. And while the language of the "other insurance" provisions may vary slightly from state to state, they are sufficiently similar for our purposes. CD Investment Co., supra, 84 Cal.App.4th at 1426-27, 101 Cal.Rptr.2d at 815. As observed in the CD Investment decision, several other courts have reached the same result. See, e.g., Connecticut Ins. Guar. Ass'n. v. Union Carbide Corp., 217 Conn. 371, 388-9, 585 A.2d 1216, 1224-5 (1991) ("to construe [the other insurance provision] to allow CIGA to offset its obligation as guarantor of the insolvent policies by amounts paid by solvent insurers that fall short of satisfying a claim, for indemnification would, seriously undercut the protection that the legislature intended to provide . . . CIGA's proposed interpretation effectively reduces the coverage afforded by the insolvent policies to the extent of coverage available under the solvent policies even though the loss remains partially unsatisfied."), and Devane [DeVane] v. Kennedy, 205 W.Va. 519, 530, 519 S.E.2d 622, 633 (1999) ("once the claimant or insured has exhausted all other sources of solvent insurance which collaterally insure the covered claim or where there exists no other solvent insurance which provides coverage for the covered claim, he/she is entitled to enforce his/her covered claim against the West Virginia Insurance Guaranty Association, to the extent allowed by [the Act]"). See also RI Insurers' Insolvency Fund v. Benoit, 723 A.2d 303, 306-08 (1999); Cimini v. Nevada Ins. Guar. Ass'n., 112 Nev. 442, 915 P.2d 279 813 (1996); Aztec v. Prop. & Cas. Ins. Guar. Ass'n., 115 N.M. 475, [485], 853 P.2d 726, 731 (1993); Alabama Ins. Guar. v. Magic City Trucking, 547 So.2d 849, 851-3 (1989). NJPLIGA submits a recent unpublished decision of the Superior Court of Delaware in Marra v. Wilson, (2003 WL 367831, decided February 20, 2003). In this case the claimant was injured in an automobile accident involving a driver insured by Reliance. The damages were stipulated as being in excess of any available insurance coverage. The claimant recovered $100,000 from other insurance coverage. Delaware's statutory structure parallels Section 12(b) and its equivalent of NJPLIGA also has a $300,000 cap on its liability. The Delaware Fund argued that, by reason of the claimant's recovery in excess of the Fund's statutory cap, it was entitled to a credit against its liability to the claimant and should therefore be required to pay only $200,000 on the claim. The claimant's position, similar to Plaintiffs' here, was that the statutory reference to the "reduction" in the "amount payable" referred to a reduction in the amount of the claim that could be asserted against the Fund, not to a reduction in the amount payable by the Fund. The court, however, agreed with the Fund and ruled that the Pennsylvania Superior Court decision in Blackwell v. Pennsylvania Ins. Guar. Ass'n., 390 Pa.Super. 31, 567 A.2d 1103 (1989), was both apposite and persuasive. The Delaware court did not focus on or discuss the "covered claim" issue that Plaintiffs here insist is a distinguishing aspect of the Blackwell decision, and the opinion does not reference or discuss the cases throughout the country that reached the opposite conclusion. From all of the foregoing, it is apparent that the determination of the issue sub judice implicates significant policy considerations as well as questions of statutory interpretation. The specific language of Section 12(b) has, as noted; been adopted in states throughout the nation, and there is apparently no conclusion in the several courts' review of the language more consistent than the observation of the Arizona Supreme Court in Herder, supra, 156 Ariz. at 207, 751 P.2d at 523, cited by the Nevada Supreme Court in Cimini v. Nevada Ins. Guar. Ass'n., 112 Nev. 442, 915 P.2d 279, 282 (Nev.1996), and noted with approval by our Supreme Court in Carpenter, supra, 172 N.J. at [514, 800 A.2d at 60], that "the last sentence of [Section 12(b)] is neither a model of clarity nor an exemplar of the draftsman's craft." With the exception of the recent Delaware decision in Marra, supra, all of the reported decisions that have directly addressed the issue at hand have determined that the proper interpretation of Section 12(b) is one that applies the "reduction" to the total amount of the claimant's claim, not to the amounts to be paid by the Fund. I find these cases persuasive, and the results fully consonant with the approach taken by our courts in Carpenter and Harrow. Carpenter established the standard that the statute should be applied so as to "result in [an] as equitable as possible allocation of the inevitable loss where `everyone makes some concessions to the common necessity and no one suffers too much.'" Carpenter, supra, 172 N.J. at 515[, 800 A.2d at 60]. On these facts, interpreting Section 12(b) as Plaintiffs urge will result in no "windfall" or double recovery for Plaintiffs, and NJPLIGA's exposure will be, as required by the Act, limited to the replacement of up to $300,000 for each of the covered claims. This result is consistent with those in both Carpenter and Harrow, where the principles 814 were established that NJPLIGA's exposure is secondary to that of the solvent carriers and to the obligations of a comparable Fund in the state of the residence of the claimant. Nor is this result precluded by the words of Section 12(b). Acknowledging, as, has been amply observed, the deficiencies in the legislative draftsmanship, the "spirit of the law" behind the words is, in my view, most effectively realized by an interpretation that links the required reduction in NJPLIGA's exposure to the availability of other insurance that "arises out of and is within the coverage" issued by the insolvent insurer. Were it otherwise, a claimant would be artificially disadvantaged by the fortuitous fact that he or she had other available insurance that would, but for the insolvency, be additive to, rather than a replacement of, the coverage provided by the insolvent carrier. There is nothing in the language or legislative history of Section 12(b) that compels this result, and the focus of Carpenter on the "spirit" of a law that was designed to further an allocation of risk that is "as equitable as possible" militates in favor of the position taken by Plaintiffs. The Blackwell decision upon which the court relied in Marra is, on its facts, not to the contrary. Blackwell v. Pennsylvania Ins. Guar. Ass'n., 390 Pa.Super. 31, 567 A.2d 1103 (1989). Blackwell's result can, and in my view should, be read as turning on the fact that the insurance available to the claimant there was available solely by reason of the insolvency of the insurer. The statute was designed, in my view, to put a claimant in essentially the same position, no better and no worse, than if there had been no insolvency. Of course, in view of the statute's limit on the liability of the Fund, some claimants with very serious injuries and insufficient other insurance, such as Spell, will not be in the "same" position as if there had been no insolvency, but that policy determination by the Legislature, articulated in N.J.S.A. 17:30A-2(a), reflects a balanced approach to the stated legislative purpose: to "provide a mechanism for the payment of covered claims under certain insurance policies, to avoid excessive delay payment, to avoid financial loss to claimants or policyholders because of the insolvency of an insurer, to assist in the detection and prevention of insurer insolvencies, and to provide an association to assess the cost of such protection among insurers." Harrow Stores, Inc. v. Hanover Ins. Co., 315 N.J.Super. 547, 554[, 719 A.2d 196, 200] (App.Div.1998). In this context, there is no reason to impose solely on claimants such as Plaintiffs the burden of being significantly disadvantaged by the insolvency of an insurer. The burden of the insolvency was intended by the Legislature to be shared, in this case by a claimant who will recover significantly less than he would have without the insolvency, and by NJPLIGA, which will absorb the burden, capped at $300,000, that the statute contemplated that it would incur by reason of the insolvency. NOTES [1] N.J.S.A. 17:30A-1 to -20. [2] N.J.S.A. 17:30A-12a sets priorities for claims against the Association and similar entities in other states. [3] APCIGF's statutory cap is $100,000. A.R.S. § 20-667B (2005). [4] WIGA's statutory cap is $300,000. RCWA 48.32.0601(a) (2005).	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532224/	305 B.R. 854 (2004) In re William D. WHITNALL, Debtor. Julie Halverson, Plaintiff, v. William D. Whitnall, Defendant. Bankruptcy No. 02-31285-JES, Adversary No. 02-2430. United States Bankruptcy Court, E.D. Wisconsin. January 16, 2004. 855 Thomas C. O'Brien, Esq., Salem, WI, for Plaintiff. John A. Cabranes, Esq., Racine, WI, for Defendant-Debtor. DECISION JAMES E. SHAPIRO, Bankruptcy Judge. INTRODUCTION In this adversary proceeding, Julie A. Halverson ("plaintiff"), former spouse of debtor, William D. Whitnall ("defendant"), seeks a determination that payments to her from the defendant arising out of a divorce settlement and identified as "§ 71 payments"[1] are nondischargeable under 856 11 U.S.C. § 523(a)(5). Alternatively, the plaintiff asserts that if these § 71 payments are not maintenance under § 523(a)(5), they are nondischargeable under 11 U.S.C. § 523(a)(15). FACTS The plaintiff and defendant were married on June 7, 1991 and were divorced on September 29, 1999. No children were born to or adopted by the parties. At the time the divorce was granted, each party was 57 years old. The plaintiff presently works as a customer service representative with Aegis Communications in Elkins, West Virginia. Her average net pay, based upon an hourly rate of $6.75, is approximately $438 every two weeks, although with overtime she sometimes earns in excess of that sum. The most net pay which she received over a 2-week period was $550. Her annual gross pay is approximately $16,000. The defendant formerly was an attorney. His license was suspended at the time the divorce was granted and has since been revoked by consent. The defendant is now employed full-time as a special education high school teacher in the Racine Unified School District and is in his third year of employment. He earns as gross pay between $35,000 and $37,000 per year. On September 29, 1999, an oral stipulation was reached by these parties in the divorce case with respect to all contested issues. The stipulation provided that the § 71 payments would be paid by the defendant to the plaintiff in the sum of $400 each month commencing 36 months from the date the divorce was granted. It further provided that, pursuant to § 71 of the Internal Revenue Code, the payments are deductible to the defendant and taxable to the plaintiff and are nonmodifiable. These "§ 71 payments"[2] were to continue until the plaintiff became 65 years of age. On September 4, 2002, or about at the time the § 71 payments were scheduled to commence, the defendant filed a petition in bankruptcy under chapter 7. This adversary proceeding was thereafter filed on December 27, 2002. LAW It is the plaintiff's burden to establish by a preponderance of the evidence that the § 71 payments she was awarded are nondischargeable. In re Crosswhite, 148 F.3d 879, 881 (7th Cir.1998). Although exceptions to discharge are generally construed strictly against the creditor and liberally in favor of the debtor, that policy is tempered when the debts in question deal with obligations for spousal and child support. Bankruptcy law has had a long-standing, corresponding policy of protecting a debtor's spouse and children. Crosswhite, 148 F.3d at 881. 857 SEC. 523(a)(5) Under § 523(a)(5) of the Bankruptcy Code, whether a debt is a maintenance obligation or a property division is a matter of federal bankruptcy law, rather than state law. In re Reines, 142 F.3d 970, 972 (7th Cir.1998). Many factors must be taken into consideration in deciding this issue. One key factor is the underlying intent of the parties. Unfortunately, in this case, that intent is not clear. The testimony produced at this adversary proceeding by the attorneys representing each of the parties in the divorce action as well as their statements made to the court in the divorce proceedings are not very helpful in assessing the underlying intent of the parties. Attorney Judith Hartig-Osanka represented the defendant in the divorce case. She testified that she was opposed to any order which provided for maintenance and that she "did not feel this was a maintenance case." She further stated that she discussed maintenance with the defendant and that he was steadfastly opposed to making any maintenance payments. Attorney Hartig-Osanka also testified that she did not recall any discussions with Attorney Thomas O'Brien, who represented the plaintiff in the divorce case, concerning the consequences of bankruptcy. Attorney Hartig-Osanka did, however, acknowledge that bankruptcy could have been discussed because her memory, using her words, "may not be the world's greatest." She stated that she viewed these payments as a "lump sum nonmodifiable settlement." In the transcript of the divorce proceedings, Attorney Hartig-Osanka made the following statements to the divorce court: Your Honor the agreement would be as follows: maintenance to both parties is waived and denied. There will be an agreement that there will be what we call § 71 payments. Those are deductible to Mr. Whitnall, taxable to Mrs. Whitnall. They are nonmodifiable. They will commence in 36 months. They will be $400 per month, up to the time that Mrs. Whitnall becomes 65 years of age, which will be approximately 4 years and 9 months of payments. . . . If Mr. Whitnall's income is over $60,000, then commencing May 1st of that year for the following 12 months the payments will increase to $600 per month. . . . The payments will terminate upon Mrs. Whitnall's 65th birthday and eligibility for social security. Attorney Hartig-Osanka further stated: Your Honor, § 71 of the Internal Revenue Code has elements of maintenance in[sic] a property division, but avoids some of the pitfalls of both. Maintenance is amendable based upon a change of circumstances. Property divisions are dischargeable in bankruptcy. This is allowed by the Internal Revenue Code and is a combination of maintenance and property division which eliminates both of those features, and either being amendable or being dischargeable. On the other hand, Attorney O'Brien, who represents the plaintiff in this adversary proceeding and also represented the plaintiff in the divorce case, testified that he clearly recalled that the subject of bankruptcy was discussed with Attorney Hartig-Osanka and further that it was his intent to have these payments made nondischargeable should a bankruptcy ultimately be filed by the defendant. In the transcript of the divorce proceedings, he stated the following: § 71(a), Your Honor, is a portion of the Internal Revenue Code as amended that allows parties to define a maintenance obligation. It further permits them by 858 formula or by express terms of the agreement to reach a nondischargeable amount (underlining added for emphasis) to be paid. The testimony by the plaintiff and defendant regarding their underlying intent also does not shed light on what they intended and was directly contradictory. The defendant testified he did not recall any discussion about nondischargeability of § 71 payments in the event of his bankruptcy and further that, at the time the divorce was granted, he did not even intend to file for bankruptcy. On the other hand, the plaintiff testified that she repeatedly said, in the presence of both defendant and defendant's attorney, that these § 71 payments cannot be dischargeable. In view of the foregoing, the court's ability to ascertain the underlying intent of the parties is, to the say the least, difficult. However, there are other factors which the court evaluates in deciding if payments constitute maintenance or property division. Bankruptcy courts frequently look to the function that such payments were intended to serve, notwithstanding any language in the parties' agreement or divorce decree to the contrary. Collier Family Law § 6.04(8) states the following: Debtors seeking to establish that their obligations are in the nature of property settlements rather than alimony or support often point in support of their arguments to clauses in marital settlement agreements in which their spouses waived all rights to alimony or support or agreed to make payments in lieu of alimony or support. They are sometimes successful. Usually such arguments have had little persuasive effect especially if the non-debtor spouse did not have any other adequate means of support at the time of the agreement. The case of Sylvester v. Sylvester, 865 F.2d 1164, 1166 (10th Cir.1989), declares that, even though a wife agreed that she was relinquishing any rights that she may have for support, the circumstances of her low income and her needs to care for a child, the lengthy period of the payments, and the terminability of the obligation upon remarriage or death led the court to conclude that the marital obligation was for support. Similarly, in In re Carrigg, 14 B.R. 658 (Bankr.D.S.C.1981), despite the fact that the divorce decree stated payments were a property settlement and that the obligee had "waived any alimony and she is forever barred from alimony" the bankruptcy court nonetheless found these payments were intended to provide the plaintiff with a place to live and therefore were in the nature of alimony or support. Id. at 661. In this case, even though the marital settlement agreement declared that "maintenance to both parties is waived and denied," for purposes of nondischargeability in bankruptcy, that statement is not conclusive. It is clear to this court that the § 71 payments were needed to enable the plaintiff to maintain her daily necessities, including food, housing, and transportation and also to bridge the gap for the plaintiff until such time as she attained age 65, when she would then be eligible to receive Social Security and a small pension of around $300-320 per month over ten years from Davis & Elkin College in West Virginia where she previously had worked. It is also clear to this court that the plaintiff would have great difficulty in providing for herself unless she received these payments. Up to now, she has had to rely upon her children and others to meet her daily needs. She testified that she is receiving food from the cleaning lady at Aegis Communications who gives her "outdated food" from the vending machines. It is the function of 859 the § 71 payments that tip the scales in favor of this court's determination that the § 71 payments are a form of maintenance. SEC. 523(a)(15) Although this court has found that the § 71 payments are maintenance, it recognizes that because of the ambiguity with respect to the intention of the parties, this is a close call. However, even if the § 71 payments are not maintenance, this court is persuaded that they are nondischargeable under § 523(a)(15). Under § 523(a)(15), the burden of establishing this exception to discharge is initially on the plaintiff. Once it is shown that the debt was incurred in connection with a separation agreement or a divorce decree, the burden then shifts to the debtor. Crosswhite, 148 F.3d at 884-85. In this case, it is undisputed that the § 71 payments arose out of the parties' stipulation which was then incorporated into the divorce decree. The burden then shifted to the defendant to prove that this debt should be discharged either because: (1) he lacks the ability to make these payments or (2) the benefit of a discharge to him outweighs the detrimental consequences to the plaintiff. Courts have differed as to what is the appropriate time to determine the respective financial circumstances of the parties for purposes of § 523(a)(15). Clearly, it is not when the divorce was granted. Some courts, however, hold that the financial circumstances must be viewed as of the time of the filing of the bankruptcy petition. In re Carroll, 187 B.R. 197 (Bankr.S.D.Ohio 1995). Most courts hold that these financial circumstances are to be considered either at the time of the filing of the adversary complaint or at the time of the trial. In re Dunn, 225 B.R. 393, 399 (Bankr.S.D.Ohio 1998); In re Haines, 210 B.R. 586 (Bankr.S.D.Cal.1997); and In re Morris, 193 B.R. 949 (Bankr.S.D.Cal.1996). In the case at bar, it makes little difference because the financial circumstances of the parties changed very little from the date of the filing of the bankruptcy petition to the date that the adversary trial was held. This court has in the past and continues to take the position that it must view the financial circumstances of the parties as of the date of the trial. See In re Shteysel, 221 B.R. 486, 488 (Bankr.E.D.Wis.1998). Ability to pay test-§ 523(a)(15)(A) As previously noted, the defendant is working as a high school special education teacher in the Racine Unified School District, with gross pay earnings between $35,000 and $37,000. He is contributing $600 each month to be used in connection with the monthly mortgage on the home in which he and his fiancée reside and which home is owned by her. He carries medical insurance and stated that he is in reasonably good health, although he does need some dental work. He is working on a full-time basis. The defendant does not own a car and is driving a car owned by his fiancée's granddaughter until such time as he can purchase his own car. He acknowledges, however, that he is "a lot better off" financially at the present time than he was when the divorce was granted. Recently, the defendant started setting aside $400 from each of his paychecks and is depositing these funds into his credit union account because of his fear that he may be required to return to the Racine Unified School District the increased wages he was receiving in 2003. He bases this concern upon a letter he received from Frank L. Johnson, Executive Director/Counsel of the District in October of 2003 which points out this possibility unless the District's proposal for a new contract with the teachers in this District is 860 accepted. While such a drastic step of recovery by the District of the increased wages made to the teachers is a possibility, it is only a possibility. The defendant testified that he is unaware of this drastic step ever having been taken in the past. It appears to this court that this is a negotiating tactic being utilized by the District in attempting to work out a new contract with the teachers. Recovery of the increased payments made to the teachers is not a certainty, and in the unlikely event that recovery of the increased wages is invoked by the District, it is unclear how much the defendant would be required to repay or the method of such repayment.[3] The court finds that the defendant's actions in setting aside $400 from each paycheck and placing it into the Racine Teachers Credit Union is an arbitrary measure on his part. It further finds that this demonstrates the defendant's ability to make such payments to the plaintiff as agreed upon in the oral stipulation reached in the divorce case. The court is satisfied that the defendant has the ability to make these payments to the plaintiff. Benefit of a discharge to the defendant vs. detrimental consequences to the plaintiff § 523(a)(15)(B) Upon a review of the income and expenses of these parties, the court finds that the detriment the plaintiff would suffer should the defendant's obligation to make payments be discharged clearly outweighs any benefit to the defendant which he would otherwise obtain if the obligation to make the § 71 payments is discharged. The defendant's income and earning ability far exceed that of the plaintiff. While the payment of this obligation may well place some strain upon the defendant, it is minimal when compared to the detriment which the plaintiff would otherwise suffer if this obligation is discharged. The record in this case is compelling that the plaintiff is barely able to survive at the present time. She has both physical and emotional problems and is unable to handle stress. She, like the defendant, also is in need of dental work. As previously pointed out in the court's discussion under § 523(a)(5), the plaintiff can only meet her daily needs with the assistance from her children and from others. Although she does own a home, it was purchased through the West Virginia Housing Development Fund, an assistance program for persons such as the plaintiff with limited income. The home she owns is described as "a very small house containing 860 square feet." She does have a boarder, but his contributions are meager approximately $20 per month and he is in very poor health. The plaintiff owns a 1998 Dodge Neon automobile, which she purchased after the parties separated and before the divorce was granted. This car has over 100,000 miles. She testified that she cannot presently afford to purchase a television set. On the other hand, the defendant's fiancée is park director at West Lawn Memorial Park in Racine, Wisconsin. Although the defendant testified he did not know what his fiancée is earning, it is clear that her financial situation is much more stable than that of the plaintiff's boarder. Based upon a comparison of the financial condition of each of the parties, the court is satisfied that the granting of a discharge to the defendant would be much more detrimental to the plaintiff than any benefit which the defendant would obtain if *861 such discharge of this obligation is granted to him. CONCLUSION Under these circumstances, the payments which the defendant was ordered to pay to the plaintiff arising out of the divorce settlement and identified as "§ 71 payments" are nondischargeable. An appropriate order declaring such payments nondischargeable shall be entered. The foregoing constitutes this court's findings of fact and conclusions of law pursuant to Rule 7052 of the Federal Rules of Bankruptcy Procedure. NOTES [1] "§ 71 payments" are so designated because they are made pursuant to § 71 of Title 26 of the Internal Revenue Code. Payments qualifying under this provision are, for income tax purposes, deductible by the payor and reportable as income by the payee. [2] Although the parties in the divorce case purported to structure the payments in accordance with § 71 of the Internal Revenue Code, it is questionable if that goal was accomplished. One of the requirements under § 71 of the Internal Revenue Code is that there shall be no liability for any further payments after the death of the payee spouse. In this case, in response to questioning by Judge S. Michael Wilk, the presiding judge in the divorce case, both attorneys stated that the payments would continue to the age of 65 and that, in the event of the plaintiff's death prior to that time, payments would nonetheless still continue to be paid to her estate (see pp. 4-5 of Exhibit "F"). Be that as it may, for purposes of this decision, the payments in question are referred to in this decision as "§ 71 payments," as so identified by the parties. [3] On January 8, 2004, the Milwaukee Journal Sentinel reported that the District and the Racine teachers reached a tentative contract. Some of the terms of the contract were set forth in this article. Nothing reported indicates that there will be any recovery from the teachers of the increased wages they received in 2003.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532233/	831 S.W.2d 121 (1992) 309 Ark. 257 James PLEDGER, Director, Department of Finance and Administration, State of Arkansas, Appellant, v. GETTY OIL EXPLORATION COMPANY, Appellee. No. 91-228. Supreme Court of Arkansas. May 4, 1992. 122 Rick Pruett, Little Rock, for appellant. Eugene G. Sayre, Little Rock, David J. Dziak, Tulsa, Ok., for appellee. DUDLEY, Justice. The single issue in this case is whether the accrued interest income of the appellee corporate taxpayer, Getty Oil Exploration Company, constituted apportionable business income in 1983 and 1984 under the Uniform Division of Income for Tax Purposes Act. The chancellor determined that the income was not taxable by the State of Arkansas. We affirm the chancellor's ruling. Getty Oil Company, the taxpayer's parent corporation, was a publicly traded major integrated oil company which was incorporated in Delaware but had its headquarters and commercial domicile in Los Angeles, California. In 1979, in anticipation of a subsequent merger, Getty Oil Company formed a wholly owned domestic subsidiary, Getty Reserve Oil, Inc., which also was headquartered in Los Angeles. This subsidiary was authorized to do business in eighteen states, including Arkansas. At the same time, Reserve Oil and Gas Company was a major integrated oil and gas producer and marketer and was a parent company of numerous wholly owned subsidiaries, including Reserve Oil, Inc. On January 23, 1980, Getty Oil Company acquired the Reserve Oil and Gas Company by corporate merger. The merger included the assets of the wholly owned subsidiary, Reserve Oil, Inc. The assets of Reserve Oil, Inc. were transferred, as planned, to Getty Reserve Oil, Inc. None of the assets of Reserve Oil, Inc. were shown to be in Arkansas. Reserve Oil, Inc. was subsequently dissolved and is no longer material to this case. Getty Reserve Oil, Inc. soon transferred the assets it received from Reserve Oil, Inc. to its parent, Getty Oil Company for a consideration of $159,750,000.00. Getty Oil Company paid this amount with a 123 promissory note dated August 1, 1980, payable to Getty Reserve Oil, Inc. and bearing interest at the rate of six (6) per cent. (It is the interest on this note that will accrue in 1983 and 1984 which the Department of Finance and Administration will attempt to tax.) Getty Oil Company never made a cash payment on the note and for the first sixteen months, made no entries reflecting interest owing on the note. Likewise, Getty Reserve Oil, Inc. made no entries showing interest accruing on the note. Next, on December 31, 1982, immediately before the tax years at issue began, the books of Getty Reserve Oil, Inc. reflected an accrual of $24,247,189.42 interest income on the note and the records of Getty Oil Company reflected the same as an accrued interest expense. After the note had been executed and delivered, Getty Reserve Oil, Inc. conducted an active oil and gas exploration business in eighteen states and, as a part of that business, acquired and managed gas producing properties in Arkansas. In early 1983, Getty Oil Company negotiated the sale of Getty Reserve Oil, Inc.'s corporate stock to an unrelated company, Comajo Petroleum Company. However, Getty Oil Company wanted to keep the Arkansas gas producing properties and negotiated retention of those assets. Meanwhile, from August 10, 1972, until December 28, 1982, Getty Oil Company owned an inactive subsidiary named Getty Oil International (Spain) S.A. On December 28, 1982, the name of this subsidiary was changed to Getty Oil Exploration Company. On February 11, 1983, Getty Oil Exploration Company became qualified to do business in Arkansas under the name of Getty Arkoma, Inc., and immediately afterwards, the promissory note and the title to the Arkansas gas producing properties were transferred from Getty Reserve Oil, Inc. to Getty Oil Exploration Company. (The State contends that the income tax liability began to accrue at this time to Getty Oil Exploration Company.) Getty Oil Exploration Company had no employees of its own; it contracted with Getty Oil Company for the active management of the Arkansas gas fields. It did not hold the note; it was held in Getty Oil Company's office. Getty Oil Exploration Company did not control the note; it was controlled by Getty Oil Company's corporate treasury department. Getty Oil Exploration Company gave nothing for the note which was later cancelled under generally accepted accounting principles. On December 31, 1983, Getty Oil Company issued a new promissory note to Getty Oil Exploration Company in the amount of $204,793,434.14 bearing interest at the rate of eleven (11) per cent. This new note represented a consolidation of all indebtedness between the parent and the subsidiary. Getty Oil Exploration Company's books, which were kept by the corporate treasury department of Getty Oil Company, reflected an intercompany interest income of $23,211,877.00 as of December 31, 1984. This interest was classified on the corporate books as non-operating revenue. On December 31, 1984, the trial balance of Getty Oil Exploration Company books showed accrued intercompany interest receivable of $11,979,097.00 and long-term intercompany notes receivable of $216,026,213.00. On February 17, 1984, Texaco, Inc. acquired all of the stock of Getty Oil Company and all of its subsidiaries. As part of the plan of reorganization of the merged companies, Texaco, Inc. made Getty Oil Company a wholly owned subsidiary. Texaco, Inc. owned another subsidiary, Texaco Producing, Inc., and it caused Texaco Producing, Inc. to acquire all of the stock of Getty Oil Exploration Company. By the end of 1984, Getty Oil Company had transferred most of its assets and liabilities, including the liability on the note at issue, to Texaco Producing, Inc. in exchange for stock in Texaco Producing, Inc. In 1985, Texaco, Inc. caused Getty Oil Exploration Company to transfer all of its assets, including the promissory note and title to the gas properties in Arkansas, to Texaco Producing, Inc. as a dividend in kind. Thus, Texaco Producing, Inc. held both the liability of the note payable and asset of the note receivable. The asset and the liability were then canceled by offsetting accounting entries 124 on the books of Texaco Producing, Inc. Under generally accepted accounting principles, when an obligation and an asset are in the same company, it is the accepted practice to cancel the note. In Arkansas, Getty Oil Company filed a separate income tax return in 1983 and filed an apportioned income tax return in 1984. It did not attempt to deduct the interest accruing to Getty Oil Exploration Company on either of these returns. Getty Oil Exploration Company, the taxpayer, filed an apportioned tax return in both 1983 and 1984, and reported the accrued interest income, but designated it as "nonbusiness income." Therefore, it did not pay income tax to the State of Arkansas on the accrued interest income. Through auditors, the Director of the Department of Finance and Administration conducted an audit of Getty Oil Exploration Company's 1983 and 1984 income tax returns and reclassified the accrued interest as "business income." This reclassification caused Getty Oil Exploration's gross income to be increased in 1983 from $1,838,208.00 to $22,638,083.00 and in 1984 from $1,063,283.00 to $21,372,622.00, and caused a deficiency assessment of $389,433.00. Getty Oil Exploration Company protested the deficiency assessment, but it was affirmed by the Administrative Law Judge of the Revenue Department's Board of Hearings and Appeals. The Commissioner of Revenues denied a request for a revision. In 1987, an assessment of corporate income tax and interest was made against Getty Oil Exploration Company in the amount of $512,065.18. This amount was paid by Texaco, Inc., under protest, and this suit for refund was filed in the Chancery Court of Pulaski County. The chancellor found that the accrued interest was "nonbusiness income" and entered a judgment in favor of the taxpayer for the amount paid under protest. The Director of Finance and Administration's single point of appeal is that the accrued interest was "business income" and therefore taxable. The argument is without merit. Arkansas is one of twenty-three states that have adopted UDITPA, the Uniform Division of Income for Tax Purposes Act, Ark.Code Ann. §§ 26-51-701 to -723 (1987, Supp.1989). This Act governs the manner in which Arkansas may impose income and franchise taxes on the earnings of multistate and multinational corporations doing business in the State. UDITPA is designed to fairly apportion among the states in which a corporation does business the fair amount of regular business income earned by the corporation's activities in each state. Under UDITPA, net taxable business income of a corporate taxpayer involved in a multistate business is apportioned by a well recognized three-factor formula consisting of tangible property, payroll, and sales. Ark.Code Ann. §§ 26-51-710 to -717 (1987). "Business income" is defined in Ark. Code Ann. § 26-51-701(a) (1987, Supp.1989) as: [Ijncome arising from transactions and activity in the regular course of the taxpayer's trade or business and includes income from tangible and intangible property if the acquisition, management, and disposition of the property constitute integral parts of the taxpayer's regular trade or business operations. [Emphasis added.] "Nonbusiness income" is defined in Ark. Code Ann. § 26-51-701(e) (1987, Supp.1989) as "all income other than business income." To the extent that it constitutes "nonbusiness income," interest income is allocated to the state of the taxpayer's commercial domicile. Ark.Code Ann. §§ 26-51-704 and -707 (1987). In this case the taxpayer, Getty Oil Exploration Company, paid the tax on the accrued interest in California, the state of its commercial domicile. The focus of the statute defining "business income" is the nature of the taxpayer's business. Under the statute business income arises from either of two sources: (1) transactions and activity in the regular course of the taxpayer's business, referred to as the transactional test, or (2) income from the acquisition, management, 125 and disposition of property that constitutes integral parts of the taxpayer's regular business, referred to as the functional test. See McGowan and Murray, The Business v. Nonbusiness Income Controversy: Recent Developments, 8 Journal of State Taxation 303, 303-304 (1989). Under the transactional test, the transfer of the note from Getty Reserve Oil, Inc. to the taxpayer, Getty Oil Exploration Company, was an extraordinary and non-recurring event. It was not a transaction in the "regular course of the taxpayer's business." The evidence clearly shows that the taxpayer gave no consideration for the multi-million dollar intercompany note, and the parent corporation simply used the subsidiary taxpayer to hold the note. It was a unique, non-recurring event. This is the only promissory note that the appellee taxpayer, Getty Oil Exploration Company, is shown to have held. It was not shown to have accrued any other interest. The chancellor correctly held this was a non-recurring event and was not a transaction that occurred in the regular course of the taxpayer's business. The proof is equally clear under the functional test. The appellee taxpayer, Getty Oil Exploration Company, was not in the business of acquiring, managing, or disposing of this type of property. Before 1983, it existed only as an inactive corporate shell named Getty Oil International (Spain) S.A. The shell did not acquire, manage, or dispose of notes or invest in other intangible assets. The related company that originally held the note, Getty Reserve Oil, Inc., was sold to an unrelated company. The parent company changed the name of this corporate shell to Getty Oil Exploration Company at the end of 1982 and in January 1983, transferred the note and the gas producing property in Arkansas into it. The appellee taxpayer is not the successor of the original holder, Getty Reserve Oil, Inc, which ceased to exist within the taxpayer's corporate family. The appellee taxpayer was a subsidiary corporate entity into which the parent placed the intercompany note for bookkeeping purposes; it gave no consideration for the note. It was a passive holder of a note that was generated as a result of an intercompany transaction to which it was not a party. It did not have a plan of active corporate investment in order to expand the corporation. It did not manage the note; it had no employees. It did not hold the note; it was held at the parent company's office. It did not control the note; it was controlled by the parent corporation. It did not have any active investment strategies in intangibles such as stocks, bonds, or promissory notes. Thus, the acquisition, management, and disposition of notes was not an integral part of the taxpayer's regular trade or business. The taxpayer proved that the intangible income was earned in the course of activities unrelated to its regular business operations within the State. The Director argues that one of the principal purposes for the taxpayer's existence was to manage the note. He argues that the taxpayer's income from gas operations amounted to only $1,838,200.00 in 1983 and $1,063,283.00 in 1984, while the intercompany interest income amounted to $20,799,875.00 in 1983 and $20,309,339.00 in 1984. Based on these figures he argues that the taxpayer's main purpose was to manage the note. For the reasons set out in the preceding paragraphs, it is clear that the taxpayer's regular business purpose was not to manage notes. In addition, the "purpose" test has been discredited by the Supreme Court of the United States. In ASARCO, Inc. v. Idaho State Tax Comm'n, 458 U.S. 307, 102 S. Ct. 3103, 73 L. Ed. 2d 787 (1982), the State argued that, under UDITPA, it should be able to tax its apportionable share of the intangible income of a corporation doing business in the State but domiciled elsewhere if the intangible property is acquired, managed, or disposed of for purposes relating or contributing to the taxpayer's business. Rejecting the State's "purpose" test, the Court observed that this concept would be no limitation at all on the State's ability to tax the income of a corporation not domiciled within it and said: *126 The business of a corporation requires that it earn money to continue operations and to provide a return on its invested capital. Consequently, all of its operations, including any investment made, in some sense can be said to be "for purposes related to or contributing to the [corporation's] business." Id. at 326, 102 S.Ct. at 3114. Similarly, in the present case, such a "purpose" interpretation of UDITPA'S definition of business income would eliminate the distinction between business and nonbusiness income. Thus, the chancellor made no error in her application of the law. We are not aware of any case to the contrary. The Director cites us to the case of Bendix Corp. v. Director, Div. of Taxation, 125 N.J. 20, 592 A.2d 536 (1991), but that case is clearly distinguishable. It does not involve the interpretation of UDITPA, but rather involves constitutional issues under the Commerce and Due Process Clauses. It does not involve an isolated note that was generated and passively held as the result of an intercompany transaction, but rather involves investments which were an integral part of the taxpayer's plan of expansion of the existing corporate business by merger and acquisitions. The appellee taxpayer makes an alternative argument for sustaining the ruling of the chancellor. It argues that the income from the notes did not have a rational relationship with the State of Arkansas, and a tax on this income would be violative of the Due Process Clause for the State of Arkansas to tax the income from the notes. See Exxon Corp. v. Wisconsin Dept. of Revenue, 447 U.S. 207, 100 S. Ct. 2109, 65 L. Ed. 2d 66 (1980). We do not reach the argument since we affirm the chancellor under the language of the statute. Affirmed.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532211/	305 B.R. 661 (2004) Harry J. CAVAZOS and Minerva Cavazos, Plaintiffs, v. Luis MUNOZ, d/b/a/ Munoz Roofing and Construction, Defendant. Civ.A. No. B-03-057. United States District Court, S.D. Texas, Brownsville Division. February 12, 2004. 662 663 664 665 666 Gerardo Ernesto Linan, Attorney at Law, Brownsville, TX, for Petitioner. Richard O. Habermann, Attorney at Law, McAllen, TX, for Respondent. MEMORANDUM OPINION AND ORDER HANEN, District Judge. This appeal concerns the validity of an original contractor's mechanic's lien to secure a debt for labor and material furnished in connection with renovations of existing improvements on a residential homestead. Debtors in a Chapter 13 bankruptcy case filed an adversary proceeding in the United States Bankruptcy Court for the Southern District of Texas seeking to avoid the lien. Although the contractor complied with the preconditions set forth in Article 16, Section 50(a)(5)(A)-(D) of the Texas Constitution and Section 53.254(a)-(c), (e) of the Property Code, the Bankruptcy Court denied the lien because the contractor had failed to file a lien affidavit pursuant to Section 53.052(b) of the Property Code. The contractor appealed. Upon careful consideration of this matter, this court holds that the contractor obtained an enforceable constitutional lien upon fulfillment of the requirements prescribed in Article 16, Section 50(a)(5)(A)-(D) of the Constitution and Section 53.254(a)-(c), (e) of the Property Code. Filing a lien affidavit was not necessary in order to effectuate that lien. Accordingly, the Bankruptcy Court's ruling is reversed. I. STANDARD OF REVIEW Findings of fact made by the Bankruptcy Court will not be set aside unless clearly erroneous, and conclusions of law reached by the Bankruptcy Court are reviewed de novo by this court. Matter of T.B. Westex Foods, Inc., 950 F.2d 1187, 1190 (5th Cir.1992). II. FACTUAL AND PROCEDURAL BACKGROUND This case involves an appeal from the Bankruptcy Court's order denying an original contractor's mechanic's lien on a residential homestead for renovation of existing improvements thereon. The Bankruptcy Court filed its Findings of Fact and Conclusions of Law. This court adopts the former, and the controlling facts are as follows: Appellant Luis Munoz, doing business as Munoz Roofing and Construction ("Munoz") prepared a proposal for improvements to Appellees Harry J. and Minerva Cavazos' ("the Cavazos") homestead on or about January 1, 1998. Upon acceptance of the proposal, the Cavazos applied for a mortgage to finance the construction work from the Rio Grande Mortgage Company in Harlingen, Texas; the mortgage was approved in September 1998. Munoz agreed to finance the work until its completion, at which time the mortgage company would fund the mortgage and reimburse Munoz for his work. A Builder's and Mechanic's Lien Contract and Lien Note, which set forth the terms of the agreement, were prepared on March 5, 1999.[1] Munoz and the Cavazos signed the documents and the signatures 667 were properly acknowledged at the office of the Rio Grande Valley Abstract Company, Inc. on March 10, 1999, and the documents were recorded on or about March 16, 1999. The contract contained the following capitalized, boldfaced language: "YOU MAY, WITHIN 3 BUSINESS DAYS AFTER CLOSING, RESCIND THIS LOAN WITHOUT PENALTY OR CHARGE." Munoz began performance of the work after recordation of the contract and continued until September 1999, when construction was halted because the Cavazos terminated the mortgage application and refused to pay Munoz for either the work completed or remaining. Munoz never filed a lien affidavit after the indebtedness accrued. On January 28, 2000, the Cavazos filed a petition for Chapter 13 relief and subsequently filed an adversary proceeding to avoid Munoz's purported lien on their property. The Bankruptcy Court, relying upon CVN Group, Inc. v. Delgado, 47 S.W.3d 157 (Tex.App. Austin 2001), rev'd on other grounds, 95 S.W.3d 234 (Tex.2002), concluded that Munoz needed to comply with the requisites set forth in Article 16, Section 50(a)(5)(A)-(D) of the Texas Constitution and Sections 53.254(a)-(c) and 53.052(b) of the Texas Property Code in order to perfect his lien.[2] The Bankruptcy Court determined that Munoz satisfied the constitutional requirements and those of Section 53.254, but not Section 53.052(b) because he did not file a lien affidavit, as prescribed by that provision. The Court therefore held that Munoz failed to properly perfect his lien on the Cavazos' homestead, entered judgment in favor of the Cavazos, and granted their application to remove Munoz's lien on their property. III. DISCUSSION This case presents this court with a single issue: whether an original contractor, who has complied with the requirements of Article 16, Section 50(a)(5)(A)-(D) of the Texas Constitution and Section 53.254(a)-(c), (e) of the Property Code, must also file a lien affidavit pursuant to Section 53.052(b) of the Code in order to perfect a mechanic's lien on a residential homestead for repayment of material and labor furnished for the renovations of existing improvements thereon.[3] As mechanic's liens referred to by many authorities as "mechanic's and materialman's liens"[4] do not arise at common law, but rather are creatures of constitutional and statutory law, Lippencott v. York, 86 Tex. 276, 280, 24 S.W. 275, 276 (1893), the Texas 668 Constitution and the mechanic's lien statutes of the State must be referenced to determine the rights of a claimant asserting such a lien. Due to the numerous changes in the constitutional and statutory provisions pertaining to mechanics' liens and the myriad cases construing and, at times, misconstruing these provisions over the past 165 years, courts have not always been as consistent or as specific as they might have been in some of their observations and rulings. Consequently, the body of case law on such liens is not a model of clarity, and it is doubtful that all the germane cases could be reconciled. This court, therefore, finds it beneficial to review that portion of Texas' lien history relevant to the issue at hand, with citation to a few pertinent authorities. A. HISTORY OF THE MECHANIC'S LIEN Texas law recognizes two different mechanic's liens: the statutory mechanic's lien and the constitutional mechanic's lien. Apex Financial Corp. v. Brown, 7 S.W.3d 820, 830 (Tex.App. Texarkana 1999, no writ) ("[a] statutory lien exists through compliance with the applicable statutes, while a constitutional lien arises by virtue of the Constitution without the aid of the statutes.") (citations omitted); see also Youngblood, Mechanics' and Materialmen's Liens in Texas, 26 SW. L.J. 665 (discussing, inter alia, the differences between the procedural steps an original contractor must follow to create each type of lien). Prior to the adoption of the Texas State Constitution of 1869, the sole basis of a mechanic's lien was statutory. Consequently, and perhaps surprisingly, the statutory mechanic's lien predated the constitutional lien, and its roots can be traced back to the Acts of the Republic. 1. STATUTES ENACTED DURING THE REPUBLIC OF TEXAS AND EARLY STATEHOOD The mechanic's lien debuted in Texas in 1839, when the Congress of the Republic of Texas enacted "An Act For the relief of Master Builders and Mechanics of Texas." Act of Jan. 23, 1839, 3rd Cong., Repub. Tex. Laws, reprinted in 2 H.P.N. GAMMEL, THE LAWS OF TEXAS 1822-1897, at 66 (Austin, Gammel Book Co. 1898). Pursuant to the Act, an original contractor who entered into a written contract for the construction of a building in an incorporated city or town was given a lien on the building and the land on which it was situated to secure payment for work and material furnished. 2 GAMMEL, supra at 66-67. The Act further required that the contract be filed within thirty days of execution; otherwise, the lien was inoperative as to all persons without notice. 2 GAMMEL, supra at 67. When the "new" State of Texas adopted a Constitution in 1845, the Act of 1839, along with the Act of 1844 which pertained to the rights of subcontractors became statutes of the State and continued to regulate the rights of those claiming a mechanic's lien. Tex. Const. of 1845, art. XIII, § 3 (providing that all laws or parts thereof of the former Republic of Texas that were not averse to the new State Constitution would remain viable). The adoption of the Constitution of 1869 gave birth to the constitutional mechanic's lien, and it also instructed the Legislature to provide for its "speedy and efficient enforcement."[5] Tex. Const. of 1869, art. 669 XII, § 47. However, this provision did not reference liens on buildings erected or repaired and was judicially construed not to grant original contractors a self-executing lien on real estate independent of the then existing statute that required the original contractor to record the written contract to perfect the lien. Campbell v. Fields, 35 Tex. 751, 1872 WL 7476, at 3 (1872) (interpreting the 1869 Constitution to confer a self-executing lien for only articles manufactured or repaired by a claimant). At this point in the history of the mechanic's lien, an original contractor created a valid lien upon buildings erected or repaired on either homestead or non-homestead property in the same manner. Id. In other words, prior to the Act of 1871, which is discussed below, the work performed and the labor furnished must have been contracted for in writing and recorded within thirty days of execution. Id. Moreover, at this point in time, courts seemingly did not differentiate between the constitutional and statutory provisions and consequently read them as establishing only one lien. See e.g., Shields v. Morrow, 51 Tex. 393, 1879 WL 7684 (1879). The Legislature responded to the Constitution's directive to provide for "the speedy and efficient enforcement" of the lien therein by passing "An Act to provide for and regulate mechanics, contractors, builders, and other liens in the State of Texas" in 1871. Act of November 17, 1871, 12th Leg., Adj. S., ch. 34, §§ 1-6, reprinted in 7 H.P.N. GAMMEL, THE LAWS OF TEXAS 1822-1897, at 30 (Austin, Gammel Book Co. 1898). The Act of 1871 was cumulative of all the preceding Acts of the Congress of the Republic and the Act of 1848. Shields, 51 Tex. 393, 1879 WL 7684, at 3. This Act extended the mechanic's lien to performance of work pursuant to oral, as well as written, contracts.[6] 7 GAMMEL, supra at 30; see also Shields, 51 Tex. 393, 1879 WL 7684, at 3. The 1871 Act also introduced the lien affidavit to the statutory perfection scheme (at that time designated a "bill of particulars"), which was an itemized sworn statement of the original contractor's claim. 7 GAMMEL, supra at 30; ELDON L. YOUNGBLOOD, YOUNGBLOOD ON TEXAS MECHANICS' LIENS § 103.2(a)(2) (2nd ed.1999). As an oral contract could not be recorded to perfect a lien, the bill of particulars (lien affidavit) was required to be filed in connection with liens claimed to arise under same in the exact manner provided for written contracts, and a copy was to be served upon the person that owed the debt. 7 GAMMEL, supra at 30; Ferguson v. Ashbell & Simpson, 53 Tex. 245, 1880 WL 9302, at 3-4 (1880); YOUNGBLOOD, supra § 103.2(a)(2). This instrument thus served as a substitute for the recorded written contract, where the agreement between the parties was verbal. See Id. Consequently, with the enactment of the Act of 1871, an original contractor who endeavored to enforce a mechanic's lien on either homestead or non-homestead property had to perfect it by either recording the written contract or by recording the bill of particulars (lien affidavit) if the claimed debt arose pursuant to an oral contract. 7 GAMMEL, supra at 30; see also Ferguson, 53 Tex. 245, 1880 WL 9302, at 3-4. Both of these instruments had to be filed within six months from the time the 670 claimed indebtedness became due. Id. When recorded, each had to be accompanied by a description of the lands, lots, houses, and improvements against which the lien was claimed, and the lien became perfected from the date the appropriate document was recorded. Id. 2. THE CONSTITUTION OF 1876 The Constitution adopted in February 1876 which is the present Constitution of the State radically altered the mechanic's lien landscape. While Article 16, Section 37 of that document contained a mechanic's lien provision nearly identical to that of the prior Constitution, it also expressly created a constitutional mechanic's lien applicable to improvements on real estate.[7] Tex. Const. of 1876, art. XVI, § 37. The Constitution also provided for homestead foreclosure protection in Article 16, Section 50, which today remains a fundamental law of Texas.[8] Tex. Const. of 1876, art. XVI, § 50. Pursuant to this provision, a homestead could be subject to forced sale for, inter alia, payment of debts "for work and material used in constructing improvements thereon . . . only when the work and material are contracted for in writing, with the consent of the wife given in the same manner as is required in making a sale and conveyance of the homestead. . . ."[9]Id. at § 50(a)(5). Responding to the command of Article 16, Section 37 of the Constitution to craft laws for "the speedy and efficient enforcement" of the lien thereby created, the Legislature promulgated the Act of 1876, which revised the procedures for perfecting a lien.[10] Act of August 7, 1876, 15th Leg., R.S., ch. 81, §§ 1-8, reprinted in 8 H.P.N. GAMMEL, THE LAWS OF TEXAS 1822-1897, at 927 (Austin, Gammel Book Co. 1898). With respect to non-homestead property, the Act in keeping with the dictates of the former Act required that the written contract be recorded, or, in the case of an oral contract, the lien affidavit be recorded in order to perfect a lien.[11] 8 GAMMEL, supra at 927. As to homestead property, however, the requisites for securing a lien were amended. Id. Though the Act included a recitation of the constitutional prerequisites necessary for enforcing such liens, the statute went further and required that the written contract set 671 forth the terms of the contract;[12] that it be signed and acknowledged by the owner and spouse, if married, before the work or material were furnished; and that it be recorded in the county clerk's office in the county where the improvements were located or the land was situated.[13]Id. The constitutional lien granted by Article 16, Section 37 of the 1876 Constitution was momentous for another reason: it was self-executing i.e., it did not require compliance with the statutory requisites for perfection under the applicable mechanic's lien statutes and thus a lien separate and apart from the statutory mechanic's lien established by the legislative acts. While today this principle is firmly embedded in Texas law, the self-executing feature of the lien did not immediately become the cornerstone of mechanic's lien jurisprudence, but rather developed over several years through several decisions of the Supreme Court of Texas. The Supreme Court of Texas first recognized that the Texas Constitution imposed the lien at the moment of the transaction and was thus independent of the lien statutes in Keating Implement and Mach. Co. v. Marshall Elec. Light & Power Co., 74 Tex. 605, 607-08, 12 S.W. 489, 490 (1889). In Keating, the implement company averred that the mandate contained in the Act of 1885 directing that contractors should have a lien upon compliance with the provisions therein meant that a mechanic's lien could not arise upon commencement of the work, but rather that the lien could come into existence only after it had been perfected by compliance with the statutorily prescribed perfection procedures. Id. The Keating Court held that position to be mistaken, reasoning that, because Article 16, Section 37 of the Constitution was the source of the lien referred to in the statutes, it arose at the moment of the transaction and was subject only to being regulated by the Legislature as to the time and method of its enforcement. Id. Despite the holding in Keating, six years later the Supreme Court in Warner Elevator Mfg. Co. v. Maverick, although recognizing the independence of the constitutional lien, implied that the viability of said lien was conditional upon compliance with the lien perfection steps required by the controlling statutes. 88 Tex. 489, 492-94, 30 S.W. 437, 438-39 (1895). It was not until one year later in the landmark case of Strang v. Pray, 89 Tex. 525, 35 S.W. 1054 (1896), that the characteristics of the lien conferred by the Constitution were decisively established. In Strang, the owner attempted to defeat the original contractor's claimed lien on a building, together with the lot upon which the building was situated, on the basis that the statutes required either the contract for the erection of the building to be recorded or a bill of particulars 672 (lien affidavit) filed, neither of which had been done. Id. at 1055. The Court held that as between the owner of the property and the original contractor the lien created by the Constitution and arising upon the performance of the work was self-executing, and the requirements imposed by the Legislature to perfect the lien did not affect the claimant's rights as to its enforcement.[14]Id. at 1056. The Court further concluded that compliance with the statutory requisites was necessary only to secure the original contractor's rights as against third parties, i.e., intervening purchasers or encumbrancers who became so in good faith, for value, and without notice of the lien.[15]Id. Accordingly, the Strang Court recognized the existence of two types of liens: the constitutional lien, which existed independent of and apart from any legislative acts and the statutory lien established by the state legislature. Id. The constitutional lien unlike the statutory lien was self-executing as between the original contractor and the owner and not dependent upon compliance with the requirement that a bill of particulars (lien affidavit) be filed. Id. However, though the constitutional lien was self-executing, it could not be enforced against a bona fide purchaser or encumbrancer that had no notice of the lien without satisfying the statutory perfection requirements. Id. An original contractor could only enforce a constitutional lien against the owner of the property, i.e., the person with whom he had directly contracted and with whom he was in privity. Id. Thus, in order to perfect a statutory lien that was effective against third parties, an original contractor had to file a lien affidavit in the manner set forth in the statutes. Id. The principles articulated in Strang were affirmed and more extensively explained in Farmers' & Mechanics' Nat. Bank v. Taylor, 91 Tex. 78, 40 S.W. 876 (Tex.Civ.App. 1897), aff'd, 91 Tex. 78, 40 S.W. 966 (1897). The Court in Farmers' & Mechanics' Nat. Bank construed Strang as follows: "[w]e think that the language of the learned judge who delivered the opinion in [Strang] . . . means that the filing and recording of the contract or account, as provided in the statute, is not necessary in any case arising between the original contractor and the owner; that it is only necessary to fix, secure, and protect the lien as against subsequent purchasers and mortgagees and lien holders who become so in good faith, for a valuable consideration, without notice of such a claim and lien, and that this is all that the legislature meant by [Article 3295, Revised Civil Statute of Texas, 1895]. . . . It could not prescribe conditions of forfeiture, nor conditions upon which the lien should arise or take effect. The constitution covered that part of the subject fully by declaring that the contractor who furnished the material or did the work should have the lien. No record within four months, or any other time, is required to give the lien. The 673 legislature is commanded simply to provide by statute for the `speedy and efficient enforcement' of such lien. The provisions of the statute requiring the claim to be recorded were intended to protect mechanics, artisans, and material men as against subsequent purchasers, mortgagees, and lien holders in good faith without notice, by furnishing constructive notice to the world of the existence of the lien, in designating where such matters can be found recorded, and thus making it the duty of persons dealing with the property to examine such records before advancing money on the property."[16] Id. at 879-80 (emphasis added). Consequently, the adoption of the 1876 Constitution and the concomitant passage of the Act of 1876 created material differences in the necessary steps for a constitutional lien to arise on non-homestead and homestead property. See Tex. Const. of 1876, art. XVI, §§ 37, 50; 8 Gammel, supra at 927. A constitutional lien arose on non-homestead property upon commencement of the work and was independent of and existed apart from the perfection requirements contained in the mechanic's lien statutes. Tex. Const. of 1876, art. XVI, § 37; Strang, 35 S.W. at 1056; Farmers' & Mechanics' Nat. Bank, 40 S.W. at 880. For both non-homestead and homestead property, a contract with the owner to perform lienable work or to deliver material for an improvement to real estate was an essential prerequisite for a valid lien under the Constitution, Article 16, Section 37. Youngblood, supra § 501.1. Regarding non-homestead property, though a contract between the original contractor and the owner of the property was required, it could be written or oral. 8 Gammel, supra at 927; Ball v. Davis, 118 Tex. 534, 539, 18 S.W.2d 1063, 1064 (1929); Ferguson, 53 Tex. 245, 1880 WL 9302, at 3-4. On such property, a contract could also be express or implied. Tenison v. Hagendorn, 155 S.W. 690, 693-94 (Tex.Civ.App. Dallas 1913) (finding a contract was implied where the owner knew the work was for his benefit, suggested modifications, and supervised the work). On homestead property, a constitutional lien arose upon commencement of the work and was independent of and existed apart from the perfection requirements contained in the mechanic's lien statutes if the requisites of Article 16, Section 50 of the Constitution and Section Four of the Act of 1876 were followed. Tex. Const. of 1876, art. XVI, § 50; 8 Gammel, supra at 927. Thus, a lien could not attach to a homestead unless the work was performed pursuant to a written contract that set forth the terms of the agreement; that was signed and acknowledged by the owner and spouse, if married, before the labor was performed or the material furnished; and that was recorded in the county clerk's office. Id. Since a constitutional lien was unenforceable against both non-homestead and homestead property as to intervening purchasers or encumbrancers who became so in good faith, for value, and without notice of the lien, an original contractor needed to perfect a statutory mechanic's lien to protect all of the claimant's rights arising under the lien. Strang, 35 S.W. at 1056; Farmers' & Mechanics' Nat. Bank, 40 S.W. at 880. Perfection was achieved by either recording the written contract or, in the case of an oral contract for work performed on non-homestead property, the lien affidavit, in the exact manner and 674 within the time constraints prescribed by the applicable statutory provisions. 8 GAMMEL, supra at 927; Strang, 35 S.W. at 1056; Farmers' & Mechanics' Nat. Bank, 40 S.W. at 880. 3. SUBSEQUENT SUBSTANTIVE DEVELOPMENTS IN MECHANIC'S LIEN JURISPRUDENCE The Act of 1885 modified the time restraints for recordation of an original contractor's claim. Act of March 28, 1885, 19th Leg., R.S. ch. 66, 1885 Tex. Gen. Laws 683, reprinted in 9 H.P.N. GAMMEL, THE LAWS OF TEXAS 1822-1897, at 683 (Austin, Gammel Book Co. 1898). Rather than require an original contractor's written contract to be filed within six months after the indebtedness accrued (or a lien affidavit, if the work was performed under an oral contract), the Act mandated that the appropriate instrument be filed within four months after the indebtedness accrued. 9 GAMMEL, supra at 683-84. The mechanic's lien laws as amended through 1909 were recodified in 1911 at Tex. Civ. Stat., arts. 5621-5639, with the aforementioned statutory requirements for securing a constitutional lien upon a homestead contained in Article 5631. Revised Statutes of Texas of 1911, 32nd Leg., (Arts. 5621-5639) 1188-93, 1190-91. These mechanic's lien statutes were again reorganized by the Act of 1925 into Arts. 5452-5472. Revised Statutes of Texas of 1925, 39th Leg. (Arts. 5452-5472) 1537-43. The requisites for perfecting a lien upon a homestead were inserted at Article 5460. Id. at 1540-41. The Act of 1961, known as the Hardeman Act, revised Article 5452 et seq. and ushered in sweeping changes in the manner of perfecting a claimant's statutory mechanic's lien within the statutory scheme.[17] Ch. 382, § 1, 57th Leg., 1961 Tex. Gen. Laws 863 (1961). The Act eliminated the requirement that a claimant's contract if written be recorded in the manner set forth in the statutes and instead rendered recordation of the lien affidavit the primary action of the statutory perfection procedures required of all original contractors, whether the contract was oral or written.[18] § 2, 1961 Tex. Gen. Laws 864-65. An original contractor needed to file the affidavit not later than 120 days after the indebtedness accrued. Id. Tex.Rev.Civ. Stat. art. 5460, the provision pertaining to liens on homesteads, however, was not amended and thus still preserved the long-standing requirements of recording the written, signed, and acknowledged contract that had to be executed prior to the commencement of the work that an original contractor needed to fulfill in order to possess a valid constitutional lien that was enforceable against the owner of the property. Ch. 382, 1961 Tex. Gen. Laws 863; see e.g., In re Daves, 770 F.2d 1363, 1366-67 (5th Cir.1985) (holding that a valid lien could not be created on a homestead unless there was strict compliance with Article 16, § 50 of the Constitution and Tex.Rev.Civ. Stat. art 5460); Herrington v. Luce, 491 S.W.2d 478, 480-81 (Tex.Civ.App. Tyler 1973, no writ) (observing that an original contractor's self-executing constitutional lien arose from his contract for homestead improvements upon satisfying Article 16, Section 50 and 675 Article 5460). Consequently, as to homestead property, the Legislature retained the recordation of the written contract requisite pertinent to the creation of a constitutional lien that an original contractor could enforce against the owner of the property and required the filing of a lien affidavit in the exact manner prescribed in the statutes in addition to fulfilling the constitutional and statutory homestead formalities contained in Article 16, Section 50 of the Constitution and Tex.Rev.Civ. Stat. art. 5460 if the contractor needed to perfect a statutory lien that could be enforced against third parties. Tex. Const. of 1876, art. XVI, § 50; § 2, 1961 Tex. Gen. Laws 864-65; Article 5460, Revised Civil Statutes of Texas, 1925. The Act of 1983, in pertinent part, recodified the entire body of mechanic's lien statutes as Chapter 53 of the Property Code (formerly Tex.Rev.Civ. Stat.1925 art. 5452 et seq.). Act of June 19, 1983, 68th Leg., R.S., ch. 576, § 1, 1983 Tex. Gen. Laws 3535 (1983). Though numerous statutes were substantially reworded and reorganized, the Texas Legislature expressly declared that this recodification was a non-substantive revision. § 7, 1983 Tex. Gen. Laws 3730. The provisions applicable to claims on homestead property were codified at Section 53.059 (formerly Tex.Rev.Civ. Stat.1925 art. 5460). § 1, 1983 Tex. Gen. Laws 3543. Section 53.052 (formerly Tex.Rev.Civ. Stat. Ann. art. 5453) carried over the lien affidavit filing deadlines required in order to perfect a statutory mechanic's lien. § 1, 1983 Tex. Gen. Laws 3538. 4. RECENT SUBSTANTIVE DEVELOPMENTS IN MECHANIC'S LIEN JURISPRUDENCE With the Act of 1997, the Texas Legislature modified Chapter 53 of the Property Code by adding a new subchapter Subchapter K that dictated the necessary steps for statutorily perfecting a lien applicable only to "residential construction projects," as that term was defined in Section 53.001 of the Property Code.[19] Act of May 31, 1997, 75th Leg., ch. 526, § 23, 1997 Tex. Gen. Laws 1887. Section 53.059, which applied to all homestead property, was repealed as to claims arising under contracts executed on or after September 1, 1997, and reinserted into the newly created Subchapter K at Section 53.254. §§ 23-25, 1997 Tex. Gen. Laws 1887-88, 1892. This provision which applied exclusively to residential construction projects that were homesteads provided, in pertinent part, as follows: (a) To fix the lien on a homestead, the person who is to furnish material or perform labor and the owner must execute a written contract setting forth the terms of the agreement. (b) The contract must be executed before the material is furnished or the labor is performed. (c) If the owner is married, the contract must be signed by both spouses. (d) If the contract is made by an original contractor, the contract inures to the 676 benefit of all persons who labor or furnish material for the original contractor. (e) the contract must be filed with the county clerk of the county in which the homestead is located. The county clerk shall record the contract in records kept for that purpose.[20] § 23, 1997 Tex. Gen. Laws 1887-88 (currently at TEX. PROP. CODE ANN. § 53.254). The Act of 1997 also amended Section 53.052 of the Property Code to differentiate the lien affidavit filing requirement of residential construction projects from that of other projects. § 5, 1997 Tex. Gen. Laws 1881. An affidavit for a claim of a lien arising from a residential construction project had to be filed "with the county clerk of the county in which the property is located not later than the 15th day of the third calendar month after the day on which the indebtedness accrues."[21]Id. (currently at TEX. PROP. CODE ANN. § 53.052(b)). This requisite was effective only as to claims arising under contracts executed on or after September 1, 1997. §§ 5, 25, 1997 Tex. Gen. Laws 1881, 1892. Since the adoption of the Texas Constitution in 1876, the only constitutional preconditions provided therein for establishing a lien on a homestead was that a written contract for the work performed and the material furnished be signed and acknowledged by the owner and spouse, if married before the work commenced.[22] Tex. Const. of 1876, art. XVI, § 50(a)(5). However, a 1997 constitutional amendment, effective January 1, 1998, imposed the following three additional requirements on all renovation and repair work on existing improvements on a homestead as preconditions to a valid lien: 1) the contract must not have been executed before the 12th day after the owner made written application for any extension of credit for the work and material; 2) the contract must have expressly provided that the owner may rescind the contract without penalty or charge within three days after the execution of the contract by all parties; and 3) the contract must have been executed by the owner and the owner's spouse only at the office of a third-party lender making an extension of credit for the work and material, an attorney at law, or a title company.[23] Tex. Const. art. XVI, § 50(a)(5)(A)-(D) (amended 1997). 677 The final revision to the corpus of mechanic's lien laws was another constitutional amendment. Effective January 1, 2002, Article 16, Section 50 of the Constitution was amended to reduce the twelve day working period after signing the written application for extension of credit to five days. Tex. Const. art. XVI, § 50(a)(5)(B) (amended 2001). The 1997 and 2001 constitutional amendments and the provisions contained in the Act of 1997, which are the current law today, shepherded in critical distinctions between an original contractor's method of creating and perfecting a lien on a non-homestead residential construction project, a residential homestead, and a business homestead.[24] Under the present law, while all residential homesteads meet the Property Code definition of a "residential construction project," not all residential construction projects constitute homestead property.[25] YOUNGBLOOD, supra § 1002. With respect to non-homestead residential construction projects, the constitutional and statutory homestead preconditions necessary to create a valid constitutional lien are inapplicable. See Tex. Const. art. XVI, § 50(a)(5); Tex. Prop. Code Ann. § 53.254; Youngblood, supra § 1002.1. Further, to perfect a lien on a non-homestead residential construction project that would be enforceable against third parties, an original contractor must file a lien affidavit (which has the statutorily prescribed contents) with the county clerk of the county in which the property is located within three months of the accrual of indebtedness and send a copy to the owner at the owner's last known business or residential address on or before the applicable sending deadline by certified mail. Tex. Prop. Code Ann. §§ 53.052(b), 53.055(a); Youngblood, supra § 1002.1. Concerning homestead property, the distinction between a business homestead and a residential homestead is an important one with respect to creating a valid constitutional lien, as a business homestead is not a residential construction project. See TEX. PROP. CODE ANN. §§ 53.001(8) &(10); YOUNGBLOOD, supra § 902.15. The constitutional requisites necessary to establish a lien upon a homestead are equally applicable to both residential and business homesteads. See Tex. Const. art. XVI, § 50(a)(5); Youngblood, supra § 502.1. However, Subchapter K of the Property Code (of which Section 53.254, the homestead provision, is a component) effective as to claims under contracts executed on or after September 1, 1997, and which sets forth the statutory 678 steps pertinent to liens on residential construction projects is inapplicable to business homesteads. See Tex. Prop. Code Ann. §§ 53.001(8) & (10), 53.251(a); Youngblood, supra §§ 502.1, 902.15. The upshot of this inapplicability is that between an original contractor and an owner a lien could be enforceable against a business homestead without following the statutory homestead requirements of Section 53.254. Youngblood, supra § 502.1. Thus, it is unnecessary for a written contract related to improvements on a business homestead to be recorded in order to create a valid lien. Id. To perfect a statutory lien on a business homestead enforceable against third parties, an original contractor in addition to complying with the constitutional homestead formalities of Article 16, Section 50 must file a lien affidavit (which has the statutorily prescribed contents) with the county clerk of the county in which the property is located on or before the fifteenth day of the fourth calendar month after the date the claimant's indebtedness accrued and send a copy to the owner at the owner's last known business or residential address on or before the applicable sending deadline by certified mail. Tex. Prop. Code Ann. §§ 53.052(a), 53.055(a); Youngblood, supra § 1000. Further, the procedures an original contractor must satisfy to create a constitutional lien on residential homestead property also differ, depending upon whether the contractor provided work in connection to new improvements or repair or renovation work on existing improvements. If the work and material were for new construction, for a constitutional lien to arise thereon, the only constitutional requirement is that the contract be in writing.[26] TEX. CONST. art. XVI, § 50(a)(5); Spradlin v. Jim Walter Homes, Inc., 34 S.W.3d 578, 581 (Tex.2000). The 1997 constitutional amendment dispensed with the acknowledgement requirement of the spouses' signature with regard to new construction, and this requirement does not appear in Section 53.254 of the Property Code. See TEX. CONST. art. XVI, § 50(a)(5) (amended 1997); TEX. PROP. CODE ANN. § 53.254. With respect to renovation or repair work, however, the Constitution necessitates that: 1) the work and material be contracted for in writing; 2) the contract be signed and acknowledged by the owner and spouse, if married, before the work commenced; 3) the contract not be executed by the owner before the 5th day after the owner made written application for any extension of credit for the work and material; 4) the contract expressly provide that the owner may rescind the contract without penalty or charge within three days after the execution of the contract by all parties; and 5) the contract be executed by the owner and the owner's spouse only at the office of a third-party lender making an extension of credit for the work and material, an attorney at law, or a title company.[27] TEX. CONST. art. XVI, § 50(a)(5)(A)-(D) (amended 1997 and 2001); Spradlin, 34 S.W.3d at 581. Additionally, for both new improvements and renovation or repair work performed on a residential homestead, Section 53.254 of the Property Code requires that the contract set forth the terms of the agreement, that it be signed by the husband and wife before the work commenced, and that it be recorded. TEX. PROP. CODE ANN. 679 § 53.254(a)-(c), (e); YOUNGBLOOD, supra § 1002.2(a). To perfect a statutory lien on either new improvements or renovation or repair work on existing improvements on residential homestead property that would be enforceable against third parties, an original contractor must comply with both the constitutional and statutory requirements set forth in the preceding paragraph. See YOUNGBLOOD, supra §§ 1002.2-1002.2(b)(3). Additionally, a lien affidavit (which has the statutorily prescribed contents) must be filed within three months of the accrual of indebtedness, and a copy must be sent to the owner at the owner's last known business or residential address on or before the applicable sending deadline by certified mail. TEX. PROP. CODE ANN. §§ 53.052(b), 53.055(a); YOUNGBLOOD, supra § 1002.3. B. CURRENT STATUS OF THE LAW To summarize the foregoing discourse as to the law relevant to residential homesteads which is the type of property at issue in the present case one and one-half centuries of Texas mechanic's lien jurisprudence can be condensed as follows: there are two types of mechanic's liens the constitutional mechanic's lien and the statutory mechanic's lien.[28]See Strang, 35 S.W. at 1056; Apex Financial Corp., 7 S.W.3d at 830; Youngblood, Mechanics' and Materialmen's Liens in Texas, 26 SW.L.J. 665. The mechanic's lien contemplated by the statutes is indistinguishable from the lien provided for in the 680 Constitution. See Strang, 35 S.W. at 1056; Myers, 30 S.W. at 913; YOUNGBLOOD, supra § 601. In other words, all mechanic's liens have their source in Article 16, Section 37 of the Constitution; this provision establishes the lien to which the statutes refer. Id. The Court in Strang made this principle clear when it opined: [i]n the greater number of the states, mechanic's liens are created by statutes which usually express that the mechanic or materialman shall have a lien upon the land connected therewith . . . We conclude that the proper construction of the language of the constitution of this state . . . gives to mechanics, artisans, and materialmen a lien upon the interest or estate that the person causing such building or improvements to be made thereon has in the land upon which they are situated . . . The lend does not depend upon improvements. The lien does not depend upon power to affix to that lien conditions of forfeiture. It may, under the constitution, provide means for enforcing the lien, and, in doing so, may prescribe such things to be done as may be deemed necessary for the protection of the owner or purchasers of such property, a limitation upon the time for the enforcement of such lien, and such other things as pertain to the remedy . . . In so far as the statute gives to persons not embraced in the terms of the constitution, if it does so, a lien upon the buildings and lands on which they stand, the lien is dependent upon the statute, and a compliance therewith would be necessary in order to its existence. But, as between the contracting parties in this case, the lien attached under the constitution of the state, and was not lost by a failure to record the contract . . . as directed by the statutes. Strang, 35 S.W. at 1056. Thus, when the statutes reference a mechanic's lien, they are referring to the very lien that springs from the Constitution, which is merely regulated by the statutes. Id. While the source of a constitutional lien is Article 16, Section 37 of the Constitution, Article 16, Section 50 therein and Section 53.254 of the Texas Property Code provide the manner in which such a lien can be and is created on a residential homestead. See CVN Group, 95 S.W.3d at 235 & n. 5 (citing both Article 16, Section 37 and Section 50 of the Constitution when observing that an arbitrator had found that the contractor possessed a constitutional lien); see also Moray Corp. v. Griggs, 713 S.W.2d 753, 754 (Tex.App. Houston [1st Dist.] 1986, writ ref'd). As the court in Moray Corp. noted: [t]he Texas Constitution is very clear that a construction or improvement lien on a homestead is invalid unless created in a manner provided in section 50 of article 16. That section requires that the owner execute a contract with the builder. In this regard, the homestead provisions do override article 16, section 37, by requiring a written contract between the builder and the owner. 713 S.W.2d at 754 (citations omitted). With respect to a residential homestead, whether the work thereon is for new improvements or repair or renovation work on existing improvements determines the requisites with which an original contractor must comply for a constitutional lien to arise. A contractor who contracts with a property owner for new improvements must contract for same in writing. TEX. CONST. art. XVI, § 50(a)(5) (amended 1997); Spradlin, 34 S.W.3d at 581. Further, the contract must set forth the terms of the agreement, be signed by the owner and spouse, if married, before the work commences, and be recorded. TEX. PROP. CODE ANN. § 53.254(a)-(c), (e). 681 An original contractor who contracts with an owner for renovations or repairs on existing improvements is the beneficiary of a constitutional mechanic's lien if the claimant complies with Article 16, Section 50(a)(5)(A)-(D) of the Constitution and Section 53.254(a)-(c), (e) of the Property Code. Tex. Const. art. XVI, § 50(a)(5)(A)-(D) (amended 1997); Tex. Prop. Code Ann. § 53.254(a)-(c), (e); Spradlin, 34 S.W.3d at 581. As a constitutional lien is not enforceable against bona fide good faith purchasers for value or encumbrancers without actual notice, a contractor would be wise to file a lien affidavit to perfect a statutory mechanic's lien, thus giving constructive notice. Strang, 35 S.W. at 1056; Farmers' & Mechanics' Nat. Bank, 40 S.W. at 880; Wood, 420 S.W.2d at 429; Apex Financial Corp., 7 S.W.3d at 830. IV. APPLICATION OF THE LAW TO THE CURRENT CASE Turning to the instant case, the foregoing survey of constitutional and statutory law pertaining to mechanics' liens compels this court to find that Munoz possesses a constitutional lien enforceable against the Cavazos' homestead. As Munoz renovated existing improvements thereon, Article 16, Section 50(a)(5)(A)-(D) and Section 53.254(a)-(c), (e) control, and it is to these provisions that this court looks in rendering its decision. As detailed above, the Constitution requires that the contract 1) be in writing; 2) be signed and acknowledged by the Cavazos before commencement of the work; 3) not be executed before the 12th day after the Cavazos made written application for any extension of credit for the work and material; 4) provide that the Cavazos could rescind same without penalty or charge within three days of execution; and 5) be signed by the Cavazos only at the office of a third-party lender making an extension of credit for the work and material, an attorney at law, or a title company.[29] Tex. Const. art. XVI, § 50(a)(5)(A)-(D) (amended 1997). Section 53.254 of the Property Code further requires that the written contract set forth the terms of the agreement, be signed by both spouses and executed before the work or material were furnished, and be filed with the county clerk in the county in which the homestead property is located. Tex. Prop. Code Ann. § 53.254(a)-(c), (e). Munoz and the Cavazos signed a written, acknowledged contract setting forth the terms of the agreement at the office of the Rio Grande Valley Abstract Company, Inc. on March 10, 1999, and recordation of same occurred on or about March 16, 1999. Execution of the contract occurred more than twelve days after the Cavazos applied for a mortgage (the Rio Grand Mortgage Company approved the mortgage in September 1998) and before material was furnished or labor was performed. The contract also provided that the Cavazos could rescind the agreement without penalty or charge within three days of execution. Thus, Munoz satisfied all the requirements necessary to possess a constitutional lien. Consequently, having found that Munoz complied with all the necessary steps for a constitutional lien, this court further holds that the Bankruptcy Court erroneously found Munoz's lien to be invalid on the ground that he failed to file a lien affidavit pursuant to Section 53.052(b) of the Property Code. The recordation of an affidavit 682 is necessary only if Munoz was attempting to render the lien effective as to a third party without actual notice. Strang, 35 S.W. at 1056 (constitutional lien is unenforceable against subsequent good faith purchasers of a property or lenders taking a security interest thereon who acquire the interest without actual or constructive notice of the lien claim); Wood, 420 S.W.2d at 429; Apex Financial Corp., 7 S.W.3d at 830; YOUNGBLOOD, supra § 1000. Munoz, however, contracted directly with the Cavazos, the owners of the property. A constitutional lien may be asserted by one in privity with the owner of the property in question for renovations to existing improvements on a homestead if the prescriptions in Article 16, Section 50(a)(5)(A)-(D) and Section 53.254(a)-(c), (e) of the Property Code are followed. Strang, 35 S.W. at 1056; Herrington, 491 S.W.2d at 480-81; Gilmer v. Wells, 17 Tex. Civ. App. 436, 439, 43 S.W. 1058, 1060 (Tex.Civ.App. 1897, writ ref'd). Said lien's viability is not subject to compliance with the lien perfection requirement of Section 53.052(b). Strang, 35 S.W. at 1056. The Bankruptcy Court relied upon CVN Group, Inc. v. Delgado, 47 S.W.3d 157 (Tex.App. Austin 2001), rev'd on other grounds, 95 S.W.3d 234 (Tex.2002) in support of its holding. Such reliance, however, was misplaced. In CVN Group, the owners of a homestead employed a contractor to construct a new residence on their property; however, before construction was completed, the owners ordered the work to cease. Id. at 160. The contractor alleged that the homeowners breached the contract, and as the contract contained an arbitration clause, the parties submitted their dispute to an arbitrator, who ultimately found that the contractor possessed both valid statutory and constitutional mechanic's liens. Id. The contractor brought an action to confirm the arbitration award and foreclose the lien. Id. The trial court, however, declared the lien invalid and denied foreclosure. Id. at 167. Specifically, the Court found that the evidence failed to demonstrate that the contractor had properly filed an acknowledged lien contract. Id. at 166. The contractor appealed, and the Austin Court of Appeals affirmed the trial court's decision, reasoning that the protection afforded homesteads constituted a fundamental public policy and that to safeguard a homestead a court must review an arbitrator's decision concerning the validity of a lien before granting or denying foreclosure.[30]Id. at 164-67. The issue before the Austin Court in CVN Group was whether an arbitrator could determine the validity of a lien on a homestead or whether a court must make the determination before foreclosure could be ordered. As mentioned above, the arbitrator 683 had found that the contractor had possessed both a constitutional and a statutory lien, and it is within this context that the Austin Court reiterated and evaluated the findings of the arbitrator and the trial court. Unfortunately, as is all too typical of the case law surrounding mechanics' liens, the Austin Court was not as clear or specific in its construction of the applicable constitutional and statutory law as it could have been and neglected to distinguish between the two kinds of liens when it reviewed the evidence offered in support of each. It is this lack of clarity and the unavailability of the Supreme Court's decision that no doubt induced the improper conclusion advanced by the Bankruptcy Court in the present case (i.e., that the contractor, Munoz, needed to file a lien affidavit to create an enforceable lien). The Austin Court explicitly stated and correctly so that Article 16, Section 50 of the Constitution and Section 53.254(a)-(c), (e) of the Property Code prescribe the required constitutional and statutory procedures that an original contractor in direct privity with an owner of a homestead must follow before a lien can attach against the property.[31]Id. at 164-65. The Court, however, failed to mention that it is a constitutional lien that is created upon compliance with these provisions. Applying the aforementioned requirements, the Court concluded that the proof of the necessary contract in the record before it was inadequate and held that the trial court did not abuse its discretion in refusing to find a lien arose against the property.[32]Id. at 166. The Court then ruled that the lien affidavit filed by the contractor was insufficient because it was not filed with the county clerk by the fifteenth day of the third calendar month after the day on which the indebtedness accrued in accordance with Section 53.052(b) of the Property Code. Id. It is this consideration of the affidavit, which pertains to a statutory lien, that probably compelled the Bankruptcy Court's reasoning and ultimate decision in the present case. It never mentioned the context within which it reviewed the affidavit. In other words, the Court never pointed out that the lien affidavit was pertinent to the question of whether the contractor possessed a valid statutory lien. Nevertheless, as made clear by this court's review of the mechanic's lien history, the filing of the lien affidavit is sine qua non only when a claimant is attempting to perfect a statutory lien on a homestead, not when a constitutional lien is being asserted.[33]See Strang, 35 S.W. at 1056; Farmers' & Mechanics' Nat. Bank, 40 S.W. at 880; see also YOUNGBLOOD, supra § 1000. The failure of an original contractor to file 684 a lien affidavit prior to the expiration of the applicable deadline will result in a loss of all the claimant's statutory mechanic's lien rights arising from work under the contract, not the rights arising from a perfected constitutional lien. Id. This court's reading of the Austin Court of Appeals' decision in CVN Group is bolstered by an unpublished opinion authored by the First Court of Appeals that similarly construed CVN Group. See Fraser v. Baybrook Bldg. Co., Inc., No. 01-02-00290-CV, 2003 WL 21357316 (Tex.App. Houston [1st Dist] June 12, 2003, pet. denied) (not designated for publication). In Fraser, the Court cited CVN Group for the proposition that a contractor may secure a valid mechanic's lien against a homestead on which work was performed if the constitutional and statutory procedures set forth in Article 16, Section 50 of the Constitution and Section 53.254 of the Property Code are followed. Id. at 3. Any other construction of CVN Group would be inconsistent with the case law that has addressed this issue over the last 128 years. See e.g., In re Daves, 770 F.2d at 1366 (holding that a "constructive trust may not be judicially imposed to secure a lien against Texas homestead property when the constitutional and statutory requirements [i.e., Article 16, Section 50 and Tex.Rev.Civ. Stat. art 5460, a predecessor statute to Section 53.254] for fixing such a lien have not been met."); Lyon, 17 S.W. at 405 (holding that a lien is not enforceable against a homestead without compliance with the requirements set forth in Article 16, Section 50 and Tex.Rev.Civ. Stat. art. 3174, a predecessor provision of Section 53.254); Collier v. Valley Building & Loan Ass'n, 62 S.W.2d 82, 84 (Tex. Comm'n App.1933, holding approved) (holding same when construing Article 16, Section 50 and Tex.Rev.Civ. Stat. art. 5460); Herrington, 491 S.W.2d at 480-82 (holding that an original contractor's self-executing constitutional lien arising from his contract for homestead improvements upon satisfying the constitutional and statutory requisites [i.e., Article 16, Section 50 and Tex.Rev.Civ. Stat. art 5460] did not inure to the subcontractor because the subcontractor neither filed a lien affidavit nor gave notice of his claim within the applicable time prescribed by the statutes); Schmoker v. Waelder, 115 S.W.2d 1134, 1135-36 (Tex.Civ.App. Amarillo 1938) (holding same as Lyon). V. CONCLUSION Accordingly, based upon the foregoing discussion, this court reverses the decision of the Bankruptcy Court and finds that a constitutional mechanic's lien exists in favor of Munoz. Article 16, Section 50(a)(5)(A)-(D) of the Texas Constitution and Section 53.254(a)-(c), (e) of the Property Code together prescribe the specific requirements necessary for an enforceable constitutional mechanic's lien to arise from a debt for labor and material furnished for renovation or repair of existing improvements on residential homestead property. Munoz has fulfilled these requirements and is thus entitled to whatever consideration that lien affords him. This case is remanded back to the Bankruptcy Court for further proceedings not inconsistent with this opinion. NOTES [1] There were actually two contracts and lien notes. A lien contract and lien note were originally prepared on or about September 12, 1998, but were not signed until February 12, 1999, and never recorded. These initial documents are not at issue in this case. [2] Though the Bankruptcy Court determined that Munoz needed to satisfy only subsections (a), (b), and (c) of Section 53.254, Munoz also needed to comply with subsection (e) of that provision, which requires that the contract be recorded. See TEX. PROP. CODE ANN. § 53.254(e). Munoz did so comply. [3] An "original contractor" is statutorily defined as ". . . a person contracting with an owner either directly or through the owner's agent." TEX. PROP. CODE ANN. § 53.001(7). [4] Among the many inconsistencies that exist among authorities in this area, there appears to be a difference of opinion as to the precise name of the lien. For example, the lien has been referred to as "mechanic's and materialmen's liens," Wood v. Barnes, 420 S.W.2d 425, 427 (Tex.Civ.App. Dallas 1967, writ ref'd n.r.e.), "materialman's lien," J.D. McCollom Lumber Co. v. Whitfield, 59 S.W.2d 1106, 1107 (Tex.Civ.App. Austin 1933, writ ref'd), "mechanics' and material men's liens," Lippencott, 24 S.W. at 276, and the "mechanic's lien." Eldon L. Youngblood, Mechanics' and Materialmen's Liens in Texas, 26 SW. L.J. 665 (1972). Inconsistencies also exist as to whether one supplies material or whether one supplies materials. For the sake of consistency, this court will use "material" and refer to the name of the lien as a "mechanic's lien." [5] This provision provided that "[m]echanics and artisans of every class, shall have a lien upon the articles manufactured or repaired by them, for the value of their labor done thereon, or materials furnished therefor; and the Legislature shall provide by law for the speedy and efficient enforcement of said liens." Tex. Const. of 1869, art. XII, § 47. Neither of the two previous constitutions of 1845 or 1866 made reference to such a lien. [6] This Act also expanded the scope of the lien to include repairs to or construction of a building, i.e., any improvement, regardless whether located in the city or in a rural area. 7 GAMMEL, supra at 30. [7] Article XVI, § 37 provided that "[m]echanics, artisans, and materialmen of every class, shall have a lien upon the buildings and articles made or repaired by them for the value of their labor done thereon, or material furnished therefor; and the Legislature shall provide by law for the speedy and efficient enforcement of said liens." Tex. Const. of 1876, art. XVI, § 37. [8] This provision was followed by Section 51, which defined what property constituted the homestead subject to the exemption specified in Section 50. TEX. CONST. of 1876, art. XVI, § 51. [9] Though the Constitution failed to expressly require an acknowledgement of both the husband's and wife's signatures, this requirement was implicit in the admonition that the consent of the wife must be given in the same manner as was required in making a sale and conveyance of the homestead. Tex. Const. of 1876, art. XVI, § 50(a)(5); Kalamazoo Nat. Bank v. Johnson, 5 Tex. Civ. App. 535, 538-39, 24 S.W. 350, 351-52 (Tex.Civ.App. 1893, no writ). Acknowledgement of each signature had to be accomplished prior to the commencement of the work. Panhandle Const. Co. v. Flesher, 87 S.W.2d 273, 275 (Tex.Civ.App. Amarillo 1935, writ dism'd). [10] The Act of 1876 was not cumulative of the previous Acts, but rather repealed all laws and parts of laws in conflict with it, including the mechanic's lien acts of the Congress of the Republic and the Act of 1871. [11] The Act did change the appropriate recording clerk to the "county clerk" rather than the district clerk. 8 GAMMEL, supra at 927. [12] Only the essential conditions of the agreement needed to be included, not an itemization or detailed description of the work or material and not the plans or specifications. Harrop v. National Loan & Investment Co. of Detroit, Mich., 204 S.W. 878, 880 (Tex.Civ.App. Fort Worth 1918, writ ref'd.). [13] Section Four of the Act of 1876 is the predecessor statute to Section 53.254 of the Texas Property Code, the statute at issue in the present case. See 8 GAMMEL, supra at 927; TEX. PROP. CODE ANN. § 53.254. The first codification of the Civil Statutes of Texas in 1879 contained in Article 3174 the requisites set forth in the Act of 1876. Revised Statutes of Texas of 1879, 16th Leg. (Arts. 3164-3179). This provision was subsequently codified as Article 3304, Revised Civil Statutes of 1895; Article 5631, Revised Civil Statutes of 1911; Article 5460, Revised Civil Statutes of 1925; Section 53.059 of the Texas Property Code; and Section 53.254 of the Texas Property Code. [14] Only original contractors, not subcontractors, benefited from the self-executing feature of the lien created by the Constitution. In re A & M Operating Co., Inc., 182 B.R. 997, 1001 (E.D.Tex.1995); Horan v. Frank, 51 Tex. 401, 1879 WL 7685, at 3 (1879). [15] There are two types of permitted notice: actual and constructive. Detering Co. v. Green, 989 S.W.2d 479, 481 (Tex.App. Houston [1st Dist] 1999, pet. denied). Actual notice of a lien can be inferred when a purchaser has the "means of knowledge and a reasonably diligent inquiry would have disclosed the full truth." Apex Financial Corp., 7 S.W.3d at 831. A contractor can give constructive notice by timely filing a statutory lien affidavit in the public record. Wood, 420 S.W.2d at 429. [16] Article 3295, Revised Civil Statute of Texas, 1895, the provision the Court in Farmers' & Mechanics' Nat. Bank addressed, is the predecessor statute to Section 53.052, the statute at issue in the present case. See TEX. PROP. CODE ANN. § 53.052. [17] The Act amended nine articles (former Arts. 5452-56, 5463, 5467-69); repealed four articles (former Arts. 5457, 5461, 5462, and 5465 (Rev.Stat.1925)); and added one new article (5467d, providing for statutory payment bonds). § 1, 1961 Tex. Gen. Laws 863. [18] This requirement which applied to subcontractors, as well was codified at Tex.Rev.Civ. Stat. 5453, § 2, 1961 Tex. Gen. Laws 864-65. [19] A "residential construction project" was statutorily defined as ". . . a project for the construction or repair of a new or existing residence, including improvements appurtenant to the residence, as provided by a residential construction contract." § 2, 1997 Tex. Gen. Laws 1881 (currently at TEX. PROP. CODE ANN. § 53.001(10)). A "residence" was defined in the Act as . . . a single-family house, duplex, triplex, or quadruplex or a unit in a multiunit structure used for residential purposes that is: (A) owned by one or more adult persons; and (B) used or intended to be used as a dwelling by one of the owners. Id. (currently at TEX. PROP. CODE ANN. § 53.001(8)). [20] Section 53.254 also contained the following requirement that governed the contents of a lien affidavit filed in connection with a homestead: (f) An affidavit for a lien filed under this subchapter that relates to a homestead must contain the following notice conspicuously printed, stamped, or typed in a size equal to at least 10-point boldface or the computer equivalent, at the top of the page: "NOTICE: THIS IS NOT A LIEN. THIS IS ONLY AN AFFIDAVIT CLAIMING A LIEN." § 23, 1997 Tex. Gen. Laws 1888 (currently at TEX. PROP. CODE ANN. § 53.254(f)). This requisite was added by the Act of 1989. Act of June 14, 1989, 71st Leg., ch. 395, Sec. 1, 1989 Tex. Gen. Laws 1527. [21] On all other projects it was to be recorded on or before the fifteenth day of the fourth calendar month after the date on which the claimant's indebtedness accrued. Id. (currently at TEX. PROP. CODE ANN. § 53.052(a)). [22] These requirements were necessary in the case of both a constitutional and a statutory lien. See YOUNGBLOOD, supra §§ 502.1, 1002.2-1002.2(b)(3). Moreover, neither of these liens could be enforced against a homestead unless the requisites of Section 53.254 of the Property Code were followed. Id. [23] These three added steps were not required where ". . . the work and material [were] . . . necessary to complete immediate repairs to conditions on the homestead property that materially affect[ed] the health and safety of the owner or person residing in the homestead and the owner of the homestead acknowledge[d] this in writing." TEX. CONST. art. XVI, § 50(a)(5)(A)-(D) (amended 1997). [24] Though much of the discourse pertaining to the dissimilarities as to the proper procedures necessary to create a mechanic's lien on non-homestead residential construction projects, residential homesteads, and business homesteads is inapplicable to the case at bar, nevertheless, in order to provide a complete analysis of the law and to prevent possible future confusion in a different factual setting, this court will impart a brief synopsis of these differences. [25] To claim a homestead exemption on real property, an owner must either actually occupy the property as a home or, in the absence of actual occupancy, demonstrate an intent to reside thereon as a home coupled with an overt act of preparation displaying that intention. Gilmore v. Dennison, 131 Tex. 398, 400, 115 S.W.2d 902 (Tex.Com.App.1938). The owner is entitled to only one homestead at a time. Id. Applying these tenets, if an owner owns and resides in one home situated on lot A as a homestead and is erecting another house on lot B while still occupying the former, there is no homestead protection afforded to the house on lot B, regardless of the owner's intent towards or use of the home thereon, until the owner permanently moves out of the home on lot A. YOUNGBLOOD, supra § 1002. Lot B is nonetheless a residential construction project. Id. [26] This requirement is the same when a contractor performs work related to new improvements on a business homestead. See TEX. CONST. art. XVI, § 50(a)(5). [27] These requirements are the same for renovation and repair work performed on business homesteads. See Tex. Const. art. XVI, § 50(a)(5)(A)-(D). [28] It should be noted that another type of lien may be imposed upon a homestead: an express contract lien. Lippencott, 24 S.W. at 276. While this lien may be referred to as a mechanic's lien in a construction contract, a mechanic's lien should be distinguished, as it arises from a different source and in a different way. Id. A contract lien to secure repayment for the furnishing of labor and material for the construction of improvements is a mortgage lien and arises exclusively from the agreement of the parties. Id. at 282. A mechanic's lien arises by operation of law upon the commencement of work under a contract; it cannot be created by a contract. Myers v. Houston, 88 Tex. 126, 129, 30 S.W. 912, 913 (1895). A contract that grants an express lien may give rise to both an contract lien and, upon performance, a mechanic's lien. Mundine v. Berwin, 62 Tex. 341, 1884 WL 8918, at 2 (1884); Lippencott, 86 Tex. at 280-83, 24 S.W. 275. Thus, these two liens may coexist; having a contract lien does not preclude a mechanic's lien arising for the same work. Mundine v. Berwin, 62 Tex. 341, 1884 WL 8918, at *2; Lippencott, 86 Tex. at 280-83, 24 S.W. 275. A contract lien is valid on homestead property if the requirements of Article 16, Section 50 of the Constitution are satisfied. Interstate Bldg. & Loan Ass'n v. Goforth, 94 Tex. 259, 263-64, 59 S.W. 871, 873-74 (1900); Lippencott, 86 Tex. at 280-83, 24 S.W. 275. As between the parties to a contractually granted lien, the contract does not have to be recorded because the homestead formality requirements of the mechanic's lien statutes unlike the homestead formality requirements of the Texas Constitution are immaterial to the viability of a granted contract lien on the homestead. Interstate Building & Loan Ass'n, 59 S.W. at 873-74. If a contract concerning improvements on homestead property complies with the requirements of both the Constitution and those of Section 53.254(a)-(c)(e), a constitutional mechanic's lien arises by operation of law and secures the debt. Lippencott, 86 Tex. at 280-83, 24 S.W. 275. Unlike contractual liens, which may include a right to foreclose by non-judicial sale under an agreed power of sale, a constitutional or statutory mechanic's lien may be foreclosed only by judicial action. TEX. PROP. CODE ANN. § 53.154; CVN Group, Inc. v. Delgado, 95 S.W.3d 234, 247 (Tex.2002); Lippencott, 86 Tex. at 281, 24 S.W. 275. Thus, a suit or arbitration proceeding must be brought to enforce a mechanic's lien. Hearthshire Braeswood Plaza Ltd. Partnership v. Bill Kelly Co., 849 S.W.2d 380, 390 (Tex.App. Houston [14th Dist.] 1993, writ denied). In the present case, the issue as to whether Munoz also possessed a contract lien is not properly before this court, as the Bankruptcy Court did not address this question and neither party raised it. [29] As the contract was executed in 1999, the constitutional amendment, effective January 1, 2002, reducing the twelve-day working period after signing the written application for extension of credit to five days is inapplicable. See TEX. CONST. art. XVI, § 50(a)(5)(B) (amended 2001). [30] The Supreme Court of Texas granted a petition for review and reversed the Court of Appeals. CVN Group, 95 S.W.3d at 234. Because the Court issued its opinion subsequent to the Bankruptcy Court's ruling, the Bankruptcy Court in this case did not have the benefit of that opinion. The Supreme Court concluded that an arbitration award could not be set aside on public policy grounds unless there were extraordinary circumstances that clearly violated an articulated, fundamental policy. Id. at 239. The Court found no such circumstances present, as the arbitration award did not contravene the protections provided a homestead in the Texas Constitution and Property Code. Id. The Court noted that, although the homeowners argued that the contractor failed to satisfy two requirements for perfecting its liens, the contractor disputed this claim and both parties submitted evidence and briefs to the arbitrator. Id. The Court opined that a decision by an arbitrator that differed from how a judge would have decided the issue did not constitute a violation of public policy. Id. The Court determined that nothing in the arbitration proceeding indicated that the arbitrator disregarded the requirements for perfecting a mechanic's lien. Id. [31] Because the homeowners hired the contractor to construct a new residence on their property, the contractor needed to have only a written contract under the Constitution. Id. at 164. [32] The Austin Court observed that at the trial court hearing the parties concentrated on whether a contract had been acknowledged and filed with the county clerk in the county in which the property was located pursuant to Section 53.254(e). Id. at 165. Because the documents-only arbitration record did not contain a copy of the contract, the trial court determined that the evidence failed to show that this instrument was filed. Id. at 165-66. The Austin Court searched the trial court record and also failed to locate said document. Id. at 166. Though the contractor produced a copy in its appellate reply brief, the Court concluded that it was not part of the record, as it was required to determine the case on the record as filed. Id. [33] This court does find it somewhat curious that the Austin Court even addressed the lien affidavit. It is well-settled that neither a constitutional lien nor a statutory mechanic's lien may be enforced against a homestead unless a written contract for the work and material to be supplied is signed by all owners prior to the work commencing and is recorded. TEX. CONST. art. XVI, § 50(a)(5); TEX. PROP. CODE ANN. § 53.254(a); see also Lyon v. Ozee, 66 Tex. 95, 97, 17 S.W. 405 (1886); Kepley v. Zachry, 131 Tex. 554, 559, 116 S.W.2d 699, 701-02 (Tex.Com.App.1938); Guaranty Const. Co. v. Atwood, 43 S.W.2d 159, 163 (Tex.Civ.App. Amarillo 1931), rev'd, 63 S.W.2d 685 (Tex.Com.App.1933, judgm't adopted). The Austin Court's finding that there was no contract in the record obviated the need to determine the adequacy of the affidavit.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532219/	872 A.2d 1067 (2005) 377 N.J. Super. 298 Ronald J. FROOM and Froom Development Corp., Plaintiffs-Respondents/Cross-Appellants, v. Marc A. PEREL; Robert J. Ambrosi; Edward Jaten; John C. Walsey; Ronald Saverin; J.W. Trust; Edison I HD, LLC; Edison I North, LLC; Edison Prince, LLC; Edison I South 34A, LLC; Edison I South 34B, LLC; Eidson I North 35A, LLC; Edison I North 35B, LLC; Edison I North 35C, LLC; Edison I North 35D, LLC; John Doe, Inc. 1-5, John Doe(s) 1-5, Defendants, and Vincent P. Maltese, Esq. and Wilentz, Goldman & Spitzer, P.C., Defendants-Appellants/Cross-Respondents. Superior Court of New Jersey, Appellate Division. Argued March 7, 2005. Decided April 27, 2005. 1069 Robert G. Rose, Florham Park, argued the cause for appellants/cross-respondents (Pitney Hardin, attorneys; Mr. Rose, Elizabeth J. Sher and Paul J. Halasz, on the brief). Gregory A. Anderson of the Florida bar, admitted pro hac vice, argued the cause for respondents/cross-appellants; (Anderson, St. Denis & Glenn and Maran & Maran, attorneys; Mr. Anderson, Brooks C. Rathet, admitted pro hac vice, and David Maran on the brief). Before Judges PETRELLA, PARKER and YANNOTTI. The opinion of the court was delivered by YANNOTTI, J.A.D. Defendants Wilentz, Goldman & Spitzer, P.C. and Vincent P. Maltese, a member of the firm, (the Wilentz defendants) appeal from a final judgment entered in favor of plaintiff Froom Development Corp. (FDC) on a legal malpractice claim. FDC cross-appeals from the judgment. We reverse the judgment and dismiss the cross-appeal as moot. I. Plaintiff Ronald J. Froom is a commercial real estate broker. Sometime in 1991, Froom learned about a 27-acre tract of property owned by Berger Industries, Inc. (Berger) and located in Edison, New Jersey. Although the property consisted of an "old mostly abandoned manufacturing facility" and was "in horrible disrepair," Froom considered the property a "diamond in the rough" because of its "great" location. He envisioned the property as the site of "a large shopping center." Froom informed defendant John C. Walsey, an experienced investor and developer, about the property. Walsey also saw its potential and agreed to proceed with the acquisition and development of the property. According to Froom, in the summer of 1992, he and Walsey had a telephone conversation during which they discussed their respective interests in the venture. Froom asserted that Walsey agreed he would provide all of the money to acquire and develop the property but Froom would receive a 50% non-dilutable ownership interest in the project. To Froom, non-dilutable meant that his 50% interest would remain unchanged even if other investors subsequently were brought into the deal. Froom described himself as a "sweat equity" developer who locates the property, performs preliminary research and investigations, prepares a demographic profile report and retains an architect to prepare a preliminary rendering. Walsey's version of his deal with Froom was different. He testified he told Froom that, although he lacked money at the time, he could arrange financing from third-party investors and Froom would receive 50% of any return that Walsey received from the property. Walsey also said that Froom's interest would be converted to an equity position only after these conditions were met: Walsey must recover all of his investment in the project, Froom could not interfere with the financing of the venture by having an equity position and Froom had to perform as a day-to-day developer of the project. Froom was advised to consult Maltese at the Wilentz firm to discuss the firm's 1070 qualifications to handle the transaction. Froom met Maltese in September 1993 and Maltese introduced Froom to Steven Tripp, an attorney at the firm with zoning experience. Froom told Maltese and Tripp that he wanted to retain the Wilentz firm and he encouraged Tripp to make inquiries about rezoning of the property. Froom informed Maltese that Walsey also would be participating in the project and Maltese would soon be hearing from him. Walsey called Maltese several days later. As a result, in mid-November 1993, Maltese attended a meeting where discussions were held with Berger's representatives and certain creditors with liens on the property. In November or December 1993, Maltese prepared draft contracts for the purchase of the property. Initially, FDC was listed as the sole purchaser, but later the contracts were changed and FDC and Walsey's company, W.L. Associates (WL), were identified as purchasers. At or about this time, Berger filed for protection under the federal bankruptcy code. In December 1993, Maltese prepared an engagement letter and he addressed the letter to FDC and to WL. Maltese noted that he was writing to confirm that Froom Development Corp., a Florida Corporation ("Froom"), and W.L. Associates, Inc. ("Associates") have requested this law firm to represent their interests in connection with the purchase of a parcel of land located along Route 1 in Edison, New Jersey presently owned by Berger Industries, Inc. After setting forth billing rates and the obligation to reimburse the firm for its expenses and disbursements, Maltese requested an advance retainer of $7,500. Maltese added that "[t]he terms of this engagement do not cover any litigation matters related to the Project, the partners' interests therein or for any other reason. Litigation matters must be covered by a separate engagement arrangement." Maltese also stated: Although we don't anticipate a problem in this matter, in the event any conflict of interest arises during the course of our representation it may become necessary for our firm to cease all work on this matter pending resolution of the conflict. In the event the conflict cannot be resolved you reserve the right to transfer the file to another lawyer but, in any event, you agree to pay our firm for all work performed even if the resolution of the conflict results in a transfer of the matter to another attorney or law firm. Maltese requested that Froom and Walsey countersign the letter and return it to him. When he received no response from Froom to his letter, Maltese wrote to Froom in January 1994 and requested that the signed engagement letter and retainer be forwarded to him in short order. Froom responded and told Maltese that he "was not going to be responsible for any financial obligation" in hiring the firm and he wanted to check with Walsey before proceeding any further. Walsey thereafter told Froom, "[S]top wasting time, sign the letter and send it back." Froom claimed that he signed the letter and returned it. Maltese testified that during a January 1994 telephone conversation, Froom told him for the first time that Wilentz was not representing FDC but was representing WL. Maltese said that Froom informed him that FDC would not be paying any legal fees and WL would be the responsible party. Froom told Maltese that Walsey would call him to discuss the matter. After receiving a telephone call from Walsey, Maltese concluded that the Wilentz firm no longer represented FDC. Maltese testified that he never received a signed retainer from Froom on behalf of FDC. 1071 On January 21, 1994, Maltese sent to FDC an invoice for services rendered to that date by the Wilentz firm. Froom testified that after receiving this bill, he immediately called Maltese and reminded him that Walsey was responsible for paying Wilentz's charges. According to Froom, Maltese replied, "That's right, you did tell me that Ron, I'm sorry, don't worry about it." A meeting was held at the Wilentz offices on February 28, 1994, attended by Berger's representatives, Froom, Walsey, and defendant Ronald Saverin, who was introduced to Maltese by Walsey as a prospective participant in the venture. In June 1994, Maltese forwarded to Berger's counsel a term sheet he had prepared. The document listed "W.L. Associates, Inc. (or its nominee)" as the prospective purchaser and it was initialed by Walsey as President of WL. Walsey faxed a copy of the letter and the term sheet to Froom. At or about this time, Froom learned that draft contracts prepared by Maltese only contained Walsey's name. Froom testified that he called Maltese and Maltese told him that with the amount of paperwork going back and forth with the bankruptcy issues[,] John [Walsey] [is] in Atlanta, you're in Florida, you're all moving around a bit, to streamline the process it's just easier, but it doesn't really matter because when you get ready to close on the property and the ultimate purchaser, which will be new corporation or a new LLC as they call it, is formed that's when you'll get your stock issue. I know you own 50 percent of the deal and don't worry about it. On August 2, 1994, Maltese faxed Froom a copy of the term sheet with changes made by Berger's counsel. When questioned about the significance of this and other faxes sent to Froom, Maltese testified that he had been instructed by Walsey to keep Froom "in the loop." Froom asserted that he advised Maltese on numerous occasions that he and Walsey were 50/50 partners in the project and he was going to own 50% of the project. According to Froom, Maltese responded that was "fine." In September 1994, Maltese forwarded a second billing statement to Walsey in which WL was identified as the firm's client. Several months later, Maltese prepared a certificate of formation for the limited liability company that would acquire the property. The company was called "Edison One, LLC." The certificate stated that the entity was to be comprised of two or more members. Maltese said that he understood at that time that Walsey and Saverin were to be the members. The purchase agreement was executed on March 25, 1995. Walsey signed the contract in his capacity as managing member of Edison One. Prior to execution of the contract, Maltese may have faxed or called Froom, but Maltese had no distinct recollection of speaking with him. During cross-examination, Maltese acknowledged that in March 1995 he left a message on Froom's answering machine and advised that FDC "was there on the deal." In that message, Maltese advised Froom in detail of the status of certain negotiations with the Berger tenants and informed Froom that he was "certainly part of this deal." Maltese insisted, however, that he was only following Walsey's direction to keep Froom informed of developments with the transaction. During the summer of 1995, a meeting was held at the Wilentz offices to negotiate the terms of an operating agreement for the project. Walsey and Saverin negotiated the agreement. Froom was present and said nothing when Saverin asked for a 70% to 80% interest in the project. Walsey would not agree to Saverin's demand. 1072 Maltese prepared a draft operating agreement with spaces left blank for insertion of the percentages of each individual's ownership interest. Subsequently, the Edison One operating agreement, dated August 31, 1995, was prepared and executed. It provided that Walsey and Saverin would each own 50% of the project, through their respective companies. Sometime in 1995, Edward Jaten of ARC (a development group comprised of Jaten, defendant Marc A. Perel and defendant Robert J. Ambrosi) learned that Berger had entered into a contract for the sale of the property to WL. Jaten called Tripp at the Wilentz firm and asked him to set up a meeting with WL. A meeting was arranged at the Wilentz offices. At the meeting, Jaten told Walsey that ARC was interested in participating in the project, had recently completed a major project in Edison, was familiar with the locality and wanted him to consider ARC becoming a joint venture partner. Froom learned that ARC was interested in participating in the project and he expressed his opposition to Maltese. Saverin also did not want ARC to participate in the venture. He believed that the project could proceed without ARC's participation. Maltese told Froom that ARC was a very formidable company that possessed "great experience and resources" and Froom should keep an open mind on the issue. Maltese also told Froom that ARC had been a client of the Wilentz firm. A hearing on the contract to purchase the Berger property was conducted by the bankruptcy court on September 12, 1995. Maltese, Froom, Walsey and Jaten were in attendance. The head of Wilentz's bankruptcy department made a presentation on behalf of Edison One. He told the court that Edison One consisted of two members, Saverin's company and Walsey's company. He described development projects that both companies had been involved in throughout the country. No one objected to the sale and the bankruptcy judge approved the contract. After the hearing, Froom and Walsey went to lunch. Froom told Walsey that he was not in favor of ARC's participation in the project. Froom subsequently sent Walsey a letter dated September 28, 1995 in which he stated: With the bankruptcy hearing behind us, it is now time for my stock, membership in an LLC or whatever form is to be used, to be delivered to me. We started as partners John, and there should not be a situation in which either of us is in a different position than the other. When the LLC was formed, I should have automatically from day one, been consulted and had my papers put in hand. If this is being handled by Ron's [Saverin] attorney, please have him contact my attorney referenced below [Evan Marbin, Miami, Florida]. If this is being handled by Vince [Maltese], then he should be advised to take the necessary steps to conclude this matter. According to Maltese, Froom did not consult with him at the time he sent this letter to Walsey. Under the terms of the contract, Edison One was required to post a $235,000 letter of credit within ten days of the approval of the contract by the bankruptcy court. Edison One did not post the letter of credit and Berger declared a default. During the fall of 1995, Walsey and Saverin negotiated with the ARC to include it in the joint venture. By letter dated November 20, 1995, Maltese advised Berger's counsel of the impending inclusion of ARC as a new member of Edison One and he informed him that ARC soon would be obtaining the $235,000 letter of credit. In a document entitled Consent to Representation and Waiver of Potential Conflict dated November 21, 1995, Walsey, 1073 The J.W. Trust, Saverin, WL, and Edison One acknowledged their representation by Wilentz in connection with the purchase of the Berger property. The Trust had been created by Walsey for the benefit of his children. The document stated that ARC had reached an agreement with Saverin, Walsey, WL and the Trust that would result in ARC and/or its affiliate Prince Group becoming a member of Edison One. The document stated in pertinent part: The Undersigned agree that Wilentz may continue to represent the interests of ... [Walsey, Saverin, WL] and the Trust in Edison I with respect to the organizational documents to be prepared by Wilentz allowing for admission of ARC and/or Prince into Edison I as a Member.... ARC and/or Prince agree that Wilentz does not represent their respective interests in connection with their admission as a Member to Edison I. Wilentz has advised ARC and/or Prince to secure independent counsel to negotiate and/or review the documentation to be prepared by Wilentz. The consent form was signed by all parties. Neither Froom nor FDC was named in the document and consequently neither party signed the document. Negotiations between Saverin, Walsey and the ARC group culminated in the creation of a new joint venture on or about December 4, 1995, with Saverin and Walsey each having 25% ownership shares and Edison-ARC, LLC having a 50% ownership share in the venture. Maltese prepared a draft operating agreement which the parties executed in August 1996. By November 1996, the Trust had run out of money and could not meet calls for infusion of capital to the project. ARC met the capital calls on Walsey's behalf. In December 1996, Walsey offered Froom an opportunity to purchase Walsey's interest for approximately $160,000-$170,000. Although Walsey gave Froom six months to come up with the money, Froom could not do so. Walsey thereupon reached an agreement with ARC under which Walsey reduced his interest in the project from 25% to 5%, and would not be responsible for any additional capital calls. ARC thereby obtained a 70% interest in the project. Saverin retained his 25% interest. The Wilentz firm's involvement in the transaction ended sometime in March 1997. A meeting was held in August 1997 attended by Froom, Walsey, Jaten, Perel and Ambrosi. At the meeting, Froom asked that he be issued his 50% interest in the project. Ambrosi refused. In a letter to Froom dated December 17, 1997, Walsey traced the history of the project including financial problems encountered: Unfortunately, this project is not what we started with. The projected profit is much smaller, etc. I have given you the opportunity in the past to cover our position and give you my share. You didn't step forward and therefore, our interest was reduced. We have been partners since the beginning and we are still partners in our interest. Hopefully, someday we will see a profit, as well as any fees we may earn. The transaction closed in June 1998. Froom and FDC commenced this action in February 1999. They asserted claims of legal malpractice, fraud, and tortious interference against the Wilentz defendants. They also asserted claims of breach of contract, fraud, tortious interference, and unjust enrichment against Walsey, The J.W. Trust, Saverin, Perel, Ambrosi and Jaten. Prior to trial, Froom's claims against the Wilentz defendants were dismissed because he did not have standing to assert FDC's claims. The matter was tried before a jury from March 10, 2003 to April 1, 2003. After FDC presented the case, the trial judge 1074 dismissed all claims against the Wilentz defendants except for the legal malpractice claim. The judge denied a motion by the Wilentz defendants to dismiss the claim for lack of proof that the alleged negligence by the Wilentz defendant was a proximate cause of the alleged loss of FDC's interest in the project. FDC's claims against the other defendants were dismissed except for the breach of contract claim. The jury returned a verdict in the amount of $2.7 million against the Wilentz defendants and the same amount was assessed against the other defendants. The judge awarded FDC $694,219 in attorneys' fees and costs of $48,230 for a total judgment against the Wilentz defendants of $3,442,449.60, plus post-judgment interest. The judge denied motions by the Wilentz defendants for a new trial and for judgment n.o.v. FDC subsequently reached a tentative settlement with Walsey, Saverin and the ARC defendants. On this appeal, the Wilentz defendants argue that: 1) they were entitled to judgment as a matter of law on the issue of proximate cause; 2) the judge erred by not ruling as a matter of law that there was no attorney-client relationship between the firm and FDC; 3) the judge erroneously instructed the jury that FDC was a client of the Wilentz firm; 4) there was insufficient evidence to support the jury's damages award; 5) FDC's legal malpractice claim was not supported by competent, admissible expert testimony; and 6) the judge erred in his award of attorneys' fees. In its cross-appeal, FDC argues: 1) the judge erred in dismissing its claim for punitive damages; and 2) the judge erroneously failed to award pre-judgment interest. II. We turn first to the contention by the Wilentz defendants that the trial judge erred in ruling as a matter of law that FDC was a client of the Wilentz firm. Defendants assert that the evidence is clear that the firm was only retained to represent the entity that acquired the Berger property and the firm provided no representation to FDC or to any of the individual members of the acquiring entity. The Wilentz defendants alternatively argue that at the very least there was a genuine issue of material fact as to whether FDC was the firm's client and the trial judge erred when he instructed the jury that there was an attorney-client relationship between FDC and the Wilentz firm. The existence of an attorney-client relationship is, of course, essential to the assertion of a cause of action for legal malpractice. Conklin v. Hannoch Weisman, 145 N.J. 395, 416, 678 A.2d 1060 (1996). In view of the conflicting evidence on the issue, we are convinced that the judge erred in deciding as a matter of law that there was an attorney-client relationship between FDC and the Wilentz firm. We are satisfied that the evidence presented at trial demonstrated that there was a genuine issue of material fact as to whether FDC was a client of the firm and the judge erred in instructing the jury that FDC and the Wilentz firm had an attorney-client relationship. As we explained previously, the evidence established that Froom and Walsey initially agreed to acquire and develop the Berger property together. Froom engaged Maltese and the Wilentz firm and he informed Maltese that Walsey would be participating in the transaction. Maltese prepared draft agreements that initially identified FDC and WL as the purchasers. It could therefore be inferred that the Wilentz firm had been retained to protect the joint interests of these two entities. In addition, the December 1993 engagement letter was addressed both to FDC and to WL. In the letter, Maltese wrote that the firm had been retained to represent the 1075 interests of both entities in connection with the acquisition of the Berger property. The Wilentz defendants argue however that, whatever the nature of the firm's relationship with FDC in the fall of 1993, that relationship was terminated in January 1994 when Froom informed Maltese that the firm was not representing FDC but was instead representing WL. Froom told Maltese that Walsey would be responsible for all of the Wilentz bills. Maltese testified that in his view the firm did not owe FDC a legal duty after January 1994. FDC presented evidence to counter Maltese's assertion. The record shows that, as the transaction was negotiated over time, Maltese often communicated with and forwarded documents to Froom. Maltese testified that he did so because Walsey wanted him to keep Froom "in the loop" but the evidence could reasonably support an inference that notwithstanding Maltese's assertions to the contrary, Maltese and his firm continued the attorney-client relationship with FDC after January 1994. Despite this conflicting evidence, the judge found the Wilentz firm had an attorney-client relationship with FDC and he refused to submit to the jury a question that would have required the jury to determine whether FDC was a client of the Wilentz firm. The judge stated: ... I think to the extent that there is at least an admission that at some point in time to some extent there was some client relationship involved. I don't think it's even a question the jury has to determine. However, as we have pointed out, although Maltese may have admitted that the firm had a relationship of some kind with FDC in the fall of 1993, Maltese maintained that the firm's relationship with FDC terminated in January 1994. The key factual issue was whether, in the period after January 1994, when the transaction was changed and FDC's interest in the project eliminated, the firm had an attorney-client relationship with FDC that required the firm to protect FDC's interest. This was not an issue that could be decided by the judge as a matter of law. Nevertheless, the judge instructed the jury: In this action plaintiff contends the defendant did not comply with the standard of care which the law imposes upon him while attending to the legal needs of his client, the plaintiff, legally his client in this case, the plaintiff Froom Development. The judge thus instructed the jury that there was an attorney-client relationship between these parties and a duty of reasonable care on the part of the firm. The jury was directed to determine whether the Wilentz firm and Maltese were negligent and, if so, to state the amount of damages proximately caused by such negligence. In our view, the jury instructions were fatally flawed and consequently the finding by the jury that Maltese and the Wilentz firm were negligent cannot stand. Clear and correct jury instructions are essential to a fair trial and the failure to provide them in this case is reversible error. Das v. Thani, 171 N.J. 518, 527, 795 A.2d 876 (2002). "A charge is a road map to guide the jury, and without an appropriate charge a jury can take a wrong turn in its deliberations...." Ibid. (quoting from State v. Martin, 119 N.J. 2, 15, 573 A.2d 1359 (1990)). Here, the trial judge erroneously withdrew from the jury a critical issue of material fact on an essential element of FDC's claim. In doing so, the judge committed reversible error. III. Although the judge's error in instructing the jury on an essential element of a cause 1076 of action would ordinarily require that the matter be remanded for a new trial, the Wilentz defendants argue that the judgment should be set aside and the legal malpractice claim dismissed with prejudice because FDC failed to present sufficient evidence to support a finding by the jury that any professional malpractice on their part was a proximate cause of the loss allegedly sustained by FDC. We agree. In this case, plaintiff was not only required to establish an attorney-client relationship that gives rise to a duty of care by the attorney, and breach of that duty, the plaintiff also was required to show that defendant's breach was a proximate cause of plaintiff's injury. Conklin, supra, 145 N.J. at 416-20, 678 A.2d 1060. To establish the requisite causal connection between a defendant's negligence and plaintiff's harm, plaintiff must present evidence to support a finding that defendant's negligent conduct was a "substantial factor" in bringing about plaintiff's injury, even though there may be other concurrent causes of the harm. Id. at 419, 678 A.2d 1060. We stated in 2175 Lemoine Ave. v. Finco, Inc., 272 N.J.Super. 478, 487-88, 640 A.2d 346 (App.Div.1994), that: [t]he general rule in this State is that an attorney is only responsible for a client's loss if that loss is proximately caused by the attorney's legal malpractice. The test of proximate cause is satisfied where the negligent conduct is a substantial contributing factor in causing the loss. The burden is on the client to show what injuries were suffered as a proximate consequence of the attorney's breach of duty. That burden must be sustained by a preponderance of the competent, credible evidence and is not satisfied by mere "conjecture, surmise or suspicion." In the context of this case, the measure of damages is ordinarily the amount that a client would have received but for the attorney's negligence. [Id. at 487-88, 640 A.2d 346; emphasis added]. In Lemoine, the trial court held that an attorney had committed legal malpractice in connection with a transaction that she negotiated and structured and awarded her former client, damages in the sum of $111,283. Id. at 483, 485, 640 A.2d 346. In connection with the transaction, the attorney prepared a purchase option that had been declared invalid because it was in violation of the New Jersey Real Estate License Act. Id. at 482, 640 A.2d 346. Although we determined that substantial credible evidence existed to support the trial court's malpractice finding, we concluded that the client failed to present sufficient evidence to prove that the malpractice was a proximate cause of his loss. Id. at 487, 640 A.2d 346. On appeal, the plaintiff suggested ways in which the attorney could have legally structured the transaction. Id. at 489, 640 A.2d 346. We held, however, that "legal expert testimony was necessary to show that the complex commercial transaction... could have been legally structured," and because the client failed to present such testimony, he failed to establish proximate cause. Id. at 490, 640 A.2d 346. We added that even if the transaction could have been legally structured, the claim for legal malpractice failed because there was no evidence to show that the other parties to the agreement were willing or able to structure the agreement in that manner. Ibid. The same principles were applied in Lamb v. Barbour, 188 N.J.Super. 6, 455 A.2d 1122 (App.Div.1982), certif. denied, 93 N.J. 297, 460 A.2d 693 (1983). There, the trial court found an attorney, who had represented the plaintiff purchasers of a business that failed within two months, 1077 professionally negligent. Id. at 9, 455 A.2d 1122. The trial judge based his finding upon an array of "shortcomings" related to the attorney's "duty to furnish advice and guidance and to safeguard his client's legal position." Id. at 10, 455 A.2d 1122. Those shortcomings included the attorney's failures to: (1) tell plaintiffs of his doubts concerning the sufficiency of their judgment, skill and experience to operate businesses of the size involved; (2) warn the plaintiffs that the sellers might have mentioned unreported income just to make a failing business seem more attractive and should have cautioned plaintiffs that the failure to report income could result in a liability to the Internal Revenue Service for back taxes and penalties; and (3) suggest that the plaintiffs acquire a more current financial statement, an accounting of the company's books and an examination of the company's physical equipment. Id. at 10-11, 455 A.2d 1122. We held, however, that even accepting the finding that the attorney had been negligent, there was insufficient evidence to support a finding that the attorney's negligence was a proximate cause of any loss to the plaintiff. We stated: [M]ost conspicuous is the absence of testimony by either of plaintiffs as to any circumstances reasonably to be hypothesized under which they could have been dissuaded from completing the transaction. It should not be lightly assumed that these young people would have been easily discouraged from acquiring for a net cash investment of only $4,000 a business which as we said earlier, grossed annual revenues of more than $1,000,000 and which had been successfully operated for approximately 16 years. [Id. at 12-13, 455 A.2d 1122]. Our decisions in Lemoine and Lamb therefore make clear that in cases involving transactional legal malpractice, there must be evidence to establish that the negligence was a substantial factor in bringing about the loss of a gain or benefit from the transaction. Where, as here, a plaintiff alleges that he suffered a loss in a particular transaction because an attorney failed to take steps to protect his interest, the plaintiff must present evidence that, even in the absence of negligence by the attorney, the other parties to the transaction would have recognized plaintiff's interest and plaintiff would have derived a benefit from it. See also Blackhawk Building Systems, Ltd. v. The Law Firm of Aspelmeier, et al., 428 N.W.2d 288, 290-91 (Iowa 1988)(attorney's negligent failure to include a non-competition clause in an employment agreement was not the proximate cause of injury because plaintiff did not prove that employee would have agreed to that clause). We are convinced that the evidence presented by FDC was insufficient to support a finding by the jury that any negligence on the part of the Wilentz defendants was a proximate cause of FDC's loss of its purported interest in the project. Based on the evidence presented by FDC, a rational jury could not find that, even had the Wilentz defendants acted to protect FDC's interest, the other parties to the transaction would have agreed to give FDC a 50% ownership interest in the project even though FDC made no financial contribution to acquisition of the property or its development. At trial, FDC presented testimony from E. Leo Milonas, its legal malpractice expert. Milonas, who is a retired New York appellate judge, testified that there was an attorney-client relationship between FDC and Maltese. He stated that the Wilentz firm had a duty to be loyal to FDC and the firm could not represent others in conflict with the interests of its clients. Milonas stated that, at a minimum, when ARC 1078 agreed to participate in the venture, the firm had a duty to advise FDC as to ARC's role in the project and advise FDC that there may be a conflict of interest in representing both parties. Milonas asserted that it was Froom's understanding that he owned 50% of the project and, in the end, he wound up with nothing. Milonas further testified that Wilentz's actions obviously caused Mr. Froom damage if you have a proposition where you start off with 50 percent of something and end up with nothing and you're being represented by a law firm throughout, [you're] damaged somewhere in between 100 percent and zero; there's a damage, and I don't know what it is. When asked whether the Wilentz firm and Maltese proximately caused FDC to suffer damages, Milonas simply replied that, "They committed malpractice." When asked whether the Wilentz defendants had a direct connection to the damages sustained by FDC, Milonas stated, "They caused the damages." The Wilentz defendants argue that the trial judge erred in permitting Milonas to testify as an expert witness. They note that, under N.J.S.A. 43:6A-13, retired New Jersey state court judges may not practice law in courts of this state. They further note that our Supreme Court has issued a directive to illustrate the extent of the restrictions upon judges who have retired under New Jersey's judicial retirement system. The directive provides, among other things, that it is improper for a retired New Jersey state court judge to appear as an expert witness in a legal malpractice case.[1] The Wilentz defendants assert that these same limitations should be applied to Milonas. We disagree. By their terms, neither the statute nor the Supreme Court's directive applies to judges from other jurisdictions, state or federal. Therefore, the trial judge did not err in allowing Milonas to testify. However, Milonas' testimony was patently insufficient to establish the requisite causal connection between the alleged legal malpractice by the Wilentz defendants and the damages allegedly sustained by FDC. Milonas' conclusions on the issue were clearly "net opinions." An expert's opinion must be based on facts, data, or another expert's opinion, either perceived by or made known to the expert, at or before trial. N.J.R.E. 703. The "net opinion" rule renders inadmissible any opinion consisting of bare conclusions that are unsupported by factual evidence. Buckelew v. Grossbard, 87 N.J. 512, 524, 435 A.2d 1150 (1981). An expert must "give the why and wherefore" of his or her opinion, rather than a mere conclusion. Jimenez v. GNOC Corp., 286 N.J.Super. 533, 540, 670 A.2d 24 (App.Div.), certif. denied, 145 N.J. 374, 678 A.2d 714 (1996). Here, Milonas' opinions on proximate cause were no more than bare conclusions that were unsupported by any factual evidence. Milonas simply assumed that FDC was damaged because, in his view, the Wilentz defendants committed professional negligence. There was no evidence that, even had the Wilentz defendants not committed professional malpractice, as alleged by FDC, the transaction would have gone forward with the other parties agreeing to allow FDC to retain a 50% interest in the project. Milonas' testimony was a conclusion without any factual basis whatsoever. FDC argues, however, that it presented sufficient evidence from which reasonably minded jurors could determine that the alleged malpractice by the Wilentz defendants 1079 was a substantial factor in causing FDC's loss. FDC argues that although no expert with a background in real estate development could say with "absolute certainty" that ARC or another investor would have provided funding for the project if FDC claimed a 50% interest, the trial testimony established that there was a substantial probability that the project would have attracted the necessary financing even if FDC retained a 50% interest and made no financial contribution whatsoever. FDC maintains that, even without an expert, a jury could have concluded that the project would have been worth the financial contributions made by ARC and Saverin even after considering FDC's 50% interest. We disagree. We reject FDC's contention that expert testimony was not required on the issue of proximate causation in this case. Expert testimony is required when the issue is beyond the "common knowledge of lay persons." Kelly v. Berlin, 300 N.J.Super. 256, 265-66, 692 A.2d 552 (App.Div. 1997). The transaction here was undoubtedly a complex real estate acquisition and development. In our view, jurors could not be expected to know, based on their own common knowledge and experience, whether sophisticated investors would be willing to invest in the acquisition and development of the property and allow FDC to retain a 50% interest while making no monetary contribution to the project. We harbor serious doubts as to whether investors would be willing to provide all of the capital for the acquisition of the property and its development while agreeing to yield one-half of their gain to a party providing no financial contribution whatsoever. FDC did not present any competent expert testimony that would have allowed a jury to accept such a dubious proposition. Moreover, even were we persuaded that expert testimony was not required in this case, the testimony of the fact witnesses failed to provide an evidential foundation for a finding that the other parties to the transaction would have recognized FDC's 50% ownership interest if the Wilentz defendants acted to protect FDC's interest. Contrary to FDC's contentions, Saverin's testimony does not support its claim that the project would have secured investors even if FDC claimed a 50% interest. Saverin testified that he had the financial capability to meet all obligations of the joint venture and, after he came into the deal, he would finance it for a 50% interest, leaving 25% for Froom and 25% for Walsey. FDC contends that if Saverin would have financed the transaction for a 50% interest, then the jury was free to find that other reasonable investors would similarly have financed the deal for a 50% interest. We are not persuaded by this argument. Saverin's testimony only pertained to the agreement he reached with Walsey in June 1995 to make equal capital contributions to the project with Walsey. Saverin did not state that he would invest in the project and allow other parties to have a 50% interest while making no financial contributions to the venture. Futhermore, in response to Wilentz's summary judgment motions, Saverin submitted a certification in which he stated that he would never have agreed to a demand by FDC for a 50% interest in the venture. Saverin stated "without reservation" that he would never have participated in the project if he had known that Froom was asserting a 50 percent ownership claim without any financial obligation to the project. The testimony of real estate broker Jeff Troy also provides no support for FDC's argument. At trial, FDC endeavored to elicit testimony from Troy as to whether his firm would have invested in the project in lieu of ARC or Saverin. The judge 1080 sustained the objection to the question because no foundation had been established regarding the terms of such an investment. Thus, Troy never addressed the issue in his trial testimony. What is more, in his deposition testimony, Troy conceded that FDC's chance of obtaining a 50% "sweat equity" investment from any investor "would be something that you would not see." The testimony of Dr. David Scribner, FDC's real estate appraisal expert, also provides no support for FDC's claim. Scribner stated in a certification submitted in response to Wilentz's summary judgment motion that he had identified certain willing investors for the project. However, at his deposition, Scribner stated that he had never informed these investors about FDC's "demand" for a 50% interest, or certain environment and zoning problems that had to be overcome to develop the property. Scribner conceded that he could only speculate as to whether these investors would have agreed to FDC's demand for a 50% interest with no financial investment. At trial, Scribner did not testify on this issue. FDC additionally argues that it was not required to prove that the other investors would have acquiesced in its demand for 50% of the project. FDC says that Wilentz's negligence deprived it of the opportunity to protect its interest in the project, causing a loss of some percentage up to a 50% share of the project. FDC contends that the notion of a "non-dilutable" 50% interest is merely a "straw man" set up by the Wilentz defendants to defeat its claim. FDC asserts that, had the Wilentz defendants protected its interest in the project, it could reasonably have sought to retain an interest "at or below" 50% for locating the property, initiating the project, performing due diligence, bringing in the initial investor and locating three key tenants. FDC's assertions are unconvincing. At trial, FDC never pursued a claim for anything less than 50% of the project. FDC's counsel made that demand in his opening statement. Froom advanced that claim in his trial testimony. When discussing the verdict sheet at the charge conference, FDC's counsel rejected the judge's suggestion that the jury be permitted to select FDC's percentage of ownership. Defense counsel asserted that the only percentage before the jury was 50% and FDC's counsel agreed. Thus, throughout the trial, FDC proceeded on the claim that, as a consequence of Wilentz's alleged malpractice, it had sustained a loss of its 50% interest in the project. In our view, it is too late in the day for FDC to contend that the jury should have been free to find that FDC suffered a loss in the project of some percentage less than 50%. In any event, there was no evidence to support any claim for the loss of something less than 50% of the project. As we have explained, there was no competent testimony from any expert that the investors in this complex real estate transaction would have acquiesced to giving FDC any percentage of the project. There was no evidence whatsoever that the parties to the transaction or other potential investors would have agreed that FDC could retain a percentage of something less than 50% even though it was making no financial contribution to the project. Reversed and remanded for entry of judgment dismissing the legal malpractice claim against the Wilentz defendants with prejudice. The cross-appeal is dismissed as moot. NOTES [1] The Supreme Court issued Directive # 2-97 on March 19, 1997. It was superceded by Directive # 7-04 on May 17, 2004 but the sections pertinent to this appeal were not changed.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532251/	831 S.W.2d 164 (1992) KENTUCKY FARM BUREAU MUTUAL INSURANCE COMPANY, Movant, v. Walter McKINNEY, Administrator of Diana Lynn McKinney Reed Estate, Walter McKinney, Administrator of Infant Reed Estate, and Walter McKinney, Individually, Respondent. No. 90-SC-000821-DG. Supreme Court of Kentucky. May 14, 1992. E. Patrick Moores, R. Craig Reinhardt, Fowler, Measie & Bell, Lexington, for movant. Thomas K. Herren, Glover, Herren & Adams, Lexington, for respondents. DAVID L. YEWELL, Special Justice. This is a review of the decision of the Court of Appeals which upheld a judgment of the Jessamine Circuit Court that found uninsured motorist insurance coverage (Kentucky Farm Bureau Mutual Insurance Company) was applicable and payable to the estates of Diana Lynn McKinney Reed and her unborn infant child. Diana was struck and killed August 7, 1984, as she was flagging on-coming traffic around the scene of a disabled vehicle she had just exited. The rear of this vehicle was obstructing southbound traffic on Kentucky Highway 39, a public highway in Jessamine County, Kentucky. 165 The sole issue in this review requires an interpretation of the standard Kentucky uninsured motorist insurance policy definitional terms "Insured" and "Occupying." Specifically, under the facts of this case, at the time they were struck and killed by an uninsured motorist, were Diana and her unborn child "occupying" the insured vehicle and thus entitled to be covered as insureds under the uninsured motorist insurance coverage endorsement of the applicable policy? The term "occupying" is defined in the policy as meaning "in or upon or entering into or alighting from, with permission of the owner." This issue has not been directly considered previously by this Court in the context of an uninsured motorist insurance policy endorsement. FACTS In Jessamine Circuit Court, the parties entered into a Stipulation of Facts and Evidence. These facts are crucial to our review and must be recited: 1. That judgment for the wrongful death of Diana Lynn McKinney Reed to her estate, by and through the Administrator, Walter McKinney, would be in excess of $25,000.00, the liability limit per person of the uninsured motorist coverage in issue; 2. That judgment for the wrongful death of "Unborn Infant" Reed to the estate, by and through the Administrator, Walter McKinney, would be in excess of $25,000.00, the liability limit per person of the uninsured motorist coverage in issue; 3. That on August 7, 1984, prior to being struck by the motorcycle, Diana McKinney Reed, a 26 year old resident of Jessamine County, Kentucky, was operating a pickup truck on Kentucky Highway 39 in Jessamine County; 4. That Mrs. Reed was carrying her eight and one-half month term unborn infant; 5. That the pickup truck was owned by Charles Reed, father of Diana's husband, Doug Reed; 6. That Kentucky Farm Bureau Mutual Insurance Company had the insurance coverage on the truck, including uninsured motorist coverage; 7. That Doug Reed and Diana McKinney Reed did not reside in the "household" of Charles Reed on August 7, 1984; 8. That Mrs. Reed attempted to turn the truck into their property, but the right front wheel slid off of the side of their driveway into a culvert, and the vehicle became stalled or stuck; 9. That the bed of the truck was obstructing the southbound portion of the road; 10. That Mr. Reed asked Mrs. Reed to go up the roadway and attempt to warn motorists of the obstruction (bed of the truck in the roadway); 11. That Mrs. Reed left her purse and other belongings in the truck and proceeded up the roadway; 12. That motorists had passed Mrs. Reed, and she had been successful in waving to those persons to warn them of the obstruction in the road; 13. That Mrs. Reed was carried after the impact in excess of 90 feet in a southbound direction back toward the vehicle from which she had departed; 14. That Mrs. Reed was between 130 and 200 feet away from the truck from which she had departed at the time of the impact; 15. In addition, the Kentucky Farm Bureau insurance policy in issue has been filed as a Exhibit to this review. Therein appears the Uninsured Motorist Coverage Endorsement, UM-1 (10-66), which provides insuring agreements for damages incurred by bodily injury caused by an uninsured motorist. Essential to our examination are the specific definitions within this particular policy which are as follows: II. DEFINITIONS "Named Insured" means the person or organization named in Item I of the declaration, and if such person is an individual, also includes his spouse if a resident of the same household. "Insured" means (1) the named insured and, if the named insured is an 166 individual or husband and wife, a relative; (2) any other person while occupying an insured automobile; and (3) any person, with respect to damages he is entitled to recover because of bodily injury, to which this endorsement applies, sustained by an insured under (1) or (2) above. "Relative" means a person related to the named insured by blood, marriage or adoption who is a resident of the same household. "Occupying" means in or upon or entering into or alighting from, with permission of the owner. This uninsured motorist coverage results from the language of KRS 304.20-020 which mandates that such insurance be provided in automobile liability or motor vehicle liability insurance policies in Kentucky, subject, however, to rejection in writing by the named insured. Upon these facts, judgment was entered in Jessamine Circuit Court against Farm Bureau in the sum of $50,000.00, that being the full uninsured motorist insurance coverage purchased by Charles Reed for the truck that Diana had been operating and then departed which was found to be applicable to and provide coverage for the stipulated damages to her estate and that of her unborn infant child. HOLDING For the reasons hereinafter discussed, we AFFIRM the September 29, 1990, opinion of the Court of Appeals and find that Diana and her unborn child were insureds under the Kentucky Farm Bureau insurance policy as they were "occupying," for uninsured motorist insurance purposes, the insured pickup truck at the time they were fatally injured. Neither Diana nor her husband, Doug Reed, was the "Named Insured" on the automobile insurance policy. They did not own the truck nor did they reside within the household of Charles Reed who was the actual title owner of the truck and the "Named Insured" in the policy which insured the truck. If they are to be "Insured" under the policy, they must fall within the definition this Court now gives to the phrase "(2) any other person while occupying an insured vehicle." Thus, we are asked to give our interpretation to the word "occupying" and state whether it should be narrowly or broadly construed, giving consideration to the present facts and all applicable existing law on this subject. Interestingly, KRS 304.20-020 requires uninsured motorist coverage against loss for "bodily injury or death suffered by any person arising out of the ownership, maintenance or use of a motor vehicle." The issue of whether or not the more narrow insuring agreement language of the policy meets the broader requirements of KRS 304.20-020 was not raised by the pleadings or litigated at any stage of this action. The statute appears to require broad coverage for persons damaged by one's "ownership, maintenance or use" of a motor vehicle while the policy language seems to provide coverage for such persons as Diana, under a more narrow approach, and only when she is found to be "occupying" the vehicle. When faced with the necessity of construing such statutory and contractual language, we must look to prior pronouncements of any policy by which such insurance contracts will be interpreted by the courts of Kentucky. In so doing, we find that two cardinal principles apply: "(1) the contract should be liberally construed and all doubts resolved in favor of the insureds; and, (2) exceptions and exclusions should be strictly construed to make insurance effective." Grimes v. National Wide Mutual Ins. Co., Ky.App., 705 S.W.2d 926 (1985); Davis v. American States Ins. Co., Ky.App., 562 S.W.2d 653, 655 (1977), Wolford v. Wolford, Ky., 662 S.W.2d 835 (1984); and Tankersley v. Gilkey, Ky., 414 S.W.2d 589 (1967). Additionally, the authoritative research and writing of Professor Alan I. Widiss on the specific issue of when a person is "occupying" an insured vehicle is most helpful, Uninsured and Underinsured Motorist Insurance, Second Edition, Volume 167 One, see pages 189-228, Chapter 5. As Professor Widiss explains, uninsured motorist insurance which provides coverage for persons who are insured while "occupying" an insured vehicle are usually identified as: "Clause (b)" or "Clause (2)," and this class of covered persons is generally known as "Clause (b)" insureds (also sometimes referred to as Clause II, Class II, Class (2) or Class (b) insureds), page 189. As in Grimes, supra, when viewed as a group, courts generally employ expansive interpretations of insurance policy coverage terms to provide indemnification for persons engaged in a task related to the use, operation or maintenance of an insured vehicle even though they were not upon, entering into or alighting from an insured vehicle, page 204. "It is now evident that when this aspect of the uninsured motorist insurance terms is at issue, judges throughout the nation will employ a variety of approaches that result in sustaining the claims of injured persons who are either in proximity to an insured vehicle or engaged in some activity related to the use of an insured vehicle," page 204. "Even when a claimant is not in physical contact with an insured vehicle, coverage interpretations have been extended when the person's activities in proximity to the vehicle are consistent with the policy and principles of interpretation accorded safety responsibility legislation and statutorily mandated uninsured motorist coverage," page 204. "Conversely, when a claimant was found not to be engaged in an activity "directly related to the use or maintenance" of an insured vehicle just prior to the accident, and, was not in immediate proximity to an insured vehicle, courts have frequently denied coverage," page 204. Movant Farm Bureau argues in this case that Diana and her unborn child, as "Clause (II)" insureds, should be provided no uninsured motorist insurance coverage because they were not physically in, upon, entering into or alighting from the truck at the moment they were struck and killed. Using the factors of time and distance, Farm Bureau asserts that Diana had severed her relationship with the truck when she left her zone of safety and undertook an activity arguably not reasonably incidental to her "alighting from" the truck. Emphasizing the fact that Diana was 130-200 feet away from the truck, it asserts that she became a pedestrian not engaged in a transaction essential to the use of that truck, much like a third party beneficiary to an insurance contract and one who under those circumstances could not reasonably have expected to be a covered person for motor vehicle insurance purposes. We believe, however, that Kentucky should adhere to its stated policy of liberally construing insurance contracts in favor of the asserted "insured" to provide insurance coverage and thereby make insurance effective, Grimes, supra. In our present case, while Diana was physically outside and away from the disabled vehicle she formerly occupied, this record does not reveal any act she took which was not directly connected to the disabled insured vehicle which at the very moment she was struck was creating an actual safety hazard upon that public highway in Jessamine County, Kentucky. She was actively engaged in a safety activity essential to the use of the insured truck and was attempting to carry out the reasonable act of protecting not only the insured disabled vehicle, but also all other persons and vehicles using that highway on that particular occasion. Perhaps if no accident had occurred on that occasion, Farm Bureau would have applauded Diana's efforts in the prevention of an accident for which it might have been liable for payment of damages due to the insured truck's creation of a dangerous situation in blocking the southbound traffic of that highway. Unquestionably, Diana's departure from the disabled truck was temporary as she left her purse and personal belongings therein when she proceeded up the roadway. She was not a pedestrian out for a stroll and her presence at the point of impact was directly caused and necessitated by the disability of the insured vehicle. These facts satisfy the "nexus" or causal relationship required by many courts when coverage is granted to injured persons and 168 interpretation is given to the term "occupying" under uninsured insurance contracts. We now join with other jurisdictions which employ expansive interpretations to provide uninsured motorist insurance coverage for persons who have been occupants of an insured vehicle. In the spirit of Grimes, supra, we find that the four criteria established by Rau v. Liberty Mut. Ins. Co., 21 Wash.App. 326, 585 P.2d 157 (1978), represent a reasonable method of analysis which should be applied to Kentucky cases involving the interpretation of the term "occupying" in uninsured motorist insurance policy language. These criteria are: (1) There must be a causal relation or connection between the injury and the use of the insured vehicle; (2) The person asserting coverage must be in a reasonably close geographic proximity to the insured vehicle, although the person need not be actually touching it; (3) The person must be vehicle oriented rather than highway or sidewalk oriented at the time; and, (4) The person must also be engaged in a transaction essential to the use of the vehicle at the time, id. at 162. We also find persuasive the interpretation given to the term "occupying" in the cases of Hartford Accident & Indemnity Co. v. Booker, 140 Ga.App. 3, 230 S.E.2d 70 (1976), Stevens v. USF & G Co., 345 So. 2d 1041 (Miss.1977), Contrisciane v. Utica Mutual Ins. Co., 312 Pa.Super. 549, 459 A.2d 358 (1983), DeStefano v. Oregon Mut. Ins. Co., 762 P.2d 1123 (Utah App.1988), Estate of Cepeda v. United States Fidelity & G. Co., 37 A.D.2d 454, 326 N.Y.S.2d 864 (1971), Smith v. Girley, 260 La. 223, 255 So. 2d 748 (1971), MVAIC v. Oppedisano, 41 Misc. 2d 1029, 246 N.Y.S.2d 879 (1964), Moherek v. Tucker, 69 Wis. 2d 41, 230 N.W.2d 148 (1975), Nelson v. Iowa Mutual Insurance Company, 163 Mont. 82, 515 P.2d 362 (1973) and General Acc. Ins. Co. of America v. Oliver, 574 A.2d 1240 (R.I. 1990). Clearly, under the facts presented in this action, Diana met all four criteria. The decision of the Court of Appeals and the judgment of the Jessamine Circuit Court are hereby AFFIRMED. STEPHENS, C.J., and COMBS, LAMBERT and WINTERSHEIMER, JJ., concur. LEIBSON, J., dissents by separate opinion in which SPAIN, J., joins. LEIBSON, Justice, dissenting. Respectfully, I dissent. The narrow question presented is whether Diana Lynn McKinney Reed fit the description of a person "occupying an insured automobile" at the time she was struck and killed on April 7, 1984. That term is defined in the Uninsured Motorist Coverage Endorsement of the Kentucky Farm Bureau Automobile Policy as follows: "`Occupying' means in or upon or entering into or alighting from, with permission of the owner." At the particular point in time when Diana was struck, she stood 130-200 feet away from the vehicle, which was in a disabled condition, flagging on-coming traffic in an effort to avoid a collision. While surely her activity was "vehicle oriented," and surely there was a "causal relation or connection between the injury and the use of the insured vehicle," it is equally certain that her position and activity did not constitute "occupying an insured vehicle" as defined in the policy. The question here is whether "occupying" is synonymous with "use of the insured vehicle," and the answer is it is not. The answer lies in understanding that, unlike liability coverage, the premise underlying uninsured motorist coverage is to protect persons insured rather than to insure vehicles against loss caused by their use. The Majority Opinion is inconsistent in stating on the one hand that "Diana was physically outside and away from the disabled vehicle she formerly occupied," but on the other hand that her position and activity should be classified as occupying because "this record does not reveal any act she took which was not directly connected to the disabled insured vehicle." 169 Accepting that her activities were "directly connected to the disabled insured vehicle," nevertheless it is a contradiction in terms to define Diana's status as that of a former occupant and then classify her as an occupant. The fact is that Diana was not "in," nor "upon," nor "entering into," nor "alighting from" the disabled vehicle when she was struck, and no amount of legal legerdemain, no matter how well intended, can fit her within the definition of "occupying." This is the sina qua non for Diana, who was not a person insured or a member of the insured's household, to qualify as an additional insured within the uninsured motorist coverage of this policy. The Majority Opinion appears to justify rewriting the policy definition of the term "occupying" on grounds of a public policy analysis derived from KRS 304.20-020, buttressed by material from Professor Alan Widiss' treatise on Uninsured and Under-insured Motorist Insurance. The Majority Opinion states "[t]his uninsured motorist coverage results from the language of KRS 304.20-020 which mandates that such insurance be provided in automobile liability. . . policies . . ., subject, however, to rejecting in writing by the named insured." While I respect both the general principles stated in the Majority Opinion and Professor Widiss' reputation in the field, I find nothing in the statute to get us beyond the policy language. A case such as Hartford Accident & Indemnity Co. v. Booker, 140 Ga.App. 3, 230 S.E.2d 70 (1976), cited as "persuasive" in the Majority Opinion, imposing coverage where the injury is causally related to "use" even though such "use" would fall beyond a reasonable application of the term "occupying," is distinguished from this one by the difference in statutory language. The Georgia statute in the Booker case required coverage for "any person who uses, with the consent, express or implied, of the named insured, the motor vehicle to which the policy applies." Id. 230 S.E.2d at 72 (emphasis added). The Kentucky Uninsured Motorist Statute has no such statutory mandate. When KRS 304.20-020 is analyzed carefully, what it requires is that when "automobile liability" policies are sold "insuring against loss . . . suffered by any person arising out of the ownership, maintenance or use of a motor vehicle," the insurer must also provide the policyholder uninsured motorist insurance unless the policyholder shall reject the coverage. The words "ownership, maintenance or use of a motor vehicle" in KRS 304.20-020 are used as part of the description of the term "liability policy"; they do not describe who must be extended uninsured motorist coverage beyond those persons specifically insured by the liability policy. The statute does not require that uninsured motorist coverage must extend to any person involved in the use of the vehicle in any form or fashion. If it did, I would agree with the result reached in the Majority Opinion. Paraphrased for present purposes, KRS 304.20-020 provides: No automobile liability policy shall be delivered in this state unless coverage is provided therein for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured vehicles. The statute does not say that persons other than policyholders must be insured only that, unless rejected, uninsured motorist coverage must be provided to the "persons insured." It is a separate type of insurance added on to the liability policy. Who is insured is left to the policy definitions. Nor does the Motor Vehicle Reparations Act (MVRA), KRS 304.39-010, et seq., which defines who must be insured for basic reparations benefits (BRB) and for tort liability, define who must be insured for uninsured motorist protection. KRS 304.39-080(5) requires "security for payment of tort liabilities, arising from maintenance or use of the motor vehicle," and KRS 304.39-110 provides the "required minimum," i.e., the policy limits, for "payment of tort liabilities," and elsewhere in the MVRA KRS 304.39-030 provides for the right to BRB "from injury arising out of maintenance or use of a motor vehicle." But, just as with the Uninsured Motorist Statute, nowhere in the MVRA is there statutory language mandating that the insurer 170 must extend uninsured motorist coverage to persons other than an insured simply because their activity may be considered connected to the use of the vehicle. Thus compulsory insurance against tort liability for losses caused by the use of the vehicle is mandated by the MVRA, but no statute mandates uninsured motorist protection for the user unless the user falls within the policy definition of an insured person. In sum, the key question in this case is not whether this tragic accident was one "arising out of the ownership, maintenance or use of a motor vehicle." In KRS 304.20-020 that phrase is part of the description of the "automobile liability or motor vehicle liability policy" which triggers the offer of uninsured motorist coverage; it does not describe the scope of the uninsured motorist protection which must be offered along with the automobile liability policy. The statute requires no uninsured motorist protection for former occupants of the vehicle. It requires uninsured motorist protection for occupants as such only if they qualify as "persons insured" under the policy definitions. If the deceased (Diana) is to qualify for uninsured motorist protection under this policy, she must do so by fitting within the extended definition of persons insured found within the contractual language; she must meet the policy definition of "occupying" which then would qualify her as an insured. Unfortunately, she stepped considerably beyond that point. SPAIN, J., joins this dissent.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532281/	305 B.R. 249 (2004) In re Bobbie Jean HEATH. Bobbie Jean Heath, Debtor and Plaintiff on Behalf of Herself and Others Similarly Situated, Plaintiff, v. General Motors Acceptance Corporation, Defendant. Bankruptcy No. 88-42576, Adversary No. 97-4113. United States Bankruptcy Court, N.D. Mississippi. January 19, 2004. 250 Don Barrett, Lexington, MS, Frederick B. Clark, Greenwood, MS, John M. Duck, Michael G. Crow, Adams & Reese, LLP, New Orleans, LA, for Bobbie Jean Heath. William H. Leech, McGlinchy Stafford, PLLC, Jackson, MS, Jess Dickinson, Gulfport, MS, for General Motors Acceptance Corporation. OPINION DAVID W. HOUSTON, III, Bankruptcy Judge. On consideration before the court is the Plaintiff's Second Supplemental and Amended Motion for Class Certification; response thereto having been filed by the defendant, General Motors Acceptance Corporation (GMAC); and the court, having heard and considered same, hereby finds as follows, to-wit: I. JURISDICTION The court has jurisdiction of this adversary proceeding pursuant to 28 U.S.C. § 1334 and 28 U.S.C. § 157, as well as, the General Order of Reference entered by the United States District Court for the Northern District of Mississippi on July 27, 1984. This is a "core" proceeding as defined in 28 U.S.C. § 157(b)(2)(A) and (O). II. FACTUAL SUMMARY In July, 1988, the plaintiff financed the purchase of a 1987 Pontiac Sunbird through the defendant, GMAC. On December 20, 1988, the plaintiff filed a voluntary petition for relief under Chapter 13 of the Bankruptcy Code. At the time of filing, she owed GMAC the approximate sum of $9,806.89. The plaintiff timely filed her Chapter 13 plan and proposed to pay GMAC the value of the 1987 Pontiac Sunbird, i.e., $6,500.00, plus interest at the rate of 12% per annum over a period of sixty months. Nothing was to be paid on GMAC's unsecured deficiency claim. On June 6, 1989, since there were no objections to confirmation, an order confirming the plaintiff's Chapter 13 plan was entered by the court. The plaintiff met all of the obligations required by her plan and ultimately received a discharge pursuant to § 1328 of the Bankruptcy Code on March 25, 1994. The order of discharge effectively relieved the plaintiff from liability as to both the secured and unsecured portions of the indebtedness owed to GMAC. According to the allegations set forth in her complaint, the plaintiff attempted to purchase a car from Delta Chevrolet, Inc., Greenwood, Mississippi, in February, 1997. The purchase of the vehicle was to be financed again through GMAC. The plaintiff was advised that, as a condition for financing this purchase through GMAC, she would be required to satisfy the balance owed from her former purchase of the 1987 Pontiac Sunbird. The plaintiff then tendered a check, payable to GMAC, through the dealership for a sum approximately equivalent to the unsecured deficiency claim discharged in her bankruptcy case. Shortly thereafter, once GMAC learned that it had received the payment 251 of a discharged debt, it promptly refunded the money to the plaintiff's attorney. Initially, the plaintiff sought to represent a nationwide class of debtor claimants that were denied financing for a subsequent automobile purchase until a previous indebtedness, which had been discharged in bankruptcy, had been fully paid or satisfied. The court conditionally certified this proposed class pursuant to Rule 23(c)(1), Federal Rules of Civil Procedure. However, the class was subsequently decertified because the numerosity requirement of Rule 23(a)(1), Federal Rules of Civil Procedure, could not be met. Following extensive discovery conducted in this proceeding, the plaintiff filed her Second Supplemental and Amended Motion for Class Certification, which is the subject of this opinion. In this motion, the plaintiff seeks certification of a class defined as follows, to-wit: All persons or individuals who were GMAC customers who (1) received financing from GMAC for the purchase or lease of a motor vehicle; (2) filed a petition for relief under any appropriate chapter of the Bankruptcy Code at a time when GMAC was a secured or unsecured creditor; (3) were discharged for any portion of their debt to GMAC; or (4) have not yet been discharged and (a) the amount of debt discharged in Bankruptcy has been or will be maintained on GMAC's "paid in full inquiry screen" or in any database readily available to personnel in a position to unlawfully utilize such information and (b) have or may receive their title or release of lien to the financed vehicle after discharge in excess of the time permitted by applicable state law and/or (c) whose records have or will be inadequate to evidence or reflect the time of delivery of title after discharge. Excluded from the Class are Defendant, any parent, subsidiary, or affiliate of Defendant; the officers, directors, agents, servants, or employees of any of the same; and the members of the Judicial Branch of the United States Government, and the members of the immediate families of any such person. The plaintiff has advised that no longer is she seeking actual or punitive damages from GMAC, but rather she is pursuing only injunctive or declaratory relief which is characterized in her reply memorandum as follows, to-wit: The Plaintiff now seeks injunctive relief to insure that the policies and procedures implemented by GMAC in response to this lawsuit will remain in effect and will be systematically followed by GMAC after this lawsuit is concluded so that current and future Bankruptcy debtors are not prejudiced by GMAC's practices, policies and procedures that facilitated its discrimination against discharged debtors in violation of the Bankruptcy Code and in violation of and in contradiction to the fresh start policy of the Bankruptcy Code. (The preceding paragraph refers to allegations that GMAC deliberately or negligently withheld motor vehicle certificates of title, in violation of state laws, long after the debtors had received their discharges in bankruptcy.) Further, Plaintiff and thousands of other GMAC debtors seek to enjoin GMAC from maintaining the exact amounts discharged in Bankruptcy on GMAC's "paid in full inquiry screen" which serves no legitimate purpose and facilitates GMAC's violation of the discharge injunction and the Bankruptcy Code's fresh start policy, as well as, discrimination against discharged debtors. Therefore, Plaintiff requests that this Court enjoin GMAC from maintaining exact 252 amounts discharged in Bankruptcy on the "paid in full inquiry screen" . . . ("The preceding paragraph refers to an `in house' procedure utilized by GMAC to record customer debts discharged in bankruptcy cases.") Interestingly, insofar as the retention of the motor vehicle certificates of title is concerned, there is a sharp factual dispute in the plaintiff's individual circumstances. The records maintained by GMAC reflect that the plaintiff's certificate of title was mailed to her even before she received her discharge in bankruptcy, while, in contrast, the plaintiff indicates that she has never received her certificate evidencing the release of GMAC's lien. At an earlier hearing, the court made inquiry of the plaintiff's attorney as to whether the plaintiff was asserting that the retention of the motor vehicle certificates of title was a surreptitious attempt by GMAC to collect an otherwise discharged debt. The following exchange appears in the hearing transcript: Mr. Barrett (Plaintiff's attorney): The claim is not that GMAC holds titles illegally to enforce payment of a discharged debt. Court: Are you saying that you agree with Mr. Dickinson (GMAC's attorney) that the withholding of the title is not a tactic to induce the payment of a dischargeable debt? Mr. Barrett: Your Honor, yes, sir. Mr. Crowe (Plaintiff's attorney): Yes, sir. Mr. Barrett: Yes, sir, we are, at least we can't prove that. Probably we could prove it in individual cases, that is, Ms. Heath's, but we cannot prove that class wide, that is correct. Concerning the "paid in full inquiry screen" issue, the plaintiff alleges that the maintenance of this information by GMAC facilitates its ability to discriminate unfairly against discharged debtors. GMAC asserts responsively that it is entitled to maintain information which assists in justifying accounting entries made on prior accounts, which cautions GMAC employees about the uncollectability of "charge-offs" by labeling them as bankruptcy matters, and which assesses the risks associated with potential customers' new contracts. In oral argument, the plaintiff's attorney implied that the use of this recorded information violates § 525 of the Bankruptcy Code. However, the court is of the opinion that this particular section is not implicated in any way whatsoever by the maintenance of the "paid in full inquiry screen." It will not be addressed further in this opinion. III. DISCUSSION The requirements of Rule 23(a) and (b), Federal Rules of Civil Procedure, which are made applicable to bankruptcy adversary proceedings pursuant to Rule 7023, Federal Rules of Bankruptcy Procedure, determine whether a class action should be certified. These provisions are set forth as follows: Rule 23. Class Actions (a) Prerequisites to a Class Action. One or more members of a class may sue or be sued as representative parties on behalf of all only if (1) the class is so numerous that joinder of all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the class. (b) Class Actions Maintainable. An action may be maintained as a class 253 action if the prerequisites of subdivision (a) are satisfied, and in addition: (1) the prosecution of separate actions by or against individual members of the class would create a risk of (A) inconsistent or varying adjudications with respect to individual members of the class which would establish incompatible standards of conduct for the party opposing the class, or (B) adjudications with respect to individual members of the class which would as a practical matter be dispositive of the interests of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interests; or (2) the party opposing the class has acted or refused to act on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole; or (3) the court finds that the questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy. The matters pertinent to the findings include: (A) the interest of members of the class in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already commenced by or against members of the class; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; (D) the difficulties likely to be encountered in the management of a class action. In this proceeding, there are only two issues that merit discussion: (1) whether GMAC intentionally or negligently retained motor vehicle certificates of title and, consequently, refused to release its liens on the related automobiles in excess of the time permitted by applicable state laws following the debtors' discharges in bankruptcy; and (2) whether GMAC's maintenance of a discharged debtor's name and the amount of the debt discharged on the "paid in full inquiry screen" or on any data base readily available to personnel, in a position to unlawfully utilize such information, should be enjoined. The interaction of these issues with the requirements of Rule 23(a) and (b) will be discussed separately. (1) Whether GMAC intentionally or negligently retained motor vehicle certificates of title and, consequently, refused to release its liens on the related automobiles in excess of the time permitted by applicable state laws following the debtors' discharges in bankruptcy. As noted in the factual summary hereinabove, the plaintiff candidly acknowledged, that for purposes of class certification, she cannot establish "class wide" that GMAC's alleged retention of the motor vehicle certificates of title constitutes a violation of the Bankruptcy Code's discharge injunction set forth in § 524(a)(2). As such, the plaintiff is effectively asking this court to enjoin GMAC from violating applicable state laws regulating the release of motor vehicle certificates of title following the payment of the related indebtedness or, alternatively, to enjoin GMAC to insure that the policies and procedures that it implemented in response to this lawsuit will remain in effect and will be systematically followed by GMAC after this lawsuit is concluded. In substance, 254 this translates to injunction demands for GMAC to comply with a variety of state laws, as well as, to continue doing what it is already doing. As noted earlier, there is a material factual dispute as to when the plaintiff actually received her title from GMAC. From the court's perspective, there could be numerous differences in what the plaintiff experienced as to the receipt, if at all, of her certificate of title compared to what might have happened with other potential class members. In addition to disparities in the applicable state laws, several fairly obvious variables which could arise are set forth as follows: (a) The adequacy and timing of the notices that were disseminated to GMAC advising it of the debtors' discharges. (b) Whether or not there were co-debtors on the particular accounts. (c) Whether the pertinent bankruptcy cases were filed as or converted to Chapter 7 where the liens on the vehicles could likely survive the debtors' discharges. (d) Whether the cases were dismissed and the debtors received no discharge. (e) Whether there were reaffirmation agreements filed in the Chapter 7 cases which necessitated the retention of the certificates of title long after the debtors' discharges. (f) Whether the automatic stay was lifted permitting a repossession of the vehicle which would indicate that the certificate of title was never returned to the debtor who may or may not have received a discharge. Insofar as this issue is concerned, the court is not convinced that the plaintiff's claim meets either the typicality or commonality requirements of Rule 23(a)(2) or (3), Federal Rules of Civil Procedure. There are simply too many potential inconsistencies that could arise insofar as the plaintiff's factual circumstances are concerned as compared to those of other potential class members. Consequently, the court declines to certify a class as to this particular issue. (2) Whether GMAC's maintenance of a discharged debtor's name and the amount of the debt discharged on the "paid in full inquiry screen" or on any data base readily available to personnel, in a position to unlawfully utilize such information, should be enjoined. As perceived by the court, the maintenance of the "paid in full inquiry screen" is a record keeping procedure utilized by GMAC to track debts that have been discharged in bankruptcy. The listing reflects the customer's name and the amount of the debt discharged. It is available "in house" to GMAC officials and employees. The plaintiff contends that this procedure allows GMAC to discriminate unfairly against its customers who have filed or will file bankruptcy cases. The plaintiff also alleges that the availability of this listing facilitates GMAC's ability to collect otherwise dischargeable debts by targeting the debtor customer community. To the contrary, there has been no suggestion, anecdotal or otherwise, that this information has been used unlawfully or even improperly. GMAC counters this argument with the assertion that the "paid in full inquiry screen" is a legitimate mechanism used to monitor the credit worthiness of potential customers in addition to serving as a normal business record which reflects relevant information of financial concern. Before class certification of a cause of action can be sustained, there 255 must be a showing that a cognizable or viable cause of action actually exists. The court has seen nothing to indicate that GMAC's maintenance of the "paid in full inquiry screen" is sinister or inherently wrong. The plaintiff seeks injunctive and declaratory relief to proscribe what appears to be a legitimate record keeping function by GMAC. As such, the court declines to certify a nationwide class to pursue this cause of action. IV. CONCLUSION For the reasons cited hereinabove, the court finds that the Plaintiff's Second Supplemental and Amended Motion for Class Certification is not well taken. By a separate order, entered contemporaneously herewith, the said motion will be overruled.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532282/	831 S.W.2d 223 (1992) Allan R. HOFFMAN, et al., Respondents, v. CITY OF TOWN AND COUNTRY, Appellant. No. 59436. Missouri Court of Appeals, Eastern District, Division Four. April 28, 1992. 224 Robert B. Hoemeke, Robert J. Will, St. Louis, for appellant. Peter W. Herzog, Jr., Michael Angelo Vitale, St. Louis, for respondents. SATZ, Judge. This is a declaratory judgment action in which plaintiffs, partners in Centre Park Forty Associates (CP40), challenge the reasonableness of the residential zoning of their property located on the north outer road of Highway 40, in the defendant city, Town and Country. The trial court found the residential zoning to be unconstitutionally unreasonable. Town and Country appeals. We affirm. Scope of Review At the outset, the parties disagree about the scope of our review. Town and Country argues that we must review de novo the evidence adduced at trial, and, in turn, it also contends that our review is not restricted by the standards of appellate review established in Murphy v. Carron, 536 S.W.2d 30 (Mo. banc 1976). CP40 contends that challenges to the validity of zoning ordinances are to be reviewed de novo, but, in doing so, the appellate court must defer to the findings of the trial court in factual issues, "especially those that were made with respect to conflicting testimony." This disagreement stems, in part, from the review process itself and from the language used by our courts explaining that process. Both parties are partially correct. In Missouri, zoning, rezoning and refusals to rezone are considered to be legislative acts, not quasi-judicial acts. E.g., Erigan Company, Inc. v. Town of Grantwood Village, 632 S.W.2d 495, 496 (Mo.App.1982). The review of the local legislative body's grant or denial of rezoning is not initiated in a trial court by direct appeal on the record made before the legislative body, rather review is initiated by a plenary action, such as the request for a declaratory judgment to declare the grant or denial of rezoning to be a deprivation of 225 rights. See, e.g. Vatterott v. City of Florissant, 462 S.W.2d 711, 713 (Mo.1971). The trial court is, thus, not confined to nor concerned with the record made before the legislative body. However, the challenger to the legislative body's grant or denial of rezoning does not begin the plenary action unburdened. The grant or denial is presumed to be valid, with the burden placed upon the challenger to overcome that presumption. Id. In conjunction with and, perhaps, in amplification of that presumption, it is said that the decision of the legislative body to grant or deny rezoning, being a legislative act, will be upheld if the decision is "fairly debatable". E.g., Elam v. City of St. Ann, 784 S.W.2d 330, 335 (Mo.App. 1990); see Binger v. City of Independence, 588 S.W.2d 481, 486 (Mo. banc 1979) (annexation). In short, the trial court, in a plenary action, reviews a presumptively valid decision of the local legislative body to determine whether the decision was fairly debatable, on a record which may, and probably quite often does, differ from the record before the legislative body. Normally, in this review process many of the operative, relevant facts are not in dispute, such as the topography of the land in question, the development of adjacent and nearby property and the history of that development. The dispute is usually between the opinions of the parties' respective expertsone or more experts testifying the property is properly zoned, their counterparts testifying it is not. If the experts disagree on the operative facts underpinning their respective opinions, the trial court must credit one or the other. The facts discredited, in turn, discredit the opinion based upon them, and the facts credited, in turn, credit the opinion based upon them. If the trial court engages in this type of credibility determination, Rule 73.-01(c) and the mandate of Murphy v. Carron require us as an appellate court to defer to the trial court's determination. See, e.g. National Super Markets, Inc. v. City of Bellefontaine Neighbors, 825 S.W.2d 24, 26-27 (E.D.Mo.App.1992). But, quite often, the parties' respective experts reach their individual opinions by using different sets of operative facts, and no expert disputes the facts used by an opposing expert. The credibility of the experts then "occupies a very narrow field; the questions are rather those of judgment, and the logic (or lack of it) in expert opinions." Huttig v. City of Richmond Heights, 372 S.W.2d 833, 839 (Mo.1963); Loomstein v. St. Louis County, 609 S.W.2d 443, 447, n. 3 (Mo.App.1980). Regardless of the determinations made by the trial court to reach its decision that the local legislative body's grant or denial of rezoning was or was not fairly debatable, however, we, in reviewing the trial court's decision, make our own independent determination of whether the legislative body's decision was fairly debatable. Elam supra; Binger, supra. Thus, we said in Elam, perhaps inartfully, that "we review de novo" any challenges to the acts of the legislative body. Elam, supra, 784 S.W.2d at 335. However, to the extent the trial court has discredited an expert's opinion by discrediting the operative facts upon which that opinion is based, we are bound to defer to that determination in making our own independent determination of whether the legislative body's grant or denial of rezoning was fairly debatable. National Super Markets, Inc., supra. In the present case, the trial court adopted the report of the special master in which extensive findings of fact were made to support the conclusion that Town and Country's refusal to rezone was unreasonable. The court, however, did not expressly discredit the facts upon which Town and Country's experts based their opinions that the refusal to rezone was reasonable. More important, we cannot sensibly find the court so discredited those experts by implication. We cannot do so primarily because the court's findings of fact are facts apparently inferred from the opinions of CP40's experts and those opinions differ from the opinions of Town and Country's experts because, for the most part, they are based upon different sets of operative facts. Thus, we do not find that the trial 226 court necessarily discredited Town and Country's experts. However, we have read the 850 pages of transcript and read and viewed the 75 exhibits, and, independent of the trial court's findings, we have reached the same conclusion it did: Town and Country's refusal to rezone is unconstitutionally unreasonable and that issue is not fairly debatable. CP40 pleaded its challenge to the existing zoning in two counts: Count Ia request to declare the zoning unconstitutional and to enjoin Town and Country from enforcing it; and Count II, a request for damages for an unconstitutional taking of its property. Summary judgment was entered in Town and Country's favor on Count II, and Count I was referred to a special master for hearing. After the hearing, the master found in favor of CP40 on Count I. The trial court adopted the master's findings and entered judgment in favor of CP40. On appeal, Town and Country argues that the issue of "constitutional due process" was never pleaded nor tried. We disagree. Although, perhaps, not artfully pleaded in lucid and pristine isolation, CP40 did plead, in Count I, that the existing zoning was "unlawful, arbitrary [and] unreasonable" in violation of the "Fourteenth" [Amendment] to the United States Constitution. Town and Country also argues that the summary judgment in its favor on Count II effectively prohibited a hearing on the constitutional issues raised in Count I under the doctrines of "res judicata, collateral estoppel and law of the case." Although we disagree on the merits of this broad based attack, we do not address it. Town and Country makes this argument as a bald statement in its brief with reference to that part of the legal file containing similar arguments made by it at trial. Since the argument was not developed in the brief, with appropriate case law support, we deem this argument abandoned. Rule 84.04(d); e.g., Steenrod v. Klipsch Hauling Co., Inc., 789 S.W.2d 158, 166 (Mo.App.1990); Boswell v. Steel Haulers, Inc., 670 S.W.2d 906, 912 (Mo.App.1984). Location of Property The property in question is shown in the following schematic sketch not drawn to scale. 227 CP40's 13.6 acre tract of land is located approximately midway between Mason Road on the west and Interstate 270 on the east, abutting the north outer road along Highway 40. The property's northern boundary line is the city limit of Town and Country. The property is zoned suburban low which permits single family residences, churches, schools, parks, orchards and farms, and not for profit outdoor recreational areas. Immediately west of the property is the Citicorp office complex and parking lot, which is zoned office. Continuing west to Mason Road, the land is zoned for office use, and office complexes are built on that land. 228 The Priory of St. Mary owns land immediately to the northwest of CP40's property. The Priory's land is not located in Town and Country, and the part adjacent to CP40's property is undeveloped. To the north and directly adjacent to CP40's property is a 18.52 acre tract of undeveloped land also owned by CP40, located in Creve Coeur and zoned one acre residential. To the northeast is an undeveloped tract of land owned by Missouri Baptist College, not located in Town and Country. To the east and directly adjacent to CP40's property is an undeveloped 15.88 acre tract of land owned by the Church of Jesus Christ of Latter-Day Saints, located in Town and Country and zoned suburban low. Continuing east to Highway 270, the land is zoned suburban low, with three or four homes on it and the rest undeveloped. Across Highway 40, on the south side, between Mason Road on the west and Interstate 270 on the east, the land is in Town and Country and is zoned major educational and suburban estate. Directly west of Interstate 270, the land has been residentially developed. Continuing west from this residential development to Mason Road, the land is owned by the Principia School. West of Mason Road, on the north side of Highway 40, the land is still in Town and Country and is zoned suburban estate. Troop C of the Missouri State Highway Patrol has its headquarters at the junction of Mason Road and Highway 40. Continuing west to the city limits of Town and Country, the land is first zoned suburban low and so developed, and then zoned office and major educational and so developed. Immediately west of Mason Road on the south side of Highway 40, the land is in Town and Country, zoned and developed suburban estate. The land directly adjacent to Highway 40 is used for institutional purposes. Continuing west to the city limits, the land directly adjacent to Highway 40 is zoned office and commercial and so developed. Procedural History The 13.6 acre tract of land in issue is part of a larger 32.12 acre tract of land owned by CP40. In July, 1983, Woodson Holding Co., apparently a straw party for CP40, contracted to buy the 32.12 acres, contingent on that tract being rezoned. At that time, the 13.6 acre tract of land was within the zoning jurisdiction of St. Louis County, was zoned residential and had been so zoned since 1965. The remaining 18.52 acres, to the north, were located in the City of Creve Coeur and were zoned residential. In September 1983, the Woodson Holding Co. petitioned St. Louis County to rezone the 13.6 acre tract from residential to office use and petitioned Creve Coeur to rezone the 18.52 acre tract from residential to planned office use. In December 1983, Town and Country annexed the 13.6 acre tract. Subsequently, CP40, acting through Woodson, waived the rezoning contingency in the land contract, Woodson assigned the contract to CP40, and, in June, 1984, CP40 purchased the 32.12 acre tract for $1,900,-000 plus $95,000 in commissions. Prior to closing the sale, however, CP40 filed petitions for rezoning and a development proposal with the Town and Country Planning and Zoning Commission. In January 1987, before acting on CP40's petition, Town and Country adopted a land use plan, a zoning map, and a new zoning ordinance, which rezoned the property from St. Louis County's residential to its suburban low. In December 1987, CP40 resubmitted its rezoning petition and Site Development Plan to Town and Country, and, subsequently, it submitted revised Site Plans. After two public hearings in March and April, 1988, the Planning and Zoning Commission recommended denial of CP40's petition to rezone. Then, after a public hearing held in May 1988, the Town and Country Board of Aldermen denied the rezoning petition in June 1988. This action followed. Issues As previously discussed, the only issue we need review is whether Town and Country's refusal to rezone was fairly debatable. Huttig, supra 372 S.W.2d at 839; 229 Elam, supra 784 S.W.2d at 335. The refusal to rezone is presumptively valid, and CP40 has the burden of overcoming that presumption. Elam, supra at 335. The presumption of validity carries with it the presumption that maintaining the zoning is in the public interest and welfare, and, thus, the basic question is whether that public interest and welfare outweighs the detriment to CP40's interests caused by the zoning. Huttig, supra 372 S.W.2d at 839; Loomstein, supra 609 S.W.2d at 446-447. CP40 must, in the first instance, establish that the detriment caused it by the existing zoning outweighs the benefit to the general public. Elam, supra 784 S.W.2d at 335. Once CP40 satisfies that burden, we then determine whether the evidence of Town and Country makes the continuance of the existing zoning fairly debatable. Id. "No one factor is dispositive in balancing public versus private interests. Each case stands on its own facts and circumstances." Rhein v. City of Frontenac, 809 S.W.2d 107, 110 (Mo.App. 1991). Review of Evidence To show the detriment caused it by the existing zoning, CP40 showed that residential development on the property was not economically feasible. E.g., Loomstein, supra 609 S.W.2d at 447, 449. CP40's expert, Mr. Richard Ward, a consultant for city planning and real estate development, prepared several residential site plans for the property and chose what he believed to be the most feasible. The following is a schematic sketch of the site plan not drawn to scale. 230 The site plan consists of eight one acre homesite lots; three lots are located on a cul-de-sac on the west side of the property, and the remaining five lots are located aside a winding road on the east side. In the area between the five lots on the east, and the Highway 40 north outer road there is a water retention pond; the remaining acreage is woodlands. In preparing the site plan, Mr. Ward considered several factors, including the suburban low zoning, which allowed one acre lots and some "clustering" of homes,[1]231 the topography of the land, the trees that must be retained on the land, and the power lines on the west boundary line of the property. The plan was accepted by another expert for CP40 as a realistic and acceptable plan. To determine whether residential development is economically feasible, CP40 established that, in this area, the selling price of a home must be four to five times the cost of a developed lot. All experts agreed to this ratio. The cost of the developed lot is the sum of the cost to acquire the undeveloped lot plus the cost to develop the lot for building, which includes grading, protection against storm water, utilities and roads. Mr. Ray Steege, an engineer who reviews and designs subdivisions and development costs for developers, determined the development cost for the eight lots on CP40's site plan would be $88,160 per lot. This cost was accepted and relied on by CP40's other experts. The actual cost of the undeveloped land to CP40 was approximately $62,000 per acre, or $843,200 for the entire 13.6 acres.[2] Mr. Ward's site plan has eight home site lots; therefore, the cost of each undeveloped lot is $105,400 ($843,200/8); and the cost of each developed lot is $193,560 ($105,400 + $88,160). To be economically feasible, homes must sell for 4 to 5 times this amount, or $772,240 to $967,800 per home. CP40 established that homes on the CP40 property would only sell for $350,000 to $450,000, at best. Mr. Ward said the close proximity of Highway 40 had a detrimental effect on the selling price of the homes. The vista of Highway 40 and the traffic noise from the highway, Mr. Ward said, were factors which made residential use of the property "totally inappropriate". He said homes on the cul-de-sac in his site plan would be the most significantly impacted by the highway, and would sell for only $350,000 to $450,000. Two other experts in real estate testified that the homes on the property would only sell for $300,000 to $350,000 because of the close proximity of Highway 40 and the high tension power lines on the property's west boundary line. In addition, Mr. Ward testified that he did not know of any homes within 500-600 feet of the highway in this corridor along Highway 40 which have sold for $800,000. In addition to showing that residential development of the property was not economically feasible, CP40 established that the property was not desirable for residential development. E.g., Rhein, supra 809 S.W.2d at 110. Homes in close proximity to highways are in less demand than those which are not, because of highway noise and traffic. Two real estate developers testified that their companies would not be interested in developing the CP40 property as residential because of the close proximity of Highway 40. Noise and sound studies were performed on the property by Mr. Jason Weissenburger, an engineer consultant in noise and traffic. He used the noise level standards for residential development established by the Federal Highway Administration and the Department of Housing and Urban Development for each agency's use. Although these standards do not prohibit residential development, he determined that only the back one-fourth to one-third of the property would meet the Highway Administration's standards and only the back one-half to two-thirds of the property would meet the Housing Department's standards. In addition, the power lines on the west boundary of the property, the location of the property adjacent to office buildings, the non-residential land use pattern in this area of Highway 40, and the major site development costs due to the flood plain, drainage problem, and berming to provide 232 noise protection were factors which contributed further to the undesirability of the property for residential use. CP40 also established a marked disparity between the value of the property as zoned and if zoned for office use. E.g., Rhein, supra 809 S.W.2d at 110. A commercial real estate appraiser, using comparable sales, appraised the property as zoned at $1,000,000, and if zoned for office use at $4,650,000. Town and Country argues that CP40 failed to show a private detriment because CP40 did not show that the market value of the property has decreased under its current zoning. Such a decrease is a "necessary condition", it contends, to establishing private detriment. It cites Tealin Co. v. City of Ladue, 541 S.W.2d 544, 549 (Mo. banc 1976); White v. City of Brentwood, 799 S.W.2d 890, 893-894 (Mo. App.1990); Elam, supra 784 S.W.2d at 336-337; Gerchen v. City of Ladue, 784 S.W.2d 232, 235 (Mo.App.1989). Town and Country reads too much into these cases. The effect of the current zoning on property value is a factor which may tend to show private detriment. Elam, supra 784 S.W.2d at 335. But, the statement in Elam that "there can arguably be no private detriment in the absence of a demonstrated negative impact on property value", Id. at 336, (emphasis added), is characterized simply as an argument. It was not relied upon by us in Elam, nor has it limited us in our subsequent decisions. See, e.g. Rhein, supra 809 S.W.2d at 110; White, supra 799 S.W.2d at 893-894. Thus, one relevant factor in showing private detriment may be the difference in the value of the property as zoned and as desired to be zoned. E.g. Rhein, supra; White, supra. Here, CP40 has shown a detriment to its private interests by showing that residential development is not economically feasible, the undesirability of use of the property as zoned, and a marked disparity in value between the property as zoned and if zoned for office. CP40 has also shown "that the current zoning cannot be justified as serving a public interest which outweighs the detriment to [CP40's] private interest." Loomstein, supra 609 S.W.2d at 450. "Factors relevant to the determination of a public benefit include the character of the neighborhood, the zoning and uses of nearby property and the effect that a change in zoning would have on other property in the area." White, supra 799 S.W.2d at 894. As described in detail previously, the CP40 property is surrounded primarily by office development and institutional uses on the north side of Highway 40. The zoning and uses surrounding the CP40 property on the north of Highway 40 are office development on the west and a 15 acre area to the east, zoned suburban low, which will be used for church purposes. CP40 presented evidence that institutional use of property is comparable, and sometimes even more intense than, office use because of the height and size of the building and the traffic generated. To be sure, there are residential uses of property in Town and Country located on the south side of Highway 40. However, the CP40 tract is separated from the residential development south of Highway 40 by the eight or more lanes of Highway 40 and the four lanes of outer road. There is no direct access between the residential area south of Highway 40 and the CP40 property. To get from one area to the other a car must drive along the north outer road to Mason Road or Interstate 270, and then circle back on the south outer road. CP40 also showed that a change in zoning would not have a negative effect on other property in the area. CP40 presented evidence that the residential landowners to the east of the Church of Jesus Christ of Latter-Day Saints property, and on the north side of Highway 40, had no objections to the change in zoning, and in fact petitioned for the area north of Highway 40 from Interstate 270 to Mason Road to be zoned something other than single family residential. CP40 also presented evidence that the existing roadways could accommodate 233 additional traffic from an office development on the CP40 property. Town and Country points out that CP40 bought the property when it was zoned residential by St. Louis County, and, therefore, it contends CP40 cannot sensibly argue that Town and Country's continuing this residential zoning frustrates a legitimate investment backed expectation. See, e.g. White, supra 799 S.W.2d at 894. However, in 1983, prior to Town and Country's annexation of the 13.6 acres, Mr. Gary Crabtree was a "land supervisor" in St. Louis County Department of Planning. At that time, he told a representative of CP40 that the Department "could support" an office development on the original 32.12 acre tract. With this fact known to CP40, we cannot say it was an irrational gamble to purchase the property prior to annexation for office development. By this record, CP40 has overcome the presumptive validity of Town and Country's denial of rezoning. Town and Country's evidence did not show that the reasonableness of the existing zoning was fairly debatable. Town and Country introduced its own site plan and development costs. Mr. Lane Kendig, a city and regional planner who regularly develops site plans for commercial and residential developers, developed a residential plan for the CP40 property. The following is a schematic sketch of that plan not drawn to scale. 234 235 This plan differs from the CP40 site plan. It has eleven homesites; three homes surround a cul-de-sac on the west side of the property, and eight homes sit aside a road on the east side of the property. In addition, the lots are one-half acre lots,[3] for which, Mr. Kendig says, a conditional use would be required. Mr. Thomas Herrmann, an engineer and land supervisor, prepared the development costs for Town and Country's plan. He determined the development cost per lot to be $33,728. In developing the site plan and determining the accompanying development costs, Town and Country's experts took into account the same basic factors which CP40's experts did: the topography of the land, specifically the floodplain and storm water detention, and the existing trees, the location of the office use to the west, the power lines located on the west, and the effects of the close proximity of Highway 40. Town and Country, however, failed to show there was an available market for homes on one-half acre lots in this area at the price for which each home must sell. Mr. Kendig, understandably, agreed that the price a home will sell for determines whether or not a site plan is economically feasible. Town and Country's evidence was that the sale price would be about $441,500 to $550,900. The cost of the 13.6 acres was $843,200 which translates into $76,650 per lot for each of the eleven homesite lots. The development cost per lot, according to Mr. Herrmann, would be $33,-728. Thus, the cost of a developed lot would be $110,378. The selling price must be 4 to 5 times this figure, which is $441,-512 to $551,890. However, there was no testimony that the homes could potentially sell for this price. There is a reference in the evidence to The Hamptons, a residential development located on the south side of Highway 40 between Mason Road and Woodsmill Road. There is no indication in the record, however, of the distance between The Hamptons and CP40's property. At least one of CP40's witnesses referred to the homes in The Hamptons as being in the $700,000 to $800,000 range. But, this and other references cannot be construed as admissions by CP40 that the homes built or to be built at The Hamptons are marketable at those prices or are comparable to the homes which can be built on CP40's property. CP40's witnesses testified to the contrary. Thus these witnesses noted that The Hamptons' site is located on the south side of Highway 40, the approach to The Hamptons is "much nicer" since it does not require driving by commercial buildings, the property is "deeper", allowing for more houses on the back of the property, and the site is next to Fairfield, a "very high luxury" condominium project. In addition, the two lots in The Hamptons closest to Highway 40 have not yet been developed and sold. Moreover, Town and Country's evidence, particularly that of Mr. Kendig, does not show The Hamptons residential development would be comparable to a residential development located on CP40's property. Mr. Kendig presented a picture of a model house in The Hamptons and located the model house on the map. Mr. Kendig indicated this house was located 400 to 500 feet south into the property. He did not testify, however, how or why The Hamptons, or the model house, would be comparable to the residences on CP40's property. Town and Country contends that The Hamptons is comparable to the CP40 property because The Hamptons was used as a comparable property in CP40's appraisal of the fair market value of CP40's property. The appraisal referred to was conducted by Thomas Mader for CP40. Mr. Mader was hired by CP40 to appraise the current fair market value of the undeveloped 13.6 acre tract of land. One of the appraisal methods he used was the market data approach, using comparable land sales. He used the *236 sale of The Hamptons property as a comparable sale of a large undeveloped tract of land with residential zoning. Thus, he was comparing the sales of large tracts of undeveloped land, not the sale of homes which had been built on that land, nor the market prices for the homes which could be built on the land. Furthermore, the homes on Town and Country's plan are not comparable to those on CP40's plan, so we cannot find that the estimated selling prices for homes on CP40's plan are applicable to the homes on Town and Country's plan. For example, at least eight of the homes on Town and Country's plan are on one-half acre lots, in a uniform cluster arrangement, while the homes on CP40's plan are on one acre lots set out in a more spacious arrangement. Mr. Herrmann, one of Town and Country's experts, did compute a lower development cost for CP40's site plan than CP40 did. However, we used his development cost to compute the required sales price of the homes on CP40's plan and find that price to range from $606,000 to $757,500 per home.[4] There was no evidence the homes were marketable at those prices. CP40 did appraise the value of its tract at $1,000,000 as currently zoned, and Town and Country appraised the tract at $1,585,-000 as currently zoned. Because of this market value of the tract as currently zoned, Town and Country argues that development under the current zoning must be economically feasible. However, the flaw in this reasoning is that the market considers all factors, not the least of which is the possibility the zoning will be changed. Town and Country also argues that a market demand for CP40's tract as zoned is shown by the fact that the tract of land immediately east was sold "in June, 1990" at "$146,000 per acre" for church purposes. This use is permitted by suburban low zoning, but this sale for institutional purposes stands alone in this area within the recent past. That hardly shows a market demand. Moreover, two of the partners in CP40, Mr. Daniel Devereux and Mr. Sidney Stone, discussed the possible sale of the tract with a number of residential and commercial developers, and only the latter group showed any interest in purchasing the tract. Finally, the only evidence relevant to public benefit was the testimony by a present member of the Town and Country Board of Aldermen and the Planning and Zoning Commission that the road system would be overburdened because the neighboring property owners would then petition for rezoning. However, there was no evidence to substantiate this claim. Traffic studies were not conducted by Town and Country nor by Mr. Kendig. Mr. Kendig did testify that a change in zoning would effect a surrounding use because the residents in Town and Country on the south side of Highway 40 would be looking across the highway at an office development, not a residential development. It is questionable whether residences separated from CP40's tract by eight lanes of highway and four lanes of outer roads constitute a "surrounding use." However, even if considered as a surrounding use, "neighboring property owners are not the `public' and their collective interests are not the `public interest' which must be weighed in any rezoning inquiry." Rhein, supra 809 S.W.2d at 111. The reasonableness of the suburban low zoning of CP40's property is not fairly debatable. The trial court's judgment is affirmed. SMITH, P.J., and CARL R. GAERTNER, C.J., concur. NOTES [1] All experts agreed that suburban low zoning permits some clustering of homes. We accept their testimony, although we were unable to find express permission in the zoning ordinance. [2] CP40 purchased the entire 32.12 acre tract for $1,995,000. This cost includes commission. At trial, CP40's experts determined the cost of the undeveloped land by using a current appraised value of $1,000,000 for the acreage in Town and Country. We have chosen to use the actual cost of the land to CP40. [3] It is not clear from the record whether all eleven homesites are one-half acre lots or only the eight which are clustered. [4] Mr. Herrmann's development cost was $368,-890, or $46,100 per lot. Added to the cost of the land, $105,400 per lot, the total cost of each developed lot would be $151,500, requiring a selling price of $606,000 to $757,500 per home.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532291/	831 S.W.2d 35 (1992) Cynthia Day Stratton O'MALLEY, Joanna Lenore Stratton Roze, and C. Jairus Stratton, III, Appellants, v. Lee M. STRATTON, Appellee. No. 08-91-00363-CV. Court of Appeals of Texas, El Paso. April 29, 1992. Rehearing Overruled June 3, 1992. Grover S. Grimes, Jr., Jeffrey L. Rogers, Baker, Brown, Sharman & Parker, Houston, Steven C. Kiser, Lynch, Chappell & Alsup, Midland, for appellants. Tom Scott, Bullock, Scott & Neisig, Dale Strauss, Bullock, Scott, Neisig & Owens, Midland, for appellee. Before OSBORN, C.J., and KOEHLER and BARAJAS, JJ. OPINION KOEHLER, Justice. In a contest involving the construction of the provisions of a testamentary trust relating to ownership of accrued but undistributed 36 income on the date of the termination of the trust, the trial court granted partial summary judgment in favor of the trust income beneficiary. The parties representing the remainder interest in the trust estate bring this appeal contending that the court erred in its construction of the will as a matter of law. We affirm. The last will and codicil of Cynthia L. Monroe was, following her death on October 3, 1976, admitted to probate by order of the district court of Shawnee County, Kansas, and admitted to ancillary probate in Ward County, Texas. The will created several trusts, including the one here in question which devised one-sixth of the residuary estate to the designated trustee, with all income from such trust for the use and benefit of the testatrix' sister, Lenore M. Stratton, for her life, and upon her death, for the use and benefit of Lee M. Stratton, the testatrix' nephew and Appellee herein, for his life, and upon his death, the remainder to be divided in equal shares between Cynthia Day Stratton, Joanna Lenore Stratton and Clifton Jairus Stratton, III, the testatrix' great-nieces and great-nephew and Appellants herein. The will was amended by codicil which essentially provided that the income trust for the Appellee was to continue until his death or until January 1, 1990, whichever occurred first.[1]37 Lenore M. Stratton disclaimed her rights in the trust in 1976 shortly after the death of the testatrix and Appellee succeeded his mother as the sole income beneficiary of the trust. A dispute subsequently arose between the parties as to whether the Appellee as income beneficiary or the Appellants as remaindermen were entitled to oil and gas royalty income which was earned or accrued before January 1, 1990 but was either paid or remained to be paid after January 1, 1990. Although Appellants and Appellee assert that the will, including the codicil, are unambiguous, they urge diametrically opposite interpretations of the will provisions relating to disposition of income which had accrued but was unpaid as of January 1, 1990. Specifically, Appellants insist that all accrued income not actually received before January 1, 1990 became or becomes part of the trust principal and must be turned over to them as the remaindermen. They rely primarily on language in paragraph Fourth B which relates to disposition of accrued, undistributed income in the event that the Appellee died prior to January 1, 1990: "[A]nd upon the termination thereof by reason of the death of LEE M. STRATTON prior to January 1, 1990, any undistributed income theretofore accruing shall thereupon become a part of the principal of the trust provided in said paragraph B for [the three Appellants], or upon January 1, 1990, the income trusts hereunder shall in all things terminate and all of the Trust Estate subject thereto shall be distributed, delivered and paid over, absolutely and free of trust hereunder, unto [the three Appellants]...." Appellants also argue that the provision in paragraph Fifth A requiring the trustee to pay monthly to the beneficiary "all of the current net income actually received by the respective Trustees during the preceding month, ..." shows that income not actually received prior to January 1, 1990 was not to be paid to the income beneficiary. Appellee, on the other hand, contends that the language of paragraph Fourth B, particularly when considered in context with other relevant trust provisions, requires a different treatment of the accrued, undistributed or unpaid income if the trust terminates on January 1, 1990, than would be the case if termination resulted from his death prior to that date. Both parties agree that when construing an unambiguous will, the intention of the testator in the disposition of the estate is to be ascertained from the four corners of the instrument. Floyd v. Floyd, 813 S.W.2d 758, 761 (Tex.App.El Paso 1991, writ denied). That intention is to be determined from the words actually used, not from extrinsic evidence of what the testator may have intended. Id. The reviewing court should give the words used their common and ordinary meanings. White v. Taylor, 155 Tex. 392, 286 S.W.2d 925 (1956). Effect should be given to every part of a will if the language used by the testator is reasonably susceptible to a harmonious construction. Perfect Union Lodge No. 10, A.F. and A.M., of San Antonio v. Interfirst Bank of San Antonio, N.A., 748 S.W.2d 218, 220 (Tex. 1988). *38 With the foregoing principles of will construction in mind, an examination of the relevant provisions of the will and codicil and the language used by the testatrix brings us to the conclusion that she intended for the income beneficiary, if she or he survived until January 1, 1990, to be paid all income which had accrued prior to that date even though it was either not received by the trustee until after December 31, 1989 or though received had not been distributed before January 1. A close look at the language of codicil paragraph Fourth B on which Appellants rely in support of their position indicates that the testatrix intended to differentiate between the situation where the trust terminated by the death of either income beneficiary and the situation where the trust terminated by passage of time. If similar results were intended by the testatrix regardless of which of the two terminations occurred, she logically and undoubtedly would have used the same language for disposition of accrued, undistributed income for both contingencies, or more simply, would have said, "and upon termination thereof by the occurrence of either event, any undistributed income, etc." Appellants' contention does not harmonize and give effect to the two separate clauses of the sentence dealing with termination of the income trust for the benefit of Appellee. Appellants' argument that will paragraph Fifth A requiring the trustees to distribute monthly all of the current net income actually received by them during the preceding month "prohibits them from paying income which was not `actually received... during the preceding month'" is not persuasive. In our view, this provision sets out when, not what, income is payable to the income beneficiary. This provision was undoubtedly intended to prevent the trustees from accumulating income. Obviously, the trustees could not distribute income until it was actually received nor is it likely that the trustees would be able to determine what the current net income would be for a particular month until the following month. Appellants further contend that if provisions of codicil paragraph Fourth B are construed to mean that the income beneficiary is entitled to receive all income which accrued prior to January 1, 1990, this would have the effect of extending the trust and the powers of the trustee indefinitely contrary to the provisions of that paragraph which require the termination of the trust and distribution of the trust estate upon the happening of either the death of Appellee or January 1, 1990. Appellants agree that this provision does not mean that the trustees on January 1, 1990 lost all power, but that they would have whatever reasonable time was required to wind up the trust in an orderly fashion. This would necessarily include whatever time it might take to gather and transfer the assets of the trust estate to the remaindermen as well as to collect any income which had accrued prior to January 1, 1990 and distribute it to the income beneficiary. In either event, it necessitates extending the powers of the trustees until they have carried out the duties imposed upon them by the trust provisions. Finally we consider Appellants' contention that by a letter from the trial judge indicating his ruling, he "yielded to the temptation to `climb into the brain' of the testatrix to ascertain the true meaning of the provisions in question[,]" and by so doing, he disregarded all of the will construction rules. Since the letter formed no part of the court's judgment, the assumption of Appellants that the judge disregarded the rules in arriving at his judgment is unwarranted. His speculation on what the testatrix really intended comes at the end of a three page letter after he had, by his analysis of the relevant trust provisions, concluded that the income beneficiary (Appellee) was entitled to summary judgment in his favor. Appellants' point of error is overruled. Judgment of the trial court is affirmed. NOTES [1] The relevant portions of the will are: THIRD:..... B. An undivided one-sixth (`/sth) interest in all my residuary estate shall vest in my Trustees, hereinafter named, to be held in trust, managed, administered, distributed and delivered by my Trustees for the use and benefit of the following persons: (1) all income therefrom for the use and benefit of my sister, LENORE M. STRATTON for her life, and upon her death, all income therefrom for the use and benefit of my nephew, LEE M. STRATTON for his life, and (2) all the remainder thereof (other than the aforesaid life estate interests in income to LENORE M. STRATTON and LEE M. STRATTON, successively) for the use and benefit of CYNTHIA DAY STRATTON, JOANNA LENORE STRATON and CLIFTON JAIRUS STRATTON, III, my great-neices [sic] and great-nephew, respectively, in equal shares...... E. As used in this Will, "Trustees" means and includes both the Domiciliary Trustee hereinafter named and, the Texas Trustee hereinafter named. That is, such of my estate as is located in the State of Texas at the time of my death that is provided by this Will to be held in trust, shall be so held in trust and administered as provided by this Will by the Texas Trustee, and any other part of my estate provided by this Will to be held in trust by the Trustees shall be held by and administered by the Domiciliary Trustee. The two parts of my residuary estate (the Texas property held by the Texas Trustee, and the other property held by the Domiciliary Trustee) and the separate shares, divisions or trusts of each separate beneficiary in each of the aforesaid parts may be from time to time referred to herein collectively as my estate or the trust estate. Such references and all similar references herein, however, are for convenience only, as it is my intention and direction that the share or portion of my estate and of the trust estate held from time to time by each of the Trustees for the use and benefit of each separate beneficiary entitled to receive distributions of income or principal shall be a separate and distinct trust and shall be so held and so treated by the Trustees......... FIFTH: Each of the trusts created under the provisions of this Will shall be held by the Trustees for the use and benefit of the beneficiaries of such trusts, and, after paying therefrom or making provision for the payment therefrom of all reasonable and necessary expenses and charges incident to such trusts, including the compensation due and payable to the Trustees, as herein provided, the Trustees shall distribute and deliver the trust property according to the following terms and conditions. A. The Trustees of the income trust for the use and benefit of LENORE M. STRATTON for her life, and the following income trust for the use and benefit of LEE M. STRATTON for his life, shall monthly pay over to or for such respective beneficiary, free of trust, all of the current net income actually received by the respective Trustees during the preceding month, and none of the provisions of [the] following paragraphs B, C and D shall be applicable to these income trusts. The relevant portions of the codicil to this will are: FOURTH: A. Except as hereinafter expressly provided, each trust hereunder shall continue until January 1, 1990, whereupon the respective trusts shall terminate and the Trustees shall distribute, deliver and pay over, absolutely and free of trust hereunder, to the beneficiary thereof, all of the Trust Estate then held in trust hereunder. B. Notwithstanding the provisions of paragraph A of this Article Fourth, the income trust provided in paragraph B of Article Third for the use and benefit of my sister, LENORE M. STRATTON, shall continue until the death of the said LENORE M. STRATTON or until January 1, 1990, whichever shall the earlier occur, and in the event of her death prior to January 1, 1990, the trust for her benefit shall terminate and any undistributed income which had accrued to such trust during her lifetime shall be treated as a part of the income received by the Trustees to be held, administered and distributed to the income trust for LEE M. STRATTON. The income trust hereunder for LEE M. STRATTON shall commence at the date of death of LENORE M. STRATTON, if prior to January 1, 1990, and shall continue until the death of LEE M. STRATTON or until January 1, 1990, whichever shall the earlier occur, and upon the termination thereof by reason of the death of LEE M. STRATTON prior to January 1, 1990, any undistributed income theretofore accruing shall thereupon become a part of the principal of the trust provided in said paragraph B for CYNTHIA DAY STRATTON, JOANNA LENORE STRATTON and CLIFTON JAIRUS STRATTON, III, or upon January 1, 1990, the income trusts hereunder shall in all things terminate and all of the Trust Estate subject thereto shall be distributed, delivered and paid over, absolutely and free of trust hereunder, unto CYNTHIA DAY STRATTON, JOANNA LENORE STRATTON and CLIFTON JAIRUS STRATTON, III, absolutely and in fee simple.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532286/	872 A.2d 263 (2005) COUNTY OF ALLEGHENY (Department of Public Works), Petitioner v. WORKERS' COMPENSATION APPEAL BOARD (WEIS), Respondent. Commonwealth Court of Pennsylvania. Submitted on Briefs December 30, 2004. Decided April 15, 2005. 264 Michael B. Dodd, Pittsburgh, for petitioner. Robert Paul Vincler, Pittsburgh, for respondent. BEFORE: FRIEDMAN, Judge, and SIMPSON, Judge, and McCLOSKEY, Senior Judge. OPINION BY Judge SIMPSON. County of Allegheny, Department of Public Works (Employer) petitions for review of an order of the Workers' Compensation Appeal Board (Board) denying its petition seeking suspension of Donald Weis' (Claimant) benefits under the Workers' Compensation Act (Act).[1] Because the Claimant failed to carry his burden of proving that he was forced to retire from the entire labor market, we reverse. Claimant sustained a work-related injury to his left knee in 1981. WCJ Finding of Fact (F.F.) No. 1. Employer issued a Notice of Compensation Payable noting the injury was a "fracture left tibial plateau". Reproduced Record (R.R.) at 1a. After paying benefits for 20 years, Employer filed a Suspension Petition in 2001 because Claimant voluntarily withdrew from the work force. R.R. at 2a-3a. At the hearing before the WCJ on the Suspension Petition, Claimant testified that at the time of his injury he was a heavy construction equipment operator. R.R. at 14a. Claimant still experiences knee problems and could not perform any work, R.R. at 19a, although he acknowledged he did not know if he could work a desk job. R.R. at 28a. He never returned to work after his retirement, although he intended to "if they got my knee straightened out." R.R. at 24a-25a. Claimant did not seek work after his retirement. R.R. at 25a. Employer presented the deposition testimony of Cheryl Bateman, Executive Director of the Retirement Board of Allegheny County. Bateman testified Claimant's disability retirement application indicated Claimant retired because he could no longer perform his job. R.R. at 44a. Employer also presented the deposition testimony of Allan H. Tissenbaum, M.D. (Employer's physician), board-certified in orthopedic surgery. Employer's physician testified he examined Claimant in 1999 and concluded Claimant had end-stage arthritis of his left knee. R.R. at 92a. Employer's physician opined Claimant was capable of doing sedentary work. R.R. at 93a. The WCJ found all witnesses credible. F.F. Nos. 2-4. The WCJ found Claimant retired because of "the effect that the work related injury had on his ability to perform his pre-injury employment." F.F. No. 2. He found, based on Employer's physician's testimony, Claimant, "was, and remains, physically incapable of returning to his pre-injury employment." F.F. No. 4. He further found Employer presented no evidence to establish work was available to Claimant within his physical limitations. F.F. No. 5. Accordingly, the WCJ found Claimant did not voluntarily remove himself from the work force. F.F. No. 6. The WCJ denied the Suspension Petition and imposed attorneys' fees on Employer because he found Employer did not have a reasonable basis to file the suspension petition. Employer appealed. The Board concluded Claimant retired because he was no longer able to perform his pre-injury position and, therefore, met his burden of demonstrating he was forced into retirement because of his work-related injury. Accordingly, the Board affirmed 265 that portion of the WCJ's decision denying the Suspension Petition. However, the Board reversed the WCJ's imposition of attorneys' fees. Employer now appeals to this Court,[2] arguing: 1) Claimant was not forced to retire, where he was forced to leave his time-of-injury job but was not forced to leave the entire labor market; and 2) Claimant's retirement was based on non-work related conditions. Generally, to obtain a suspension of benefits, the employer must demonstrate suitable employment was made available to a claimant. Kachinski v. Workmen's Comp. Appeal Bd. (Vepco Constr. Co.), 516 Pa. 240, 532 A.2d 374 (1987). However, our Supreme Court made that rule inapplicable in cases where the claimant retires. Southeastern Pennsylvania Transp. Auth. v. Workmen's Comp. Appeal Bd. (Henderson), 543 Pa. 74, 669 A.2d 911 (1995). See also Kasper v. Workers' Comp. Appeal Bd. (Perloff Bros., Inc. and Sedgwick James & Co.), 769 A.2d 1243 (Pa.Cmwlth.2001); Maroski v. Workers' Comp. Appeal Bd. (Bethlehem Steel Corp.), 725 A.2d 1260 (Pa.Cmwlth.1999). In Henderson, the Court stated, It is clear that disability benefits must be suspended when a claimant voluntarily leaves the labor market upon retirement. The mere possibility that a retired worker may, at some future time, seek employment does not transform a voluntary retirement from the labor market into a continuing compensable disability. An employer should not be required to show that a claimant has no intention of continuing to work; such a burden of proof would be prohibitive. For disability compensation to continue following retirement, a claimant must show that he is seeking employment after retirement or that he was forced into retirement because of his work-related injury. Henderson, 543 Pa. at 79, 669 A.2d at 913 (emphasis added). Here, it is undisputed Claimant retired and did not seek employment after retirement. Therefore, Claimant was required to prove he was forced into retirement because of his work-related injury. The WCJ and Board found Claimant was forced into retirement because his work-related injury caused him to be incapable of performing his pre-injury job. The question here is whether that finding is sufficient, or whether Claimant must show he was forced out of, not only his pre-injury job, but the entire labor market. We conclude Claimant was required to demonstrate he was forced out of the entire labor market. No case provides that a claimant only is required to show he is forced out of his pre-injury job. Rather, each case that discusses this issue speaks in terms of the labor market. See, e.g., Henderson, 543 Pa. at 79, 669 A.2d at 913 ("It is clear that disability benefits must be suspended when a claimant voluntarily leaves the labor market upon retirement.")(emphasis added); Republic Steel Corp. v. Workmen's Comp. Appeal Bd. (Petrisek), 537 Pa. 32, 37, 640 A.2d 1266, 1269 (1994) ("A disability which forces a claimant out of the work force and into retirement is compensable under the Act.")(emphasis added); Capasso v. Workers' 266 Comp. Appeal Bd. (RACS Assoc., Inc.), 851 A.2d 997, 1001 (Pa.Cmwlth.2004) ("[A]fter retirement, it is a claimant's burden to demonstrate his absence from the labor market is involuntary.")(emphasis added); Kasper, 769 A.2d at 1245 ("Thus, workers' compensation benefits must be suspended when a claimant voluntarily leaves the labor market.") (emphasis added); City of Phila. v. Workers' Comp. Appeal Bd. (Rooney), 730 A.2d 1051, 1053 (Pa.Cmwlth.1999)("A disability which forces a claimant out of the work force and into retirement is compensable under the Act.")(emphasis added). Our interpretation is consistent with our statement in Shannopin Mining Co. v. Workers' Comp. Appeal Bd. (Turner), 714 A.2d 1153 (Pa.Cmwlth.1998): We recognize that there may be circumstances where a claimant may be forced to retire from his or her time-of-injury job due to a work-related injury, but may not be disabled from other type of work. In that situation, the claimant must show that he or she has not voluntarily withdrawn from the entire labor market and is open to employment within his or her physical capabilities in order to be entitled to benefits under the [Act]. Id. at 1155 n. 5 (emphasis in original). Further support for our conclusion is found in Dugan v. Workmen's Comp. Appeal Bd. (Fuller Co. of Catasauqua), 131 Pa.Cmwlth.218, 569 A.2d 1038 (1990) and Vitelli v. Workmen's Comp. Appeal Bd. (St. Johnsbury Trucking Co.), 157 Pa. Cmwlth.589, 630 A.2d 923 (1993). In Dugan, the totally disabled claimant testified he was not attempting to obtain employment because he was retired. We noted, "Although a claimant may continue to suffer a work-related physical disability, if that physical disability does not occasion a loss of earnings, then payment of workmen's compensation must be suspended." Dugan, 569 A.2d at 1041. We concluded the claimant's loss of earnings was due to his voluntary withdrawal from the labor market upon his retirement rather than his injury and affirmed the suspension of benefits. Similarly, in Vitelli, the claimant testified he did not intend to look for work because he was retired, although he also testified he would try a light-duty job if his physician advised him to do so. We applied Dugan and noted the employer was under no burden to demonstrate available jobs because the claimant had no intention of looking for work. We concluded the claimant voluntarily removed himself from the work force by retiring, and we affirmed the suspension of benefits. Pertinent to the current dispute, the Court stated: If we were to accept Vitelli's argument, retirement would become a guarantee for the continuing receipt of benefits. Further, once a claimant has removed himself from the work force, it would be pointless for the employer to provide available work or show that there has been a change in condition. If we accept Vitelli's position as law, a flood gate of individuals receiving compensation might retire in order to maintain compensation indefinitely. Id. at 925, 569 A.2d 1038. Here, Claimant received benefits for 20 years. Although he retired from his pre-injury position, the only medical evidence in the case established that he was capable of sedentary work. Nevertheless, he never sought any other position. It is clear the burden was on Claimant to establish he was forced to retire from the entire labor market. To the extent the Board concluded otherwise, it erred. As the Claimant failed to carry his burden 267 either by showing he was forced to retire from the entire labor market or that he sought employment, we reverse the Board, thereby granting the suspension petition. As a result of this conclusion, we need not discuss Employer's other argument. ORDER AND NOW, this 15th day of April, 2005, the order of the Workers' Compensation Appeal Board is REVERSED as to Employer's suspension petition, and the suspension petition is GRANTED. That portion of the Board's order denying attorneys' fees is AFFIRMED. Dissenting Opinion by Judge FRIEDMAN. I respectfully dissent. The majority reverses an order denying the suspension petition filed by the County of Allegheny, Department of Public Works (Employer). In doing so, the majority concludes that Donald Weis (Claimant) failed to prove that his work injury forced him to retire from the entire labor market. (Majority op. at 1, 5.) I cannot agree. Our supreme court has stated that, for disability compensation to continue following retirement, claimants must show that they are seeking employment after retirement or that they were forced into retirement because of their work-related injuries. Southeastern Pennsylvania Transportation Authority v. Workmen's Compensation Appeal Board (Henderson), 543 Pa. 74, 669 A.2d 911 (1995). A claimant may establish his motivation to retire through his own testimony. The Alpine Group v. Workers' Compensation Appeal Board (DePellegrini), 858 A.2d 673 (Pa.Cmwlth.2004). Claimant sustained a work-related injury to his left knee on October 22, 1981. (WCJ's Findings of Fact, No. 1.) On July 14, 1982, Claimant applied for a disability pension pursuant to section 1711 of the Second Class County Code (Code).[1] (WCJ's op. at 1; WCJ's Findings of Fact, No. 3; R.R. at 49a.) After considering the application, Employer awarded Claimant a disability pension; Claimant was fifty-two years of age and, but for the injury, would have continued working for Employer. (WCJ's op. at 1; WCJ's Findings of Fact, No. 2.) On March 21, 1983, Employer issued a notice of compensation payable (NCP) indicating that Claimant was totally disabled. (WCJ's op. at 1.) Claimant filed a third party action in connection with his work-related injury, but the parties settled the matter in 1985. The settlement included the payment of a subrogation claim to Employer and an agreement by Employer to pay Claimant workers' compensation benefits over his lifetime as long as he remains disabled. In that regard, the agreement stated that Employer would have the burden to prove that Claimant's condition had improved to the point where Claimant became employable. (R.R. at 17a-22a; O.R., Transcript of Settlement, Claimant's ex. 2 at 3.) In my view, there is no question that Claimant proved his work injury forced 268 him to retire from the entire labor market. The workers' compensation judge (WCJ) found, based on Claimant's credible testimony, that, but for the work injury, Claimant would have continued working. (WCJ's Findings of Fact, No. 2; R.R. at 26a.) As stated in Alpine Group, Claimant's credible testimony is sufficient to prove his motivation for retirement, and Claimant essentially testified that he was forced to retire because of his work injury. Moreover, Claimant presented evidence that Employer awarded him a disability pension; therefore, as a matter of law, Claimant was unable to engage in gainful employment.[2]See 16 P.S. § 4711. Furthermore, in 1983, Employer issued an NCP wherein Employer admitted that Claimant was totally disabled as a result of his work injury. Claimant also presented evidence that, in 1985, Employer agreed to pay Claimant workers' compensation benefits for his lifetime, unless Employer proved that Claimant's condition improved to the point where Claimant was employable. Such evidence constitutes an admission by Employer that, as a result of his work injury, Claimant was unemployable. Inexplicably, the majority fails to consider this evidence. Clearly, during the initial years of Claimant's retirement, Employer did not question the fact that Claimant's work injury had forced him to retire from the entire labor market. In fact, when Employer filed its suspension petition on December 10, 2001, nineteen years after Claimant's 1982 retirement, Employer alleged that Claimant voluntarily withdrew from the work force as of December 5, 2001.[3] (WCJ's op. at 1; R.R. at 2a.) Moreover, in support of the petition, Employer presented the expert testimony of Alan H. Tissenbaum, M.D., who examined Claimant on July 6, 2001, and opined that, at that time, Claimant was capable of doing sedentary work.[4] (WCJ's op. at 1; R.R. at 93a, 97a-98a.) Thus, while Claimant presented credible evidence that his work injury forced him to retire from the entire labor market in 1982, Employer presented no evidence that Claimant was capable of doing any type of work when he retired in 1982.[5] 269 Finally, I note that the doctrine of laches applies where an employer fails to exercise due diligence in filing a petition and where the delay results in prejudice to the claimant. Roadway Express, Inc. v. Workmen's Compensation Appeal Board (Allen), 152 Pa.Cmwlth. 318, 618 A.2d 1224 (1992). Here, Employer filed a suspension petition in 2001 which placed a burden on Claimant to prove that his work injury forced him to retire from the entire labor market in 1982. To me, the fact that Employer waited nineteen years to file the petition demonstrates a failure to exercise due diligence. Moreover, the record shows that: (1) the attorney who represented Claimant in negotiating the 1985 settlement is deceased, (R.R. at 15a); and (2) Claimant could not remember who advised him that Claimant's retirement was a condition of Claimant's settlement with Employer, (R.R. at 26a). Thus, the nineteen-year delay has prejudiced Claimant's ability to defend against Employer's petition. As a result, the doctrine of laches would apply here. Accordingly, unlike the majority, I would affirm. NOTES [1] Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §§ 1-1041.4, 2051-2626. [2] This Court's review is limited to a determination of whether necessary findings of fact are supported by substantial evidence, whether the Board's procedures were violated, whether constitutional rights were violated, or whether an error of law was committed. Section 704 of the Administrative Agency Law, 2 Pa.C.S. § 704; Bey v. Workers' Comp. Appeal Bd. (Ford Elecs.), 801 A.2d 661 (Pa. Cmwlth.2002). [1] Act of July 28, 1953, P.L. 723, as amended, 16 P.S. § 4711. Section 1711(a) of the Code provides that an employee with twelve years of employment who becomes totally and permanently disabled physically may apply for a retirement allowance. 16 P.S. § 4711(a). To obtain a retirement allowance, the employee is required to submit the sworn statements of three practicing physicians of the county indicating that the employee is totally and permanently disabled physically. Id. Section 1711(b) of the Code provides that the retirement board may require the former employee to undergo a medical examination once a year to determine if he or she is no longer totally and permanently disabled physically or if the former employee is able to engage in a gainful occupation. 16 P.S. § 4711(b). [2] A person is not entitled to a disability pension if that person is "able to engage in a gainful occupation." 16 P.S. § 4711(b). [3] Thus, Employer did not believe that Claimant was capable of working from 1982 until December 5, 2001. Employer only altered its view in 2001, after Dr. Tissenbaum examined Claimant and found him to be capable of sedentary work. In reversing the WCJ's and the Workers' Compensation Appeal Board's (WCAB) denials of Employer's suspension petition, the majority does not make clear whether the suspension is effective as of December 5, 2001, or as of the date of Claimant's retirement in 1982. If Employer is entitled to a suspension as of the retirement date in 1982, then Employer will recover more than twenty years of benefits from the supersedeas fund. [4] The majority states that Dr. Tissenbaum's expert testimony established that Claimant was able to do sedentary work when he retired. (Majority op. at 7.) However, the majority fails to mention that Claimant retired in 1982 and that Dr. Tissenbaum did not examine Claimant until 2001. [5] Employer does not argue before this court that, because Claimant's condition improved to the point where Claimant became employable as of December 5, 2001, Employer is entitled to a suspension of benefits as of that date. Because WCJ and WCAB focused on Claimant's initial retirement in 1982, the issues Employer raises for appellate review pertain to that period of time. If I were to consider whether Employer is entitled to a suspension of benefits as of December 5, 2001, I would conclude that a suspension would be inappropriate. It is true that, according to Dr. Tissenbaum, Claimant could perform sedentary work in 2001, but Dr. Tissenbaum restricted Claimant to sitting only two hours a day. (R.R. at 104a.) Based on Dr. Tissenbaum's testimony, Employer may be entitled to a modification of benefits, but, unless Employer can refer Claimant to a job that pays Claimant his pre-injury wages for two hours of work a day, Employer is not entitled to a suspension of benefits.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532288/	831 S.W.2d 479 (1992) Gene Earl PALMER and Emma Mae Palmer, Appellants, v. Clarence Earl PALMER, Jr., Individually and as Guardian of the Estate of Lola Lucille Palmer, Appellee. No. 6-91-124-CV. Court of Appeals of Texas, Texarkana. May 19, 1992. Guy N. Harrison, Mobley, Green, Harrison & Sparks, Longview, W. F. Palmer, Huffman, Palmer & Neal, Marshall, for appellant. Dennis M. McKinney, Steven Norris, Harbour, Kenley, Boyland, Smith, Harris, Longview, for appellee. Before CORNELIUS, C.J., and BLEIL and GRANT, JJ. 480 OPINION GRANT, Justice. This is an action on an installment note secured by a deed of trust. Gene and Emma Palmer appeal from a judgment in favor of Clarence Earl Palmer, Jr., individually and as guardian of the Estate of Lola Lucille Palmer, a person of unsound mind. (Clarence Palmer). In 1974, Gene and Emma Palmer purchased real property from Gene Palmer's parents, Lola Lucille Palmer and Clarence Palmer, Sr., giving a promissory note of $45,000 payable in fifteen annual installments of $3,000. The note was secured by a deed of trust. Clarence Palmer, Sr. died intestate in 1976. Gene and Emma Palmer stopped making payments in 1982, after the first seven installments. In October 1989, Clarence Palmer, Gene's brother, was appointed guardian of the person and estate of Lola Lucille Palmer. In December 1989, Clarence Palmer made a demand for payment. In response, Gene and Emma Palmer brought a declaratory judgment action seeking a declaration that four of the annual installments were barred by limitations. Clarence Palmer counterclaimed for the balance due on the note plus interest, costs, and attorney's fees, and also requested foreclosure on the deed of trust and an order for the sale of the property. The trial court granted Clarence Palmer all requested relief, finding that no installments due under the note were barred by limitations. Gene and Emma Palmer contend the trial court erred in overruling their limitations defense as to installment payments that were due more than four years prior to the filing of suit. They also complain that the trial court's award of attorney's fees was excessive because it was based on an incorrect balance due. Clarence Palmer urges that the appeal was groundless and taken for delay and asks this Court to award sanctions pursuant to Tex.R.App.P. 84. Gene and Emma Palmer contend that TEX.CIV.PRAC. 16.004 (Vernon 1986) is the applicable statute of limitations. The pertinent portions of Section 16.004 read: (a) A person must bring suit on the following actions not later than four years after the day the cause of action accrues: .... (3) Debt. In construing this statute, the courts have held that if a note is payable in installments, the statute of limitations begins to run against each installment when it comes due. Gabriel v. Alhabbal, 618 S.W.2d 894, 897 (Tex.Civ.App.-Houston [1st Dist] 1981, writ ref'd n.r.e.); Goldfield v. Kassoff, 470 S.W.2d 216, 217 (Tex.Civ.App.-Houston [14th Dist.] 1971, no writ). The trial court ruled, however, that Tex. Civ.Prac. 16.035(e) (Vernon 1986) applies to the present case and modifies the general rule stated in Goldfield and Gabriel. Section 16.035 is entitled "Lien Debt on Real Property" and reads: (a) A person must bring suit for the recovery of real property under a lien debt or the foreclosure of a lien debt not later than four years after the day the cause of action accrues. (b) A sale of real property under a power of sale in a mortgage or deed of trust that secures a lien debt must be made not later than four years after the day the cause of action accrues. (d) On the expiration of the four-year limitations period, it is conclusively presumed that a lien debt has been paid and the lien debt and a power of sale to enforce the lien become void at that time. (e) If a series of notes or obligations or a note or obligation payable in installments is secured by a lien on real property, the four-year limitations period does not begin to run until the maturity date of the last note, obligation, or installment. (f) In this section, "lien debt" means: (1) a superior title retained by a vendor in a deed of conveyance or a purchase money note; or 481 (2) a vendor's lien, a mortgage, a deed of trust, a voluntary mechanic's lien, or a voluntary materialman's lien on real estate, securing a note or other written obligation. (Emphasis added.) Subsection (e) appears to take this case out of the general rule that the statute begins to run on each installment when it comes due. Gene and Emma Palmer contend, however, that Section 16.035 applies to the enforceability of the deed of trust, not to the underlying debt. They contend that a creditor holding a deed of trust, or some other type of lien debt, has four years after the final maturity date to foreclose on the real property, but if the creditor elects to sue for a money judgment under the promissory note, installments due more than four years prior to the filing of suit will be uncollectible. Subsection (e) is ambiguous. The term the four-year limitations period could refer only to the action to obtain the real property, or it could be construed to refer to all payment obligations. In Uvalde Rock Asphalt Co. v. Gardner, 153 S.W.2d 604 (Tex.Civ.App.-Galveston 1941, no writ), the trial court found that Tex.Rev.Civ.Stat. Ann. art. 5520 (now Section 16.035) was applicable only in an action to foreclose a deed of trust or mortgage on real estate. The court of appeals reversed, holding that Article 5520 was not rendered inapplicable because the plaintiff sued for a money judgment on the note alone rather than seeking foreclosure of the lien. "[Tjhat statute, by its terms, plainly seems to apply to all contracts creating liens upon real estate and providing for the underlying debts to be paid in installments, irrespective of the fact that the suit brought thereon does not seek foreclosure of the lien." Gardner, 153 S.W.2d at 607; see also Uvalde Rock Asphalt Co. v. Cartledge, 154 S.W.2d 314 (Tex.Civ.App.-Galveston 1941, no writ). The applicability of Article 5520 (now Section 16.035) is not limited to suits to recover land or enforce a lien. Yates v. Darby, 133 Tex. 593, 131 S.W.2d 95, 100 (1939). The history of this statute, which was originally enacted in 1905, sheds light on the legislature's intent with regard to subsection (e). In Citizens' Nat. Bank of Hillsboro v. Graham, 117 Tex. 357, 4 S.W.2d 541 (1928), the Supreme Court construed a version of the statute which read as follows: [I]f several obligations are secured by said deed of conveyance, the same may be enforced at any time prior to four years after the note or obligation last maturing has matured and may be enforced as to all notes not then barred by the four years' statute of limitations. The court stated that if the statute had stopped after the word matured, no note or installment would be barred until four years after the maturity of the final note or installment. The court held, however, that the concluding clause, "and may be enforced as to all notes not then barred by the four years' statute of limitations" meant that notes were barred if they had matured more than four years prior to the maturity of the final note of a series. Graham, 4 S.W.2d at 542. The statute was amended in 1931, and the concluding clause was dropped. This amendment was intended to clarify when limitations begin to run on a series of notes and notes payable in installments. See Yates, 131 S.W.2d at 99. In Broussard v. Beaumont Rice Mills, 115 S.W.2d 1235, 1237 (Tex.Civ.App.-Beaumont 1938, no writ), the court held that under the statute as amended, no installments were barred until four years after the final installment matured. Thus, since suit was filed within four years after the final installment was due, an installment that was due nine years prior to the filing of suit was not barred by limitations. Broussard, 115 S.W.2d at 1237. Several other cases also construed the amended statute to mean that no installments were barred until four years after the final installment matured.[1] *482 The statute has been reenacted twice since the Uvalde Rock Asphalt cases were decided. When a statute is reenacted without material change, it is presumed that the Legislature knew and adopted the interpretation placed on the original act and intended the new enactment to receive the same construction. Coastal Industrial, Etc. v. Trinity Portland, 563 S.W.2d 916, 918 (Tex.1978). A mere change of phraseology in the revision of a statute in force before will not change the law previously declared, unless it indisputably appears the Legislature intended a change. Ennis v. Crump, 6 Tex. 34, 35 (1851). The statute was reworded in 1945. Act of 1945, 49th Leg., ch. 278, 1945 Tex.Gen. Laws 441. The primary purpose of the 1945 revision was to address issues surrounding bona fide purchasers. Gene and Emma Palmer have not suggested that the 1945 revision changed the meaning or effect of the law. In 1985, the statute was again reworded, a definition of lien debt was added, and the statute was placed in the Texas Civil Practice and Remedies Code. Act of 1985, 69th Leg., ch. 959, § 1, 1985 Tex.Gen.Laws 3256. Gene and Emma Palmer argue that the 1985 revision, and especially the definition of lien debt, justifies reconsidering the effect the courts have given this law. In TEX.CIV.PRAC.& REM. CODE ANN § 1.001 (Vernon 1986), it is provided that the Act is "without substantive change." See also Robert I. Kelley, Foreword to Tex. Civ. Prac. & Rem.Code Ann., vol. 1, p. IX (1984). When revising a statute for the Legislature, the Texas Legislative Council may not alter the sense, meaning, or effect of the statute. Tex.Gov't.Code Ann. § 323.007(b) (Vernon 1988). The revisor's note to Section 16.035 states that the definition of lien debt was added as a drafting convenience and derives from Article 5520. It is not new law. No substantive significance can be attached to the 1985 revision and codification. Gene and Emma Palmer's argument that Section 16.035(e) applies only to a suit to foreclose a lien and not to a suit on the underlying debt fails to recognize a basic concept of lien law. A lien is an incident of, and is inseparable from, the debt. University Savings and Loan Ass'n v. Security Lumber Co., 423 S.W.2d 287 (Tex. 1967). In University Savings, the court held that because a cause of action for debt was not barred, then neither was an action to foreclose the lien. University Savings Ass'n, 423 S.W.2d at 292. Stated conversely, if an action to foreclose the lien is not barred, then neither is an action to collect the debt. Considering the interpretation given Section 16.035(e) by Texas courts, and its reenactment by the Legislature, the trial court correctly held that no installments were barred by limitations. The first three points of error are overruled. The parties stipulated that ten percent of the judgment would be a reasonable attorney's fee. Because no installments were barred by limitations, the amount of the judgment is correct, and the amount awarded as attorney's fees is also correct. Gene and Emma Palmer's last two points of error are overruled. Counsel for the appellants made a cogent and reasonable argument for a different interpretation of the statute and one that may have been embraced by this Court had we been writing on a clean slate. In such circumstances, sanctions are inappropriate, and we decline to impose them. The crosspoint of error is overruled. The judgment is affirmed. NOTES [1] See also, Hughes v. Stovall, 135 S.W.2d 603, 606 (Tex.Civ.App.-Amarillo 1939, writ dism'd judgm't cor.); Hutton v. Harwell, 95 S.W.2d 467, 470 (Tex.Civ.App.-Fort Worth 1936, no writ); Kuykendall v. Taylor, 89 S.W.2d 297, 299 (Tex. Civ.App.-Dallas 1935, no writ); Shephard v. Woodson Lumber Co., 63 S.W.2d 581, 584 (Tex. Civ.App.-Waco 1933, no writ).	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532309/	831 S.W.2d 615 (1992) 38 Ark.App. 117 Randy LEACH, Appellant, v. STATE of Arkansas, Appellee. No. CA CR 91-169. Court of Appeals of Arkansas, Division I. May 13, 1992. 616 Callis Childs, Conway, for appellant. Sandy Moll, Asst. Atty. Gen., Little Rock, for appellee. JENNINGS, Judge. Appellant, Randy D. Leach, was convicted of conspiracy to commit aggravated robbery and received a six year sentence and a $5,000.00 fine. Leach raises eighteen points on appeal, two of which require reversal. Pursuant to Harris v. State, 284 Ark. 247, 681 S.W.2d 334 (1984), before we reverse and remand because of trial error we must consider whether the evidence is sufficient to sustain the conviction. Of the other issues raised we address only those which are likely to arise again on retrial. Some background is in order. On November 7, 1988, Conway Police Officer Ray Noblitt was killed when he investigated what appeared to be a theft of a flatbed trailer in progress. An investigation and manhunt resulted a few days later in the arrest of Kenneth Ray Clements, a felon, in connection with the murder. Pursuant to the investigation, police interviewed Denise Clements, wife of Kenneth, and her sister, Julie Nathe. Investigators then interviewed Conway Police Officer R.L. "Dickie" McMillen and later Leach, who was also a Conway police officer. Within a week of the murder both McMillen and Leach had been placed under arrest on suspicion of conspiracy to commit theft of property. A grand jury was impaneled to investigate the death of Noblitt. The grand jury handed down indictments charging Kenneth Clements with capital felony murder and multiple counts of theft of property, conspiracy to commit burglary, conspiracy to commit aggravated robbery, and several other criminal charges; Dickie McMillen with being an accomplice to capital felony murder, two counts of conspiracy to commit aggravated robbery, conspiracy to commit theft of property, and two counts of conspiracy to commit burglary; and Leach with conspiracy to commit aggravated robbery and conspiracy to commit burglary. Both McMillen and Leach subsequently resigned from the police force. In the case at bar, Leach was convicted of conspiring with Kenneth Clements and Dickie McMillen to commit aggravated robbery of a courier for Wal-Mart when the courier was to deliver night deposits to a bank. 1. SUFFICIENCY OF THE EVIDENCE Leach first argues that the evidence was insufficient to sustain his conviction for conspiracy to commit armed robbery. When the sufficiency of the evidence is challenged on appeal of a criminal conviction, we review the evidence, including any evidence which may have been erroneously admitted, in the light most favorable to the State and affirm if there is substantial evidence to support the verdict. Harris v. 617 State, 284 Ark. 247, 681 S.W.2d 334 (1984); Williams v. State, 29 Ark.App. 61, 781 S.W.2d 37 (1989). Substantial evidence is evidence that is of sufficient force and character that it will, with reasonable certainty, compel a conclusion one way or the other without requiring one to resort to speculation or conjecture. Ward v. State, 35 Ark.App. 148, 816 S.W.2d 173 (1991). The fact that evidence is circumstantial does not render it insubstantial as the law makes no distinction between direct evidence of a fact and circumstances from which it may be inferred. Ryan v. State, 30 Ark.App. 196, 786 S.W.2d 835 (1990). At trial, Lieutenant Doug Williams of the Arkansas State Police testified that in November of 1988 he was involved in an investigation of the Conway Police Department. In the course of that investigation he interviewed Leach, and a transcription of that interview was prepared. Sergeant J.R. Howard of the Arkansas State Police testified that he was present at the taking of Leach's statement. Howard read into the record the transcription of Leach's statement. Leach's statement described his relationship and contacts with Dickie McMillen and Kenneth Ray Clements. In this statement, Leach said that McMillen and Clements picked him up one afternoon to ride over to the house of one Nolan in order to look at some hunting dogs. During that ride there was a discussion of farm equipment, and Leach was led to believe that Clements had stolen a tractor. He stated that, on another occasion, he and McMillen had discussed the possibility of robbing a Wal-Mart courier. McMillen and Clements were to work it out so that on an evening when Leach was escorting the courier to the bank, Clements would "just come up and snatch the money and run." Leach was to "stall along and make it look good." He further stated: Shots were talked about. I told them I didn't want anybody shooting at me. Uh, I can't remember anything was said about me firing a shot. Talked about, you know, if I took off after them or something, you know, run at them, run into one of those teller machines or something, damage my car so I couldn't pursue him. Denise Clements, Kenneth Clements's wife, testified with regard to the planned robbery of the Wal-Mart courier that "Kenneth was supposed to follow the courier truck and pull it over at some point or at the bank, rob the bank, and, uh, was to get away with the money and split it with the two other police officers." It is clear that the basis for this testimony was statements made by her husband to her. She said that Clements told her that he had followed the courier to find the route and time. She stated that Clements never left the house without a gun, "no matter what he did." She testified that she was present at one meeting between Clements and McMillen where she sat in Clements's truck while he rode around with McMillen in McMillen's truck. She said that McMillen often called, and that he used an alias of "Frank." She testified that McMillen sold Clements a truck, that McMillen visited the house, and that Clements and McMillen had known each other for years. Leach argues that there was no evidence that the men conspired to commit armed robbery, or that he or the co-conspirators agreed or planned that they would be armed with a deadly weapon or would represent by words or conduct that they were so armed. From appellant's statement and the testimony of Denise Clements, we believe there was substantial evidence from which the jury could find Leach guilty of conspiracy to commit armed robbery. 2. THE "IN FURTHERANCE OF" REQUIREMENT Appellant argues that the trial court erred in allowing statements attributed to Kenneth Clements to be admitted through the testimony of Denise Clements. The statements were admitted under Ark. R.Evid. 801(d)(2)(v) which provides that a statement is not hearsay if the statement is offered against a party and is a statement by a co-conspirator of a party during the course and in furtherance of the conspiracy. Appellant argues, as he did below, that there was no evidence to indicate that 618 any of the statements made by Kenneth Clements to his wife Denise were made "in furtherance of the conspiracy," and thus the statements do not fall within the Rule. The witness herself characterized her husband as a liar, but added that "when it came to boasting and bragging about things he had and was planning on doing, he was also very good at that." Appellant argues that there is no proof that Kenneth Clements's boasting and bragging to his wife in any way furthered the objective of the conspiracy to rob the Wal-Mart courier. He relies on United States v. Eubanks, 591 F.2d 513 (9th Cir.1979), applying Fed.R.Evid. 801(d)(2)(E), which is identical to the Arkansas rule. In Eubanks, Baca, the common-law wife of the deceased conspirator Gonzales, was allowed to testify to statements made by Gonzales about his involvement in a conspiracy to distribute heroin. The Ninth Circuit Court of Appeals reversed, finding that not all statements made by co-conspirators can be considered to have been made in furtherance of the conspiracy. The Court said: In contrast, most of the statements made by Gonzales to Baca that incriminated appellants cannot reasonably be considered to have been in furtherance of the conspiracy. Gonzales and Baca had been living together in a common-law marriage relationship. Gonzales often discussed his activities with Baca, who did not participate in the alleged conspiracy until long after its inception. Baca testified that Gonzales told her that he was going to Tucson to obtain narcotics from Yanez. There is no evidence that Gonzales' statement was a declaration in furtherance of the conspiracy. Gonzales was not seeking to induce Baca to join the conspiracy and his statement did not assist the conspirators in achieving their objective. Gonzales'"statement was, at best, nothing more than [a] casual admission of culpability to someone he had individually decided to trust." Similarly, when Gonzales informed Baca about the persons to whom he had spoken over the telephone, he was not making a declaration in furtherance of the conspiracy. Instead, he was merely informing his common-law wife about his activities.... After Baca began travelling to Tucson with Gonzales and assisted him with the arrangements for obtaining heroin, she assumed a role in the alleged conspiracy. Yet Baca's participation in the conspiracy did not convert Gonzales' statements to her into declarations in furtherance of the conspiracy. Most of Gonzales' statements to Baca that were included in her testimony did nothing to advance the aims of the alleged conspiracy. 591 F.2d at 520 (citations omitted). The significance and necessity of the "in furtherance" requirement were examined by this court in Williams v. State, 7 Ark.App. 151, 645 S.W.2d 697 (1983), where it was noted that the reason for the "in furtherance" requirement was "the desire to strike a balance between the need to admit statements of coconspirators and the need to protect the accused against idle chatter of criminal partners." See also United States v. Layton, 720 F.2d 548 (9th Cir. 1983) at 556, cert, denied, 465 U.S. 1069, 104 S. Ct. 1423, 79 L. Ed. 2d 748 (1984); United States v. Johnson, 927 F.2d 999 (7th Cir.1991) at 1002. We said, "[T]he requirement is clearalthough whether a statement meets the requirement may not be." Williams, 7 Ark.App. at 155, 645 S.W.2d at 699. The facts in United States v. Wood, 834 F.2d 1382 (8th Cir.1987), were similar to those in Eubanks. Wood and Stanton were alleged co-conspirators and the District Court had permitted Stanton's wife, Mary, to testify that Stanton had told her that he was working for Wood by putting radios in boats used for drug smuggling. The Court said: Whether the statement was made in furtherance of the conspiracy is a close question. Mary Stanton testified that her husband told her that he was working for Wood installing radio equipment in boats "used for marijuana." Although the statement refers to drugs, it doesn't appear that Michael Stanton was seeking to induce his wife to join the conspiracy. There is no evidence that 619 Stanton's statement prompted action in furtherance of the conspiracy by either participant in the conversation. Stanton's statement did not identify the role of one conspirator to another, because Mary Stanton was not involved in the conspiracy. A more credible, albeit pedestrian, interpretation is that he was merely informing his wife about his activities. We hold that the statement was not in furtherance of the conspiracy, and therefore did not qualify for admission under Fed.R.Evid. 801(d)(2)(E). 834 F.2d at 1385. At trial, the State argued that Kenneth Clements's statements to his wife were in furtherance of the conspiracy because the statements were "for the purposes of covering his tracks." The State argued strenuously and repeatedly that the court had so ruled in the first McMillen trial and in the second McMillen trial and that it should so hold here. As the prosecutor argued: We've been through this twice before, and I ask the Court to hold in accordance with its previous ruling, which is someone who's involved in a conspiracy and has someone living with them and works with them, who answers the telephone and deals with people coming and going, must be aware of what that person is involved with; otherwise, the wife would trip that person up and put him flat on his back in jail. And, that's exactly why she had to be made aware of these things. It was in furtherance of the conspiracy. The State makes essentially the same argument on appeal. The facts in the case at bar cannot be successfully distinguished from those in Eubanks and Wood, and we find the reasoning of those decisions persuasive. We hold that the trial court's finding that statements made by Kenneth Clements to his wife Denise were "in furtherance of a conspiracy" was erroneous and that Denise Clements's testimony was therefore inadmissible as hearsay. 3. ADMISSIBILITY OF APPELLANT'S STATEMENTS Appellant argues that his statement was coerced by the prosecuting attorney's threat and should not have been admitted. Custodial statements are presumed to be involuntary, and the State has the burden of proving otherwise. A statement induced by fear or hope of reward is not voluntary. Sanders v. State, 305 Ark. 112, 805 S.W.2d 953 (1991). On appeal, we make an independent review of the totality of the circumstances, but will reverse only if the trial court's finding is clearly against a preponderance of the evidence. Porchia v. State, 306 Ark. 443, 815 S.W.2d 926 (1991). Appellant testified at the pretrial hearing regarding the circumstances of his giving a statement. The chief of police called appellant down to the station to talk to the state police investigators. Appellant described his contact with the prosecuting attorney as follows: A. Well, we sat down there and, uh, they said, "Well, we need to ask you some questions. Before we do," said, uh, "Mr. Foster wants to tell you something," or wants to speak to you. Q. Okay. What did Mr. Foster tell you? A. Mr. Foster came in. He, uh, sat down there at Bobby's desk, and I believe he crossed his hands, and he said, uh, "Randy," said, "this is the hardest thing I've ever had to do." He said, "I'm going to charge you with capital felony murder or accessory to capital felony murder, if you don't give me a statement." Q. Didwas there anything said about the death penalty? A. Yes. He said, uhhe said, "I'm gonna' charge you orwith accessory or accomplice to capital felony murder, and I'm gonna' ask for the chair." I remember his saying, "I'm gonna' ask for the chair." Q. Why are youwhy are you so A. Because it scared me to death. I mean it's justit's just like somebody 620 says, well, I'm fixing to blow your head off, you know. Q. Okay. Uh, what effect did Mr. Foster's statements have on you? A. Well, it was justI don't know, I just was out of control. MyI just couldn't think of whatwhat was happening. Iall I could think of was my family, my job, just, you know, everything seemed to beyou know, it was going to be down the tube, you know. My Q. DidI think I've already asked you. Did you give Mr. Swesey and Mr. Williams and Mr. Howard a statement? A. Yes, I did. Q. Did you give them the statement as a result of what Mr. Foster had told you? A. Yes. Appellant's version of this exchange basically corroborated the earlier testimony of State Police Officer Howard, except for the statement attributed to the prosecutor about "asking for the chair." It is undisputed that Leach was advised of his rights under Miranda v. Arizona, 384 U.S. 436, 86 S. Ct. 1602, 16 L. Ed. 2d 694 (1966). In examining the totality of the circumstances, the supreme court has said that the inquiry should be divided into two main components: the statement of the officer (in this case, the prosecutor) and the vulnerability of the defendant. See Sanders v. State, 305 Ark. 112, 805 S.W.2d 953 (1991); Williams v. State, 281 Ark. 91, 663 S.W.2d 700 (1983), cert, denied, 469 U.S. 980, 105 S. Ct. 382, 83 L. Ed. 2d 317 (1984); Davis v. State, 275 Ark. 264, 630 S.W.2d 1 (1982). Here, the defendant was an experienced police officer. There was no contention that he was unable to understand his rights for any reason. Nor does the nature of the statement by the prosecuting attorney require suppression. The circumstances of the case at bar are similar to those found in Tippitt v. State, 285 Ark. 294, 686 S.W.2d 420 (1985). There, Tippitt was a suspect in an aggravated robbery and attempted capital murder case. Two accomplices were charged with aggravated robbery and attempted capital murder. Investigating officers agreed not to charge Tippitt with attempted capital murder if he would give a statement. The court said: The issue before us is whether the inculpatory custodial statement, given in exchange for a promise not to prosecute appellant for an additional crime, should have been suppressed. There is no dispute that the statement was given in exchange for the promise not to charge appellant with attempted capital murder. The Miranda warnings were given prior to the statement being made. Custodial statements are presumed involuntary and the state must overcome the presumption by a preponderance of the evidence. Statements given with hope of reward are not voluntary. Under the facts and circumstances of this case, when considered in their totality, we think the trial court was correct in admitting the statement. The appellant struck a bargain, which was closely related to a plea bargain, and both sides kept their promises. Most likely the deal was a wise one for the appellant. In any event we can find no prejudicial error. [Citations omitted.] Tippitt v. State, 285 Ark. at 295, 686 S.W.2d at 421; see also Williams v. State, 281 Ark. 91, 663 S.W.2d 700 (1983), cert, denied, 469 U.S. 980, 105 S. Ct. 382, 83 L. Ed. 2d 317 (1984). We find no error in the court's denial of the motion to suppress the defendant's statement. Appellant also argues that it was error to allow Ollie Willborg, an investigator for the prosecuting attorney, to testify about comments made by appellant while he was awaiting bail and on another chance encounter at the courthouse. Appellant argues that the inculpatory nature of those statements compels the conclusion that, due to the coercive nature of the prosecutor's earlier statements, "appellant did not possess sufficient mental freedom" to confess or deny his participation in the crime. These statements were freely offered, and the circumstances do not display coercion 621 any more than those surrounding the giving of the initial statement to the investigators. 4. THE MOTION IN LIMINE At trial the State moved in limine for an order prohibiting appellant from testifying about the prosecutor's offer to charge him with capital murder unless he gave a statement. The court granted the motion. This was error. In Kagebein v. State, 254 Ark. 904, 496 S.W.2d 435 (1973), addressing a similar argument, the court said: The purpose of our Denno hearing statute (Ark.Stats. 43-2105) is to prevent a jury from hearing a confession before the court determines that it has been voluntarily given. It is not intended to restrict evidence a jury may hear after a court determination of voluntariness has been made. The defendant still has the constitutional right to have his case heard on the merits by a jury, including the weight and credibility the jury might give to the voluntariness of the confession. Walker v. State, 253 Ark. 676, 488 S.W.2d 40 (1972); Lego v. Twomey, 404 U.S. 477, 30 L. Ed. 2d 618, 92 S. Ct. 619 (1972). And in Crane v. Kentucky, 476 U.S. 683, 106 S. Ct. 2142, 90 L. Ed. 2d 636 (1986), the United States Supreme Court stated: As the Court noted in Jackson, because "questions of credibility, whether of a witness or of a confession, are for the jury," the requirement that the court make a pretrial voluntariness determination does not undercut the defendant's traditional prerogative to challenge the confession's reliability during the course of the trial. Indeed, stripped of the power to describe to the jury the circumstances that prompted his confession, the defendant is effectively disabled from answering the one question every rational juror needs answered: If the defendant is innocent, why did he previously admit his guilt? [W]e have little trouble concluding on the facts of this case that the blanket exclusion of the proffered testimony about the circumstances of petitioner's confession deprived him of a fair trial. [Citations omitted.] The record will not support the State's contention that appellant's counsel somehow invited the error. 5. SEQUESTERED VOIR DIRE Before trial, the court denied appellant's request for individual sequestered voir dire. Appellant argues that he was thereby inhibited from asking prospective jurors questions about their knowledge of related criminal litigation, and urges us to adopt § 3.4(a) of the Standards Relating to Fair Trial and Free Press promulgated by the American Bar Association Project on Standards for Criminal Justice. That section provides: (a) Method of examination. Whenever there is believed to be a significant possibility that individual talesmen will be ineligible to serve because of exposure to potentially prejudicial material, the examination of each juror with respect to his exposure shall take place outside the presence of other chosen and prospective jurors. An accurate record of this examination shall be kept, by court reporter or tape recording whenever possible. The questioning shall be conducted for the purpose of determining what the prospective juror has read and heard about the case and how his exposure has affected his attitude towards the trial, not to convince him that he would be derelict in his duty if he could not have cast aside any preconception he might have. Appellant concedes that the decision to grant or deny sequestered individual voir dire is left to the discretion of the trial court. Burnett v. State, 287 Ark. 158, 697 S.W.2d 95 (1985). He also concedes that reversal will not lie absent a showing of prejudice. See e.g., Logan v. State, 300 Ark. 35, 776 S.W.2d 341 (1989). Because here, as in Logan, the record does not reflect the requisite prejudice, appellant urges us to adopt the ABA standard and *622 overrule the supreme court's decisions in Logan; Heffernan v. State, 278 Ark. 325, 645 S.W.2d 666 (1983); and other supreme court cases stating the same principle. Despite appellant's contention to the contrary, we lack the authority to overrule decisions of the Arkansas Supreme Court. Huckabee v. State, 30 Ark.App. 82, 785 S.W.2d 223 (1990). It will be for the circuit court to decide whether, on retrial, sequestered voir dire is necessary. 6. JURY INSTRUCTIONS Appellant also argues that it was error for the trial court to refuse to give a series of five requested jury instructions on conspiracy. These instructions were based on those given in other states and supported by language in some Arkansas cases, commentary to statutes, Corpus Juris Secundum, and a federal case. The trial court gave AMCI 707, the standard instruction on conspiracy, as well as appellant's requested instruction defining an "overt act." Just because appellant's offered instructions contained correct statements of the law does not mean that it was error for the trial court to refuse to give them. Hardcastle v. State, 25 Ark.App. 157, 755 S.W.2d 228 (1988). It is not necessary to give a requested instruction if it is sufficiently covered by another instruction. Clark v. State, 15 Ark.App. 393, 695 S.W.2d 396 (1985). Non-model instructions are to be given only when the trial court finds that an AMCI instruction does not accurately state the law or is inapplicable. Campbell v. State, 294 Ark. 639, 746 S.W.2d 37 (1988). Because AMCI 707 accurately states the law and is applicable, the court did not err. 7. CLOSING ARGUMENT Ollie Willborg, the investigator employed by the prosecuting attorney's office, testified for the State. In closing argument the prosecutor said, "I hope you looked into that man's [Willborg's] eyes. Ya'll don't know him like some of the rest of us do, but I hope that you looked into his eyes." Appellant objected on the basis that the prosecuting attorney was personally vouching for the credibility of the witness. We agree that the comment could be so construed. As such it was improper, see Harrison v. State, 276 Ark. 469, 637 S.W.2d 549 (1982), and should be avoided on retrial. Our conclusion is that the trial court erred in admitting the hearsay testimony of Denise Clements, and in prohibiting the appellant from testifying about the circumstances under which he gave his statement to the police. We remand the case to the circuit court for further proceedings in keeping with this opinion. Reversed and Remanded. DANIELSON and MAYFIELD, JJ., agree.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532325/	872 A.2d 633 (2005) DISTRICT OF COLUMBIA, Appellant, v. BERETTA, U.S.A., CORP., et al., Appellees. Bryant Lawson, et al., Appellants, v. Beretta, U.S.A., Corp., et al., Appellees. No. 03-CV-24, 03-CV-38. District of Columbia Court of Appeals. Argued En Banc January 11, 2005. Decided April 21, 2005. 637 James C. McKay, Jr., Senior Assistant Attorney General for the District of Columbia, with whom Robert J. Spagnoletti, Attorney General for the District of Columbia, and Edward E. Schwab, Deputy Attorney General for the District of Columbia, were on the brief, for appellant in No. 03-CV-24. Eric J. Mogilnicki, Washington, with whom A. Stephen Hut, Jr., John Payton, David S. Molot, R. Kevin Bailey, Karen C. Daly, Rachel Zakar Stutz, Michael A. Mugmon, Roderick V.O. Boggs, and Susan E. Huhta were on the brief, for appellants in No. 03-CV-38. Lawrence S. Greenwald and Michael L. Rice, with whom Thomas E. Fennell, James A. Wilderotter, Paul R. Reichert, Lawrence P. Fletcher-Hill, Catherine A. Bledsoe, Robert E. Scott, Jr., Guido Porcarelli, William M. Griffin, III, Jonann E. Coniglio, Paul F. Strain, M. King Hill, III, James P. Dorr, Sarah L. Olson, John F. Renzulli, Jeffrey M. Malsch, Scott C. Allen, Charles L. Coleman, III, Warwick R. Furr, II, Michael C. Hewitt, Michael J. Zomcik, Robert C. Tarics, Michael Branisa, Gerald F. Ivey, Amanda L. Rixse, Lauren Lacey, Timothy A. Bumann, Paul Schleifman, Jeffrey S. Nelson, and Tina Schaefer were on the brief, for appellees. Brian J. Siebel, Washington, with whom Dennis A. Henigan was on the brief, as amicus curiae on behalf of the Brady Campaign to Prevent Gun Violence. Roy T. Englert, Jr., Alan E. Untereiner, Jan S. Amundson, and Quentin Riegel filed a brief as amicus curiae, Washington, on behalf of the National Association of Manufacturers. James M. Beck, Kansas City, MO, Frank J. Eisenhart, J. Gregory Dyer, Washington, D.C., and Hugh F. Young, Jr., filed a brief as amicus curiae on behalf of the Product Liability Advisory Council, Inc. Before WAGNER, Chief Judge, TERRY, FARRELL, REID, GLICKMAN, and WASHINGTON, Associate Judges, and PRYOR, Senior Judge. Opinion for the court by Associate Judge FARRELL. FARRELL, Associate Judge: The District of Columbia and nine individual plaintiffs appeal from the dismissal of their suit against manufacturers or distributors of firearms alleging common-law negligence and public nuisance, as well as strict liability under D.C.Code § 7-2551.02 (2001). The trial court entered judgment on the pleadings for the defendants on all counts, ruling in substance that the counts of negligence and public nuisance failed basic tests of duty, foreseeability, and remoteness as pleaded; that the District of Columbia could not bring an action under § 7-2551.02; and that, as to the individual plaintiffs, the statutory tort was insufficiently pleaded and, in any event, is an unconstitutional exercise of extra-territorial regulation by the Council of the District of Columbia. We reverse the dismissal of the statutory count as to the individual plaintiffs, holding that they may advance to discovery on strict liability notwithstanding the difficulties of proof they may confront. We also reverse the dismissal of that count as to the District of Columbia to the extentbut only the extentthat it seeks subrogated damages as to named individual plaintiffs for whom it has incurred medical expenses. Otherwise we sustain the judgment of the trial court, holding that none of the plaintiffs has stated a valid claim of common-law negligence and that the District has not stated a claim of public 638 nuisance on the facts alleged.[1] I. Background This is the second time in the District of Columbia that an actionable link has been attempted to be drawn between the manufacture or distribution of firearms and the criminal use of those weapons to kill or injure. See Delahanty v. Hinckley, 564 A.2d 758 (D.C.1989) (on certified question from federal court, finding no common law basis on facts alleged for holding handgun manufacturers and their officers liable under D.C. law for criminal use of gun by John W. Hinckley, Jr.). The plaintiffs in the present case are the District of Columbia government and nine individual persons who themselves were wounded or represent decedents shot and killed by persons unlawfully using firearms in the District of Columbia.[2] The defendants are numerous manufacturers, importers, or distributors of firearms. Underlying all three counts of the complaint are allegations that may be summarized as follows: Although the District of Columbia itself has stringent gun control laws, there nonetheless exists an unchecked illegal flow of firearms into the District to which the defendants by action and inaction have contributed. This flow of guns takes place in numerous ways, including "straw purchases" (purchases from licensed dealers on behalf of other persons not qualified to buy under applicable law), multiple sales (multiple purchases over a short stretch of time by persons intending to sell or transfer to others not qualified to buy), sales by the defendants to "kitchen table" dealers licensed to sell but who do not do so from retail stores, and gun show sales by sellers who typically lack federal firearm licenses and are not required to do purchaser background checks. The complaint alleges that the defendants have distributed their firearms without adequate self-regulation or supervision in order to increase firearm sales, knowing or constructively knowing they are creating, maintaining, or supplying the unlawful flow of firearms into the District and similarly knowing those guns will be used to commit crimes such as the ones that have caused death or injury to the individual plaintiffs or persons they represent. The complaint further alleges numerous illustrative means by which the defendants are able to restrict or impede the unlawful flow of firearms into the District but have not done so. These include (to name just three) directing and encouraging their distributors and dealers to refuse to sell in circumstances where the dealer knows or should know that the buyer seeks to make a straw purchase; requiring such dealers to refuse to sell more than one handgun a month to any person not holding a federal firearms license; and requiring their distributors to sell only to "stocking dealers," i.e., retailers who stock guns from retail stores, and not to "kitchen table" dealers or at gun shows. Based on these general allegations, Count I of the complaint (Strict Liability) alleged that the defendants are liable to the District of Columbia under D.C.Code § 7-2551.02 and related statutes for health care costs, Medicaid expenses, and other costs of assistance and compensation paid 639 by the District to or on behalf of victims of gun violence including civilians, police officers, and firefighters, and are liable to the individual plaintiffs for direct and consequential damages proximately caused by the defendants' conduct. Count II (Negligent Distribution) alleged that the defendants breached "a duty to the District and its residents not to create an unreasonable risk of foreseeable harm from the distribution of their firearms, and to take reasonable steps to limit this risk once it had been created." In Count III (Public Nuisance) the District alone alleged that the defendants have "created an ongoing public nuisance of readily available handguns and machine guns that unreasonably interferes with District residents' enjoyment of health, safety, and peace." II. Standard of Review The defendants moved for judgment on the pleadings as to all counts, Super. Ct. Civ. R. 12(c), and the trial court granted the motion and dismissed each count for failure to state a claim for which relief can be granted. Rule 12(b)(6); see Osei-Kuffnor v. Argana, 618 A.2d 712, 713 (D.C.1993) (standards same for dismissal under Rule 12(b)(6) and judgment under Rule 12(c)). In reviewing that decision, this court "conducts a de novo review of the record, construing all facts and inferences in the light most favorable to the plaintiff[s] and taking the complaint's allegations as true." Duncan v. Children's Nat'l Med. Ctr., 702 A.2d 207, 210 (D.C. 1997). A complaint may not be dismissed because the court merely "doubts that [the] plaintiff[s] will prevail on a claim," id. (citation omitted), but "dismissal for failure to state a claim may properly be granted where it appears beyond doubt that the plaintiff[s] can prove no set of facts in support of [the] claim which would entitle [them] to relief." Id. (citation and quotation marks omitted). Applying these standards, we consider first the two common-law counts alleged, then the statutory count as it relates to each of the two classes of plaintiffs. III. Negligent Distribution The trial court dismissed the count of negligent distribution primarily on the basis of Delahanty, supra. That decision, unless overruled, indeed appears to bar the plaintiffs' attempt to plead negligence for harm resulting from the unlawful actions of third parties. Delahanty came before a division of the court as a certified question from the United States Court of Appeals asking "whether, in the District of Columbia, `manufacturers and distributors of Saturday Night Specials may be strictly liable for injuries arising from these guns' criminal use."' Delahanty, 564 A.2d at 759 (citation omitted). The panel's answer to that question ranged more widely, however. It pointed out that, although "[t]he certifying court focused on whether this court would adopt the strict liability theory described in Kelley [v. R.G. Indus., 304 Md. 124, 497 A.2d 1143 (Md.1985)]," that court noted that "`the theoretical underpinnings [of Kelley] are somewhat unclear' and that the certified question was not intended to restrict this court to a particular rationale for this cause of action." Delahanty, 564 A.2d at 760 (citation omitted). Further, because this court is "not limited to the designated question of law [in any event] but may `exercise our prerogative to frame the basic issues as we see fit for an informed decision,"' and because the Delahanty appellants were not relying "exclusively on the Kelley theory but have continued to advance in this court all the theories in their complaint," we "expand[ed] our inquiry to include the question whether established theories of tort law in the District of Columbia provide a cause of action against gun manufacturers 640 and distributors for injuries arising from the guns' criminal uses." Id. (citation omitted). Just as the federal District Court had dismissed the entire complaint for failure to state a claim, this court "reject[ed] each of the theories appellants have advanced in the federal courts and in this court." Id. We rejected first their theory of strict liability for sale of a defective product, based not on a claim of defective design or manufactureno such claim was advancedbut on the assertion "that the manufacturers had a duty to warn of the dangers of criminal misuse of the gun." There is no duty to warn, we answered, when a potential danger is known and recognized, and "[b]ecause hazards of firearms are obvious, the manufacturer had no duty to warn." Id. (citing inter alia RESTATEMENT (SECOND) OF TORTS § 402A cmt. j). We paused only slightly longer over the appellants' attempt to apply the theory of "abnormally dangerous activity," see RESTATEMENT §§ 519, 520, to the marketing of handguns. That cause of action, we explained, applies only to activities that are dangerous in themselves and to injuries that result directly from the dangerous activity. The marketing of a handgun is not dangerous in and of itself, and when injury occurs, it is not the direct result of the sale itself, but rather ... of actions taken by a third party. Delahanty, 564 A.2d at 761 (citation and quotation marks omitted). We again emphasized that "any likelihood that ... harm will be great ... would result from the use, not the marketing as such, of handguns." Id. And we rejected for similar reasons the "social utility" theory of tort adopted by the Maryland courts in Kelley, supra"requiring proof that the danger of the product outweighs its social utility and that no legislative imprimatur be associated with the product to the contrary," id.pointing out, among other things, that the appellants' attempt to make actionable the manufacture or distribution of "a certain class of inexpensive and allegedly unreliable handguns" (i.e., Saturday Night Specials) ignored the fact that "[a]ll firearms are capable of being used for criminal activity." Id. at 761-62 (citation and internal quotation marks omitted). Finally, we rejected the cause of action for negligent manufacture or distribution, explaining: "In general no liability exists in tort for harm resulting from the criminal acts of third parties, although liability for such harm sometimes may be imposed on the basis of some special relationship between the parties." Hall v. Ford Enters., Ltd., 445 A.2d 610, 611 (D.C.1982); see also Kline v. 1500 Massachusetts Ave. Apartment Corp., 141 U.S.App. D.C. 370, 375-76, 439 F.2d 477, 482-83 (1970) (relationships giving rise to a duty of protection include landlord to tenant, school district to student, employer to employee, and hospital to patient); District of Columbia v. Doe, 524 A.2d 30, 32 (D.C.1987) (school to student). We are not inclined to extend the rationale of these decisions to the present case. Appellants have alleged no special relationship with the gun manufacturers and have suggested no reasonable way that gun manufacturers could screen the purchasers of their guns to prevent criminal misuse. Delahanty, 564 A.2d at 762. Although our rejection of liability in Delahanty rested throughout on the absence of a direct link between the manufacture or distribution of handguns and injuries caused by the criminal misuse of those weapons, it is especially the refusal "to extend the rationale of [our] decisions" 641 to the negligence theory alleged there that the plaintiffs must confront in asserting their claim of negligent distribution here. They first argue that the negligence discussion in Delahanty was dictum given the precise phrasing of the D.C. Circuit's question. The fact, however, that we "expand[ed] our inquiry"as the certifying court foresaw we mightto render "an informed decision" on the reach of "established theories of tort law in the District of Columbia," id. at 760, does not make our analysis of any of those theories advisory. That reasoning would make an entire subset of answers to certified questionsi.e., those in which we exercise the "latitude" given us to "consider[] nondesignated questions and [to] reformulat[e], if necessary, . . . [the] questions as certified," Penn Mut. Life Ins. Co. v. Abramson, 530 A.2d 1202, 1207 (D.C.1987)non-binding dicta, contrary to our law that such answers are "stare decisis of this court." Id. At bottom, the plaintiffs argue that Delahanty was wrongly decided, because, contrary to its holding, District of Columbia law requires no "special relationship between the parties" (such as that of landlord and tenant) to permit liability in negligence for criminal acts of others, so long as the defendant realized or should have realized the likelihood that his negligent conduct would cause foreseeable harm to the plaintiffs. Sitting en banc, we decline this invitation to overrule Delahanty. And we pass over the question whether a "special relationship" between a plaintiff and a defendant must undergird any claim of negligence in the District based on harm stemming directly from the criminal acts of third persons. But see Workman v. United Methodist Comm., 355 U.S.App. D.C. 131, 135, 320 F.3d 259, 263 (2003) (surveying this court's decisions and concluding that under them "the requirement that the defendant [has] been able to foresee that a third party would likely commit a criminal act ordinarily has, and perhaps must have, a relational component"). We nevertheless conclude that our decisions addressing general tort concepts of duty and foreseeability do not permit recognition of a claim for common-law negligence on the facts alleged here. Where an injury is caused by the intervening criminal act of a third party, this court has repeatedly held that liability depends upon a more heightened showing of foreseeability than would be required if the act were merely negligent. In such a case, the plaintiff bears the burden of establishing that the criminal act was so foreseeable that a duty arises to guard against it. Because of the extraordinary nature of criminal conduct, the law requires that the foreseeability of the risk be more precisely shown. Potts v. District of Columbia, 697 A.2d 1249, 1252 (D.C.1997) (citations and internal quotation marks omitted; emphasis added). In this context, then, the requisite duty of care required for negligence[3] is a function of foreseeability, arising only when foreseeability is alleged commensurate with "the extraordinary nature of [intervening] criminal conduct." Id.[4] And, as 642 we further stated in Potts, "[o]ur opinions have made clear the demanding nature of the requirement of `precise' proof of a `heightened showing of foreseeability' in the context of an intervening criminal act involving the discharge of weapons." Id. (citations omitted; emphasis added). The high-water mark, as it were, of a showing of facts sufficient to create a duty to protect against such conduct was in District of Columbia v. Doe, 524 A.2d 30 (D.C.1987), where the claim was that reasonable protective measures by the District of Columbia could have prevented a child from being raped at a District elementary school. Acknowledging the requirement of a heightened showing of foreseeability in that context, id. at 33, we nonetheless identified evidence specific to that school and surrounding area that "could be viewed by reasonable factfinders as enhancing the foreseeability of danger from intruders, thereby creating a duty on the part of District officials to protect the students from this type of criminal activity." Id. at 34.[5] In three succeeding cases, by contrast, we rejected liability as a matter of law where foreseeability (hence duty) was not limited by any evidentiary reference to a precise location or class of persons. In Clement v. Peoples Drug Store, 634 A.2d 425 (D.C.1993), in which an employer was sued for negligence arising from the shooting death of one of its employees in the store parking lot, "the only evidence presented with respect to [the] shooting's foreseeability was an expert's opinion based on police reports of criminal activity in the surrounding area. No evidence was introduced involv[ing] any gun-related incidents at the particular shopping mall in which the shooting occurred." Potts, 697 A.2d at 1252 (summarizing basis for Clement's holding). In Bailey v. District of Columbia, 668 A.2d 817 (D.C.1995), where the plaintiff was shot after attending a cheerleading competition at a junior high school as she was leaving the building, she offered the affidavit of witnesses who asserted that the neighborhood around the school was a "high drug area" and that shootings and other criminal acts had taken place there. Rejecting this showing as insufficient, we explained that "[a]lthough the occurrence of shootings in, and in the vicinity of, the District's public schools is an unhappy reality, ... such `generic information,' by itself, does not create a duty on the part of the District to protect against the use of firearms under the circumstances presented here." Id. at 820.[6] Finally, in Potts, supra, the plaintiffs were injured by gunshots from an unknown source as they were leaving the Washington Convention Center (WCC) after attending a boxing event organized by Spencer Promotions, Inc. They sued the organizer and (among others) 643 the District of Columbia for negligence. Relying principally on Bailey and Clement, we sustained a grant of summary judgment because "plaintiffs [had] proffered no evidence of any prior gun-related violence at any other event held at the WCC or promoted by Spencer Promotions, nor any other specific evidence bearing directly on the foreseeability of the shooting incident at issue here." 697 A.2d at 1252. Potts, Bailey, and Clement were decided on summary judgment rather than a motion to dismiss, but they demonstrate the tight boundariesrequiring "`precise' proof of a `heightened showing of foreseeability,"' Potts, 697 A.2d at 1252within which a claim of common-law negligence must be framed in this jurisdiction "in the context of an intervening criminal act involving the discharge of weapons." Id. The plaintiffs in this case broadly allege a duty and foreseeable harm to "the District [of Columbia] and its residents." Complaint, ¶ 151. That duty is unlike even the one claimed to be owed subclasses of residents (shoppers at a particular store, children at a given school, attendees of a particular event) regarding whom we have repeatedly said that "generic" proffers of foreseeability do not suffice to create a duty of care. The class to whom the defendants allegedly owed a duty here is potentially unlimited except by the population of the District of Columbia, any member of which could be a shooting victim. That indeterminacy, as other courts have recognized, results from the sheer number of ways in which firearms, despite any reasonable precautions manufacturers can be expected to take, may reach the hands of criminal wrongdoersthe sheer number of causal links, in other words, between the licensed manufacture and distribution of firearms and their use to kill or injure others. This court's decisions, we conclude, do not permit recognition of a common-law tort resting on such limitless notions of duty and foreseeability. See also Lacy v. District of Columbia, 424 A.2d 317, 320-21 (D.C.1980) (citation and internal quotation marks omitted) (recognizing, as a matter of "policy," the existence in our law of "various liability-limiting considerations which relieve the defendant of liability for harm he actually caused where the chain of events appears highly extraordinary in retrospect").[7] Among courts rejecting claims of negligent distribution of firearms similar to the plaintiffs', the New York Court of Appeals in Hamilton v. Beretta, U.S.A., Corp., 96 N.Y.2d 222, 727 N.Y.S.2d 7, 750 N.E.2d 1055 (2001), leave to appeal denied, 100 N.Y.2d 514, 769 N.Y.S.2d 200, 801 N.E.2d 421 (2003), has provided the most cogent analysis. Like our Delahanty decision, Hamilton answered certified questions of law from the federal Circuit Court, including whether under New York decisional law, "the defendants owed plaintiffs a duty to exercise reasonable care in the marketing and distribution of the handguns they manufacture." Id. at 1059. The federal District Court had "imposed a duty on gun 644 manufacturers `to take reasonable steps available at the point of ... sale to primary distributors to reduce the possibility that these instruments will fall into the hands of those likely to misuse them.'" Id. at 1061 (citation omitted). The New York Court of Appeals rejected that duty as a basis for common-law negligence. Its prior decisions, like this court's, were "cautious ... in extending liability to defendants for their failure to control the conduct of others," a "judicial resistance to the expansion of duty [growing] out of practical concerns both about potentially limitless liability and about the unfairness of imposing liability for the acts of another." Id. at 1061. Under the duty imposed by the District Court, by contrast, "[t]he pool of possible plaintiffs is very largepotentially, any of the thousands of victims of gun violence." Id. (footnote omitted). Moreover, the court reasoned, the connection between defendants, the criminal wrongdoers and plaintiffs is remote, running through several links in a chain consisting of at least the manufacturer, the federally licensed distributor or wholesaler, and the first retailer. The chain most often includes numerous subsequent legal purchasers or even a thief. Such broad liability, potentially encompassing all gunshot crime victims, should not be imposed without a more tangible showing that defendants were a direct link in the causal chain that resulted in plaintiffs' injuries, and that defendants were realistically in a position to prevent the wrongs. Id. at 1061-62. The court therefore rejected the plaintiffs' assertion of "a general duty of care aris[ing] out of the gun manufacturers' ability to reduce the risk of illegal gun trafficking through control of the marketing and distribution of their products," pointing out that to "impos[e] such a general duty of care would create not only an indeterminate class of plaintiffs but also an indeterminate class of defendants whose liability might have little relationship to the [social] benefits of controlling illegal guns." Id. at 1063.[8] Although the plaintiffs had "presented [the court] with a novel theorynegligent marketing of a potentially lethal yet legal product, based upon the acts not of one manufacturer, but of an industrywe are unconvinced," the court concluded, that "on the record before us[] the duty plaintiffs wish to impose is either reasonable or circumscribed." Id. at 1068. The plaintiffs here point out that Hamilton was not decided on a motion to dismiss but only after a trial had shown the absence of proof "that the gun used to harm [the injured plaintiff] came from a source amenable to the exercise of any duty of care that plaintiffs would impose upon defendant manufacturers." Id. at 1062. But the plaintiffs in our case do not claim that through discovery they may be able "tangibl[y]" to show "that defendants were a direct link in the causal chain that resulted in plaintiffs' injuries," id. (emphasis added)that, in the language of our cases, those injuries were foreseeable to the defendants in the "heightened" sense entailing "`precise proof'" of knowledge and corresponding ability to prevent required by our decisions. Potts, supra. At most the plaintiffs allege that the defendants in the aggregate know that a sizeable number of the firearms they manufacture make their way, through dealer practices 645 they reasonably could limit, into the District of Columbia and into the hands of criminals, sometimes with "only a short time passing between the retail sale of a firearm outside the District and its criminal misuse in the District." Complaint, ¶ 123. Even if, as they claim, discovery may enable them to tie a particular weapon used to kill or injure a named plaintiff or his decedent to a particular manufacturer, they would still not have established a cognizablei.e., a "reasonable or circumscribed," Hamilton, supracommon-law duty to these plaintiffs rather than a duty to the class of all potential victims of gun violence in the District. They would not, in sum, have stated a claim under our decisions for common-law negligence based on injuries resulting from the criminal acts of third parties. There is an additional reason why we decline to recognize the plaintiffs' claim for common-law negligence in the distribution of firearms. The Council of the District of Columbia has intervened precisely in this area by enacting a strict liability statute governing the manufacture and sale of a subclass of firearms (assault weapons) whose lethal character, in its judgment, outweighs any social utility they may have. See D.C.Code § 7-2551.02. Under that statute, as we hold in part V, infra, the individual plaintiffs have stated a valid claim (and the District as well may have limited subrogation rights). In analogous circumstances, this court has refused to expand the boundaries of a common-law cause of action in tort. Specifically, in Carl v. Children's Hosp., 702 A.2d 159 (D.C.1997) (en banc), the full court adopted the tort of wrongful discharge as an exception to the traditional at-will doctrine governing termination of employment, where the discharge violates "a clear mandate of public policy." Id. at 164. Although we left future applications of the tort to be decided on a case-by-case basis, we stressed that any such application must be "carefully tethered to fundamental policies" implicit in "statute[s] or municipal regulation[s], or in the Constitution." Id. at 164. More important for present purposes, in succeeding cases divisions of the court have declined to apply this cause of action where the policy in question was not impliciti.e., embodied in some related statutebut rather was "explicit and [might] apply directly" through a statute expressly addressing the matter. Freas v. Archer Servs., Inc., 716 A.2d 998, 1002 (D.C.1998) (rejecting application of Carl as unnecessary where suit was based on statutorily banned and actionable retaliation for exercising rights under the Workers' Compensation Act); see also McManus v. MCI Communications Corp., 748 A.2d 949, 957 (D.C.2000) (noting and applying the court's previous rejection of "the argument ... that a public policy exception to the at-will doctrine applies to an alleged statutory violation"). That deference to the legislative role commends itself to us in this case as well. The existence of § 7-2551.02 reinforces our unwillingness to relax basic "liability-limiting" standards, Lacy, supra, of duty, foreseeability, and causal remoteness to recognize the cause of action for common-law negligence the plaintiffs advocate.[9] 646 IV. Public Nuisance Much of what we have said so far explains why we also reject on the pleadings the claim for public nuisance brought by the District of Columbia alone. The RESTATEMENT (SECOND) OF TORTS § 821B (1) (1979) defines that tort as "an unreasonable interference with a right common to the general public." The District argues that this cause of action does not derive from its negligence claim, but is an independent cause of action with distinct elements, namely, (1) an interference with a public right (2) that is unreasonable. Although this court referred to that definition of the tort in B & W Mgmt., Inc. v. Tasea Inv. Co., 451 A.2d 879 (D.C.1982), the defendants and their amici argue that we have never recognized a public nuisance claim that did not involve either ownership (and control of) real property, criminal violations, or independently tortious conduct such as negligencenone of which is alleged, or sufficiently alleged, in this case. As an independent tort, claims of nuisance have indeed not been viewed favorably by this court. In recent cases we have even said that "nuisance is a type of damage and not a theory of recovery in and of itself," Jonathan Woodner Co. v. Breeden, 665 A.2d 929, 934 (D.C.1995), so that recovery in such cases, "if at all, [must be] on the theory of negligence," Bernstein v. Fernandez, 649 A.2d 1064, 1072 (D.C. 1991) (citation and quotation marks omitted), or another theory such as intentional infliction of emotional distress. Jonathan Woodner Co., supra. The District argues that these statements were made in the context of claims for private, not public, nuisance but our decision in Bernstein noted that, "for the purpose of our holding in this case," the point did not depend on "whether the alleged nuisance is public or private." Bernstein, 649 A.2d at 1072 n. 8. Even the RESTATEMENT definition explains "nuisance" by "reference to two particular kinds of harmthe invasion of two kinds of interests[, public and private]by conduct that is tortious only if it falls into the usual categories of tort liability." RESTATEMENT (SECOND) OF TORTS § 821A cmt. c (1979) (emphasis added). The defendants here do not dispute, however, that a separate tort of public nuisance is cognizable in the District of Columbia, or that the RESTATEMENT provides the appropriate definition: "an unreasonable interference with a right common to the public." We accept the case before us on that basis. The question, nevertheless, is whether the District has sufficiently pleaded that cause of action, and the answer depends critically on how prepared we are to loosen the tort from the traditional moorings of duty, proximate causation, foreseeability, and remoteness that have made us reject the plaintiffs' claim of negligence. For the following reasons, we are not convinced that the public nuisance cause of action the District alleges is sufficiently distinguishable from its negligence claim to justify a different result. The issue was defined pointedly by the majority and dissenting opinions in People ex rel. Spitzer v. Sturm, Ruger & Co., 309 A.D.2d 91, 761 N.Y.S.2d 192, leave to appeal denied, 100 N.Y.2d 514, 769 N.Y.S.2d 200, 801 N.E.2d 421 (2003), where the state's suit for public nuisance essentially mirrored the District's allegations in this case: Plaintiff's complaint ... claims that illegally possessed handguns are a common-law public nuisance because they endanger the health and safety of a significant portion of the population; interfere with, offend, injure and otherwise cause damage to the public in the exercise of rights common to all; and that, 647 after being placed on actual and constructive notice that guns defendants sell, distribute and market are being used in crimes, they have, by their conduct and omissions, created, maintained and contributed to this public nuisance, because they manufacture, distribute and market handguns allegedly in a manner that knowingly places a disproportionate number of handguns in the possession of people who use them unlawfully. Plaintiff further claims that defendants are on notice that certain types of guns, and guns sold in certain locales, are disproportionately used in the commission of crimes. Id. at 194. The dissent in Sturm, Ruger took the position that "[a] negligence analysis, with its requirement of the existence of a duty limited by concomitant considerations of proximate cause, foreseeability, fault, intent, and tempered by notions of the equitable apportionment of economic liability, is inapposite to an action for abatement of a public nuisance brought by the state in the proper exercise of its police powers." Id. at 208 (Rosenberger, J., dissenting). The majority rejected that proposition, in large part "based on the reasoning and implications of Hamilton v. Beretta, [U.S.A., Corp., supra]." Sturm, Ruger, 761 N.Y.S.2d at 194. It determined that "much of the Court[of Appeals'] reasoning in dismissing the Hamilton negligent marketing complaint logically, and most aptly, applies to our consideration of this plaintiff's common-law public nuisance claim." Id. at 196. In particular, the Hamilton court's concern about "potentially limitless liability and about the unfairness of imposing liability for the acts of another" was "common to both negligent marketing and public nuisance claims," because to disregard "the existence, remoteness, nature and extent of any intervening causes between defendants' lawful commercial conduct and the alleged harm" would invite "a flood of limitless, similar theories of public nuisance, not only against these defendants, but also against a wide and varied array of other commercial and manufacturing enterprises and activities." Id. at 196-97. Whereas New York decisions validating public nuisance claims had "involve[d] specific harm directly attributable to defendant or defendant's activity," id. at 198 n. 2, the present complaint would "impose[] an undefined duty of care on handgun manufacturers and distributors," id. at 200, despite the "intervention of unlawful and frequently violent acts of criminalsover whom defendants have absolutely no controlwho actually, directly, and most often intentionally, cause the cited harm." Id. at 199. The court concluded that the legislative and executive branches were "vastly better suited to address" the "societal problems associated with, or following, legal handgun manufacturing and marketing," "problems which may be as remote from a defendant's conduct and control as these." Id. at 203. We agree with this reasoning, and are similarly unwilling to recognize a claim of common-law public nuisance that disregards, or greatly dilutes, the liability-limiting factors applied in part III, supra. The sheer number of causal links, and resulting attenuation, that underlie the District's claim of injury from the defendants' invasion of a public right were described by the Supreme Court of Connecticut in a similar suit brought by the city of Bridgeport: The manufacturers sell the handguns to distributors or wholesalers and ... those sales are lawful because federal law requires that they be by licensed sellers to licensed buyers. The distributors then sell the handguns to the retailers, sales that, again, are required by federal law to be by licensed sellers to 648 licensed buyers. The next set of links is that the retailer then sells the guns either to authorized buyers, namely, legitimate consumers, or, through the "straw man" method or other illegitimate means, to unauthorized buyers, sales that likely would be criminal under federal law. Next, the illegally acquired guns enter an "illegal market." From that market, those guns end up in the hands of unauthorized users. Next, either the authorized buyers misuse the guns by not taking proper storage precautions or other unwarned or uninstructed precautions, or the unauthorized buyers misuse the guns to commit crimes or other harmful acts. Depending on the nature of the conduct of the users of the guns, the plaintiffs then incur expenses for such municipal necessities as investigation of crime, emergency and medical services for the injured, or similar expenses. Finally, as a result of this chain of events, the plaintiffs ultimately suffer ... increased costs for various municipal services,... injuries and deaths of Bridgeport's residents, ... and a negative impact on the ... ability of the residents to live free from apprehension of danger. Ganim v. Smith & Wesson Corp., 258 Conn. 313, 780 A.2d 98, 123-24 (2001).[10] The court rejected a claim of public nuisance brought by "a plaintiff situated as remotely from the defendants' conduct as these plaintiffs are, or who present[] a chain of causation as lengthy and multifaceted as these plaintiffs have." Id. at 133. Other courts likewise have rejected public nuisance as a basis for holding gun manufacturers and distributors liable, either because they found no duty owed to the public at large to prevent guns from ending up in the hands of criminal wrongdoers, or for reasons of attenuation, remoteness, or inability of those defendants to control the nuisance. See generally Tioga Pub. School Dist. # 15 v. United States Gypsum Co., 984 F.2d 915, 920 (8th Cir.1993) ("[L]iability for damage caused by a nuisance turns on whether the defendant is in control of the instrumentality alleged to constitute a nuisance, since without control a defendant cannot abate the nuisance."). The court in Camden County Bd. of Chosen Freeholders v. Beretta, U.S.A., Corp., 273 F.3d 536 (3d Cir.2001), for example, recited "a chain of seven links" necessary to "connect the manufacture of handguns with municipal crime-fighting costs," and held that [t]his causal chain is simply too attenuated to attribute sufficient control to the manufacturers to make out a public nuisance claim. In the initial steps, the manufacturers produce lawful handguns and make lawful sales to federally licensed gun distributors, who in turn lawfully sell those handguns to federally licensed dealers. Further down the chain, independent third parties, over whom the manufacturers have no control, divert handguns to unauthorized owners and criminal use. Id. at 541. The same court in City of Philadelphia v. Beretta, U.S.A., Corp., 277 F.3d 415 (3d Cir.2002), rejected the city's 649 attempt "to shorten the causal chain by arguing that the `thriving illegal market ... injures [it], even before any guns acquired in the illegal market are actually used in the commission of a crime.'" Id. at 424. This assertion, the court explained, "does not reduce the links that separate a manufacturer's sale of a gun to a licensee and the gun's arrival in the illegal market through a distribution scheme that is ... lawful" and a succession of unlawful third-party acts (such as straw purchases) "likely [to be] ... long[] and ... varied." Id. (footnote omitted). Most recently, the Supreme Court of Illinois unanimously rejected a public nuisance claim by the City of Chicago almost identical to the one made here (unlike in the present suit, the defendant-class there included retail gun dealers as well as manufacturers and distributors). See City of Chicago v. Beretta, U.S.A. Corp., 213 Ill. 2d 351, 290 Ill. Dec. 525, 821 N.E.2d 1099 (2004). Recognizing first that the gun manufacturers and distributors were "highly regulated by state or federal law," the court held that a claim for public nuisance could be brought against them only if, at a minimum, they had negligently conducted their business operations, which in turn presupposed that they owed a duty to the Chicago public "to exercise reasonable care to prevent their firearms from ending up in the hands of persons who use and possess them illegally in the City of Chicago." Id. at 1109. The court found no such "duty [of the manufacturers and distributors] owed to the public at large," explaining: It is reasonably foreseeable, in a nation that permits private ownership of firearms, that criminals will obtain guns and it is not only likely, but inevitable, that injuries and death will result. It is less foreseeable to these defendants that the criminal conduct of individuals who illegally take firearms into a particular community will result in the creation of a public nuisance there. Further, despite plaintiffs' suggestion that the only burden they would place on defendants is the loss of sales to criminals, the magnitude of the burden that plaintiffs seek to impose on the manufacturer and distributor defendants by altering their business practices is immense. Finally, plaintiffs predict only positive consequences if this duty is recognizedthe city will be safer and lives will be saved. Such positive consequences are speculative at best, being based on the assumption that criminals will not be able to obtain guns manufactured by other companies and sold by other dealers. The negative consequence of judicially imposing a duty upon commercial enterprises to guard against the criminal misuse of their products by others will be an unprecedented expansion of the law of public nuisance. Id. at 1126 (emphasis added). Even as to the retail dealer defendants, alleged (inter alia) to have sold firearms regularly to Chicago buyers although "the words or behavior of the buyers indicate[d] an intention to use the weapon illegally," id. at 1107, the Illinois court rejected the claim that they were the "legal cause" of the public nuisance alleged. The court pointed to "the link between the questions of the existence of a duty and the existence of legal cause" inasmuch as "[b]oth depend on an analysis of foreseeability." Id. at 1136. It noted that it was "not faced with the question of whether a gun dealer might be held liable for negligently entrusting a weapon to an individual buyer when it is foreseeable that the buyer might allow a third party to possess or use the gun illegally." Id. at 1137. Rather, the "plaintiffs argue that it is foreseeable to these defendants that the aggregate effect of numerous sales transactions occurring 650 over time and in different multiple locations operated by businesses with no ties to each other will result in the creation of a public nuisance in another city." Id. The court responded that "it is not at all clear that [this] condition would cease to exist even if these particular defendants entirely ceased selling firearms": The manufacture and sale of firearms is legal. There is a market for these products that is served by thousands of dealers all across the country. The sales that would otherwise have been made by these dealers would be made by others. Ultimately, there would be a shift in market share between these dealers and others and, perhaps, an increase in the price of illegal weapons "on the street" as those intent on illegal ownership had to go further afield in search of weapons to buy. Id. As in the case of the manufacturers and distributors, the court found that "the consequences of imposing a duty upon the dealer defendants to prevent the creation of a public nuisance in the city of Chicago by those intent on illegally possessing and using guns in the city are ... far-reaching." Id. at 1138. It concluded: [T]he alleged public nuisance is not so foreseeable to the dealer defendants that their conduct can be deemed a legal cause of a nuisance that is the result of the aggregate of the criminal acts of many individuals over whom they have no control. This is one of those "instances in which a party may have contributed in some remote way [to the harm] and yet it is inappropriate to subject that party to tort liability." Id. (quoting Sturm, Ruger, 761 N.Y.S.2d at 202) (emphasis added; internal quotation marks omitted). Applied to the manufacturer and distributor defendants before us, we agree with the Illinois court's analysis. The District contends that these defendants are aware of, and in some ways even complicit in, the practices of certain "notorious" gun dealers in the counties surrounding the District of Columbia who sell firearms indiscriminately (particularly through straw sales) to persons they know or should know intend to use or possess them in the District of Columbia. But even assuming that the defendants can be said to exercise some control over the business practices of those independent dealers, the District has not allegedany more than did the plaintiffs in City of Chicagoreason to believe that the exercise of that control would abate the nuisance of guns unlawfully in the hands of persons in the District to any perceptible degree. Deplorable though these facts may be, the ready availability of firearms in the nation at large, and the sheer number and variety of opportunities by which persons intent on acquiring them unlawfully can do so, counsel strong restraint on the part of a court asked to hold defendantsindividual or corporateanswerable for a common-law nuisance that "result[s from] the aggregate of the criminal acts of many individuals over whom they have no control." City of Chicago, 290 Ill. Dec. 525, 821 N.E.2d at 1138. In keeping with our own decisions and others we have found persuasive, we decline to relax the common-law limitations of duty, foreseeability, and direct causation so as to recognize the broad claim of public nuisance the District has alleged. In this regard, moreover, what we stated at the end of our discussion of negligence, part III, supra, remains pertinent: The legislature, by enacting D.C.Code § 7-2551.02, has eased the liability-limiting elements of traditional tort law to create a cause of action against gun manufacturers and distributors for injuries to individuals caused by a particular class of lethal firearms having little or no social utility. In 651 these circumstances, we are doubly unpersuaded of the necessity or wisdom of adopting judicially a right of action for public nuisance applied to the manufacture and sale of guns generally, where an effect may be a proliferation of lawsuits "not merely against these defendants[] but ... against ... other types of commercial enterprises"manufacturers, say, of liquor, anti-depressants, SUVs, or violent video games"in order to address a myriad of societal problems ... regardless of the distance between the `causes' of the `problems' and their alleged consequences." Sturm, Ruger, 761 N.Y.S.2d at 203. V. Strict Liability In Count I, the plaintiffs all have brought suit under D.C.Code § 7-2551.01 et seq. (2001), the Assault Weapon Manufacturing Strict Liability Act of 1990 (the "SLA" or "Act"). The operative provision of the statute, § 7-2551.02, states: Any manufacturer, importer, or dealer of an assault weapon or machine gun shall be held strictly liable in tort, without regard to fault or proof of defect, for all direct and consequential damages that arise from bodily injury or death if the bodily injury or death proximately results from the discharge of the assault weapon or machine gun in the District of Columbia. The SLA defines "assault weapon" to include a number of specific products, and invests "machine gun" with the same meaning defined in D.C.Code § 7-2501.01(10), i.e., "any firearm which shoots, is designed to shoot, or can be readily converted or restored to shoot: (A) Automatically, more than 1 shot by a single function of the trigger; [or] (B) Semiautomatically, more than 12 shots without manual reloading." In enacting the SLA, the D.C. Council understood assault weapons to "include both automatic and semi-automatic weapons," as well as "some handguns and rifles," a class of weapons it found have little or no social benefit but at the same time pernicious consequences for the health and safety of District residents and visitors. See SLA § 2(2), D.C. Law 8-263 [Act 8-289], § 2, 37 DCR 8482 (Dec. 28, 1990) (hereafter "Findings"). The trial court dismissed this count as to all defendants, concluding that (1) the statute provides no cause of action to the District of Columbia and (2), in any case, (a) the plaintiffs failed to state a claim within the Act and (b) the SLA is an unconstitutional attempt at extraterritorial regulation, violating both the Commerce Clause and principles of due process. We therefore confront three issues: A. Does the SLA, or any other statute by implication, give the District of Columbia a right of recovery for liability under the SLA; B. Did the complaint sufficiently plead the defendants' liability to the plaintiffs under the SLA; and, if so, C. Does the SLA impermissibly burden interstate commerce or violate due process? We answer these questions in order. A. District of Columbia "The text of an enactment is the primary source for determining its drafters' intent." Stevenson v. District of Columbia Bd. of Elections & Ethics, 683 A.2d 1371, 1376 (D.C.1996) (citation and quotation marks omitted). "In the ordinary case, absent any indication that doing so would frustrate [the legislature's] clear intention or yield patent absurdity, our obligation is to apply the statute as [the legislature] wrote it." Hubbard v. United States, 514 U.S. 695, 703, 115 S. Ct. 1754, 131 L. Ed. 2d 779 (1995) (citation and internal quotation marks omitted); see also Peoples Drug Stores, Inc. v. District of 652 Columbia, 470 A.2d 751, 753-54 (D.C.1983). At the same time, we do not read statutory words in isolation; the language of surrounding and related paragraphs may be instrumental to understanding them. See Carey v. Crane Serv. Co., 457 A.2d 1102, 1108 (D.C.1983). "Statutory construction is a holistic endeavor, and, at a minimum, must account for a statute's full text, language ..., structure, and subject matter." United States Nat'l Bank of Oregon v. Independent Ins. Agents of Am., 508 U.S. 439, 455, 113 S. Ct. 2173, 124 L. Ed. 2d 402 (1993) (citation and internal quotations marks omitted). Applying these standards, we hold that the SLA confers a right of action on individuals who are injured, but not the District of Columbia. The statute makes manufacturers and others strictly liable in tort "for all direct and consequential damages that arise from bodily injury or death if the bodily injury or death proximately results from the discharge of" one of the enumerated firearms. Section 7-2551.02 (emphasis added). Bodily injury or death self-evidently can happen only to individual persons, not corporate entities. Surrounding provisions of the statute confirm the purpose to give redress to individuals. The statute does "not operate to limit in scope any cause of action, other than that provided by this [subchapter], available to a person injured by an assault weapon." Section 7-2551.03(c) (emphasis added). And, it affords no right of action to "a person injured by an assault weapon while committing a crime," or to one seeking recovery "for a self-inflicted injury" resulting from "a reckless, wanton, or willful discharge of an assault weapon." Section 7-2551.03(b) & (e) (emphases added). The subject of these provisions, then, is a right of actiongranted, preserved, or withheldof individuals, not government, to sue for damages arising from bodily injury or death traceable to assault weapons.[11] In its brief to the division, the District distinguished between the verb the legislature used "arise from"and others it might have used if it meant to restrict the class of those entitled to recover damages to individuals. "Individuals' injuries," the District reasoned, "are the source of the District's damages under the SLA, including the costs of law enforcement and healthcare services that `arise from' the `bodily injury or death' of individuals." Br. for D.C. to Div. at 38; see also Reply Br. for D.C. to Div. at 23 (claiming a right under the SLA "to recover the expenses that it [has] incurred for law enforcement, health-care services, paid leave of employees, and other services" attributed to gun violence). But one need only consider the magnitudethe unboundednessof such "damages" to realize the implausibility of the argument that the Council provided for them in the SLA by its choice of a verb and nothing else. "Arise from" may well connote a causal relation less direct and immediate than, say, "result from," but to freight it with a legislative intent to include the vast array of law enforcement costs and governmental health-care services attributable to assault weapon injuries as recoverable under the statute demands far more than the verb alone can 653 bear. Neither it nor the addition of "consequential" to the "direct" damages recoverable expands, in our judgment, the class of those given a cause of action by the SLA. The District asserts, however, an additional and more limited claim for damages that we conclude has validity. The complaint alleges that in addition to the right of action the SLA gives the District (a claim we have rejected), the District may recover under two other statutes the medical and related expenses it has incurred as a result of third-party wrongful conduct. Specifically, D.C.Code § 4-601 et seq. (2001), the Health-Care Assistance Reimbursement Act of 1984 (HCARA), grants the District "an independent, direct cause of action against [a] third party for the unreimbursed value or cost of ... health-care assistance," whenever the District has "provide[d] health-care assistance to a beneficiary who has suffered an injury or illness under circumstances creating liability in [that] third party." Id. § 4-602(a). "Beneficiary" means "any individual who has received health-care assistance from the District and, if applicable, that individual's guardian, conservator, personal representative, estate, dependants, and survivors." Id. § 4-601(1). Another statute, D.C.Code § 5-601 et seq. (2001), the Medical Care Recovery Act of 1978 (MCRA), similarly gives the District a "right to recover" health-care and funeral expenses it has paid for police officers and firefighters, and the costs of their extended absence with pay, from third-parties whose tortious conduct resulted in injuries to those employees. Id. § 5-602. Applied to this case, both statutes effectively give the District rights of "legal subrogation," D.C.Code § 4-602(b), to claims a beneficiary or specified District employee may have against a defendant under the SLA. Relying on these provisions, the complaint alleges that as a proximate result of the defendants' conduct, the District "has incurred and will incur costs that are recoverable under [the HCARA and the MCRA] including: (1) health care costs and Medicaid expenses in treating victims of gun violence ...; (2) costs of care and treatment provided to officers and members of the Metropolitan Police Department and the Fire Department of the District of Columbia [injured by guns] ...; and (3) leave of absence wages and other assistance and compensation paid or to be paid police officers and firefighters... on account of their having suffered gun injuries." Complaint, ¶ 137. None of the currently named plaintiffs fits the latter two categories, but two appear to fall within the first. Thus, as to the plaintiff Bryant Lawson, the complaint alleges that as a result of injuries he suffered from bullets "most likely ... fired by a `machine gun' ... manufactured, imported, or sold by one of the [d]efendants," Complaint, ¶ 56, he "relied on Medicaid to pay for the surgery, hospitalization, medications, and rehabilitation he needed because of his gunshot wounds" and he "continues to rely on Medicaid to treat the frequent problems that result from his being a quadriplegic." Complaint, ¶ 58. Regarding a second plaintiff, Gregory Ferguson, the complaint alleges that as a proximate cause of having been struck by bullets from an AK-47-type weapon, he "spent several days in D.C. General Hospital and over a year in physical therapy." As to these individuals, the HCARA authorized the District to "[i]ntervene ... in [this] proceeding brought by the beneficiary," D.C.Code § 4-604(a)(2), to attempt to recover nonreimbursed medical expenses incurred by the District for treatment. It should be viewed as having done so, and 654 may remain in the case for that purpose.[12] B. Rule 12(b)(6) By its terms, § 7-2551.02 requires proof tying an assault weapon or machine gun that causes death or bodily injury to a particular manufacturer, importer, or dealer ("Any manufacturer, [etc.] of an assault weapon ... shall be held strictly liable ... if the bodily injury ... proximately results from the discharge of the assault weapon" (emphasis added)). The trial court dismissed the individual plaintiffs' claims under the statute because none of the plaintiffs could identify in the complaint "which defendant and corresponding [machine gun or assault weapon] was involved in their respective injury or death of the relevant decedent." The court acknowledged that "[t]he involvement of a recovered weapon might potentially moot many of the legal deficiencies associated with the plaintiffs' reliance on the [SLA]," but concluded that since "none of the individual plaintiffs bases his or her case on weapons that were actually recovered, their claims are pled on pure speculation" (emphasis in original). In our view, requiring the plaintiffs to identify with particularity the weapons that caused their injuries and the manufacturers of those weapons at this early stage of the proceedings is contrary to the usual rules of pleading, and does not justify dismissal under Rule 12(b)(6). In substance, each individual plaintiff alleged that the injuries of which he or she complains were caused by an assault weapon or a machine gun as defined by the SLA.[13] "Under conventional liberal rules of `notice' pleading," West v. Morris, 711 A.2d 1269, 1271 (D.C.1998); see Super. Ct. Civ. R. 8(a), those allegations were sufficient to state a claim because dismissal under Rule 12 is proper only if it is apparent "beyond doubt the plaintiff[s] can prove no set of facts in support of [their] claim[s] which would entitle [them] to relief." Owens v. Tiber Island Condo. Ass'n, 373 A.2d 890, 893 (D.C.1977). See also Diamond v. Davis, 680 A.2d 364, 371 (D.C.1996) ("Under the Superior Court Civil Rules ... the plaintiff need only plead facts sufficient to put the defendants on notice of the claims brought against them. A plaintiff need not plead his evidence at all.") (internal citation omitted); Vincent v. Anderson, 621 A.2d 367, 372 (D.C.1993) (issue of "whether or not appellant[s] had available evidence sufficient to prove the allegations in [their] complaint" "really had nothing to do with the legal sufficiency of the complaint"). The trial court found "no excuse for [each plaintiff's] inability to assert which defendant's weapon was used to harm him, if this fact is knowable at all," but that criticism is premature, as is the court's comment that the defendant manufacturers and distributors "surely have no 655 access to the weapons that were physically associated" with the individual plaintiffs' claims. The plaintiffs point to several avenues for linking a firearm to a particular manufacturer that may be open to them in discovery, and even if all seem "speculative" to us as a way of arriving at that link, none may be rejected at this stage. See Arnold v. Moore, 980 F. Supp. 28, 37 (D.D.C.1997) (dismissal inappropriate even though prisoner-plaintiff had "fail[ed] to identify or name the [individual prison-officer] defendants who allegedly assaulted [him]"; "[i]f, after discovery, the plaintiff still has not provided the names of the defendant... officers ..., the Court may make a determination at that time whether ... judgments should be granted in favor of the defendants"); and see, by contrast, Bly v. Tri-Cont'l Indus., Inc., 663 A.2d 1232, 1236 (D.C.1995) (summary judgment properly granted manufacturers after discovery for "lack of evidence as to which of [defendant's] products" caused plaintiffs' injuries). In Conley v. Gibson, 355 U.S. 41, 78 S. Ct. 99, 2 L. Ed. 2d 80 (1957), the Supreme Court stated: [A]ll the Rules require is "a short and plain statement of the claim" that will give the defendant fair notice of what the plaintiff's claim is and the grounds upon which its rests.... Such simplified "notice pleading" is made possible by the liberal opportunity for discovery and the other pretrial procedures established by the Rules to disclose more precisely the basis of both claim and defense and to define more narrowly the disputed facts and issues. Following the simple guide of [Fed.R.Civ.P.] Rule 8(f) that "all pleadings shall be so construed as to do substantial justice,"[14] we have no doubt that [plaintiffs'] complaint adequately set forth a claim and gave the [defendants] fair notice of its basis. Id. at 47-48, 78 S. Ct. 99 (footnotes omitted). Although we are less certain in this case about the adequacy of the complaint under these principles, we likewise follow Rule 8(f)'s command in holding that the plaintiffs have satisfied the pleading requirements of Rule 8. At the same time, however, if they are unable after discovery to tie a particular defendant to a particular injury-producing weapon, they will not be entitled to proceed under the Act against that defendant. C. Constitutional Challenges Acts of the legislature are presumptively valid, see Regan v. Time, Inc., 468 U.S. 641, 652, 104 S. Ct. 3262, 82 L. Ed. 2d 487 (1984), and thus a court may invalidate an otherwise lawful enactment "only upon a plain showing that [the legislature] has exceeded its constitutional bounds." United States v. Morrison, 529 U.S. 598, 607, 120 S. Ct. 1740, 146 L. Ed. 2d 658 (2000). Nevertheless, the defendants argue that the SLA violates both the Commerce Clause and due process principles applicable to the District through the Fifth Amendment. In essence their argument is that, by imposing strict liability on firearms manufacturers for conduct that is wholly lawful where it takes placei.e., the lawful manufacture, production and distribution of firearms outside of the jurisdiction of the statutethe SLA impermissibly burdens the lawful interstate commerce of firearms and "arbitrarily" attempts to impose a regulatory scheme beyond the boundaries of the jurisdiction enacting it. We consider first the Commerce Clause argument, then the claim of violation of due process. Neither argument persuades us. 656 1. Commerce Clause "Though phrased as a grant of regulatory power to Congress, the [Commerce] Clause has long been understood to have a `negative' [or dormant] aspect that denies the States the power unjustifiably to discriminate against or burden the interstate flow of articles of commerce." Oregon Waste Sys. v. Department of Envtl. Quality, 511 U.S. 93, 98, 114 S. Ct. 1345, 128 L. Ed. 2d 13 (1994); see District of Columbia v. Eastern Trans-Waste of Md., Inc., 758 A.2d 1, 16 (D.C.2000). Of course, "[l]egislation, in a great variety of ways, may affect commerce and persons engaged in it without constituting a regulation of it, within the meaning of the Constitution." Head v. New Mexico Bd. of Exam'rs in Optometry, 374 U.S. 424, 428, 83 S. Ct. 1759, 10 L. Ed. 2d 983 (1963) (citations and internal quotation marks omitted). In particular, "the Constitution when conferring upon Congress the regulation of commerce, ... never intended to cut the States off from legislating on all subjects relating to the health, life, and safety of their citizens, though the legislation might indirectly affect the commerce of the country." Id. (internal quotation marks omitted). Under the "two-tiered approach" adopted by the Supreme Court, [w]hen a state statute directly regulates or discriminates against interstate commerce, or when its effect is to favor in-state economic interests over out-of-state interests, we have generally struck down the statute without further inquiry. When, however, a statute has only indirect effects on interstate commerce and regulates evenhandedly, we have examined whether the [s]tate's interest is legitimate and whether the burden on interstate commerce clearly exceeds the local benefits. Brown-Forman Distillers Corp. v. New York State Liquor Auth., 476 U.S. 573, 579, 106 S. Ct. 2080, 90 L. Ed. 2d 552 (1986) (citations omitted). The vice against which the first, or anti-discrimination, component of this test operates is "local economic protectionism, laws that would excite those jealousies and retaliatory measures the Constitution was designed to prevent." C & A Carbone, Inc. v. Town of Clarkstown, New York, 511 U.S. 383, 390, 114 S. Ct. 1677, 128 L. Ed. 2d 399 (1994). No serious argument is made that the SLA exhibits economic protectionism. Because there are no legal manufacturers, distributors, or sellers of assault weapons and machine guns in the District of Columbia,[15] the SLA does not discriminate in favor of in-state business or economic interests against their out-of-state counterparts. See Exxon Corp. v. Governor of Maryland, 437 U.S. 117, 125, 98 S. Ct. 2207, 57 L. Ed. 2d 91 (1978) ("[S]ince there are no local producers or refiners, such claims of disparate treatment between interstate and local commerce would be meritless."). And, contrary to what the defendants do argue, the SLA does not "directly regulate[] ... interstate commerce." Brown-Forman Distillers Corp., 476 U.S. at 579, 106 S. Ct. 2080. It does not regulate in any direct sense, but instead imposes liability in tort for harm caused by an abnormally dangerous subset of firearms; and it limits that right of action to injuries incurred in the District of Columbia. It may have effects outside of the District if manufacturers alter their business practices to avoid that liability, but "[l]egislation ... may affect commerce and persons engaged in it without constituting a regulation of it, within the meaning of the Constitution." 657 Head, 374 U.S. at 428, 83 S. Ct. 1759 (citation and internal quotation marks omitted). See Sherlock v. Alling, 93 U.S. 99, 103, 23 L. Ed. 819 (1876) (state statute "declar[ing] a general principle respecting the liability of all persons within the jurisdiction of the State for torts resultin[g] in the death of parties injured" does not offend the dormant Commerce Clause); Stone v. Frontier Airlines, Inc., 256 F. Supp. 2d 28, 46 (D.Mass.2002) (rejecting argument that "the dormant Commerce Clause precludes state tort law from regulating any activity that, while having local effects, also effectuates some external consequences"). The defendants rely primarily on Brown-Forman, supra, and Healy v. The Beer Institute, 491 U.S. 324, 109 S. Ct. 2491, 105 L. Ed. 2d 275 (1989), both of which struck down state price control or "price affirmation" statutes that had "the undeniable effect of controlling commercial activity occurring wholly outside the boundary of the State" that enacted them. Id. at 337, 109 S. Ct. 2491. But in contrast to these statutes, the Strict Liability Act "does not regulate the price of any out-of-state transaction, either by its express terms or by its inevitable effect." Pharmaceutical Research & Mfrs. of Am. v. Walsh, 538 U.S. 644, 669, 123 S. Ct. 1855, 155 L. Ed. 2d 889 (2003) (emphasis added; internal quotation marks omitted). That the risk it creates of damage awards in the District may conceivably affect the defendants' pricing or insurance decisions related to a limited class of the products they manufacture is not the "direct[] control[ of] commerce," Healy, 491 U.S. at 336, 109 S. Ct. 2491 that the Commerce Clause forbids without more. The validity of the SLA thus depends on whether it "imposes a burden on interstate commerce that is `clearly excessive in relation to the putative local benefits.'" C & A Carbone, Inc., 511 U.S. at 390, 114 S. Ct. 1677 (quoting Pike v. Bruce Church, Inc., 397 U.S. 137, 142, 90 S. Ct. 844, 25 L. Ed. 2d 174 (1970)). State regulation on subjects "relating to the health, life, and safety of ... citizens," Head, 374 U.S. at 428, 83 S. Ct. 1759 receives special deference in that analysis. See Smith v. District of Columbia, 436 A.2d 53, 58 (D.C.1981); Electrolert Corp. v. Barry, 237 U.S.App. D.C. 328, 331, 737 F.2d 110, 113 (1984). The "benefits" of the SLA to the District of Columbia are reflected in the legislative findings that accompanied its passage. The D.C. Council found (a) that "the increase in homicides in the District has been accompanied by a proliferation of use of assault weapons (i.e., automatic and semi-automatic guns) in the community," with "[s]emi-automatic handguns represent[ing] a growing percentage of the handguns recovered by the [police and] ... involved in handgun crime"; (b) that "[a]ssault weapons, and the manufacture and distribution of assault weapons are abnormally and unreasonably dangerous, and pose risks to the citizens of and visitors to the District which far outweigh any benefits that assault weapons may bring"; (c) that "[i]t is foreseeable by manufacturers and distributors of assault weapons that the criminal or accidental use of assault weapons will cause injury and death"; and (d) that the manufacture and distribution of these weapons "are among the proximate causes of the rising number of homicides in the District, exposing the citizens [of] and visitors to the District to a high degree of risk of serious harm." Findings (9), (10), (12), (13), & (14), 37 DCR 8483. The legislation, in short, addresses a pressing concern for public safety by giving innocent victims of gun violence in the District a cause of action against manufacturers or dealers for injuries caused by particularly dangerous firearms whose destructiveness far outweighs any legitimate utility they have. 658 In contrast to this strong governmental interest, any effect the SLA would have on interstate commerce is "incidental ... [and not] clearly excessive in relation to the ... local benefits." Pike, 397 U.S. at 142, 90 S. Ct. 844. Only firearms the Council has classified as "abnormally and unreasonably dangerous"those designed essentially to kill or intimidate, and for no other purpose in private handsare covered by the Act, and liability attaches only for death or injuries resulting from the discharge of one of these weapons in the District of Columbiaand then only when the link has been established between a specific manufacturer and the gun that caused the injury. Moreover, assault weapons "originally distributed to a law enforcement agency or ... officer" are excluded from the statute's reach, § 7-2551.03(a), as are firearms used by persons injured while committing crimes or who injured themselves.[16] Section 7-2551.03(b), (e). Given these limitations, it is not apparent to us why the SLA's effect on interstate commerce is greater than that of other state laws imposing liability in tort on manufacturers of defective or abnormally dangerous products. See, e.g., Tigue v. E.R. Squibb & Sons, Inc., 136 Misc. 2d 467, 518 N.Y.S.2d 891, 897 (N.Y.Sup.Ct.1987), aff'd, 139 A.D.2d 431, 526 N.Y.S.2d 825 (1988), aff'd sub nom. Hymowitz v. Eli Lilly & Co., 73 N.Y.2d 487, 541 N.Y.S.2d 941, 539 N.E.2d 1069 (1989) (holding that relaxation of the traditional product identification requirement in tort law to provide a forum to innocent victims of the drug DES was not a "clearly excessive" burden "in relation to the putative local benefits" and, hence, was not violative of the Commerce Clause). The defendants profess alarm that the SLA, if upheld, will require them to alter their legal business practices on a national and international level. But given the limitations on the reach of the Act we have described, that fear seems fanciful, especially since it stems mainly from concern with the broader remedies the plaintiffs have soughti.e., injunctive and "abatement" relieffor the alleged negligence and public nuisance,[17] claims we have rejected here. In any event, the fact that exposure to "product liability in tort, whether strict or otherwise," may also affect commercial decisions by actors in other states, such as ... manufacturers, does not implicate the Commerce Clause. Differences in the conditions and risks of doing business from state to state are in part the inevitable result of any state economic regulation, but the effects that these differences have on commercial decisions, even those that involve interstate trade, are not by themselves nearly so direct as to `affect commerce' in the constitutional sense. Bowman v. Niagara Mach. & Tool Works, Inc., 832 F.2d 1052, 1056 (7th Cir.1987) (emphasis in original). 2. Due Process "A person who sets in motion in one State the means by which injury is inflicted in another may, consistently with the due process clause, be made liable for that injury whether the means employed be a responsible agent or an irresponsible instrument." Young v. Masci, 289 U.S. 253, 258, 53 S. Ct. 599, 77 L. Ed. 1158 (1933). As we have seen, the SLA imposes liability on out-of-state manufacturers of 659 firearms (there are none in the District) for injuries caused to innocent persons from the "discharge of [an] assault weapon or machine gun in the District of Columbia." D.C.Code § 7-2551.02 (2001) (emphasis added). The defendants nevertheless argue that the SLA constitutes an attempt by the District to impose its own policy choices as to gun regulation on other states where the manufacture of machine guns is lawful, thereby violating due process. They rely principally on BMW of N. Am., Inc. v. Gore, 517 U.S. 559, 116 S. Ct. 1589, 134 L. Ed. 2d 809 (1996)or more precisely on two sentences from Gore. The first is the Court's statement that "it follows from ... principles of state sovereignty and comity that a State may not impose economic sanctions on violators of its laws with the intent of changing the tortfeasors' lawful conduct in other States." Id. at 572, 116 S. Ct. 1589. The second, providing the due process link, is that "`[t]o punish a person because he has done what the law plainly allows him to do is a due process violation of the most basic sort.'" Id. at 573 n. 19, 116 S. Ct. 1589 (citation omitted). The defendants first of all confuse punishmentand the issue of punitive damages before the Court in Gorewith a state's authority to permit compensation to victims for injuries suffered within its jurisdiction. In State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 408, 123 S. Ct. 1513, 155 L. Ed. 2d 585 (2003), which also dealt with punitive damages and applied Gore, the Court made that distinction explicit. See id. at 416, 123 S. Ct. 1513 (explaining the "different purposes" served by compensatory and punitive damages). One looks in vain in either Gore or State Farm for a suggestion that a state may not permissibly decide that certain products, whether manufactured within or outside a state, are so dangerous that their manufacturers should face strict liability in tort for injuries the products contribute to within the State. Gore, in fact, affirmed a state's right to impose "economic penalties" on out-of-state manufacturers, "whether the penalties take the form of legislatively authorized fines or judicially imposed punitive damages," so long as such penalties are "supported by the State's interest in protecting its own consumers." Gore, 517 U.S. at 572, 116 S. Ct. 1589.[18] Under Gore, the SLA would violate due process only if it penalized manufacturers "for conduct that was lawful where it occurred and that had no impact on [the District] or its residents." Id. at 573, 116 S. Ct. 1589 (emphasis added); see also State Farm, 538 U.S. at 422, 123 S. Ct. 1513 (for punitive damage purposes, "[l]awful out-of-state conduct may be probative" if it has "a nexus to the specific harm suffered by the plaintiff"). In sum, no due process issue is raised by legislation that seeks to redress injuries suffered by District residents and visitors resulting from the manufacture and distribution of a particular class of firearms whose lethal nature far outweighs their utility. See, e.g., City of Boston v. Smith & Wesson Corp., 66 F. Supp. 2d 246, 250 (D.Mass.1999) ("As plaintiffs here are seeking relief only on behalf of injured parties in Massachusetts, the holding of the Gore case does not apply."). VI. Conclusion For the foregoing reasons, the judgment of the Superior Court is affirmed in part and reversed in part, and the case is remanded for further proceedings consistent with this opinion. So ordered. 660 WAGNER, Chief Judge, concurring, in part, and dissenting, in part. In my view, the trial court properly dismissed the individual plaintiffs' claims under the Strict Liability Act, D.C.Code § 7-2551.02 (the Act) set forth in their Third Amended Complaint.[1] Under this Act, a manufacturer, importer or dealer of an assault weapon is subject to liability without fault only if a plaintiff's injuries proximately resulted from the discharge of one of the weapons of that particular manufacturer, importer or dealer. D.C.Code § 7-2551.02. In this case, as the trial court concluded, plaintiffs did not allege that any one of the twenty-five (25) named defendants and one to one-hundred (1 to 100) DOE defendants is a manufacturer, importer or dealer of the weapon that actually caused them harm.[2] Even at the en banc argument, counsel for plaintiffs/appellants had to concede that they still cannot tie any of the individual defendants to a weapon that caused harm to any one of them. Thus, plaintiffs did not and cannot plead the predicate facts to hold any of the named defendants liable for their injuries under the Act. The failure to allege an essential element of the cause of action created by the Act is fatal to plaintiffs' pleading, and defendants are entitled to dismissal under our rules and precedents. See Super. Ct. Civ. R. 12(b)(6) (failure to state a claim on which relief can be granted); see also Bible Way Church v. Beards, 680 A.2d 419, 432 (D.C.1996), cert. denied, 520 U.S. 1155, 117 S. Ct. 1335, 137 L. Ed. 2d 494 (1997) (affirming dismissal of breach of contract and tortious interference with contract claims under Rule 12(b)(6) because the complaint did not indicate that plaintiff had a contract with defendant). To withstand a motion to dismiss for failure to state a claim, a plaintiff must "`outline or adumbrate' a violation of the statute or constitutional provisions upon which the plaintiff relies, Sutliff, Inc. v. Donovan Co., 727 F.2d 648, 654 (7th Cir.1984), and connect the violation to the named defendants; Patton v. Przybylski, 822 F.2d 697, 701 (7th Cir.1987)." Brownlee v. Conine, 957 F.2d 353, 354 (7th Cir.1992) (emphasis added). Here, the complaint fails to connect plaintiffs' injuries to any of the named defendants. Even under the liberal "notice pleading" standard embodied in Super. Ct. Civ. R. 8(a)(2) and its federal counterpart, "it is still necessary that a complaint `contain either direct or inferential allegations respecting all the material elements necessary to sustain a recovery under some viable legal theory.'" Roe v. Aware Woman Ctr. for Choice, Inc., 253 F.3d 678, 683 (11th Cir.2001) (quoting In re Plywood Antitrust Litigation, 655 F.2d 627, 641 (5th Cir. Unit A Sept.8, 1981)). Identifying the party liable for a particular wrong is one of the most fundamental requirements for an adequately pleaded claim. See Elmore v. Stevens, 824 A.2d 44 (D.C.2003). In Elmore, this court rejected as inadequate a complaint that never alleged that the defendant did anything connected with plaintiff's claims. Id. at 46; see also McDonald v. Hall, 610 F.2d 16, 19 (1st Cir.1979) ("[The court's] duty to be `less stringent' with pro se complaints does not require us to conjure up unpled allegations."(quoting Hurney v. Carver, 602 F.2d 993 (1st Cir.1979)). Here, plaintiffs' failure to identify in the complaint the *661 manufacturer of the firearm which caused them harm negates any claim under the Strict Liability Act. The Supreme Court's decision in Conley v. Gibson, 355 U.S. 41, 78 S. Ct. 99, 2 L. Ed. 2d 80 (1957), quoted in the majority opinion at p. 655, does not support the conclusion that the complaint in this case is sufficient to withstand a motion to dismiss for failure to state a claim under our local strict liability statute. Conley involved a class action discrimination complaint by railroad employees against their union. The issue was whether more factual details about the alleged discrimination was required to avoid dismissal for failure to state a claim. Id. at 47, 78 S. Ct. 99. The complaint alleged, among other things, how petitioners came to be discharged or demoted, and "[d]espite repeated pleas by petitioners, the Union, acting according to plan, did nothing to protect them against these discriminatory discharges and refused to give them protection comparable to that given white employees"; that the Union failed to represent them in good faith; and, that the union's failure violated their rights under the Railway Labor Act to fair representation from their bargaining agent. Id. at 43, 78 S. Ct. 99. The defendant Union was identified clearly and placed on notice of the alleged acts or omissions forming the basis for the plaintiffs' claim of liability. Rejecting the argument that more specific facts were required to support the general allegations of discrimination, the Supreme Court held that the Federal Rules require only "`a short and plain statement of the claim' that will give the defendant fair notice of what the plaintiff's claim is and the grounds upon which it rests." Id. at 47, 78 S. Ct. 99 (quoting Fed.R.Civ.P. 8(a)(2)). The pleading standard was met in Conley; it is not met here. In Conley, the Supreme Court simply held that the complaint adequately set forth a claim under Fed. R. Civ. 8; it did not relieve the plaintiffs of the obligation of identifying the defendant as a wrongdoer and placing it on notice of the claim against it. See Elmore, supra, 824 A.2d at 46 (citing Keranen v. National R.R. Passenger Corp., 743 A.2d 703, 713 (D.C.2000)). It is fundamental that a plaintiff must disclose sufficient information to put the defendant on notice of the claim against him. Keranen, supra, 743 A.2d at 713. The Act in question here imposes strict liability only for death or injuries resulting from the discharge of a particular kind of weapon, and then only when the link has been established between a specific manufacturer and the gun that caused the injury. D.C.Code § 7-2551.02. Plaintiffs have not alleged the requisite connection between the harm they sustained and any of the defendants in this case. Therefore, the complaint is deficient for failure to plead the predicate facts to make out the statutory cause of action. This court should not force a defendant into costly pre-trial discovery when there is no showing that plaintiff can make out a cause of action from the allegations in the complaint. Sutliff, supra, 727 F.2d at 654 (citations omitted). For these reasons, I respectfully dissent from Part V.B. of the majority opinion, and I would not reach the constitutional challenges to the Act addressed in Part V.C. However, I join in Parts I through IV. A. of the opinion of the court. NOTES [1] The present opinion by the court en banc supersedes the opinion issued by a division of the court, published at 847 A.2d 1127 (D.C. 2004). [2] To illustrate, the complaint alleges that plaintiff Bryant Lawson was shot by a semi-automatic firearm in early 1997 as he tried to flee from three armed men, all of whom were subsequently convicted of aggravated assault or related crimes arising from the shooting. As a result of the shooting, Lawson is a quadriplegic and suffers other ill effects of his disabling injuries. [3] "[T]o establish negligence a plaintiff must prove a duty of care owed by the defendant to the plaintiff, a breach of that duty by the defendant, and damage to the interests of the plaintiff, proximately caused by the breach." District of Columbia v. Harris, 770 A.2d 82, 87 (D.C.2001) (citations and internal quotation marks omitted). [4] In Workman, the D.C. Circuit noted the theoretically somewhat anomalous blending of duty and foreseeability in this court's decisions ("Ordinarily, the relationship between the parties is the key to determining whether the defendant had a legally enforceable duty to the plaintiff (or her decedent), whereas foreseeability is important to issues of proximate causation and conformity to the standard of care, issues that arise only after a duty has been found."), but that nevertheless "the D.C. courts have repeatedly spoken of the heightened foreseeability requirement in terms of duty." 355 U.S.App. D.C. at 137, 320 F.3d at 265. We see no need to reconsider that framework of analysis in this case. [5] In particular, there was evidence that "crimes against persons [had been committed] in and around the school ... [including] a robbery on the school's playground; sexual assaults and other violent activity [had occurred] in the surrounding area"; and the school security system was defective due to an open rear gate, doors that would not lock, and a malfunctioning intercom, permitting "adult males [to] freely roam[] throughout the school." Doe, 524 A.2d at 34. [6] In particular, "there was no evidence of prior gun-related violence or assaults occurring at the school or [even] at any of the many cheerleading competitions that had been held anywhere in the city." Bailey, 668 A.2d at 821. [7] District of Columbia v. Carlson, 793 A.2d 1285 (D.C.2002), does not help the plaintiffs. It concerned the District's duty to maintain in working condition traffic signals installed at intersections with pedestrian crosswalks. The main issue was whether the District could reasonably foresee "that a negligent driver might strike a pedestrian crossing the street" when the traffic light was not working. Id. at 1290. Unsurprisingly, the court held that it could, even though the driver technically had "violated a criminal statute" by failing to yield the right of way. Id. But we took pains to add that the driver's negligence "was not an intentional act," id. at 1291, reflecting our awareness of how very different "the intervening act of another" was in Carlson, id. at 1290, from the unforeseeable criminal actions of third parties in Potts, Bailey, and Clement. [8] Another way of viewing it, the court said, was that no evidence had been offered "tending to show to what degree [the plaintiffs'] risk of injury was enhanced by the presence of negligently marketed and distributed guns, as opposed to the risk presented by all guns in society." Hamilton, 727 N.Y.S.2d 7, 750 N.E.2d at 1062. [9] Cf. also Williams v. Baker, 572 A.2d 1062, 1072 (D.C.1990) (en banc), where in adopting the zone of danger test limiting the class of persons who may claim negligent infliction of emotional distress, the court explained: [T]his jurisdiction should not cast itself adrift on a sea of infinite foreseeability, subject only to such arbitrary limitation as we should impose.... [T]he issue of whether a plaintiff can recover damages for fear of harm to a third person is a question of policy for the court, not one to be determined on a case-by-case determination of whether the injury was foreseeable. [10] Like the Connecticut complaint, the District's public nuisance claim alleges that the "[d]efendants' ongoing conduct has created an ongoing public nuisance of readily available handguns and machines guns ... that unreasonably interferes with District residents' enjoyment of health, safety, and peace.... As a result of the continued possession and use of these firearms, residents of the District will be killed and injured, and the public will continue to fear for its health, safety, and welfare and will be subjected to conduct that creates a reasonable apprehension of danger to person and property." Complaint, ¶ 164. [11] The legislative findings accompanying the Act reinforce this point, stating (among other things) that the manufacture and distribution of assault weapons "expos[es] the citizens [of] and visitors to the District [of Columbia] to a high degree of risk of serious harm," and "[a]s between the manufacturer or dealer of an assault weapon on the one hand and the innocent victim of the discharge of an assault weapon on the other hand, the manufacturer or dealer is more at fault than the victim." Findings (14) & (15), 37 DCR at 8483 (emphasis added). [12] Indeed, exercising its additional right to "[i]nstitute and prosecute a proceeding alone (in its own or the beneficiary's name) or in conjunction with the beneficiary" to recover such expenses, D.C.Code § 4-603(a)(3), the District is free to move to amend the complaint in conformity with the rules to include other beneficiaries with claims under the SLA whose identity has come to light during these proceedings. [13] For example, the complaint alleged that Andre Wallace, the son of plaintiff Laura Wallace, and Natasha Marsh, the daughter of plaintiff Madilia Marsh-Williams, were shot and killed by three men, at least one of whom was armed with a 9mm pistol. Complaint, ¶ 82. Nine-millimeter bullets were recovered from the bodies of both victims. Complaint, ¶ 87. "On information and belief, the bullets that killed Wallace and Marsh were fired by a `machine gun' or `assault weapon' as those terms are defined by the Strict Liability Act." Id. Only the plaintiff Lawson qualified his allegation by stating that he was "most likely" shot by a weapon covered by the Act, but that does not affect the sufficiency of the allegation. [14] See Super. Ct. Civ. R. 8(f). [15] The manufacture and distribution of machine guns is prohibited in the District, D.C.Code § 7-2504.01 (2001), as is their possession. Id. §§ 7-2502.01 & -2502.02(a)(2). [16] To that extent, the statute incorporates the common-law defense of assumption of risk. [17] See Br. for Appellees to Div. at 71 ("By the injunctive relief or `abatement' they request, plaintiffs ultimately seek broad reforms in defendants' national and international business practices according to plaintiffs' own policy preferences."). [18] The SLA does not provide for any award of punitive damages; by its terms it permits recovery only for "all direct and consequential damages." D.C.Code § 7-2551.02. [1] Each of the amended complaints added party plaintiffs. [2] The complaint alleges that plaintiffs do not know the status of the 1 through 100 DOE defendants, but that each has "engaged in the business of manufacturing, importing, marketing, distributing, selling, or dealing in firearms" and that "[e]ach regularly sells or solicits the purchase of its firearms in the District or derives substantial revenue from firearms used or consumed in the District."	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532346/	305 B.R. 386 (2004) In re CORAM RESOURCE NETWORK, INC. and Coram Independent Practice Association Inc., Debtors. The Official Committee of Unsecured Creditors, individually and assignee of the claims of Coram Resource Network, Inc., and Coram Independent Practice Association, Inc., Plaintiffs, v. Young's Medical Equipment, Inc., Defendant. Bankruptcy No. 99-2889 (MFW), Adversary No. 01-8483. United States Bankruptcy Court, D. Delaware. January 15, 2004. 387 Michael D. Debaecke, Jason Staib, Blank Rome Comisky & McCauley LLP, Wilmington, DE. Charlene D. Davis, Deidre M. Richards, Anthony M. Saccullo, Christopher A. Ward, The Bayard Firm, Edmon L. Morton, Edwin J. Harron, James L. Patton, Matthew B. McGuire, Young, Conaway, Stargatt & Taylor, Elio Battista, Jr., Blank Rome LLP, Steven T. Davis, Obermayer, Rebmann, Maxwell & Hippel LLP, Wilmington, DE, Kevin Michael Profit, Hamilton, Gaskins, Gay & Moon, PLLC, Charlotte, NC, for debtor. Gregory M. Werkheiser, Morris, Nichols, Arsht & Tunnell, William K. Harrington, Wilmington, DE, for defendants. Kenneth E. Aaron, Weir & Partners LLP, trustee. Opinion[1] MARY F. WALRATH, Bankruptcy Judge. Before the Court is the Motion filed by Thomas Young ("Young") to dismiss the complaint filed by the Official Committee of Unsecured Creditors' ("the Committee") against Young's Medical Equipment, Inc. ("YME"). For the reasons set below, the Motion to Dismiss will be denied. I. BACKGROUND On August 19, 1999, Coram Resource Network, Inc., and Coram Independent Practice Association, Inc. (collectively "the Debtors") filed voluntary petitions under chapter 11 of the Bankruptcy Code. On November 3, 2001, the Committee filed a complaint to avoid preferential payments and fraudulent transfers allegedly made to YME. On October 17, 2002, Young filed a Motion to dismiss the complaint for insufficient service of process, failure to state a claim upon which relief may be granted, and lack of capacity to prosecute avoidance actions. On October 3, 2003, the Committee filed its response to the Motion to Dismiss. A Notice of Completion of Briefing was filed on December 2, 2002. A Supplemental Notice of Briefing was filed on December 12, 2002. II. JURISDICTION This Court has jurisdiction over this adversary proceeding pursuant to 28 U.S.C. §§ 1334 and 157(b)(2)(F). III. DISCUSSION A. Standard In determining whether to grant a motion to dismiss, the Court accepts as true all material factual allegations in the complaint. See Soto v. PNC Bank (In re Soto), 221 B.R. 343, 347 (Bankr.E.D.Pa.1998) (citing Jablonski v. Pan Am. World Airways, Inc., 863 F.2d 289, 290-291 (3d cir.1988)); In re J.E. 388 Jennings, Inc., 46 B.R. 167, 169 n. 3 (Bankr.E.D.Pa.1985). A motion to dismiss for failure to state a claim should be granted where the moving party has established on the face of the pleadings that there is no material issue of fact and it is entitled to judgment as a matter of law. In re Philip Services (Del.), Inc., 267 B.R. 62, 65 (Bankr.D.Del.2001). Rule 12(b)(6) requires the court to "accept as true all of the allegations in the complaint and all reasonable inferences that can be drawn therefrom, and view them in the light most favorable to the plaintiff." Morse v. Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir.1997) (citations omitted). B. Standing As a preliminary matter, the Committee argues that Young lacks capacity to file and prosecute the Motion to Dismiss because he is not a party to the action and has not moved to intervene in the action. The Motion to Dismiss was filed pursuant to Rule 12(b)(5) and (6) of the Federal Rules of Civil Procedure, made applicable in this proceeding by Rule 7012(b) of the Federal Rules of Bankruptcy Procedure. Rule 12(b) provides: Every defense, in law or fact, to a claim for relief in any pleading, whether a claim, counterclaim, cross-claim or third-party claim, shall be asserted in the responsive pleading thereto if one is required, except that the following defenses may at the option of the pleader be made by motion: . . . (5) insufficiency of service of process, (6) failure to state a claim upon which relief can be granted. Fed. R. Bankr.P. 7012(b). The Committee argues that Young is not a pleader and thus, may not assert a defense pursuant to Rule 12(b). The Court agrees with the Committee that Young is not a "pleader" because he is neither a defendant, counter-claim defendant, cross-claim defendant nor an intervenor. See Fed. R. Bankr.P. 7012 & 7024. "In current usage, the pleader is the party asserting a particular pleading." BLACK'S LAW DICTIONARY (5th ed.1979). The Committee also argues that even if Young was a pleader, Young has not properly intervened. There are three methods by which a party seeking intervention may properly do so: section 1109(b), Rule 7024 and Rule 2018. See, e.g., In re First Interregional Equity Corp., 218 B.R. 731, 735 (Bankr.D.N.J.1997). "[W]hile a `party in interest' may have standing to intervene, the party with the interest must still separately satisfy the requirements for intervention in order to participate in an adversary proceeding." Matter of Richman, 104 F.3d 654, 658 (4th Cir.1997). In addition, "a would be intervenor bears the burden of demonstrating to the court a right to intervene." Richman, 104 F.3d at 658. The parties to this adversary proceeding are the Committee and YME. In Young's Motion to Dismiss, Young refers to himself as a "former principal of named defendant [YME] and indemnitor of [the Trust]". As such, he is not a party to this adversary proceeding. Since Young has not filed an application to intervene a discussion on the merits of such an application is not necessary. The Court concludes that, since Young is not a party to this adversary, he lacks standing to file and prosecute the Motion to Dismiss. IV. CONCLUSION For the foregoing reasons, Young's Motion to Dismiss will be denied. An appropriate Order is attached. ORDER AND NOW, this 15th day of JANUARY, 2004, upon consideration of Thomas Young's Motion to Dismiss; it is hereby *389 ORDERED that the Motion is DENIED. NOTES [1] This Opinion constitutes the findings of fact and conclusions of law of the Court pursuant to Federal Rule of Bankruptcy Procedure 7052.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532354/	872 A.2d 282 (2005) I. Shane OLSHANSKY, et al. v. REHRIG INTERNATIONAL, et al. No. 2004-184-Appeal. Supreme Court of Rhode Island. May 3, 2005. 285 Desiree M. Santilli, Providence, for Plaintiffs. Michelle M. Lataille, for Defendants. Present: WILLIAMS, C.J., GOLDBERG, FLAHERTY, SUTTELL, and ROBINSON, JJ. OPINION PER CURIAM. Unfortunately for the plaintiffs, I. Shane Olshansky (Mr. Olshansky) and his wife, Myra Olshansky (Mrs. Olshansky) (collectively plaintiffs), the wheels on their lawsuit against the defendant, Rehrig International (Rehrig or defendant), came off when they failed to conduct discovery in a timely manner. The plaintiffs have appealed from a summary judgment granted in the Superior Court, in favor of the defendant, under the theories of strict liability, negligence, breach of warranty and loss of consortium.[1] This case came before the Supreme Court for oral argument on April 6, 2005, pursuant to an order directing the parties to appear and show cause why the issues raised in this appeal should not summarily be decided. After hearing the arguments raised by counsel and examining the memoranda filed by the parties, we are of the opinion that cause has not been shown, and proceed to decide the appeal at this time. For the reasons indicated herein, we affirm the judgment of the Superior Court. I Facts and Travel The underlying facts pertaining to this case are limited. Although summary judgment was granted just one month before the case was scheduled for trial and more than two years after plaintiffs commenced the action, very little discovery was conducted, particularly by plaintiffs. The record contains only the following: one deposition of Mr. Olshansky taken by 286 defendant; plaintiffs' responses to Rehrig's request for interrogatories; and the various pleadings that plaintiffs and defendant filed. Accordingly, the facts below are gleaned entirely from Mr. Olshansky's deposition testimony and the parties' briefs. As required in an appeal from summary judgment, we resolve any inconsistencies in the light most favorable to the nonmoving party, in this case plaintiffs. Mills v. State Sales, Inc., 824 A.2d 461, 467 (R.I.2003). On November 22, 1998, Mr. Olshansky went to the Ann & Hope department store in Warwick, Rhode Island, to return a comforter for his mother. Upon arriving, Mr. Olshansky selected a shopping cart allegedly manufactured by defendant to carry the goods he was returning. Because the store would be closing shortly after his arrival, Mr. Olshansky quickly pushed the cart up and down the aisles, searching for the appropriate department. While pushing the cart around a corner, Mr. Olshansky suddenly felt himself being propelled forward; apparently, the basket portion of the cart had come apart from the wheels, causing him to fall to the floor. As a result of the accident, Mr. Olshansky claims he suffered injury to his knees, back, head and arm. In addition, he claims he was unable to continue working as he had been previously and eventually was treated for depression. On November 21, 2001, plaintiffs filed a complaint against defendant and Ann & Hope, alleging strict liability, negligence, breach of warranty and loss of consortium. Rehrig filed a cross-claim against Ann & Hope seeking contribution or indemnification; Ann & Hope did not file any responses until three years later. In May 2004, the motion justice granted defendant's motions for summary judgment. The motion justice ruled that based on the evidence on the record, "it would be impossible for the plaintiff[s] to establish a prima facie case." In his findings, the motion justice emphasized plaintiffs' failure to produce expert testimony to support any of their theories of recovery. The plaintiffs argue on appeal that expert testimony was not required for any of their claims and that the circumstantial evidence on the record was enough to survive summary judgment. In the alternative, plaintiffs asserted that this case should be remanded to the Superior Court to allow the parties time to continue conducting discovery. For the following reasons, we are not persuaded by plaintiffs' arguments and affirm the motion justice's decision for the following reasons. II Standard of Review As noted above, "[i]n ruling on a motion for summary judgment, the hearing justice reviews the evidence in the light most favorable to the nonmoving party." Mills, 824 A.2d at 467. The moving party bears the burden of proving that no genuine issues of material fact exist and the moving party is entitled to judgment as a matter of law. Id. This burden is satisfied by "submitting evidentiary materials, such as interrogatory answers, deposition testimony, admissions, or other specific documents, and/or pointing to the absence of such items in the evidence adduced by the parties." Id. (quoting Heflin v. Koszela, 774 A.2d 25, 29 (R.I.2001)). "If the moving party establishes this initial burden, the nonmoving party then must identify any evidentiary materials already before the court or present its own evidence demonstrating that factual questions remain." Id. On appeal, we review a motion justice's grant or denial of a motion for summary judgment de novo, and apply the same standards set forth above. Id. 287 III Strict Liability First, we turn to plaintiffs' strict liability claim. In Ritter v. Narragansett Electric Co., 109 R.I. 176, 192, 283 A.2d 255, 263 (1971), we adopted the doctrine of strict liability of tort in products liability cases as set forth in the Restatement (Second) Torts § 402A (1965). We held that one who sells a product in a "defective condition unreasonably dangerous" is subject to liability for harm suffered by the ultimate user or consumer if: (1) "the seller is engaged in the business of selling such a product," and (2) the product "is expected to and does reach the user or consumer without substantial change in the condition in which it is sold." Ritter, 109 R.I. at 188, 283 A.2d at 261. "In a strict liability action, the plaintiff has the burden of proving a defect in the design or manufacture that makes the product unsafe for its intended use, and also that the plaintiff's injury was proximately caused by this defect." Thomas v. Amway Corp., 488 A.2d 716, 722 (R.I.1985). A plaintiff is permitted to draw inferences of fact based on circumstantial evidence; however, simply establishing that use of the product resulted in injury will not satisfy the burden. Id. After considering all of the evidence in the light most favorable to plaintiffs, the motion justice determined that, without presenting expert testimony, plaintiffs could not establish whether a defect existed at the time the shopping cart left defendant's possession or whether that defect caused Mr. Olshansky's injuries. The plaintiffs argue that expert testimony was not required because shopping carts are within the common understanding of jurors. Although average lay persons use shopping carts every day, we conclude that only an expert who understands the mechanics of constructing such a cart could understand and explain the mechanics of the cart and whether a defect proximately caused an injury such as Mr. Olshansky's. Without more information about the defect itself, or the history of the cartincluding how long ago it left defendant's possession and what happened to it since thenno reasonable jury could find that defendant was strictly liable for Mr. Olshanksy's injuries. An expert familiar with shopping carts would be needed to explain to a jury what defect, if any, was present; whether that defect was attributable to manufacture, design, maintenance or some other factor; and whether such a defect could cause the harm Mr. Olshansky suffered. Therefore, we hold that the motion justice properly granted defendant's motion for summary judgment based on the record below because, as a matter of law, plaintiffs failed to establish a strict liability cause of action against defendant. In plaintiffs' alternative argument, they claim that this case should be remanded so that they can continue discovery and possibly seek the assistance of an expert witness. During the hearing on defendant's motion for summary judgment, however, the motion justice specifically asked how plaintiffs intended to proceed without presenting any expert testimony. The plaintiffs' lawyer responded that "[i]n the event that defense counsel is to utilize the testimony of an expert witness, then we reserve one as well." The motion justice then reminded plaintiffs' counsel that she had the burden of proving a prima facie case, and that without an expert she would be unable to do that. He also reminded plaintiff's counsel that a defendant had no burden to produce anything and, thus, it made no sense for plaintiffs to base their decision to call an expert witness on defendant's decision to do the same. To that statement plaintiffs' counsel responded: "It is our contention that when the 288 wheel assembly from the shopping cart disengaged, that is prima facie evidence of a defective product." It is clear to us, as it was to the motion justice, that plaintiffs had no intention of presenting an expert witness and, thus, they failed to meet the burden required to survive a motion for summary judgment. The motion justice clearly put plaintiffs on notice of what would be required to defeat defendant's motion, but they failed to respond accordingly. We will not step in now, on appeal, to give plaintiffs a second bite of the apple. In addition, plaintiffs assert that the motion justice improperly placed the burden on them to establish that the cart was in the same allegedly defective condition as when it left defendant's possession. This argument need not detain us long. It is well established that a plaintiff does, as the motion justice recognized, bear the burden of proving "`that the product was in a defective condition at the time that it left the hands of the particular seller.'" Ritter, 109 R.I. at 190, 283 A.2d at 263; see also Raimbeault v. Takeuchi Manufacturing (U.S.), Ltd., 772 A.2d 1056, 1063 (R.I.2001) (quoting Simmons v. Lincoln Electric Co., 696 A.2d 273, 276 (R.I. 1997)) (stating that to survive a motion for summary judgment the plaintiff must introduce evidence to demonstrate that the product was defective when it left defendant's hands, "and that any such defect was the proximate cause of [plaintiff's] injuries"). Mr. Olshansky's response during his deposition that the cart looked like all of the other carts does not, as plaintiffs contend, "create a material issue of fact that the cart was unchanged when it left the manufacturer's hands." Mr. Olshansky's comparison of one cart at Ann & Hope to other carts on the premises does not provide meaningful evidence about what condition the cart was in when it left defendant's possession. The plaintiffs' only evidence of a defect is the fact that the basket came off the wheels while Mr. Olshansky was using the shopping cart. We reiterate our statement in Thomas, 488 A.2d at 722, that simply alleging that the use of a product resulted in injury is not enough to establish product liability. Clearly, plaintiffs' argument is misplaced because they did bear the burden of proving the cart's condition when it left Rehrig's possession, and they failed to meet that burden. Perhaps the most strained of plaintiffs' strict liability arguments is the contention that, at trial, they would be able to prove that the defect was present when it left defendant's possession through the doctrine of res ipsa loquitur. A well recognized legal principle, res ipsa loquitur "establishes inferential evidence of a defendant's negligence, thus making out a prima facie case for a plaintiff, and casts upon a defendant the burden of rebutting the same to the satisfaction of the jury." McLaughlin v. Moura, 754 A.2d 95, 98 (R.I.2000) (quoting Errico v. LaMountain, 713 A.2d 791, 795 (R.I.1998)) (emphasis added). Conversely, "[u]nder the doctrine of strict liability in tort for defective design, it is immaterial whether the manufacturer was negligent * * ." Ritter, 109 R.I. at 190, 283 A.2d at 262. Undeniably, even if this case were to be tried, plaintiffs would be unsuccessful in attempting to apply the theory of res ipsa loquitur to their strict liability claim. Notwithstanding plaintiffs' flawed application of the law, the facts are such that res ipsa loquitur would fail to advance their negligence claim as well. "Res ipsa loquitur requires the occurrence of an event that would not happen without negligence, committed by an agent who was acting within the exclusive control of a defendant and without any contributory or voluntary action by the plaintiff." Lauro 289 v. Knowles, 739 A.2d 1183, 1185 (R.I.1999) (emphasis added). The shopping cart was at Ann & Hope when the accident occurred. There is no evidence whether the cart had been at the store for several years or for several hours. Regardless, it clearly was not in the exclusive control of defendant, the manufacturer of the cart, but under the control of Ann & Hope and its agents. Therefore, plaintiffs' argument under the doctrine of res ipsa loquitur fails whether improperly considered under strict liability, or correctly considered under a negligence theory. Finally, in an argument that infuses both strict liability and negligence, plaintiffs allege that defendant failed to make the shopping cart in question available for inspection and, thus, for summary judgment purposes, it should be inferred that production of the cart would be unfavorable to defendant. The plaintiffs rely on Tancrelle v. Friendly Ice Cream Corp., 756 A.2d 744, 748 (R.I.2000), presumably where we discuss the doctrine of spoliation, which allows an inference that missing evidence would be unfavorable to the party that fails to produce it. In this case, there is no evidence that the shopping cart in question either is missing or was kept from plaintiffs. The plaintiffs filed the complaint against defendant in November 2001, yet their first request for discovery was not filed until the end of April 2004less than two months before the case was set to go to trial and three weeks after defendant filed its motion for summary judgment. Although in their request for production of documents plaintiffs ask for any documents pertaining to the location of the actual shopping cart, there was no request that defendant make the shopping cart available to plaintiffs. At oral argument, defendant's attorney informed this Court that the very cart at issue has been in Rehrig's possession and available for plaintiffs' inspection since the accident occurred. Clearly, the doctrine of spoliation has no application here and we will not infer that the shopping cart is defective simply because plaintiffs have not inspected it. Once again, we conclude that plaintiffs have failed to present enough evidence to support their strict liability claims and that the motion justice was correct to grant summary judgment. IV Negligence We turn now to plaintiffs' claim of negligence. To prevail in a negligence cause of action, a plaintiff has the burden of establishing "a legally cognizable duty owed by a defendant to a plaintiff, a breach of that duty, proximate causation between the conduct and the resulting injury, and the actual loss or damage." Mills, 824 A.2d at 467-68 (quoting Jenard v. Halpin, 567 A.2d 368, 370 (R.I.1989)). "[E]xpert testimony is required to establish any matter that is not obvious to a lay person and thus lies beyond common knowledge." Id. at 468. To defeat a motion for summary judgment on a negligence claim, a plaintiff must point to or supply affidavits or other evidence to establish that the defendant's negligence proximately caused the plaintiff's injury. Id. at 467-68 (holding that the plaintiff's contention that she could prove a causal connection through expert testimony, without supplying any expert testimony at the summary judgment hearing, did not defeat the defendant's motion for summary judgment because she failed to present any evidence to substantiate her claim of negligence). As discussed above, the only facts in the record before us are those supplied by Mr. Olshansky himself through his deposition testimony and his answers to interrogatories. We know only that he claims he was 290 injured when the shopping cart he was pushing fell apart while he was shopping at Ann & Hope. The plaintiffs supplied no evidence to support their contention that defendant negligently manufactured, designed, inspected, repaired or maintained the shopping cart. No evidence exists on the record to indicate that defendant's negligence caused Mr. Olshansky's injury. We are dismayed by the fact that, even when faced with a motion for summary judgment, plaintiffs supplied no additional information to support their arguments. The plaintiffs did not depose anyone either at Rehrig or Ann & Hope; they failed to obtain any documents relating to the shopping cart or Mr. Olshansky's accident; and they failed to obtain any other evidence through discovery to prove their case. There are endless possibilities about what caused the basket to come apart from the wheels. For example, the cart could have rusted after sitting out in the elements for years at Ann & Hope, or a car could have hit the cart in the parking lot, thus dislodging the wheels. Without speculating further about what could have caused the cart to disassemble, we conclude that plaintiffs have not shown that defendant's negligence proximately caused Mr. Olshanksy's injury. Thus, the motion justice was correct in determining, as a matter of law, that plaintiffs failed to prove their negligence cause of action against defendant. V Breach of Implied Warranty The plaintiffs' allegation of breach of implied warranty of merchantability was brought under G.L.1956 § 6A-2-314 of the Uniform Commercial Code. Section 6A-2-314 provides in pertinent part: "(1) * * a warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind. * * * "(2) Goods to be merchantable must be at least such as: (a) Pass without objection in the trade under the contract description; and (b) In the case of fungible goods, are of fair average quality within the description; and (c) Are fit for the ordinary purposes for which such goods are used; and (d) Run, within the variations permitted by the agreement, of even kind, quality, and quantity within each unit and among all units involved; and (e) Are adequately contained, packaged, and labeled as the agreement may require; and (f) Conform to the promises or affirmations of fact made on the container or label if any." In Thomas, 488 A.2d at 718, the plaintiff[2] claimed that she had broken out in a severe rash as a result of using liquid soap that she had purchased from the defendant. At trial, the plaintiff presented testimony about the severity of her rash but then, after she concluded her case, the defendant's motion for a directed verdict was granted.[3] This Court affirmed the trial justice's decision, holding that the 291 "plaintiff did not present any evidence from which a jury reasonably could have inferred that [the product] * * would not pass without objection in the trade" or that it "was not of fair average quality or fit for the ordinary purpose of cleaning." Id. at 719. Once again, our holding here is based on plaintiffs' failure to present enough evidence to overcome defendant's motion for summary judgment. Nothing on the record indicates that when the shopping cart was delivered from Rehrig to Ann & Hope it "would not [have passed] without objection in the trade." Thomas, 488 A.2d at 719. Similarly, without establishing that the cart left defendant's control in a condition below "fair average quality" or unfit for the purpose of carrying goods, plaintiffs are unable to meet their burden of proving that defendant breached its implied warranty of merchantability. Id. Therefore, we affirm the motion justice's decision and hold that, as a matter of law, plaintiffs are not entitled to recover from defendant under the theory of breach of implied warranty. In Thomas, we further stated that in an action for breach of implied warranty of merchantability, "[t]he plaintiff is not bound to exclude every other possible cause of her condition but she is required to show that the probable cause was the [product]." Thomas, 488 A.2d at 719. While this statement of law certainly applies to the case before us now, we note that it was misapplied under the doctrine of implied warranty of merchantability in Thomas. As discussed above, the key to determining liability under the theory of breach of implied warranty is whether the seller breached its duty to deliver the product in the proper condition. If the seller fails to deliver the product as required, then breach has occurred and the buyer[4] may recover. The above statement of law would be better applied under a claim of negligence, for which causation is an indispensable element. Notwithstanding, there can be no doubt that here, plaintiffs certainly did not show that a defect in the cart attributable to Rehrig caused Mr. Olshanksy's condition. VI Loss of Consortium It is well settled that a loss of consortium claim "depends on the success of the underlying tort claim." Soares v. Ann & Hope of Rhode Island, Inc., 637 A.2d 339, 353 (R.I.1994). Thus, because plaintiffs' strict liability, negligence and breach of warranty claims arising from Mr. Olshansky's injuries all fail, so too must Mrs. Olshansky's claim for loss of consortium. Conclusion For the reasons stated herein, we affirm the judgment of the Superior Court. The record shall be remanded to the Superior Court. NOTES [1] The plaintiffs initially filed complaints against both Rehrig and Ann & Hope, Inc. (Ann & Hope) on November 21, 2001. Ann & Hope did not file an answer until November 4, 2004, more than five months after the May 2004 hearing at which the motion justice granted summary judgment in Rehrig's favor. Pursuant to Rule 54(b) of the Superior Court Rules of Civil Procedure, judgment was issued only with respect to Rehrig; thus Ann & Hope is not involved in this appeal. [2] The original plaintiff, Ms. Thomas, passed away before trial from causes unrelated to the lawsuit. The case proceeded with her estate's administrator substituted as plaintiff. [3] A motion for directed verdict is the precursor to a motion for judgment as a matter of law. The standard for granting a directed verdict was the same as the standard for granting a motion for judgment as a matter of law. See Adams v. Uno Restaurants, Inc., 794 A.2d 489, 491 (R.I.2002). [4] Although Mr. Olshansky is not the purchaser of the shopping cart, warranties of merchantability discussed in G.L.1956 § 6A-2-314 extend to "any person who may reasonably be expected to use, consume, or be affected by the goods." Section 6A-2-318.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532342/	305 B.R. 402 (2004) In re THE IT GROUP, INC., et al., Debtors. The IT Group, Inc., et al., Plaintiffs, v. Rochelle Bookspan, Defendant. John Accardi, et al., Plaintiffs, v. IT Corporation, et al., Defendants. Bankruptcy No. 02-10118 (MFW), Adversary Nos. 02-4756 (MFW), 02-5486 (MFW). United States Bankruptcy Court, D. Delaware. February 3, 2004. 403 404 405 Gary Adam Rubin, Skadden, Arps, Slate, Meager, Flom, Wilmington, DE, for debtors. OPINION[1] MARY F. WALRATH, Chief Judge. Before the Court are the Defendants'[2] Renewed Motions to Dismiss the Accardi Complaint and the Bookspan counterclaims. The Motions seek a determination that the IT Corporation's Deferred Compensation Plan is an unfunded "top hat" plan. In their response to the Motions, the Accardi Plaintiffs[3] and Bookspan request 406 partial summary judgment and a determination that the Deferred Compensation Plan is "funded." For the reasons set forth below, we grant the Defendants' Renewed Motions to Dismiss. I. BACKGROUND On January 16, 2002, the Debtors filed voluntary petitions under chapter 11 of the Bankruptcy Code. Previously, on July 5 1995, IT Corporation had established the Deferred Compensation Plan, which was offered to certain eligible management employees, including the Accardi Plaintiffs. Shortly before the chapter 11 petitions were filed by the Debtors, Rochelle Bookspan had filed an action in California seeking funds allegedly due to her under the terms of the Deferred Compensation Plan. Shortly after the petitions were filed, the Debtors filed a Motion seeking authority to sell substantially all their assets to the Shaw Group, Inc. Ms. Bookspan filed an objection to the sale which was resolved by the Debtors' agreement to segregate $500,000 of the sale proceeds until it could be determined whether Bookspan was entitled to any funds from the Deferred Compensation Plan. Subsequently, the Debtors filed an adversary proceeding against Ms. Bookspan seeking a declaration that the Deferred Compensation Plan was unfunded, that any sums due to her were general unsecured claims, and that the escrow should be released. Bookspan filed a counterclaim asserting her entitlement to the escrowed funds. In the interim, the Accardi Plaintiffs (including Ms. Bookspan) filed an adversary complaint seeking a declaration that the Deferred Compensation Plan was funded and that they were entitled to the funds in the Plan. The Defendants filed a Partial Motion to Dismiss the Accardi adversary which was denied with the requirement that the Accardi Plaintiffs file an amended complaint clarifying the factual basis for certain alleged oral promises to fund the Deferred Compensation Plan, the nature of the group of employees that participated in the Deferred Compensation Plan, and the allegations of alter-ego that would warrant piercing the corporate veil. The Accardi Plaintiffs filed the Second Amended Complaint on March 12, 2003. The Defendants filed the Renewed Motions to Dismiss the Accardi Complaint and the Bookspan counterclaim on March 27, 2003. At the hearings on the Renewed Motions held on May 6, 2003, the parties agreed to consolidate the Motions for determination. The parties have fully briefed the issues. II. JURISDICTION This Court has jurisdiction over these adversary proceedings as core proceedings pursuant to 28 U.S.C. §§ 1334(b) & (e) and 157(b)(2)(A), (C), & (O). III. DISCUSSION A. Top Hat Plan The Defendants seek dismissal of Bookspan's counterclaim and the Second Amended Complaint to the extent that both seek a declaration that the Accardi Plaintiffs are entitled to payment of funds due them under the Deferred Compensation Plan. The threshold issue raised by the Renewed Motions to Dismiss is whether the Deferred Compensation Plan fits the "top hat" exclusion of ERISA. Courts have generally taken an expansive view of the applicability of ERISA to 407 deferred compensation plans. See, e.g., Duggan v. Hobbs, 99 F.3d 307 (9th Cir.1996). As a result, all deferred compensation plans are covered by ERISA. 29 U.S.C. § 1002(2)(A)(ii); Kemmerer v. ICI Americas, Inc., 70 F.3d 281, 286 (3d Cir.1995); Miller v. Eichleay Eng'rs, Inc., 886 F.2d 30, 33 n. 7 (3d Cir.1989). In this case, it is undisputed that the Deferred Compensation Plan falls within the ambit of ERISA. However, the Accardi Plaintiffs assert that the Deferred Compensation Plan is a funded plan. This is significant because ERISA treats funded plans as trusts which are excluded from a debtor employer's bankruptcy estate under section 541(c)(2). See, e.g., Patterson v. Shumate, 504 U.S. 753, 758, 112 S. Ct. 2242, 119 L. Ed. 2d 519 (1992). There is an exception, however, to this ERISA exclusion. "Top hat" plans are a special breed of ERISA plans that are excluded from the substantive portions of ERISA. 29 U.S.C. §§ 1051(2), 1081(a)(3), 1101(a)(1). If a plan fits the "top hat" exclusion, ERISA does not impose a trust on the plan's funds. Consequently, section 541(c)(2) would not exclude the property in a "top hat" plan from a debtor employer's bankruptcy estate. The "top hat" exclusion applies to a "plan which is unfunded and is maintained by an employer primarily for the purpose of providing deferred compensation for a select group of management or highly compensated employees." 29 U.S.C. § 1051(2). The burden of establishing that a plan fits the "top hat" exclusion is on the party asserting that it is a "top hat" plan. See, e.g. Carrabba v. Randalls Food Mkts., Inc., 38 F. Supp. 2d 468, 477 (N.D.Tex.1999). In this case, it is undisputed that the Debtors maintained the Deferred Compensation Plan primarily for the purpose of providing deferred compensation. The parties' dispute, however, is whether the Plan is "unfunded" and whether the Plan participants are a "select group of management or highly compensated employees." 1. The Deferred Compensation Plan Is Unfunded Regarding the first element, "any determination of the `unfunded' status of a `top hat' . . . plan of deferred compensation requires an examination of the surrounding facts and circumstances, including the status of the plan under non-ERISA law." Miller v. Heller, 915 F. Supp. 651, 658 (S.D.N.Y.1996). The "essential feature" of a funded deferred compensation plan is that its assets are "segregated" from the employer's "general assets" and are not "available to general creditors if the employer becomes insolvent." Id. at 657. Compare Dependahl v. Falstaff Brewing Corp., 653 F.2d 1208 (8th Cir.1981) (finding an excess benefit plan was "funded" because the plan documents stated that the employer had secured its obligations by purchasing life insurance and had not reserved its rights to treat the policies as general unrestricted assets) with Belsky v. First Nat'l Life Ins. Co., 818 F.2d 661, (8th Cir.1987) (distinguishing Dependahl by noting that the employer reserved its right to use the policies as general assets). "A plan is funded when benefits are paid through a specific insurance policy and unfunded when they are paid from the employer's general assets." Belsky, 818 F.2d at 664. a. Plan language In this case, the recitals of the Deferred Compensation Plan track the ERISA definition of a "top-hat" plan: The purpose of this Plan is to provide specified benefits to non-employee directors 408 and a select group of management or highly compensated employees who contribute materially to the continued growth, development, and future business success of [the Debtors]. The Plan constitutes an unfunded plan that is not qualified under [Internal Revenue Code] Section 401(a). (Deferred Compensation Plan at ¶ 1.) Further, the Deferred Compensation Plan recites that it was unfunded and future payments to participants were to be made from the general, unrestricted assets of the Debtor: Participants and their Beneficiaries, heirs, successors and assigns shall have no legal or equitable right, interest or claim in any property or assets of an Employer. Any and all of an Employer's assets shall be, and remain, the general, unpledged and unrestricted assets of the Employer. An Employer's obligation under the Plan shall be merely that of an unfunded and unsecured promise to pay money in the future. (Deferred Compensation Plan at ¶ 13.1.) The Accardi Plaintiffs assert, however, that the Deferred Compensation Plan is a funded plan because a Trust was created for them. The Accardi Plaintiffs refer to the Master Trust Agreement which was specifically incorporated into the Deferred Compensation Plan. (Deferred Compensation Plan at ¶ 12.2.) However, the Master Trust Agreement itself does not provide for the creation of a true trust; instead, it provides that the assets placed in the Trust are general assets of the Debtors subject to the claims of the unsecured creditors: [T]he principal of the Trust, and any earnings thereon, shall be held separate and apart from other funds of the Company and the Subsidiaries and shall be used exclusively for the uses and purposes of the Participants and general creditors of the Company and the Subsidiaries as herein set forth. The Participants and their Beneficiaries shall have no preferred claim on, or any beneficial ownership interest in, any assets of the Trust. Any rights created under the Plans and this Master Trust Agreement shall be mere unsecured contractual rights of the Participants and their Beneficiaries against the Company and the Subsidiaries. Any assets held by the Trust will be subject to the claims of the Company's and the Subsidiaries' general creditors under federal and state law in the event of Insolvency. (Master Trust Agreement at ¶ 1.3.) Consequently, based on the plain language of the Deferred Compensation Plan and the Master Trust Agreement, we conclude that the Deferred Compensation Plan was an unfunded plan. b. Deduction of compensation The Accardi Plaintiffs argue, however, that the Deferred Compensation Plan was, in fact, funded because the Debtors physically deducted funds from the Plaintiffs' compensation and kept records of the amounts accrued in the Deferred Compensation Plan. This argument is not persuasive. The mere deduction of compensation from the employees does not render the Plan funded under ERISA. See, e.g., Kemmerer, 70 F.3d at 284 (finding a "top hat" plan unfunded despite the employer's use of "shadow" or "tracking" accounts to identify compensation which was deferred). In fact, buying or investing in accounts or funds does not necessarily defeat the unfunded status of a plan. See, e.g., Demery v. Extebank Deferred Comp. Plan, 216 F.3d 283, 287 (2d Cir.2000) (plan was "top hat" because the benefit account, while separate, was designated as "general assets" of the employer and the benefit was described as an "unfunded and unsecured 409 promise to pay in the future"); Darden v. Nationwide Mut. Ins. Co., 717 F. Supp. 388 (E.D.N.C.1989) (the existence of a separate account and its use to pay pension liabilities did not make a pension plan "funded" since the funds were "unrestricted" and able to be used for "general corporate purposes"), aff'd, 922 F.2d 203 (4th Cir.1991), rev'd on other grounds, 503 U.S. 318, 112 S. Ct. 1344, 117 L. Ed. 2d 581 (1992). Consequently, we conclude that the fact that the Debtors deducted funds from the Accardi Plaintiffs' compensation and maintained an accounting system to record these amounts is insufficient to create a "funded" plan. c. No funds were deposited Furthermore, in this case, it is undisputed that no funds were actually segregated in the Trust. At no time were funds or assets transferred to the Trust; nor were assets purchased with the amounts designated as deferred compensation. The Accardi Plaintiffs argue, nonetheless, that the existence of a right to payment under the terms of the Deferred Compensation Plan created a funded plan. For example, a participant could accept payment of the account balance in a lump sum or in equal payments over 60, 90 or 180 months. (Deferred Compensation Plan at ¶ 5.9.) We find this argument unconvincing. The Deferred Compensation Plan expressly provided that any account balance in the Plan was "a bookkeeping entry only." (Deferred Compensation Plan at ¶ 1.1) Until the participant made the election, and was actually paid, the Deferred Compensation Plan assets remained the general assets of the Debtors. Just as a trade creditor has a right to payment on an invoice, so too did the Plan participants have a general unsecured claim against the Debtors. There is nothing in the Deferred Compensation Plan or the tracking account statements that created any right of the Plan participants in specific assets of the Debtors. d. Tax treatment The tax treatment of the Deferred Compensation Plan also supports the conclusion that it was unfunded. In Kemmerer, the Third Circuit noted that deferred compensation plans are used to reduce a participant's taxable income in the present year. 70 F.3d at 286 ("Top hat plans . . . largely exist as devices to defer taxes"). In this case, no tax was withheld or paid by the Plan Participants on the deferred compensation. The Deferred Compensation Plan's terms mirrored the language required under the Internal Revenue Code to obtain and maintain tax-deferred status. See 26 U.S.C. § 457(b)(6) (funds "must remain (until made available to the participant or other beneficiary) solely the property . . . of the employer . . . subject only to the claims of the employer's general creditors"). The Accardi Plaintiffs argue, however, that there were no tax benefits for them because there was no compensation paid at all. This argument misses the mark entirely. The lack of compensation in the given period is precisely what provides the tax benefit for the participant. By deferring payment of compensation, the tax liability for that deferred amount is also deferred. This benefit is not without risk, however, because to qualify for such treatment, the deferred amount must be subject to general unsecured creditors' claims. Otherwise, the "deferred" amount would not be deferred compensation at all and the participant would owe income tax in the current period. That the company might not survive is part of the financial risk taken to reap the tax benefit. As a result, the intended (and actual) tax treatment of the Deferred Compensation Plan 410 bolsters our conclusion that it was an unfunded plan. 2. Select Group of High Level Employees The Defendants also assert that the Deferred Compensation Plan participants were a "select group of management or highly compensated employees." The Accardi Plaintiffs dispute this. The Deferred Compensation Plan documents track the ERISA language with respect to this element of the "top hat" exclusion: Participation in the Plan shall be limited to non-employee directors and to employees of an Employer who are part of a select group of management or highly compensated employees. Generally, in the case of employees, such group shall be limited to employees eligible to participate in the Company's bonus incentive plan and with a Base Annual Salary of at least $100,000. From the foregoing, the Committee shall select, in its sole and absolute discretion, employees to participate in the Plan. (Deferred Compensation Plan at ¶ 2.1.) The plain language of the Deferred Compensation Plan leaves little room for the Accardi Plaintiffs to prevail. To satisfy the requirement that a "top hat" plan be restricted to a "select group of management or highly compensated employees," the standard must be met both quantitatively and qualitatively. Senior Executive Benefit Plan Participants v. New Valley Corp. (In re New Valley Corp.), 89 F.3d 143, 148 (3d Cir.1996) ("In number, the plan must cover relatively few employees. In character, the plan must cover only high level employees"). a. Quantitative test With respect to the quantitative "select group" restriction, the highest percentage of employees covered by a plan found to have been a "top hat" plan, while not a bright line test, has been 15%. Demery, 216 F.3d at 283. In this case, the Accardi Plaintiffs submitted no proof that the Deferred Compensation Plan covered more than a "select group" of employees despite the opportunity to amend their complaint. Since the Accardi Plaintiffs bear the burden of asserting any facts that may support their position, which was not met, we conclude that the Plan meets the quantitative "select group" analysis. b. Qualitative test With respect to the qualitative character, the deferred compensation plan participants must all be "high level" employees, either "management" or "highly compensated." New Valley, 89 F.3d at 148. In this case, the Deferred Compensation Plan states that to be eligible an employee must participate in the Bonus program, have a salary in excess of $100,000, and be selected by the Deferred Compensation Committee. i. Management employees The Accardi Plaintiffs argue that several of the Plan participants were not "executive" level employees who could bind the Debtors. This argument is not persuasive. "Executive" level seniority is not required; "management" level is sufficient. In this case, the Accardi Plaintiffs were all "manager" level or higher. In fact, the salary sheet attached to the complaint lists the lowest ranking grade as "E10: Human Resource Manager II." (Second Amended Complaint, Exhibit 8.) Nearly all of the jobs listed on the salary sheet contain the title "Manager," "Director," or "Controller." (Id.) 411 The Second Amended Complaint alleged no basis for concluding that the Deferred Compensation Plan covers anything other than management level employees. Accordingly, we conclude that there is no genuine issue of material fact and hold that the Deferred Compensation Plan satisfies the "management" requirement for a "top hat" plan. ii. Highly compensated Nor is there a genuine issue of material fact regarding whether the Deferred Compensation Plan satisfies the "highly compensated" criteria of the "top hat" exclusion. In addition to the Deferred Compensation Plan language which expressly provides that the Plan covers highly compensated employees, each of the Plan participants earned salaries in excess of $100,000 per year. We conclude that this satisfies the "highly compensated" criteria for a "top hat" plan. While the test requires satisfaction of either the "management" or "highly compensated" employees standard, we conclude that the Deferred Compensation Plan meets both elements of the "top hat" exclusion. Accordingly, we find that the Deferred Compensation Plan is excluded from ERISA's substantive requirements as a matter of law. 3. Oral Representation to Plaintiff Mahoney The Accardi Plaintiffs assert, however, that an oral representation to one of them establishes that the Deferred Compensation Plan was a funded Plan. Specifically, they argue that the President and CEO of IT Corporation made an oral representation to one of the Plaintiffs, Dr. James Mahoney, that, in the event of the Debtors' insolvency, the Trust would be funded and the amounts owed to participants would be paid in full. The Accardi Plaintiffs argue that such an oral representation was made a part of the Deferred Compensation Plan and gave rise to a funding obligation on the part of the Debtors. a. Parol evidence If the Deferred Compensation Plan was ambiguous, parol evidence such as the oral representation to Dr. Mahoney could be admitted to resolve the ambiguities. To determine whether parol evidence is admissible, we must determine whether an ambiguity exists in the Deferred Compensation Plan. New Valley, 89 F.3d at 149-50. In New Valley, the Third Circuit held that a court "cannot interpret words in a vacuum, but rather must carefully consider the parties' context." Id. at 149. The Third Circuit has specifically denounced the "four corners" approach to contract interpretation when determining whether ambiguities exist. Id. at 150. Extrinsic evidence should be considered to determine whether an ambiguity exists. Id. at 149. Courts should consider "the proffer of the parties and determine if there are objective indicia that, from the linguistic reference point of the parties, the terms of the contract are susceptible of different meanings." Id. at 150 (citations omitted). The court should also review the meanings of the contract language suggested by both sides and the evidence offered to support the interpretations. Id. Possible extrinsic evidence includes the contract's structure, the parties' bargaining history, and an individual's conduct that reflects the interpretation of the contract. Id. In this case, the oral representation would add an additional term to the contract regarding funding; it would not shed light on the written terms of the Plan. Thus, we conclude that it does not suggest any ambiguity in the clear and very precise 412 language of the Deferred Compensation Plan and there is no objective indicia that the terms of the Deferred Compensation Plan, as written, are susceptible to different meanings. The Deferred Compensation Plan is not ambiguous, no extrinsic evidence is necessary to resolve any ambiguity, and the Deferred Compensation Plan documents control. b. Integration clause The Defendants argue further that, even if such an oral representation was made (which they dispute), it could not be considered an oral modification of the Deferred Compensation Plan given the unequivocal merger clause in the Annual Plan Agreement: This Agreement contains the entire understanding between parties with respect to the subject matter hereof and supersedes any prior understanding and agreements with respect thereto. (Annual Plan Agreement at ¶ 7.) The Annual Plan Agreement incorporates the Deferred Compensation Plan and its terms: The Plan Document, a copy of which has been delivered to the Participant, is hereby incorporated into and made a part of this Agreement as though set forth in full in this Agreement and vice versa. The parties to this Agreement agree to and shall be bound by, and have the benefit of, each and every provision of the Plan as set forth in the Plan Document. This Agreement and the Plan Document, collectively, shall be considered one complete contract between the parties. The Employee [sic] shall be responsible for all of the Participant's benefit under the Plan. (Annual Plan Agreement at ¶ 2.) The Accardi Plaintiffs argue, however, that "top hat" plans, in contrast to ERISA plans, do not have a writing requirement. They argue, therefore, that the lack of a writing requirement in "top hat" plans means that the Deferred Compensation Plan cannot be integrated and that oral modifications must be considered. Cf. New Valley, 89 F.3d at 149 (ERISA's writing requirement for non "top hat" plans acts as an integration clause and limits the litigants to the plan documents). No case law supports this creative argument. That a "top hat" plan may be partially or totally oral does not support the proposition that it cannot be written and merged. The case law suggests only that portions of a "top hat" plan "can" be oral, not that every oral representation "must" be included in the Plan. Id. Consequently, we agree with the Defendants that the Deferred Compensation Plan documents can and do preclude consideration of the alleged oral modification. c. Conflict with plan purpose Further, even if the Deferred Compensation Plan did permit oral modification, it did not permit the modification of the Plan as requested by the Accardi Plaintiffs. Section 9.1(e) of the Master Trust Agreement specifically provides that the Trust could not be amended in a manner that would cause the Plan participants and beneficiaries to be taxed on their benefits in any year other than the year in which the benefits are received. (Master Trust Agreement at § 9.1(e)). If the Trust was amended to be fully funded, as the Accardi Plaintiffs assert it was, it would have caused the Deferred Compensation Plan to be a funded plan under ERISA thereby triggering the taxation of benefits in the year in which the compensation was deferred rather than the year in which the benefits are ultimately paid by the Debtors. This would be contrary to the express provisions of section 9.1(e). 413 Therefore, we conclude that the oral promise, even if made, cannot modify the Plan to destroy its purpose. d. Oral modification insufficient Even if the oral representation was made and was considered a term of the Deferred Compensation Plan, the Accardi Plaintiffs would not prevail in establishing that the Deferred Compensation Plan was a funded plan. If the Debtors had placed funds in the Trust when the risk of bankruptcy arose, the Plaintiffs still would have had no right to those specific assets. The Deferred Compensation Plan documents all provide that the Plan participants have no greater right to the funds in the Deferred Compensation Plan or Trust than general unsecured creditors. Further, even the oral representation that the Deferred Compensation Plan participants would be paid in full would not establish entitlement to specific funds or create a funded plan. This representation cannot create a right in any specific assets any more than a representation to pay a trade creditor creates a trust in specific assets of a debtor. Thus, the Accardi Plaintiffs have failed to establish any facts which would support anything other than a general unsecured claim against the Debtors. Therefore, we conclude that, even assuming the facts asserted by the Accardi Plaintiffs that the oral representation was a modification of the Deferred Compensation Plan, they have failed to establish that the Deferred Compensation Plan was a funded plan. Consequently, the Defendants are entitled to dismissal of the Second Amended Complaint. B. Counts against Committee In the Second Amended Complaint, the Accardi Plaintiffs allege that the individual members of the Deferred Compensation Committee are liable to them as well. The Accardi Plaintiffs assert that the implied duty of good faith and fair dealing required the Deferred Compensation Committee to cause the Debtors to fund the Trust for their benefit. The Defendants disagree because the funding of the Trust would have destroyed the express purpose of the Plan which was to defer the payment of taxes. They argue that the implied covenant of good faith and fair dealing cannot be used to imply a duty to act in a manner that is contrary to the express terms of the contract. See, e.g., Northview Motors, Inc. v. Chrysler Motors Corp., 227 F.3d 78, 91-92 (3d Cir.2000). We agree with the Defendants. The Deferred Compensation Committee had no duty to cause the Debtors to fund the Plan if it would have destroyed the very purpose of the Plan. Further, even if the Committee had caused the Debtors to fund the Plan or the Trust, that would have created no right to those funds in favor of the Accardi Plaintiffs. The Deferred Compensation Plan documents all clearly provide that the Plan participants have no greater rights to the Plan and Trust assets than a general unsecured creditor. Thus, they have failed to state a cause of action against the Committee members and the Complaint must be dismissed as to them as well. C. State Law Claims The Accardi Plaintiffs have also sued for recovery under the Pennsylvania Wage Payment and Collection Law ("WPCL") and for tortious interference with contract. The Defendants assert that these state law claims are preempted by ERISA. The Defendants argue that regardless of whether the Deferred Compensation Plan is a top hat plan, it is still covered by the ERISA preemption principles. See 29 U.S.C. §§ 501-07; New Valley, 414 89 F.3d at 149; Olander v. Bucyrus-Erie Co., 187 F.3d 599, 604 (7th Cir.1999). Courts have generally held that, to the extent that recovery is sought of sums deferred under employee benefit plans, ERISA preempts claims under the WPCL as well as claims for tortious interference. See, e.g., Kuhl v. Lincoln Nat'l Health Plan of Kansas City, Inc., 999 F.2d 298 (8th Cir.1993) (tortious interference with right to contract claim preempted); McMahon v. McDowell, 794 F.2d 100, 106 (3d Cir.1986) (WPCL claim preempted); Feret v. Corestates Fin. Corp., No. Civ. A. 97-6759, 1998 WL 426560, at 8 (E.D.Pa. July 27, 1998) (same); Valentine v. Carlisle Leasing Int'l Co., 1998 WL 690877, at 5 (N.D.N.Y. Sept.30, 1998) (tortious interference claim preempted); Jones v. Baskin Flaherty Elliott & Mannino, P.C., 788 F. Supp. 878, 879 (W.D.Pa.1992) (WPCL claim preempted). Thus, it is clear that the counts for violation of the WPCL and for tortious interference with contract have been preempted and dismissal is warranted. IV. CONCLUSION For all the foregoing reasons, we grant the Defendants' Motion to Dismiss the Second Amended Complaint filed by the Accardi Plaintiffs and the counterclaim filed by Bookspan. NOTES [1] This Opinion Constitutes the findings of fact and conclusions of law of the Court pursuant to Federal Rule of Bankruptcy Procedure 7052. [2] The Defendants are the IT Group, Inc., and affiliates (collectively "the Debtors"), three officers of the Debtors, and Carlyle Partners II, L.P. ("Carlyle"), as the Debtors' alleged alter ego. Carlyle filed a separate Motion to dismiss for failure to state a claim that it is the Debtors' alter ego. Since we grant the Defendants' joint motion to dismiss, we need not decide the Carlyle motion. [3] The Accardi Plaintiffs are: John Accardi, David L. Backus, Rochelle Bookspan, Melissa L. Dubinsky, Dennis G. Fenn, John P. Franz, William A. Gauntt, Thomas W. Grimshaw, David W. Hickman, Warren C. Houseman, Stephen C. Kenney, James R. Mahoney, Thomas R. Marti, David W. Mayfield, William H. McIntosh, Roy McKinney, David C. McMurtry, Dan Melchior, Georgeann N. Morekas, William C. Paris, Matthew G. Radek, Kevin Smith, Lou Stout, Leonard Yamamoto, John E. Foley, James M. Redwine, Stewart Bornhoft, Enzo Zoratto, and Polly Quick.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532359/	872 A.2d 315 (2005) 2005 VT 23 In re Appeal of Stuart RICHARDS. No. 03-543. Supreme Court of Vermont. February 9, 2005. 317 Present: DOOLEY, JOHNSON, SKOGLUND and REIBER, JJ., and ALLEN, C.J. (Ret.), Specially Assigned. ENTRY ORDER ¶ 1. This is the second appeal in litigation between neighbors Stuart Richards and Paul Nowicki concerning Nowicki's desire to build a house on 84 Elm Street in the Town of Norwich. In this appeal, Richards claims the environmental court erred by concluding that 84 Elm Street and an adjoining parcel Nowicki owns are two separate lots for zoning purposes because a right-of-way providing access to Richards's property divides them. We reverse. ¶ 2. In 1996, Nowicki bought 84 Elm Street and an adjoining parcel, 76 Elm Street, from an individual who had held title to both parcels since 1967. Richards and his wife live behind 76 Elm Street and must access their property by a right-of-way over 84 Elm Street along the border with 76 Elm Street. The 76 Elm Street parcel had been improved with a house when Nowicki purchased the property, but 84 Elm Street was an empty lot. Nowicki sought a building permit to construct a house for his mother on 84 Elm Street. Richards opposed the permit, and the present litigation ensued. ¶ 3. Richards continued his challenge to the building permit for 84 Elm Street all the way to this Court. See In re Richards, 174 Vt. 416, 819 A.2d 676 (2002). In his first appeal, Richards argued that Nowicki could not legally develop the 84 Elm Street property because the parcel had legally merged with 76 Elm Street in 1981 when the town adopted zoning regulations establishing a minimum lot size of 20,000 square feet. The 76 Elm Street parcel did not meet that minimum size requirement, and therefore it merged with 84 Elm Street to form one conforming lot. Once merged, Richards argued, Nowicki could not develop the parcels separately without violating the town's minimum lot size ordinance. This Court agreed with Richards, concluding that 84 Elm Street could not be developed separately because doing so would leave the 76 Elm Street parcel nonconforming under the zoning ordinance. Id. at 420, 819 A.2d at 679. We explained that the state's small lot statute, 24 V.S.A. § 4406(1), did not protect 76 Elm Street as an undersized lot because of the unified ownership of the properties since 1967: Due to the unified ownership of the parcels in 1967, however, the enactment of the minimum lot size regulations in 1981 prevented any subsequent landowner from taking advantage of § 4406(1)'s small lot exception to treat [76 Elm Street] separately from [84 Elm Street]. For the purposes of development, therefore, the parcels had merged into one property subject to a 20,000 square foot minimum lot size requirement at the time Nowicki purchased them in 1996. Id. at 420-21, 819 A.2d at 680. Notwithstanding that conclusion, we remanded the case to the environmental court so that it could consider, in the first instance, Nowicki's argument that the right-of-way between 76 and 84 Elm Street effectively separated the parcels, preventing the merger that otherwise took place by operation of law in 1981. Id. at 426, 819 A.2d 318 at 684; see Wilcox v. Vill. of Manchester Zoning Bd. of Adjustment, 159 Vt. 193, 197, 616 A.2d 1137, 1139 (1992) (holding that, in some circumstances, a right-of-way "because of location and function" may separate two parcels so that they cannot be used as one lot). ¶ 4. The court took evidence on the issue and rendered the decision that forms the basis of this appeal. In its order, the court found that 84 Elm Street and Richards's property are bounded on one side by the Blood Brook. The 84 Elm Street boundary with Blood Brook is about eighteen feet lower in elevation than 76 Elm Street, and both properties slope away from Elm Street down towards Richards's land. The court found that the right-of-way at issue is a twenty-foot-wide private road or driveway used by Richards and his wife for ingress and egress to their property behind 76 Elm Street. The right-of-way has been used to access the rear basement entrance of 76 Elm Street as well. After purchasing the property, Nowicki regraded the right-of-way by removing a hump that impaired the view of Elm Street from Richards's property at the end of the right-of-way. Nowicki also installed a three-foot-high retaining wall running alongside the right-of-way from Elm Street to the back of the house on 76 Elm Street. The environmental court concluded that the parcels had not merged due to the right-of-way, reasoning: [A]lthough the right-of-way is private, these properties are equivalent to those at the end of and flanking the end of a short dead-end village street. While a person capable of walking and of going up and down steps or a slope would be able to cross from the 76 Elm Street parcel onto the 84 Elm Street parcel, or vice-versa, it is not possible to use the two parcels as a single parcel, primarily because the owners of those two parcels cannot block the use of the right-of-way by the owners of [Richards's] parcel. The right-of-way occupies the entire adjacent boundary; that is, it is not possible to cross from the 76 Elm Street parcel onto the 84 Elm Street parcel without crossing the right-of-way. . . . While the 84 Elm Street parcel could have been used as a single lot if it had been in common ownership with [Richards's] property, it cannot be used as a single lot in common ownership with the 76 Elm Street lot. The court emphasized that Richards's property had numerous potential uses under the town's zoning ordinance, including a day care center, a small group home, a home occupation, or a two-family residence. The potential for Richards to use the right-of-way so intensively prevented the two lots from merging. Thus, the court concluded, Nowicki could develop the two lots separately. This appeal followed. ¶ 5. On appeal, Richards argues that the environmental court's findings do not support its conclusion that Nowicki's two Elm Street parcels had not merged. According to Richards, upholding the environmental court's decision here would defeat the Legislature's intent to limit nonconforming uses of property to uses existing prior to the effective date of zoning. Because Richards does not contest the findings upon which the environmental court's decision rests, we review the court's legal conclusions using a nondeferential and plenary standard. Catamount Slate Prods., Inc. v. Sheldon, 2003 VT 112, ¶ 14, 176 Vt. 158, 845 A.2d 324. ¶ 6. At issue here is the impact of the state's small lot statute, 24 V.S.A. § 4406(1), to property divided by a right-of-way that was held in common ownership at the time zoning became effective in the Town of Norwich. The statute exempts from the town's minimum lot size regulation 319 any property held in separate and unaffiliated ownership from "surrounding properties" on the effective date of a town's minimum size zoning regulation. Richards, 174 Vt. at 419-20, 819 A.2d at 678-79. Adjoining property held in common ownership on the effective date of zoning is deemed merged by operation of law under the statute because one goal of zoning is to phase out nonconforming uses, including undersize lots. Id.; Drumheller v. Shelburne Zoning Bd. of Adjustment, 155 Vt. 524, 529, 586 A.2d 1150, 1152 (1990). Once merged, the property may not be developed in a manner that would recreate the nonconforming use. Drumheller, 155 Vt. at 529-30, 586 A.2d at 1152. ¶ 7. Although § 4406(1) establishes a bright line rule for the merger of adjoining lots held in common ownership, there are limited circumstances under which the bright line rule may not apply. In Wilcox, this Court explained that contiguity "is a strong indicator that two lots should not be deemed separate within the meaning of § 4406(1)," but noted that contiguity is not the only factor. 159 Vt. at 197, 616 A.2d at 1139. Wilcox held that, depending on its location and function, a right-of-way could separate a piece of property so that it cannot be used in the ordinary manner as a single lot. Id. In those circumstances, § 4406(1) would not consider the properties adjoining and no merger would occur. Id. The Court cautioned, however, that while contiguity does not "always equal[] unity," the existence of a right-of-way between two parcels does not always mean the parcels are separate. Id. at 198, 616 A.2d at 1140. We noted that: The term "right-of-way" on a deed is traditionally construed as an easement, absent additional descriptive language. However, a right-of-way could be a well-travelled [traveled] road, or simply lines on a plan that pose few practical barriers to enjoyment of the property as a single parcel. Id. (citation omitted). The Court concluded by emphasizing the "strong legislative intent to phase out nonconforming uses" and its expectation that the Wilcox holding would not "invite claims of separate-lot status based solely on the configuration of a lot as depicted on a deed." Id. ¶ 8. Wilcox did not elaborate on how a trial court must analyze a claim of nonmerger due to the existence of a right-of-way. Section 4406(1) and the cases interpreting it establish, however, that the focus must be on the circumstances existing at the time zoning regulation became effective because the only property entitled to small lot protection is property held in individual and unaffiliated ownership on the effective date of zoning. See Richards, 174 Vt. at 420, 819 A.2d at 679 (explaining that the small lot statute applied only if Nowicki showed that his two parcels were in separate, individual, and nonaffiliated ownership in 1981 when Norwich adopted the 20,000 square foot minimum lot size ordinance); 3 A. Rathkopf, The Law of Zoning and Planning § 49:13 (1997) (explaining that when dealing with substandard lots, "the point of reference is the effective date of the bylaw"). Unless the zoning ordinance provides otherwise, small lots held in unaffiliated and separate ownership on the effective date of zoning regulation do not lose their protected status if, subsequent to the effective date of zoning, they come into common ownership. In re Weeks, 167 Vt. 551, 555, 712 A.2d 907, 909 (1998). Conversely, once two parcels merge by operation of law, they remain so notwithstanding a subsequent owner's efforts or desire to separate them for development. Drumheller, 155 Vt. at 529-30, 586 A.2d at 1152. Thus, in this case, either the adjoining parcels merged because they were held in common ownership 320 in 1981 as we held in the earlier appeal, or they did not merge at that time because the location and function of the right-of-way rendered the two parcels functionally separate and distinct. ¶ 9. Nowicki had the burden "to show that the parcels were held in `individual and separate and non-affiliated ownership' when the 20,000 square foot minimum lot size regulations were enacted in 1981." Richards, 174 Vt. at 420, 819 A.2d at 679. His evidence, however, related exclusively to the present and potential uses of the right-of-way, and the environmental court's analysis was deficient in relying on this evidence. We are left then with only the impediments to overall use of the lots that flow from the presence of a right-of-way. See Restatement (Third) of Prop.: Servitudes § 4.9 (2009) (outlining servient estate owner's right to use property burdened by a servitude). Nowicki cannot block the right-of-way by building a structure on it; he cannot fence his property for example, to keep animals on it because the fence would obstruct the right-of-way. If we were to hold that these impediments alone were sufficient to prevent merger in 1981, then the existence of a right-of-way would always prevent merger, a conclusion we rejected in Wilcox, 159 Vt. at 197-98, 616 A.2d at 1140. ¶ 10. The impediments do not prevent use of the property as one lot in many ways. For example, in Weeks, owners of a preexisting small lot purchased a second adjoining lot on which they "maintained a garden, parked their mobile home, and built a garage for storage." 167 Vt. at 552, 712 A.2d at 908. Thus, 76 and 84 Elm Street can be used together in virtually any way a primary residence can be used with surrounding land. It is not uncommon in Vermont that uses of land, for example, for a garden, are separated from the residence by a driveway. ¶ 11. Nowicki argues that the environmental court correctly determined that the two parcels did not merge because Richards's actual and potential use of the right-of-way impairs his ability to enjoy his property as a single lot. Again, the present and potential use of the right-of-way cannot determine whether merger occurred in 1981 when the town adopted the 20,000 square foot minimum lot size. The Wilcox exception to merger asks the court to look at the function and location of the right-of-way to determine if it effectively prevents the use of the property as a single lot. Here, the right-of-way functions as a driveway to serve a single residence. Although it divides the 76 and 84 Elm Street parcels, it is apparent from the record that the right-of-way's location renders the configuration of the merged lot consistent with the configuration of many single lots with driveways that separate one part of the lot from another. ¶ 12. We conclude that the environmental court's findings do not support its conclusion because the findings do not address the relevant inquiry under Wilcox as of 1981, and the use of a right-of-way as a driveway does not alone make the property on one side of the driveway separate from that on the other side. Thus, the 76 Elm Street and 84 Elm Street properties merged to form a single conforming lot in 1981, and, as we held in our first decision, the development of 84 Elm Street would leave 76 Elm Street nonconforming in violation of the Norwich zoning ordinance. Reversed.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532347/	305 B.R. 705 (2004) In re Stanislaw BRZAKALA, Debtor. Tadeusz and Janina Bednarsz, Plaintiffs, v. Stanislaw Brzakala, Defendants. Nos. 03 B 20884, 03 A 3868. United States Bankruptcy Court, N.D. Illinois, Eastern Division. March 10, 2004. 706 707 Robert D. Gordon, Chicago, IL, for Debtor. Daniel Rozenstrauch, Chicago, IL, for Plaintiffs. MEMORANDUM OPINION AND ORDER A. BENJAMIN GOLDGAR, Bankruptcy Judge. This matter is before the court on the motion of debtor-defendant Stanislaw Brzakala to dismiss the amended complaint of plaintiffs Tadeusz and Janina Bednarsz. The complaint asks this court to find Brzakala's $81,620 debt to the Bednarszes nondischargeable pursuant to 11 U.S.C. § 523(a)(2)(A) and (B). For the reasons that follow, the motion is granted in part and denied in part. 1. Jurisdiction The court has subject matter jurisdiction over this case pursuant to 28 U.S.C. §§ 1334(a) and 157(a), and the district court's Internal Operating Procedure 15(a). This is a core proceeding under 28 U.S.C. § 157(b)(2)(I). The court accordingly may enter a final judgment, In re Smith, 848 F.2d 813, 816 (7th Cir.1988). 2. Background The amended complaint and accompanying exhibits contain the following facts. In early 1998, the Bednarszes lent one Mariusz Kaczmarczyk $223,000, in return for which Kaczmarczyk executed and delivered to the Bednarszes a promissory note in that amount. (Am. Compl., Ex. A at 2). The note required Kaczmarczyk to repay the Bednarszes with a single payment to be made on April 30, 1998. (Id.). On June 20, 1998, D & M Developers, Ltd. ("D & M"), an Illinois corporation, delivered to the Bednarszes a check for $30,000 in partial payment of the note. 708 (Id. at ¶ 6 and Ex. A at 3). On July 15, 1998, D & M delivered to the Bednarszes a second check, this time for $243,000, in payment of the note. (Id.). It is unclear what relationship Kaczmarczyk has with D & M or, for that matter, what relationship the debtor Brzakala has with either one. The amended complaint alleges only that D & M issued the checks to the Bednarszes "through Debtor Brzakala." (Id. at ¶ 6). The allegation is not explained, and the amended complaint offers nothing more.[1] The signatures on the checks are illegible. (Id., Ex. B, C). The amended complaint assumes, however, that Brzakala signed them. (See id. at ¶ 14). Regardless, both checks turned out to be uncollectible because the checks were issued on closed accounts. (Id. at ¶ 7 and Exs. B, C). In October 1998, the Bednarszes therefore brought an action against Kaczmarcyk (on the note) and against Brzakala and D & M (for issuing the bad checks) in the Circuit Court of Cook County, Illinois. (Id. at ¶ 5 and Ex. A). Against Brzakala the Bednarszes requested $243,000 in damages. (Id., Ex. D). Four years later, the parties settled the action. Brzakala agreed to pay the Bednarszes $77,000 within 90 days and also agreed to issue a mortgage to the debtors in the same amount on property Brzakala owned in Lake Forest. (Id. at ¶ 8 and Ex. D). The settlement agreement was signed by all the parties and incorporated into a court order, which the circuit court retained jurisdiction to enforce. (Id., Ex. D). But Brzakala failed to comply with his obligations under the settlement agreement. (Id. at ¶ 9). On March 5, 2003, the circuit court accordingly entered a judgment for $81,620 against Brzakala and in favor of the Bednarszes. (Id. at ¶ 9 and Ex. E). Brzakala has paid only $6,000 toward satisfaction of the judgment. (Id. at ¶ 10). Faced with the judgment, Brzakala filed a petition for relief under chapter 7 of the Bankruptcy Code on May 9, 2003. In September 2003, the Bednarszes filed their adversary complaint against Brzakala asserting that his debt to them is nondischargeable under sections 523(a)(2)(A) and (B) of the Code.[2] The Bednarszes allege that Brzakala "obtained the underlying debt by fraud, false pretenses, and false writings," inasmuch as he wrote the checks and executed the settlement agreement not intending to fulfill, and knowing he could not fulfill, his obligations under them. (Compl. at ¶ 14). Brzakala moved to dismiss the complaint. After the complaint was amended, he also moved to dismiss the amended complaint the motion currently before the court. According to Brzakala, the Bednarszes do not allege in the amended complaint "that any money or property was obtained by the NSF checks but rather [that] they were payments on account." Therefore, Brzakala concludes, the amended complaint fails to state a claim under sections 523(a)(2)(A) or (B). The court set a briefing schedule on the motion, but neither party filed a brief. The court thus has only Brzakala's motion before it. 709 3. Discussion Though pled as a single count, the Bednarszses' amended complaint actually contains efforts at four separate claims. Two are based on the bad checks a claim under section 523(a)(2)(A) and a claim under section 523(a)(2)(B). Two others are based on the settlement agreement again a claim under section 523(a)(2)(A) and a claim under section 523(a)(2)(B). On a motion to dismiss under Rule 12(b)(6), Fed.R.Civ.P. 12(b)(6) (made applicable in Bankruptcy Rule 7012(b)), the court accepts the allegations of the complaint as true, drawing all reasonable inferences in favor of the plaintiff. Hickey v. O'Bannon, 287 F.3d 656, 657 (7th Cir.2002). Dismissal is proper "`only if it is clear that no relief could be granted under any set of facts that could be proved consistent with the allegations.'" Weizeorick v. ABN AMRO Mortgage Grp., Inc., 337 F.3d 827, 829 (7th Cir.2003) (quoting Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S. Ct. 2229, 81 L. Ed. 2d 59 (1984)), cert. denied, ___ U.S. ___, 124 S. Ct. 1418, ___ L.Ed.2d ___, 72 U.S.L.W. 3421, 3535 (Feb. 24, 2004) (No. 03-859); see also United States Gypsum Co. v. Indiana Gas Co., 350 F.3d 623, 626 (7th Cir.2003) (noting that complaint states a claim "when it narrates an intelligible grievance that, if proved, shows a legal entitlement to relief"). Of the four purported claims in the Bednarszes' amended complaint, only one meets this standard. The other claims are dismissed. a. The Section 523(a)(2)(B) Claims The Bednarszes' amended complaint states no claim under section 523(a)(2)(B) not in connection with the bad checks and not in connection with the settlement agreement. Section 523(a)(2)(B) of the Code excepts from discharge (a) . . . any debt (2) for money, property, services, or an extension, renewal or refinancing of credit, to the extent obtained by . . . (B) use of a statement in writing (i) that is materially false; (ii) respecting the debtor's . . . financial condition; (iii) on which the creditor to whom the debtor is liable . . . reasonably relied; and (iv) that the debtor caused to be made or published with intent to deceive. 11 U.S.C. § 523(a)(2)(B). A claim under this section has five elements: (1) the debtor made a statement in writing; (2) the statement was materially false; (3) the statement concerned the debtor's financial condition; (4) the debtor intended to deceive the creditor; and (5) the creditor reasonably relied on the statement. In re Sheridan, 57 F.3d 627, 633 (7th Cir.1995); Phillips v. Napier, 205 B.R. 900, 905 (Bankr.N.D.Ill.1997); Banner Oil Co. v. Bryson (In re Bryson), 187 B.R. 939, 961 (Bankr.N.D.Ill.1995). Putting aside other flaws the section 523(a)(2)(B) claims here may have, those claims plainly lack a critical element: a written statement "respecting the debtor's financial condition." To satisfy section 523(a)(2)(B), the statement must do more than just prompt speculation about the debtor's finances. It must be "sufficient to determine financial responsibility." In re Price, 123 B.R. 42, 45 (Bankr.N.D.Ill.1991). In the case of an individual, for example, "statements of income and expenses or schedules of assets and liabilities" will qualify. Id. Transactional documents that merely imply a certain financial status, on the other hand, will not. See, e.g., In re Segal, 195 B.R. 325, 332 (Bankr.E.D.Pa.1996) (finding lease and promissory note insufficient); City Fed. Sav. Bank v. Seaborne (In re Seaborne), 106 B.R. 711, 714 710 (Bankr.M.D.Fla.1989) (finding loan closing documents insufficient). The Bednarszes here appear to allege that the two uncollectible checks and the settlement agreement are statements "respecting the debtor's financial condition." They are not. A bad check is not a statement of any kind, much less a false statement about someone's financial condition. See Williams v. United States, 458 U.S. 279, 284, 102 S. Ct. 3088, 73 L. Ed. 2d 767 (1982) (holding that bad check was not a "false statement" for purposes of criminal statute and noting that "a check is not a factual assertion at all"). As for the settlement agreement, it never mentions Brzakala's financial condition. It simply contains promises on Brzakala's part to pay a sum of money and to grant a mortgage in return for the dismissal of a civil action. Inferences that might be drawn about Brzakala's financial condition from those promises are not enough to bring the settlement agreement under section 523(a)(2)(B). Because the amended complaint alleges no statement respecting Brzakala's financial condition, it fails to state a claim under section 523(a)(2)(B). b. The Section 523(a)(2)(A) "Bad Checks" Claim The Bednarszes' amended complaint also states no section 523(a)(2)(A) claim, at least not one based on the bad checks. Section 523(a)(2)(A) of the Code exempts from discharge (a) . . . any debt (2) for money, property, services, or an extension, renewal or refinancing of credit, to the extent obtained by (A) false pretenses, a false representation, or actual fraud, other than a statement respecting the debtor's . . . financial condition. 11 U.S.C. § 523(a)(2)(A). To make out a claim under section 523(a)(2)(A), a creditor must prove that (1) the debtor made a false representation of fact (2) which the debtor (a) either knew to be false or made with reckless disregard for its truth and (b) made with an intent to deceive, and (3) the creditor justifiably relied on the false representation. In re Bero, 110 F.3d 462, 465 (7th Cir.1997); Citibank (S.Dakota), N.A. v. Michel, 220 B.R. 603, 605 (N.D.Ill.1998); Golant v. Care Comm, Inc., 216 B.R. 248, 253 (N.D.Ill.1997). The bad check claim under section 523(a)(2)(A) fails for two reasons. First, a section 523(a)(2)(A) claim requires a false representation of fact, Michel, 220 B.R. at 605, and again a check "is not a factual assertion at all," true or false, Williams, 458 U.S. at 284, 102 S. Ct. 3088 (1982). A check is simply an instruction to a bank to pay the face amount of the check to the bearer. Id. Citing Williams, the Seventh Circuit held more than a decade ago that a bad check is not a misrepresentation for purposes of section 523(a)(2)(A), see Goldberg Sec., Inc. v. Scarlata (In re Scarlata), 979 F.2d 521, 525 (7th Cir.1992), a proposition that by now is well-established, see Mega Marts, Inc. v. Trevisan (In re Trevisan), 300 B.R. 708, 716-17 (Bankr.E.D.Wis.2003); but see Bryson, 187 B.R. at 959-60 (noting split of authority on the question). Second, as Brzakala correctly argues, the amended complaint does not allege (and could not allege) that Brzakala obtained anything by writing the bad checks. Section 523(a)(2)(A) not only requires a misrepresentation, it requires that through the misrepresentation the debtor have "obtained" either "money, property, services, or an extension, renewal or refinancing of credit." 11 U.S.C. § 523(a)(2)(A); see generally Golant, 216 B.R. at 253-54. Here, however, the Bednarszes allege that the checks in question 711 were issued solely in payment of a prior debt, the debt represented by the promissory note. Brzakala obtained nothing through writing the checks not money, property, or anything else and the amended complaint nowhere suggests that he did. Because the bad checks were not misrepresentations, and because Brzakala obtained nothing by issuing them, the amended complaint fails to state a claim under section 523(a)(2)(A) based on the bad checks. c. The Section 523(a)(2)(A) "Settlement Agreement" Claim The section 523(a)(2) claim based on the settlement agreement, however, is another matter. That claim appears to be viable. Unlike the bad check claim, the settlement agreement claim in the amended complaint pleads the necessary misrepresentation. The Bednarszes allege that in the settlement agreement Brzakala made promises to pay them $77,000 and to issue them a mortgage on property he owned in Lake Forest; that Brzakala did so never intending to fulfill those promises and knowing he was unable to fulfill them; and that in fact he did not fulfill them, breaching the settlement agreement. (Am. Compl. at ¶¶ 8-9, 14 and Ex. D). These allegations satisfy section 523(a)(2)(A). For purposes of that section, it is true, the misrepresentation generally must "relate to a present or past fact," and a promise to pay in future, even if false, is not such a misrepresentation. Shea v. Shea (In re Shea), 221 B.R. 491, 496 (Bankr.D.Minn.1998). A promise to pay made with a present intention not to perform, however, will satisfy the misrepresentation requirement. Id.; see also McCrary v. Barrack (In re Barrack), 217 B.R. 598, 606 (9th Cir. BAP 1998); 4 A. Resnick & H. Sommer, eds., Collier on Bankruptcy ¶ 523.08 [1][d] at 523-44. That is the sort of misrepresentation the amended complaint here alleges. Unlike the bad check claim, the settlement agreement claim in the amended complaint also alleges that Brzakala "obtained" something through his misrepresentation. Section 523(a)(2) applies not only to a debtor who obtains money, property or services by his deception. It also applies to a debtor who obtains an "extension, renewal or refinancing of credit." 11 U.S.C. § 523(a)(2). An "extension of credit" is "an indulgence by a creditor giving his debtor further time to pay an existing debt." John Deere Co. v. Gerlach (In re Gerlach), 897 F.2d 1048, 1050 (10th Cir.1990) (internal quotation omitted). Section 523(a)(2) therefore protects a creditor deceived into forbearing collection efforts. Id.; see also Codisco, Inc. v. Marx (In re Marx), 138 B.R. 633, 636 (Bankr.M.D.Fla.1992). The amended complaint alleges a forbearance of collection on the part of the Bednarszes. Rather than pursue their action in the circuit court, they agreed to a settlement that was highly beneficial to Brzakala. As a result of the settlement agreement's execution, Brzakala settled a $243,000 claim for a $77,000 payment and a $77,000 mortgage a substantial saving. (Am.Compl., Ex. D). Brzakala also managed to postpone payment: the payment under the settlement agreement was not due until 90 days after the order incorporating the settlement was entered. (Id.). The amended complaint's allegations that Brzakala induced the Bednarszes to enter into a settlement agreement he had no intention of performing states a claim for relief under section 523(a)(2)(A). See Zarate v. Baldwin, 578 F.2d 293, 295 (10th Cir.1978) (holding debt on fraudulently induced settlement agreement non-dischargeable *712 because creditor "forwent her right to pursue her claim to judgment").[3] 4. Conclusion The motion of debtor-defendant Stanislaw Brzakala to dismiss the amended complaint of plaintiffs Tadeusz and Janina Bednarsz is granted in part and denied in part. The motion is granted as to all claims under 11 U.S.C. § 523(a)(2)(B) and as to the claim under 11 U.S.C. § 523(a)(2)(A) relating to the checks. Those claims are dismissed. The motion is denied as to the claim under 11 U.S.C. § 523(a)(2)(A) relating to the settlement agreement. The debtor-defendant shall file his answer to the amended complaint's remaining claim in 14 days. NOTES [1] The initial complaint did not even allege this much. The complaint was amended and additional exhibits attached after the court noted at a status hearing that the initial complaint did not connect Brzakala with the underlying debt at all. [2] The Bednarszes ask in their amended complaint that $81,620 be excepted from discharge. If, as the Bednarszes allege, Brzakala paid $6,000 on the $81,620 judgment, they are owed at most $75,620. [3] This does not mean, of course, that the Bednarszes will be able to prove their claim. Among other things, it may be difficult to prove that Brzakala never intended to comply with the settlement agreement. Where a section 523(a)(2)(A) claim is based on a failure to perform contractual duties, the requisite intent can be inferred from the debtor's failure "to take any steps to perform under the contract." 4 A. Resnick & H. Sommer, supra, ¶ 523.08[1][d] at 523-44. Brzakala's payment of $6,000 under the settlement agreement (see Am. Compl. at ¶ 10) would tend to dispel such an inference here.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532361/	831 S.W.2d 426 (1992) Jack Warren DAVIS, Appellant, v. The STATE of Texas, Appellee. No. 3-90-118-CR. Court of Appeals of Texas, Austin. May 13, 1992. Discretionary Review Refused September 30, 1992. 429 John J. Curtis, New Braunfels, for appellant. Bill M. Reimer, Dist. Atty., Comal County and Robert H. Fisher, Asst. Dist. Atty., New Braunfels, for appellee. Before JONES, KIDD and B.A. SMITH, JJ. JONES, Justice. A jury convicted Jack Warren Davis, appellant, of capital murder. Tex.Penal Code Ann. § 19.03(a), (b) (1989). After the jury was unable to answer the first special issue on punishment (deliberateness), the court sentenced him to life imprisonment pursuant to 1985 Tex.Gen.Laws, ch. 44, § 2, at 434 (Tex.Code Crim.Proc. art. 37.071, since amended). Davis appeals, bringing sixteen points of error. We will reverse the judgment of conviction and remand the cause for a new trial. On November 17, 1989, at approximately 10:15 p.m., appellant, a maintenance worker at the New Braunfels Oaks Apartments, reported to Carolyn Toth, the manager of the apartment complex, that he had found the body of Kathie Balonis in her apartment. The police were called. At some point after their arrival, the on-scene investigators became suspicious of appellant when they observed blood on his clothing and a cut on his left hand. Detective Felix Roque, New Braunfels Police Department, questioned appellant at the department. After this interview, the police took him to his apartment, allowed him to change clothes, and then seized the clothes he had been wearing. They returned him to the police department and fingerprinted him. The district attorney's office then requested that he be booked for the offense of murder. SUFFICIENCY OF THE EVIDENCE Appellant contends, in point of error one, that the evidence is legally insufficient to support his conviction. The evidence in the case consisted of various accounts of the evening's events, forensic evidence such as the analysis of blood found at the scene, and expert testimony on the type of crime and possible characteristics of the offender (e.g., that it was possible for a person who had not displayed violent tendencies to, in essence, "explode"). Discovery of the Body/Description of the Crime Scene The apartment building in which Kathie Balonis lived, one of several buildings in the complex, is a two-story structure with three sets of stairs: east and west at either end of the building, as well as a middle staircase. Kathie's apartment was the westernmost apartment on the second floor. Marci French, another resident in the complex, lived in the apartment east of, and adjacent to, Kathie Balonis. Appellant lived on the ground floor in the apartment second from the east end of the building. On the day of the murder, he was wearing jeans, a tan maintenance uniform shirt, and a blue insulated-type vest. Appellant was described as having a medium heavy build, with medium-length brown hair and sideburns. Appellant testified that on the night of the murder, at about 10:00 p.m., he went onto the porch outside his apartment to smoke a cigarette. He heard a sound, like somebody saying, "Hey." He looked toward 430 the west end of the building, in the direction of Kathie Balonis's apartment, but saw nothing. A minute or two later, he saw a man coming hurriedly, but not running, down the stairs. Appellant followed the man to the parking lot and saw him get into a small car (a Chevrolet Vega, he thought) and drive away rapidly. Appellant stated he returned to the building and went up the west stairs. He saw people in Marci French's apartment, and everything looked all right. He went to Kathie's apartment, knocked three times, got out his passkey, but tried the knob and found the door unlocked. He entered and announced "maintenance" several times, but got no response. He saw the bed in front of the doorway, saw Kathie's body on the floor, kneeled beside her, put his arms underneath her shoulders, shook her, and shouted her name. He got no response, put her back down, and went to the apartment of Carolyn Toth, the apartment-complex manager, for help. Carolyn Toth testified that appellant knocked at her door at about 10:15 p.m., telling her, "The girl in 202, it's horrible, it's horrible, she might be dead, you've got to come, it's horrible." Appellant was wearing blue jeans, a tan maintenance uniform shirt, a baseball hat, and a blue vest. She noticed what appeared to be blood on his clothing. He later said it was pizza sauce. Toth said that appellant told her he had been watching television with his stepson, went out on the porch, heard a noise like a "herd of elephants" coming down the west staircase, and saw a man with shoulderlength dark hair wearing a white shirt. Appellant had said he followed the man as the man ran to the parking lot and left in a Vega. Toth told her mother to call the police, and the two of them and appellant went outside, where they encountered Karen Balonis, Kathie's sister, who also lived in the complex. Karen Balonis had been doing laundry on the night of the murder. She left her apartment to attend to the laundry sometime after 10:00 (after the news had started, but before the weather came on). She saw Carolyn Toth, Toth's mother, and appellant standing at the entrance to the laundry room looking up. Toth told her that Kathie had been stabbed. Karen ran to Kathie's apartment. She looked around the living room, then headed for the bedroom. The bed was blocking the entrance to the bedroom, so she had to climb over it. She saw her sister on the floor with the top of her head under the bed. As she pulled Kathie out from under the bed she did not see a lot of blood on her. She did, however, notice blood on the pillow case. She found no pulse, but started CPR anyway. At that point Marci French, a neighbor, and French's guest Shelly Flynn entered the apartment. French saw Karen Balonis as she ran up the stairway. French said Karen paused, looked in her window, and ran over to Kathie's apartment. French then heard Karen scream that Kathie had been stabbed. She and Flynn ran to Kathie's bedroom. The bed was in front of the bedroom door and appeared to be in disarray. French told Flynn to call the police, then returned to her apartment to call the police herself because Flynn, her visitor, did not know the address of the apartment complex. When French saw that police were already arriving, she returned to Kathie's apartment. She did not notice the apartment being in disarray, other than the bed being in the wrong place. She moved an ironing board and a chair so that EMS personnel could get through the apartment more easily, and she put a sheet over Kathie's body. As Karen was performing CPR on Kathie she told Flynn to apply pressure to an abdominal wound so that the CPR would not force more blood out of the wound. Karen said that at no time did she get more than a spot of blood on her pants legno blood was on her hands, mouth, or any other part of her body. Officer Scott Lange, New Braunfels Police Department, responded to the call reporting a stabbing. When he arrived, he heard a scream. As he entered Kathie's apartment and went back to the bedroom, he noticed the bed blocking the doorway 431 from the living room to the bedroom. He saw Karen Balonis and Shelly Flynn in the bedroom and saw the body of Kathie Balonis on the floor. He went back outside to use his radio to call for EMS because the radio would not work inside the apartment. At that point, Officer Keating arrived and went into the apartment. Lange remained about half-way up the stairway by the apartment. Appellant, who Lange knew was the maintenance worker at the apartments, approached Lange and expressed concern about Balonis' condition. Lange said that in his opinion appellant was intoxicated, although not to the point of incoherence. Appellant told Lange that he had seen the person who did it, describing a white male with black hair. He said the man ran down the stairs, ran beside the pool, ran between two other buildings and into the parking lot where he left in a Vega. Other than the one time he talked to him, Lange did not see appellant come up the stairs or stand on the upstairs balcony. Shortly after 10:00 p.m., Officer Keating, New Braunfels Police Department, responded to the call about a stabbing. He entered Kathie's apartment and went to the bedroom. He could see that the bed was partially blocking the doorway. Three people were in the room. He went in and began CPR. He then removed Karen because she was "emotionally out of control" and went back into the apartment. He moved the bed so EMS technicians could get in. Karen Balonis said that after EMS personnel arrived, she was asked to leave the apartment. She went outside on the balcony. She said appellant came up the center stairs to the balcony, hugged her, and kept telling her he was sorry. She said, contrary to appellant's version of events, that she did not return his hug, did not touch him, and could not have gotten any of Kathie's blood or saliva on him from her hands even if any had been on her hands, which she denied. Carolyn Toth, on the other hand, testified that she saw appellant go up the west stairs by the victim's apartment, and that when appellant embraced Karen Balonis, Karen returned the embrace. This dispute as to the nature of the embrace is important in the following respect: Forensic evidence placed Kathie Balonis' blood and saliva on the back shoulder of appellant's vest, which was not consistent with his account of what happened when he discovered the body. Appellant's exculpatory explanation was that the blood and saliva must have been on Karen Balonis' hands and was transferred to his clothing during their embrace on the balcony. Officer Kama, an investigator for the New Braunfels police department, asked appellant what he had seen, and appellant told him. The officer shined a light on appellant's legs and asked what "that" (the bloodstain) was. Appellant told him at the time that it was pizza sauce, stating at trial that he "didn't, at that time, care for what he was insinuating." Later that evening, appellant was arrested. During subsequent questioning, appellant never told Detective Roque, an investigator with the New Braunfels Police Department, that the stain was anything other than appellant's own blood. The State presented forensic evidence linking appellant to the scene. Fred Zain, the State's expert witness who performed the blood and DNA testing, testified to the presence of Kathie's blood and saliva on the right rear shoulder of appellant's vest and to the presence of her blood on appellant's pants leg. Zain also testified that appellant's blood was found on Kathie's pillow, on the carpet next to her body, on carpet away from the body, and on the neck of her blouse and sweater. Appellant's blood was also found on the outside doorknob of his apartment. Appellant's Account of Earlier Events Appellant testified that he finished work between 3:30 and 4:00 p.m. on the day of the murder. He picked up his check around 4:00, went to his apartment, and attempted to open a large package that had arrived earlier that day. While using a kitchen knife to do so, he cut his hand on the palm, then pressed his hand against his pants leg in the left front pocket area in 432 order to stop the bleeding. He then helped Raymond Powell, his stepson, move some equipment from one apartment to another. Appellant then went to Landa Station, a restaurant, where he worked in the office. He left Landa Station around 6:30 p.m. and went to the Kings & Queens Bar to play darts. He said he falsely told the police in his statement taken on the day of the murder, November 17, that he got home at 6:30 because he felt bad about being at a bar playing darts while his wife was in the hospital. After he left the bar, he returned to Landa Station for a few minutes, then went home. Pamela Sue Foulds, a friend of appellant and his wife, testified that she was at the Kings and Queens Bar on November 17, between 6:30 and 9:15 p.m. She saw appellant there and played darts with him. She did not see a cut on his hands or notice him bleeding. The fact that Foulds did not notice a cut is important because re-opening a previous wound is appellant's explanation for the presence of his own blood at the murder scene. Appellant said he arrived home about 9:15 p.m. Raymond Powell and his wife Hazel Marie were in appellant's apartment watching television. While appellant ate dinner, he talked to them until around 10:00 p.m. or a little later, when they left. Hazel Marie Powell is appellant's daughter-in-law. She testified that about 5:30 or 6:00 p.m., her husband Raymond returned home from work. She fixed him something to eat, and they went back to the New Braunfels Oaks Apartments to turn on the heat in an apartment that was to be painted the next day. The door to appellant's apartment was unlocked, so they went in a little after 8:00 p.m., turned on the television, and started watching a movie. Appellant returned a little after 9:00. He talked to them while he ate. Hazel Marie said that before they left, the movie had ended and she saw a clock that showed it to be almost 10:30 p.m. Her time estimate is inconsistent with other witnesses' accounts of the time when the body was discovered. Rick Barr, a resident of the New Braunfels Oaks Apartments, said that on November 17, sometime between 4:00 p.m. and 5:00 p.m., he noticed a man with long dark stringy hair walking across the lawn to the stairs to Kathie Balonis' apartment. He did not see the man leave. Although the description is similar to appellant's description of the man he saw leaving later that night, Barr did not see the man enter Kathie Balonis' apartment and the time that Barr saw the man is much earlier than the murder. Jessica Ornelas, who lived in the apartment below Kathie Balonis', said that at around 4:30 p.m. on the day of the murder she heard what sounded to her like the noise of water running in the bathroom coming from Kathie's apartment. Although this might tend to support the idea that someone else had access to the apartment, the time is again significantly earlier than the murder. Neighbors' Accounts of the Events Carolyn Toth, the apartment complex manager, testified that she arrived at the apartment complex about 7:30 p.m. Around 9:15 p.m., she saw appellant arrive. At 9:45, she left with her mother to pick up her father. She saw a burnt-orange car leaving the parking lot, but did not see appellant in the parking lot. Toth and her parents returned about 10:05 and did not see a dark-haired man or appellant, nor did they see any vehicle leaving the parking lot. Maintenance records were introduced through Toth that showed no calls to Kathie Balonis' apartment in the several days before the murder. Officer Keating, a patrolman with the New Braunfels Police Department, was a resident of the apartment complex and worked as a courtesy patrol for it. At about 9:55 p.m. on the night of the murder, he was at the complex. He testified that he did not see a Vega in the parking lot at the time and did not see appellant chasing anyone. Marci French described the walls between the apartments as being thin enough to hear people talking or laughing in the adjacent apartment. The doors of the apartments were close enough together so 433 that one could hear knocking at adjacent doors. When the stairway outside her apartment is used, it causes her apartment to vibrate. During the evening, she never heard a scream, anyone running down the stairs, a knock on the door of the adjacent apartment, or an announcement of "maintenance," all directly contrary to appellant's account of events. On the day of the murder, French was entertaining guests. She and her guests had been out shopping and returned to her apartment sometime between 8:45 and 9:00 p.m. Around 9:30 she heard some kind of "rumbling" noise that she first thought was coming from the stairs, but then thought was coming from Kathie's apartment. One of the guests, Kenneth Stainbrook, said he was sitting next to a large window. At about 9:30 p.m., he saw a white male of medium build, wearing a tan cap and an insulated blue vest, out on the balcony. Fifteen to twenty minutes later, he saw the same person walking to the east on the balcony. Stainbrook never heard a knock on Balonis' door or an announcement of "maintenance." Shelly Flynn, another of French's guests, saw a man walking by French's apartment in a west to east direction at about 9:20. Because her view was partially blocked, all Flynn could really see was the arm of his shirt. She was unsure whether the sleeve was a white underwear-type shirt or a tan shirt. She saw a man walk by again about 10:05. A few minutes later, she saw a man she identified as appellant walk by. She could not identify appellant as the man she had seen between 9:00 and 10:00 p.m. She never heard a knock on Kathie Balonis' door or an announcement of "maintenance." She said she later heard appellant make a comment about how he got Kathie Balonis' blood on himself. After Kenneth Stainbrook and his wife left, shortly after 10:00 p.m., French saw a man crossing from east to west on the balcony. He was wearing a light-colored shirt and a sleeveless vest, and had brown hair with scruffy sideburns. She was alarmed because of the hour and because that portion of the balcony was seldom used as a travelway due to a large number of hanging plants in front of one of the apartments. She opened her door, but the man had already disappeared. Kathie Balonis' apartment door was closed. After French reentered her apartment, she heard someone go down the stairs. She and Flynn went outside and looked down from the balcony, but did not see anyone. Shortly thereafter, French heard someone coming up the steps. She looked out her door, but saw no one. Kathie Balonis' door was shut. As French was on her way out her door to see what was going on at Kathie Balonis' apartment, she saw appellant coming out of Kathie's apartment. She said he stopped at the top of the stairs and "just pondered for a moment," then walked down the stairs. She said appellant was dressed the same way as the man she had seen earlier: a puffy blue vest, light-colored shirt, dark pants, and a cap. Karen Balonis testified that she saw Kathie on the night of the murder, about 8:40 p.m., while Karen was doing laundry. They talked until they went back to their respective apartments around 9:00 p.m. About 9:30, Karen went back to the laundry room to check on her laundry. As she was on her way back to her apartment, she thought she heard Kathie's door, which made a unique sound, open or close. She looked, but saw no one outside Kathie's door. Karen returned to her apartment and called Kathie about 9:40 p.m., but got no answer. Shortly after 10:00, as she returned to the laundry room, she encountered appellant and the Toths, who told her that Kathie had been stabbed. Rationality of Conviction The critical inquiry in a legal-sufficiency challenge is not whether this Court believes the evidence at trial established guilt beyond a reasonable doubt, but 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, 434 443 U.S. 307, 99 S. Ct. 2781, 61 L. Ed. 2d 560 (1979); Griffin v. State, 614 S.W.2d 155, 159 (Tex.Crim.App.1981). In both circumstantial and direct-evidence cases, we review the evidence to determine whether any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt. Carlsen v. State, 654 S.W.2d 444 (Tex.Crim.App.1983).[1] The evidence must exclude every other reasonable hypothesis except the defendant's guilt, even if the evidence leads to a strong suspicion or probability that the defendant committed the offense. Skelton v. State, 795 S.W.2d 162, 167 (Tex.Crim.App.1989). If the evidence supports a reasonable hypothesis other than the guilt of the defendant, a finding of guilt beyond a reasonable doubt is not rational. Denby v. State, 654 S.W.2d 457, 464 (Tex.Crim.App.1983) (opinion on rehearing). In reviewing the sufficiency of the evidence, we consider all of the evidence, whether properly admitted or not. Dunn v. State, 721 S.W.2d 325 (Tex.Crim. App.1986). The jurors are the exclusive judges of the facts, the credibility of the witnesses, and the weight to be accorded their testimony. Esquivel v. State, 506 S.W.2d 613, 615 (Tex.Crim.App.1974). The jury is free to reject any or all of the evidence presented at trial. Russeau v. State, 785 S.W.2d 387, 391 (Tex.Crim.App. 1990). We conclude that it was not irrational for the jury to convict appellant based on the evidence presented to them at trial. The jury heard accounts of the evening's events that placed appellant in Kathie Balonis' apartment more than the one time he claimed. There were maintenance records that showed no calls to her apartment. The jury also heard descriptions of her body's position at the scene that differed from appellant's version. Appellant admitted that he had initially lied about the time of his return home. He admitted that he had falsely claimed that blood on his jeans was pizza sauce. The witness with whom appellant played darts that evening said that she saw no sign of blood or a cut on his hand at a time when he said he had already cut his hand on a package. Appellant claimed to hear noise and see a person leaving in a Vega at the time of the murder, but other people in the vicinity did not. The forensic evidence presented to the jury placed the victim's blood and saliva on appellant, as well as identifying appellant's blood in the victim's apartment, in locations not consistent with his version of events. Appellant challenges the credibility of Zain's testimony. During the trial, Zain stated that appellant's blood was on the collar of the victim's shirt, a fact that was not revealed in any of his previous written reports. Zain characterized this omission as an "oversight." We do not reweigh the credibility of the witnesses, and whether this mistake as to one sample should affect the rest of Zain's testimony was a matter for the jury.[2] There was testimony that a man was seen at the apartment complex who fit the description of the man appellant said he saw leaving Kathie Balonis' apartment. In addition, noises were heard in the apartment at a time when Kathie Balonis was not home. However, this testimony, other than appellant's, referred to a time much earlier in the afternoon. In any event, the jury was entitled to believe the State's witnesses' accounts of the events of that day. Because a rational trier of facts could have found the essential elements of the crime beyond a reasonable doubt, we overrule appellant's point of error one; appellant is not entitled to an acquittal. PROSECUTORIAL MISCONDUCT Background In point of error nine, appellant contends that the trial court erred in overruling his 435 motions for mistrial and for instructed verdict based on prosecutorial misconduct; specifically, appellant complains that the district attorney intimidated a witness and used her perjured testimony. We will sustain this point of error. The witness in question is Carolyn Toth, the manager of the New Braunfels Oaks Apartments. The testimony in question involved Toth's description of a consolatory embrace between appellant and the victim's sister, Karen Balonis, shortly after the murder was discovered. The significance of the testimony, from appellant's perspective, is that it could explain forensic evidence showing the presence of the victim's blood and saliva in a location on appellant's vest inconsistent with his account of his contact with the victim's body. Toth testified, on direct examination by the State, concerning the events on the night of the murder and the physical layout of the apartment complex. The building had three sets of stairs: east and west at either end of the building, as well as a middle staircase. Kathie Balonis' apartment was the westernmost apartment on the second floor. On cross-examination, Toth testified that after the discovery of the body and the arrival of police officers, she saw appellant go up the west stairs by the victim's apartment and embrace the victim's sister, Karen, who returned the embrace. On redirect examination, the district attorney pointed out that two police officers were on the west stairway restricting access to the area of the victim's apartment at the stairway. He asked if appellant might have gone up the middle stairway, and if Toth might have seen him after he arrived at the second floor balcony. Toth replied that when she saw him, he was walking up the stairs by the victim's apartment. The district attorney then asked her if she saw Karen Balonis actually embrace appellant or if she just saw them get close together as if an embrace were going to occur. Toth answered that she saw hands on shoulders in an embrace. The next day, the State recalled Toth. She was questioned by the district attorney as follows: Q: Mrs. Toth, after testifying, this morning did youafter testifying, did you contact me, Mrs. Toth, and inform me that you felt that perhaps you had left the wrong impression on some of your testimony? A: Correct. Q: You testified yesterday that you saw the defendant go up the stairs to Kathie Balonis' apartment. Did you actually see him go all the way to the top of the stairs or did you just see him start up the stairs? A: Start. Q: You never saw him actually come to the top of the stairs? A: No. * * * * * Q: You also testified yesterday to what, in your mind, you initially thought was an embrace between Karen Balonis and the defendant, Jack Warren Davis; is that correct? A: Yes, sir. Q: Now, along that upper balcony, is there a large wooden handrail that goes across there? A: Correct. Q: Would that have obstructed your view? A: Very possibly. Q: Did you see a concluded embrace, to where the hands of Karen Balonis actually touched the shoulders of Jack Davis, or did you see Jack Davis go around (indicating) and the hands just start up by Karen Balonis? A: What you said the first time. Q: You did not see a concluded embrace? But just off of your presentsense impression you just had assumed that it was concluded? A: When I saw his arms go up around her, I just assumed when I saw her arms they were consoling one another and the arms came up. 436 Q: In other words, you found there may be a difference between an initial act and a concluded act; is that correct? A: That's correct. The State then passed the witness. Defense counsel asked her to explain, in her own words, what differed between her prior testimony and her current testimony. She replied: That yesterday in my statement, I had thought, when you had asked me the question, I said I thought there was an embrace, they had "consoled each other," is a good choice of words; and when I went home last night and thought about it, thought about the arms coming up, and I saw Jack's arms going around Karen, I saw other arms come up, and it made me think last night maybe it could have been anybody's arms coming up, but it wasn't an embrace where Karen put her arms completely around Jack. She then said that she did not see Karen's arms go around appellant; and in response to a question whether she saw Karen's arms start to go around appellant, she made a gesture which was recorded in the statement of facts as Karen's arms going up to her side. The questioning then moved on to whether anyone had asked her to change her testimony or had threatened her if she did not do so. She said that no one had done so. Hearing on Motion for Mistrial Upon learning that, in between Toth's two rounds of direct testimony, the district attorney had threatened Toth with a grandjury indictment for perjury if her original testimony about the staircase and the embrace were found to be false, appellant moved for a mistrial on the ground of prosecutorial misconduct. The trial court heard testimony at an informal hearing outside the jury's presence. At this hearing, the district attorney informed the court that after Toth first testified, he reviewed the statements from the various police officers, particularly from the two who said that they had secured the west stairway by the victim's apartment and that appellant had only come halfway up the stairs. He also reviewed Karen Balonis' testimony that she did not embrace the defendant. He then asked an officer to contact Toth and have her call his office. When she arrived at his office, he told her that there was a conflict between her testimony and that of other witnesses; that if he could not resolve this conflict he would present the matter to the grand jury; and that if the officers had lied he would indict the officers, or "the reverse if she had not told the truth." He also told her that he had "already put one person in jail for lying on the stand last year." He said he then asked her if she might have been mistaken about having seen a completed embrace. She said she had been mistaken. The trial court then recalled Toth, still outside the presence of the jury, told her that she now had judicial immunity from prosecution for perjury, and assured her that she was not going to jail. The court asked her if she had changed her testimony in response to the district attorney's threat to have her brought before the grand jury. She answered, under oath, "That's why I changed it." She said that the district attorney's manner frightened her; that she felt intimidated by his saying that he had already put one person in jail for lying; that she was afraid he would put her in jail; and that she was now distraught about the matter and had been suffering physically. After the court finished its questioning of Toth, the district attorney questioned her. During this questioning, Toth became upset, telling the district attorney that he was not allowing her to properly answer the questions and that he had "put me and my life through hell and back, and you can't do this to me." She said that she had been intimidated by his attitude and manner, by his having come unexpectedly onto the apartment complex property one day, and by a police officer who had tried to get her to "ride out in the country" one day to talk about the case. The district attorney also questioned Toth about a lawsuit filed by the victim's estate against the apartment complex, to which she responded that the lawsuit was not her concern because she had not been sued personally. 437 Defense counsel then questioned Toth. She said the district attorney's office had called her after she first testified and asked her to come in for a talk. She said the only person she called after that was her attorney. She said that after their meeting the district attorney told her on three different occasions that he was going to say in front of the jury that she called him. Defense counsel then called Doris R. Simms, Toth's mother, still outside the presence of the jury. Simms said that as she was sitting in the hallway while Toth was waiting to testify for the second time, the district attorney came up to Toth, patted her hand, and told her that he was going to tell the jury that she had called him and said that she had thought about the matter and wanted to change her story. The district attorney said he was attempting to show that the filing of the civil lawsuit against the apartment complex had caused a change in attitude in several witnesses. The district attorney then asked Simms if she was aware of a "quasi feud" between the Balonis sisters and Toth over another tenant. Simms said her daughter had no hard feelings about the matter of this tenant, who eventually was asked to leave. The district attorney then called Nancy Filkins, an employee in his office, to testify at the hearing. Filkins had been present when Toth came to the office to give her statement of May 1. Filkins said the district attorney had requested Officer Alvarez to ask Toth to come to the office. Filkins said she told the district attorney that Toth had called back, although she herself did not take the call. She was told that Toth would be there in thirty minutes. She said that the district attorney's only knowledge of the phone call was through her, and that she did not see him berate, intimidate, or in any other manner try to coerce Toth during their meeting. Filkins was in the room the entire time. She said the district attorney told Toth that there was a discrepancy between an officer's testimony and hers; that he would go after the officer if he made a misstatement on the stand as well; that Toth did not appear to be extremely upset; that she remained in his office for about an hour and a half and did not express any displeasure about the way in which the contact had been handled; and that he turned on the tape immediately when she came into his office. Defense counsel then called the district attorney, who said he had not attempted to intimidate Toth; that it was his understanding that Toth had called his office; that he was simply trying to find out if someone was lying or if there was simply a perception problem caused by a tendency to see part of an act and assume its completion; and that he had informed Toth that if anyone involved were lying he would take them to the grand jury. Counsel then asked whether the officers had testified in depositions that appellant was not on the balcony, while Karen Balonis, as well as Toth, had said that he was. After this hearing, the trial court ruled that there had not been prosecutorial misconduct that would justify a mistrial. The judge said he was going to instruct the jurors that they were not to consider Toth's second round of testimony for any purpose, which he later did. He said the district attorney would be called to a separate hearing to see whether he should have to face sanctions. Analysis Under certain circumstances, a judge's or prosecutor's threats or intimidation that dissuade a witness from testifying or persuade a witness to change their testimony may infringe a defendant's dueprocess rights. See Webb v. Texas, 409 U.S. 95, 93 S. Ct. 351, 34 L. Ed. 2d 330 (1972). "It is not improper per se for a trial court judge or prosecuting attorney to advise prospective witnesses of the penalties for testifying falsely." United States v. Blackwell, 694 F.2d 1325, 1334 (D.C.Cir. 1982); accord United States v. Hooks, 848 F.2d 785, 799 (7th Cir.1988); United States v. Whittington, 783 F.2d 1210, 1219 (5th Cir.), cert, denied, 479 U.S. 882, 107 S. Ct. 269, 93 L. Ed. 2d 246 (1986); United States v. Simmons, 670 F.2d 365, 371 (D.C.Cir. 1982), cert, denied, 464 U.S. 835, 104 S.Ct. 438 121, 78 L. Ed. 2d 119 (1983). "But warnings concerning the dangers of perjury cannot be emphasized to the point where they threaten and intimidate the witness into refusing to testify." Blackwell, 694 F.2d at 1334; accord Hooks, 848 F.2d at 799; United States v. Hammond, 598 F.2d 1008,1012-13 (5th Cir.1979); United States v. Morrison, 535 F.2d 223, 227-28 (3rd Cir. 1976). Although there is no bright line of demarcation between proper and improper perjury warnings, we agree with the following comments in a recent opinion by the North Carolina Supreme Court: Whether judicial or prosecutorial admonitions to defense or prosecution witnesses violate a defendant's right to due process rests ultimately on the facts in each case. Such admonitions should be administered, if at all, judiciously and cautiously. This is particularly true with regard to prosecutorial conduct because, as here, it generally occurs outside the context of the trial itself, is not a part of the official court proceedings, and is not subject to judicial supervision and control. Witnesses should not be discouraged from testifying freely nor intimidated into altering their testimony.... In all these kinds of cases the reviewing court should examine the circumstances under which a perjury or other similar admonition was made to a witness, the tenor of the warning given, and its likely effect on the witness's intended testimony. If the admonition likely precluded a witness "from making a free and voluntary choice whether or not to testify," Webb, 409 U.S. at 98, 93 S.Ct. at 353, 34 L.Ed.2d at 333, or changed the witness's testimony to coincide with the judge's or prosecutor's view of the facts,... then a defendant's right to due process may have been violated. On the other hand, a warning to a witness made judiciously under circumstances that reasonably indicate a need for it and which has the effect of merely preventing testimony that otherwise would likely have been perjured does not violate a defendant's right to due process. State v. Melvin, 326 N.C. 173, 388 S.E.2d 72, 79-80 (1990). In the present case, the actions of the district attorney went far beyond a cautious and judicious warning. First, the conversation between the district attorney and Toth occurred outside the context of the trial court and the protection of judicial supervision. Second, it was a personal interview in the district attorney's office, a setting clearly conducive to intimidation. Third, the tenor of the district attorney's comments were more threatening than a simple warning would need to be; for example, the district attorney's remark that he had "already put one person in jail last year for lying" seems designed to intimidate Toth. Finally, the dramatic effect of the meeting on Toth was clearly established, both in the very fact that she changed her testimony and in the reasons she gave for the change. In response, the State dwells at length on the prosecution's general duty to correct false testimony, attaching to its brief the text of an article on the problem of the "recanting witness."[3] Toth, however, was not a recanting witness in the sense that the State urges. Nowhere in the record of the hearing concerning the district attorney's actions is there any evidence that she voluntarily changed her story before the district attorney told her she faced a possible perjury indictment. Moreover, although the district attorney referred to his perception of a "change in attitude" on the part of several witnesses after the filing of a lawsuit against the apartment complex (and also attempted to show bad feelings between Toth and the Balonis sisters), his concern with Toth's testimony was simply that it conflicted with statements from other witnesses. It is not unusual for conflicts to exist between eyewitnesses' accounts of events. The claimed discrepancies here seem to be 439 that type of conflict: did the defendant go all the way up the west stairway or did he use the middle stairway or was he on the second-floor balcony at all? Did he embrace Karen Balonis, did she embrace him back, and, if so, to what degree? The district attorney had the opportunity on recross to elicit the fact that Toth saw appellant start up the stairs, but perhaps did not watch him continuously from the bottom to the top of the stairway. The desired clarification of Toth's testimony could have been handled in the ordinary course of examination and argument. See Pierce v. State, 777 S.W.2d 399, 415-16 (Tex.Crim.App.1989), cert, denied, 496 U.S. 912, 110 S. Ct. 2603, 110 L. Ed. 2d 283 (1990) (court properly exercised discretion in excluding expert testimony on eyewitness reliability; jury is qualified to make credibility determination about eyewitnesses, aided by cross-examination and common knowledge of memory and its effect on perception); Annotation, Admissibility, at Criminal Prosecution, of Expert Testimony on Reliability of Eyewitness Testimony, 46 A.L.R. 4th 1047 (1986) (collecting cases dealing with admissibility of expert testimony on the reliability of eyewitness perceptions and identifications). A private meeting with Toth outside the presence of the trial judge, in which the district attorney boasted of having already sent one person to jail for perjury, was unnecessary and was calculated to intimidate Toth into changing her testimony. We hold that the district attorney's actions were improper. Furthermore, the knowing use of perjured testimony by a prosecutor in obtaining a conviction violates a defendant's due-process rights and denies the accused a fair trial. Mooney v. Holohan, 294 U.S. 103, 55 S. Ct. 340, 79 L. Ed. 791 (1935). A new trial is required if the false testimony could in any reasonable likelihood have affected the judgment of the jury. Giglio v. United States, 405 U.S. 150, 92 S. Ct. 763, 31 L. Ed. 2d 104 (1972); Ex parte Adams, 768 S.W.2d 281, 292 (Tex. Crim.App.1989). In the present case, in addition to the intimidation of Toth, the district attorney knowingly created a false impression for the jury. By asking Toth, on recall to the stand, whether she had contacted him and informed him that she felt that her earlier testimony had "left the wrong impression," and by allowing her to answer "Correct," the district attorney created the impression that Toth voluntarily returned to his office on her own initiative. We cannot sidestep the problem presented by the prosecutor's conduct by dealing with it as a lapse in communication between him and an employee who told him that Toth had called his office, thus rendering his question to her about the phone call "technically accurate, literally true, and legally true," as the State contends in its brief. The salient point is that the district attorney, by his own admission, initiated the contact with Toth and implicitly threatened to prosecute her for perjury if she did not change her testimony. Yet, his presentation in front of the jury was calculated to leave the misimpression that she had contacted his office, by phone, on her initiative because she thought her testimony had been misleading. This constitutes the knowing use of perjured testimony. Nor can we conclude that the district attorney's actions did not prejudice appellant's defense. Toth's original testimony was important for the defense because she saw the embrace between appellant and Karen Balonis, the extent of which could arguably explain how the blood and saliva got on appellant's vest. The trial court instructed the jury to ignore Toth's second round of testimony. A simple instruction, however, could not cure the false impression left by the prosecution that, first, Toth had initiated contact with his office and, second, had voluntarily changed her story. Indeed, the court's instruction may well have inadvertently exacerbated the harm. In light of Toth's changing stories, we think it likely that the court's instruction to ignore part of her testimony had the effect of convincing at least some jurors that she was simply not a credible witness and that all of her testimony should be ignored. We hold that the district attorney's actions denied appellant a fair trial and violated appellant's due-process rights. Accordingly, the trial court erred in denying appellant's 440 motion for mistrial. We sustain appellant's point of error nine. SEARCH AND SEIZURE OF BLOOD In point of error ten, appellant contends that the trial court erred in overruling his objection to evidence obtained as a result of a warrant issued in violation of requirements of the Texas Code of Criminal Procedure. We agree and will also sustain this point of error. The record shows that a "motion for hair, blood, and sperm samples" was submitted to a magistrate and granted on November 29, 1989. This motion stated that appellant was a suspect in the offense of capital murder and that the State requested an order allowing the police department to acquire samples of blood, body hair, and sperm from him. That portion is signed by the district attorney. An affidavit follows and states: I, MONTGOMERY KAMA, being over the age of eighteen (18) years and having personal knowledge based upon my investigation of the same do hereby affirm all statements in the above motion are true and correct, and that said defendant JACK DAVIS is a suspect in a Capital Murder case in Comal County, Texas. The affidavit is followed by an order of the magistrate granting the motion. Taking blood is a search and seizure under federal and state law. Schmerber v. California, 384 U.S. 757, 86 S. Ct. 1826, 16 L. Ed. 2d 908 (1966); Escamilla v. State, 556 S.W.2d 796 (Tex.Crim.App. 1977). Absent consent, taking a blood sample from a defendant in custody requires a validly obtained warrant. Smith v. State, 557 S.W.2d 299, 301-02 (Tex.Crim.App. 1977). A warrant may be issued to search for and seize property or items that are evidence of an offense or which tend to show that a particular person committed an offense. Tex.Code Crim.Proc.Ann. art. 18.-02(10) (Supp.1992). To justify the issuance of a search warrant under article 18.02(10), there must be a supporting affidavit setting out sufficient facts to establish probable cause that a specific offense has been committed, that the specifically described property or items that are to be searched for or seized constitute either evidence of that offense or evidence that a particular person committed that offense, and that the property or items constituting evidence to be searched for or seized are located at or on the particular person, place, or thing to be searched. Tex.Code.Crim.Proc.Ann. art. 18.01(c) (Supp.1991). Compare Mulder v. State, 707 S.W.2d 908, 915-16 (Tex. Crim.App.1986) (affidavit for a search warrant to take a blood sample held insufficient) with Marquez v. State, 725 S.W.2d 217, 233-34 (Tex.Crim.App.) (affidavit held sufficient), cert, denied, 484 U.S. 872, 108 S. Ct. 201, 98 L. Ed. 2d 152 (1987). The affidavit in this cause does not establish probable cause to issue a search warrant. The affidavit itself does not even state that the evidence to be searched for and seized is the defendant's blood. No facts whatsoever are set out in the affidavit to show that the items to be searched for are evidence of a crime or show that the person involved committed the offense. The motion to which the affidavit was attached simply states that appellant is a suspect in the offense and then requests the blood, hair, and sperm samples. The only statement that the affidavit swears is true is that appellant is a suspect in the murder of Kathie Balonis in Comal County. The State contends that, notwithstanding the inadequacy of the affidavit to establish probable cause for the issuance of the warrant, the evidence should not be excluded because the officers who performed the search did so in good faith, reasonably relying on a warrant issued by a magistrate. United States v. Leon, 468 U.S. 897, 104 S. Ct. 3405, 82 L. Ed. 2d 677 (1984). In Leon, a magistrate issued a facially valid search warrant on the basis of an affidavit that related information obtained from a confidential informant and recited the results of police surveillance of several suspects. Although the district court later found the question to be very close, it held the affidavit to be insufficient because the confidential informant was of unproven reliability; without his information, the events observed during police surveillance were inadequate 441 to establish probable cause. Nonetheless, the Supreme Court held that the evidence, because obtained in reasonable, good-faith reliance on a warrant, should not have been excluded. In the present case, the State's first obstacle to the admission of the challenged evidence is the Texas statutory exclusionary rule. Tex.Code Crim.Proc.Ann. art. 38.23 (Supp.1992). Article 38.23(b) creates an exception to the general rule for evidence obtained by a law-enforcement officer acting in objective, good-faith reliance on a warrant issued by a neutral magistrate based on probable cause. This statute is not a codification of Leon, because it requires a finding of probable cause, while "the exception enunciated in Leon appears more flexible in allowing a good faith exception if the officer's belief in probable cause is reasonable." Gordon v. State, 801 S.W.2d 899, 913 (Tex.Crim.App.1990); see also Eatmon v. State, 738 S.W.2d 723 (Tex.App. 1987, pet. ref'd) (statutory goodfaith exception inapplicable where search warrant not supported by probable cause); see also Imo v. State, 822 S.W.2d 635 (Tex. Crim.App. 1991) (defendant who moves to suppress evidence on statutory grounds automatically invokes article 38.23); Robert 0. Dawson, State-Created Exclusionary Rules in Search and Seizure: A Study of the Texas Experience, 59 Tex.L.Rev. 191 (1981). The present circumstances do not fall within the exception contained in article 38.23(b). We further conclude that the evidence in question here was not admissible even under Leon's more flexible good-faith exception. Leon emphasizes that a magistrate must be "detached and neutral," not a rubber stamp for the police. Leon, 468 U.S. at 914, 104 S.Ct. at 3416. Moreover, an officer does not manifest objective good faith in relying on a warrant based on an affidavit "so lacking in indicia of probable cause as to render official belief in its existence entirely unreasonable." Id. at 923, 104 S.Ct. at 3421. These principles enunciated in Leon do not permit the admission of the blood sample taken from appellant in the present case. The affidavit on which the warrant was based is completely lacking in facts to support a finding of probable cause. Thus, no reasonable, good-faith reliance by the officers was manifested. The State also contends that this error was not preserved. The State asserts that the record fails to show that appellant ever objected to the blood being admitted into evidence on the specific ground that it was illegally seized or that the affidavit was insufficient to show probable cause, other than in a pretrial motion to suppress. But where, as here, the pretrial motion to suppress is heard and overruled, further objection at trial is unnecessary. Tex.R.App.P. 52(b). Moreover, the trial record shows that after establishing that the officer obtained the blood sample pursuant to the "motion to take blood," defense counsel objected to any evidence seized on the ground that the motion was not a valid search warrant. The district attorney argued that the "good faith exception" allowed admission, and the trial court agreed. When the judge then allowed the district attorney to proceed with expert testimony regarding the blood, counsel again objected. We conclude that appellant properly preserved the error.[4] We sustain appellant's point of error ten. Moreover, because the evidence relating to the blood sample was important forensic evidence, we are not able to conclude that the error was harmless, i.e., we are not able to determine beyond a reasonable doubt that its erroneous admission made no contribution to the conviction. See Tex. R.App.P. 81(b)(2). 442 OTHER POINTS OF ERROR Because we reverse on points nine and ten, we need not address appellant's other points of error. In light of our disposition of the appeal, however, we will discuss some of the other complaints appellant has raised on appeal in order to provide guidance for the trial court in the event of retrial. Lost Evidence Appellant contends that the court erred in overruling his motion to dismiss for due process violations based on the State's negligent investigation of the case (point two) and on the intentional destruction of exculpatory evidence (point three). Appellant points out that photographs and negatives were missing, that hairs found in the victim's hand and mouth were missing, that a tape recording of an interview with the victim's next-door neighbor immediately after the discovery of the body was erased, and that the vials of blood tested by Zain were destroyed. Three factors are relevant in determining whether the failure to preserve evidence has resulted in a violation of due process: (1) the likelihood that the lost evidence was exculpatory; (2) the likelihood that the defendant was significantly prejudiced at trial by the absence of the evidence; and (3) the level of government culpability. Gardner v. State, 745 S.W.2d 955, 958-59 (Tex.App. 1988, no pet.); see also Arizona v. Youngblood, 488 U.S. 51, 109 S.Ct. 333,102 L.Ed.2d 281 (1988); California v. Trombetta, 467 U.S. 479, 104 S. Ct. 2528, 81 L. Ed. 2d 413 (1984); Ex parte Brandley, 781 S.W.2d 886 (Tex.Crim.App. 1989); State v. Shelton, 802 S.W.2d 80, 82 (Tex.App.1990, pet. granted). Failure to preserve potentially useful evidence, absent a showing of bad faith on the part of the police, does not, in and of itself, result in a denial of due process of law. Arizona v. Youngblood, 488 U.S. at 58, 109 S.Ct. at 337. The accused must show that the police conduct itself indicates that the evidence could form a basis for exonerating the appellant. Id. We do not find in the present record evidence of misconduct sufficient to compel the conclusion that the police or their agents acted in bad faith regarding the failure to preserve evidence. Accordingly, the denial of appellant's motion to dismiss on this basis has not been shown to be error. Impeachment Appellant contends in point of error sixteen that the trial court erred in refusing to permit him to impeach a State's witness as to bias or prejudice. Specifically, he complains that he was not permitted to question the victim's sister about a wrongful-death suit filed by her family against the owners of the apartment complex, even though the State was permitted to question the apartment complex manager about the suit in order to try to show bias on her part. The Court of Criminal Appeals recently held that in a prosecution for aggravated assault, it was error to prohibit the defendant from cross-examining the victim's mother about a pending suit for damages against the owners of the apartment complex where the assault occurred. See Shelby v. State, 819 S.W.2d 544 (Tex.Crim.App. 1991). For the reasons stated in Shelby, we conclude that the district court erred by limiting appellant's cross-examination of Karen Balonis on this subject. Chain of Custody In point of error twelve, appellant contends that his right to a fair trial was abrogated by the State's failure to establish and prove the chain of custody of both the victim's and appellant's blood. Specifically, he urges that the State failed to adequately explain the end of the chain of custody. The State asserted that Fred Zain, the scientific expert who tested the blood, retained the vials. Zain testified that he later returned the vials to Detective Guerrero. After appellant's objections to the chain of custody, the State recalled Guerrero, who provided the explanation that after Zain returned the vials of blood to him, they were destroyed. 443 In general, proof of the chain of custody is vital to the admissibility of evidence if its relevant characteristics are distinguishable only by scientific tests or analyses. Hammett v. State, 578 S.W.2d 699, 708 (Tex.Crim.App.1979); Edlund v. State, 677 S.W.2d 204, 210 (Tex.App.1984, no pet.). If the State proves the beginning and the end of the chain of custody, any gaps in between usually go to the weight and not the admissibility of the evidence. Id. In this case, the State eventually did prove the end of the chain: the officer testified that he received the samples back from the expert and the samples were then destroyed. The credibility of that explanation was a matter for the jury to decide. The implications of the destruction of evidence have been discussed above. We find no merit in point of error twelve. Extraneous Offense Appellant contends that the trial court abused its discretion by permitting the introduction of an alleged extraneous offense into evidence. This point of error relates to the testimony of a resident of the apartment complex that, a few days before the murder, she saw appellant enter the victim's apartment without knocking or turning on lights, even though it was dark outside. The principles governing the admission of extraneous transactions or offenses have been extensively discussed. See, e.g., Montgomery v. State, 810 S.W.2d 372 (Tex.Crim.App. 1990); Williams v. State, 662 S.W.2d 344 (Tex.Crim.App.1983); Albrecht v. State, 486 S.W.2d 97 (Tex.Crim. App.1972). Among the "exceptions" to the general rule prohibiting the admission of extraneous offenses are: motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident. Tex.R.Crim.Evid. 404(b). The admissibility of an offense is affected by whether its probative value is substantially outweighed by the danger of unfair prejudice. Banda v. State, 768 S.W.2d 294 (Tex.Crim.App.), cert, denied, 493 U.S. 923, 110 S. Ct. 291, 107 L. Ed. 2d 270 (1989); Tex.R.Crim.Evid. 403. A major danger in the use of extraneous transactions or offenses is that the accused will, in effect, be tried for being a "bad person" rather than for the offense with which he is charged. In the present cause, the State's use of the extraneous transaction does not appear to be an improper attempt to show that appellant was a bad person with a propensity to commit crimes. Rather, the State offered the resident's testimony in an attempt to show that appellant planned the offense. The prejudicial value of the offense is uncertainthe jury knew that appellant was the maintenance worker at the complex and therefore had access to the apartments. The maintenance logs of the apartment complex had also been introduced by the State and did not agree with appellant's statements about the times he had been in the apartment to do maintenance. Because the extraneous conduct was probative and carried little danger of unfair prejudice, no error is shown. Cumulative Error Although appellant does not raise the issue as a separate point of error, he urges throughout his brief that the cumulative effect of the errors in the investigation and trial of this cause denied him due process of law. Ex parte Brandley, 781 S.W.2d 886, 894 (Tex.Crim.App. 1989), cert, denied, ___ U.S. ____, 111 S. Ct. 61, 112 L. Ed. 2d 35 (1990); Bethany v. State, 814 S.W.2d 455 (Tex.App. 1991, pet. ref'd). We do not reach this contention, as we have found individual errors that require that appellant's conviction be reversed. It appears to us that appellant's other points of error relate to matters that are not likely to recur in a retrial of this cause; accordingly, we will not address them. We reverse the judgment of conviction and remand the cause for a new trial. NOTES [1] Geesa v. State, 820 S.W.2d 154 (Tex.Crim.App. 1991), overruling Carlsen and its progeny, does not apply to this appeal. Geesa specifically stated that Carlsen would continue to apply to all cases pending on appeal at the time Geesa was handed down, November 6, 1991. [2] Appellant's brief refers to another problem raised in a deposition given by Zain in a civil action and contained in his out-of-time motion for new trial: the blood on some carpet samples was not appellant's, but the victim's blood. That evidence is not before us for review, because it was not part of this trial. [3] The material attached was apparently presented at a seminar. It is now published as G. Sarno & J. Douglass, Recantation: Problems for Prosecutors Before, During and After Trial, 18 Am.J.Crim.L. 187 (1991). [4] In its brief, the State also displays a general misunderstanding of what must be done to preserve error. A party must complain only until he receives an adverse ruling. Ramirez v. State, 815 S.W.2d 636, 643 (Tex.Crim.App. 1991). Thus, when an objection is overruled, it is not necessary, in order to preserve error, to request an instruction or a mistrial. Only if an objection is sustained must the party making the objection then request an instruction, if one is desired. If the instruction is given, the party must then request a mistrial, if one is desired. Otherwise, the objecting party has received all of the relief requested and no harm has been done about which to complain. Brooks v. State, 642 S.W.2d 791, 798 (Tex.Crim.App. 1982).	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532322/	831 S.W.2d 662 (1992) Michael B. WHITE, McDowell, Rice & Smith, Joseph McDowell, Respondents, v. MEDICAL REVIEW CONSULTANTS, INC., Appellant. No. WD 44990. Missouri Court of Appeals, Western District. April 14, 1992. Motion for Rehearing and/or Transfer Denied June 2, 1992. Application to Transfer Denied July 21, 1992. 663 James R. Hess, Kansas City, for appellant. Philip Sanford Smith, Kansas City, for respondent Michael B. White, et al. Fletcher Allen Speck, Kansas City, for respondent McDowell, Rice & Smith. Before FENNER, P.J., and ULRICH and SPINDEN, JJ. Motion for Rehearing and/or Transfer to Supreme Court Denied June 2, 1992. FENNER, Presiding Judge. Appellant, Medical Review Consultants, Inc., (MRC), appeals an order of the trial court granting a partial summary judgment in favor of Respondents. MRC is in the business of representing health care providers in appealing denials of medical payment claims pursuant to the provisions of the federal medicare program under the Social Security Act. Respondent, Michael B. White, is a lawyer and former employee of MRC. In his employment with MRC, Michael White represented MRC in regard to denial of medical payment claims before administrative law judges throughout the United States. After working for MRC for one year, Michael White voluntarily left his employment and went to work for the law firm of McDowell, Rice and Smith, also a respondent herein. Michael White sought to compete against MRC on behalf of McDowell, Rice and Smith. However, Michael White had signed an employment contract with MRC providing that he would not compete with MRC in federal administrative appeals upon termination of his employment. Respondents initiated a declaratory judgment action seeking to have said covenant not to compete declared invalid. MRC filed an answer and counterclaim. MRC denied that the covenant not to compete was invalid and filed a three count counterclaim. Under Count I, MRC sought to have Michael White enjoined from violating the covenant not to compete; under Count II, MRC sought damages alleging White's use of confidential and proprietary information of MRC in violation of his employment contract; and under Count III, MRC sought damages alleging trespass against White for his having improperly entered onto MRC's premises. The trial court entered summary judgment on behalf of respondents, finding Michael White's covenant not to compete invalid 664 and further finding in respondents' favor under Count I of MRC's counterclaim. MRC appeals the order of partial summary judgment.[1] The validity of the covenant not to compete in Michael White's employment contract with MRC is called into question by virtue of the Missouri Supreme Court Rules in relation to Professional Conduct of Lawyers. Specifically, Rule 5.6, which prohibits lawyers from making employment agreements that restrict the rights of a lawyer to practice after termination of employment. In its first point on appeal, MRC argues that Rule 5.6 does not apply to federal administrative appeals because such appeals are a federal activity regulated and controlled by federal law which preempts state law and does not prohibit the covenant not to compete in question here. There are three bases for finding preemption of state law by federal law: (1) an express statement by Congress that state law is preempted; (2) when Congress intends that federal law occupy a given field; and (3) when compliance with both state law and federal law is impossible because of an actual conflict. California v. ARC America Corp., 490 U.S. 93, 100, 109 S. Ct. 1661, 1665, 104 L. Ed. 2d 86 (1989). MRC argues that the practice of appearing before federal administrative law judges for appeals under the Social Security Act is controlled by the Administrative Procedure Act, 5 U.S.C.A. § 551, et seq. (1988). MRC points out that the Code of Federal Regulations allows non-attorneys to represent claimants in regard to denial of medical payment claims before administrative law judges. See 20 C.F.R. § 404.1705 (1991) and 42 C.F.R. § 498.10 (1991). MRC also argues that 20 C.F.R. § 404.1740 (1991) sets forth the standard of conduct for attorneys and others representing claimants before federal agencies.[2] Preemption is not to be lightly presumed. California Federal Savings and Loan Association v. Guerra, 479 U.S. 272, 281, 107 S. Ct. 683, 689, 93 L. Ed. 2d 613 (1987). Moreover, when Congress legislates in a field traditionally occupied by the states, a preemption review starts with the assumption that the historic police powers of the states were not to be preempted unless that was the clear and manifest purpose of Congress. California v. ARC America Corp., 490 U.S. at 101, 109 S.Ct. at 1665. Regulation of the Bar is an historic police power of the States. Goldfarb v. Virginia State Bar, 421 U.S. 773, 792, 95 S. Ct. 2004, 2015, 44 L. Ed. 2d 572 (1975). It is also relevant herein that appellant cites federal regulations in support of its preemption argument. Although the occupation of a field may be inferred from federal regulations, the preemption inquiry for federal regulations is more rigorous than for federal statutes. Hillsborough County v. Automated Medical Laboratories, Inc., 471 U.S. 707, 717, 105 S. Ct. 2371, 2377, 85 L. Ed. 2d 714 (1985). MRC cites nothing to show the preemption of state law regarding the validity of a covenant not to compete in the practice of law upon termination of employment by a lawyer. There is nothing to show that Congress has preempted the right of the *665 States to set a policy, as has Missouri, that renders invalid such a covenant not to compete. Missouri has the right to determine that it is in the public's best interest to allow individuals to choose the lawyer they desire without interference from a covenant not to compete, limiting the lawyer's practice and also limiting the public's right to choose a given lawyer. MRC's first point is denied. In its second point, appellant argues that the trial court erred in granting summary judgment because the defenses of estoppel, waiver and unclean hands raise factual issues which preclude summary judgment. MRC's second argument also fails because in Missouri, as elsewhere, it is generally recognized that a contract or transaction prohibited by law is void. Such contracts are based upon illegal consideration and cannot be enforced either at law or equity. King v. Moorehead, 495 S.W.2d 65, 77 (Mo.App.1973). See also, American Civil Liberties Union/Eastern Missouri Fund v. Miller, 803 S.W.2d 592 (Mo. banc 1991); cert. denied, ___ U.S. ___, 111 S. Ct. 2239, 114 L. Ed. 2d 481 (1991).[3] The judgment of the trial court is affirmed. All concur. NOTES [1] Although not all counts of MRC's counterclaim were disposed of, the trial court specifically determined that there was no just reason for delay in ruling in relation to the issue of the validity of the covenant not to compete. This is the issue presented in the claim for relief under respondents' petition and Count I of MRC's counterclaim. Counts II and III present claims separate from the question of the validity of the covenant not to compete. In accordance with Rule 74.01(b), this judgment is therefore final for purpose of appeal. See also, Quiktrip Corp v. City of St. Louis, 801 S.W.2d 706, 710-711 (Mo.App.1990). [2] 20 C.F.R. § 404.1740 (1989) prohibits attorneys and others representing a claimant from such conduct as defrauding, deceiving and misleading a claimant, collecting a fee in excess of that allowed, making a false statement effecting the material rights of a person, or divulging confidential information. [3] In Miller, 803 S.W.2d at 594, the Missouri Supreme Court held that an otherwise binding contractual obligation to return fees to a civil rights organization which fees were recovered in litigation conducted while an attorney was an employee of said organization was a fee splitting agreement and was unenforceable as being in violation of the Rules of Professional Conduct. Rule 5.4.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532320/	872 A.2d 159 (2005) JEANES HOSPITAL v. WORKERS' COMPENSATION APPEAL BOARD (Shawn HASS) Appeal of Shawn Hass. Supreme Court of Pennsylvania. Argued May 12, 2004. Decided April 14, 2005. 160 Jerry Michael Lehocky, Patricia Farrell Karelo, George E. Smith, III, Philadelphia, for Shawn Hass, appellant. Lawrence R. Chaban, for PA Trial Lawyers Ass'n, appellant amicus curiae. Amber Marie Kenger, Richard C. Lengler, Harrisburg, for W.C.A.B., appellee. Leah-Beth Cilo, Philadelphia, for Jeanes Hosp., appellee. BEFORE: CAPPY, C.J., CASTILLE, NIGRO, NEWMAN, SAYLOR, EAKIN and BAER, JJ. OPINION Justice NEWMAN. This Court is called upon to decide the appropriate mechanism by which a workers' compensation claimant can institute proceedings to amend a Notice of Compensation Payable (NCP) to add additional injuries. In the instant matter, Shawn Hass (Appellant) was employed by Jeanes Hospital in Philadelphia (Employer) for about ten months as an intensive care nurse when, on August 31, 1995, she was injured while attempting to relocate a ventilator-dependent patient by means of a Hoyer lift.[1] The Employer accepted responsibility and she received benefits for total disability pursuant to an NCP, which described the work-related injury as "low back." On July 19, 1999, nearly four years after the injury, Appellant was examined by Dr. Barry Lipson, a specialist in orthopedic surgery, at the request of Employer, following which Dr. Lipson certified Appellant's full recovery from her August 31, 1995 "lumbar strain and sprain". Employer filed a Petition to Suspend or Terminate Benefits on September 1, 1999, alleging that Appellant was fully recovered from her work-related injury as of August 23, 1999. Appellant then filed a Petition to Review Compensation Benefits on September 21, 1999, seeking attorneys fees and amendment of the description of the work related injury contained in the NCP. Appellant wished to amend the NCP to cover work-related shoulder injuries, fibromyalgia,[2] thoracic outlet syndrome[3], and depression. 161 A workers' compensation judge (WCJ) conducted hearings during which Appellant testified in support of her Petition and in opposition to that of Employer. Specifically, Appellant described the circumstances of the injury to her back and shoulder. She testified that she was attempting to move a ventilator-dependent patient by means of the Hoyer lift with the assistance of two other nurses. The lift caught on a chair and the patient began to slide. She stated that she caught the entire weight of the patient and held her until the two other nurses were able to properly position the chair. Appellant reported the incident to her supervisor and went directly to the emergency room complaining of back pain. The Business Health Department of Employer provided follow up treatment for the six months following the injury. Appellant stated that her shoulder began to hurt within two days of the incident, which she disclosed to the physicians in Business Health. Subsequent treatment included initial conservative measures, instrumented spinal surgery performed by Dr. Richard Balderston in September of 1996, shoulder surgery by Dr. Gerald Williams (Dr. Williams) in January of 1996[4], further treatments by Dr. Carla Rodgers (Dr. Rodgers), a psychiatrist concentrating in pain management, beginning in April of 1998 and continuing to the date of the hearing, as well as treatments by a rheumatologist, Dr. Michael Franklin (Dr. Franklin), because the surgeries failed to alleviate her pain. Further, Dr. Williams diagnosed Appellant with Thoracic Outlet Syndrome in November of 1997. Appellant also described her unsuccessful, one-day, attempt to return to work for the same employer in October of 1995, her unsuccessful three-month return to work, and her continuing symptoms of pain, loss of mobility, and depression, which, in her view, prevented any return to work as a critical care nurse. She disclosed a previous work-related back injury in 1993 that had completely resolved and that, aside from irritable bowel syndrome and polycystic ovarian disease, she had been physically and emotionally healthy until this work accident. She also acknowledged prior psychiatric problems and two previous suicide attempts in her early adult years. Dr. Rodgers, Appellant's psychiatrist, testified by deposition that her examination of Appellant included the administration of various psychological tests from which she concluded that Appellant continues to be disabled by "pain disorder with associated psychological and physical factors." (Deposition of Dr. Carla Rodgers dated March 20, 2000, at 13.) She elaborated that Appellant has chronic unremitting pain causing depression and feelings of being overwhelmed. Id. In the opinion of Dr. Rodgers, Appellant's medical prognosis is guarded at best and she remains 162 totally disabled by psychiatric infirmities that are directly connected to the work-place injury in 1995. Id. at 16. Although Appellant sees more than one physician, Dr. Rodgers prescribes all of her pain medications and coordinates Appellant's pharmaceutical regimen to ensure that no contraindicated drugs are prescribed. On cross-examination, Dr. Rodgers conceded that she had reviewed few of the notes of Appellant's previous physicians, and was unaware of Appellant's previous suicide attempts. Dr. Franklin, Appellant's rheumatologist, examined her on October 21, 1998, and concluded that she is disabled by fibromyalgia syndrome, a set of associated symptoms of unknown etiology including a recognized symmetrical distribution of locations on the body that produce pain when touched. He provided a detailed recitation of Appellant's medical history and conducted a battery of tests (both blood and muscle), thereby ruling out Thoracic Outlet Syndrome, autoimmune disorders, metabolic disorders, and thyroid problems. (Deposition of Dr. Michael Franklin dated April 26, 2000, at 16.) On physical examination, Dr. Franklin noted multiple tender points in the shoulder area, the lateral epicondyles outside the hips, the medial fat pads of the knees, and the bursa below the knee. Dr. Franklin thus concluded that Appellant is totally disabled by Fibromyalgia Syndrome and that her prognosis is poor to guarded. It was his opinion that Appellant's fibromyalgia is a direct result of her work-related shoulder injury. Employer presented the expert testimony of its orthopedic specialist, Dr. Lipson, and psychiatric expert, Susan Fenichel, M.D. (Dr. Fenichel); the former opining that Appellant was fully recovered from her workplace injury and could return to her previous position without restrictions, and the latter that Appellant remained disabled by chronic pain and depression but that these conditions were not related to the work incident of August 1995. Dr. Lipson testified that Appellant's complaints of pain did not correlate with the results of his objective examination or diagnostic testing, and he opined that Appellant was being prescribed excessive amounts of narcotics. Dr. Fenichel testified that Appellant suffered from no disabling psychiatric condition and required no further psychiatric treatment because of the work place injury. She also expressed concern as to the quantity of narcotics being prescribed for Appellant by Dr. Rodgers. The WCJ credited the testimony of Appellant and Drs. Franklin and Rodgers. Specifically, he credited Appellant's testimony that she had injured her shoulder in the August 1995 work incident and that she had not fully recovered from her injury. He found the testimony of Dr. Franklin credible because Dr. Franklin had reviewed all of Appellant's medical records, had treated Appellant over time, and had credibly determined that Appellant suffered from fibromyalgia. The WCJ concluded that the testimony of Drs. Lipson and Fenichel was less credible, and determined that Appellant was not fully recovered as of August 23, 1999, from the fibromyalgia and "pain disorder with associated psychological and physical factors" sustained as a result of the August 1995 workplace injury. The WCJ decided that, based on the medical evidence, the NCP, in describing the injury solely as a "low back" injury, contained a material factual misstatement. The WCJ granted Appellant's Review Petition and ordered correction of the NCP to add the shoulder injury, fibromyalgia, and pain disorder with associated psychological and physical factors, denied Employer's Petition to Suspend 163 or Terminate benefits, and rejected Appellant's demand for penalties. On appeal to the Workers' Compensation Appeal Board (Board), Employer argued that Appellant had incorrectly filed a Petition to Review, rather than filing a Claim Petition. The Board acknowledged that the decision of the Commonwealth Court in AT & T v. Workers' Compensation Appeal Bd. (Hernandez), 707 A.2d 649 n. 2 (Pa.Cmwlth.1998), required the filing of a Claim Petition to add additional injuries. However, it noted that the Commonwealth Court had also held that the "form of the petition is not controlling where the facts warrant relief to a claimant." Coover v. Workmen's Compensation Appeal Bd. (Browning-Ferris Inds.), 140 Pa.Cmwlth.16, 591 A.2d 347, 350 (1991). Finding the credibility determinations unassailable, and that substantial evidence supported the conclusions of the WCJ, the Board held that "the Judge correctly determined that [Appellant] met the burden of proof necessary to add the conditions to the Notice of Compensation Payable, regardless of the form of the petition filed." (Board Opinion dated January 10, 2002, at 6.) Employer next argued that there was no evidence demonstrating that Appellant's work injury continues and that the WCJ erred in concluding that it had not met its burden of proof for termination. The Board noted that the WCJ specifically credited the opinions of Dr. Franklin and Dr. Rodgers, which supported the contention of Appellant that disability had not ceased. Because it was Employer's burden to prove that all disability had ceased, the credited evidence did not enable Employer to meet its burden. Accordingly, the Board affirmed the decision of the WCJ. Employer appealed to the Commonwealth Court, which affirmed in part and reversed in part in a published decision. Jeanes Hospital v. Workers' Compensation Appeal Bd. (Hass), 819 A.2d 131 (Pa.Cmwlth.2003). The court stated that, while a WCJ has the authority to amend an NCP when a material mistake occurs, the material mistake must exist at the time that the NCP is issued for Section 413 to apply. The court noted that none of the additional injures alleged by Appellant existed when the NCP was issued and there was no material mistake. It opined that, for injuries that arise subsequent to the work injury and that are not accepted by the employer in its NCP, Section 413 does not apply and a claimant must file a claim petition subject to the limitations of Section 315, 77 P.S. § 602.[5] The court reasoned that the only exception to this scheme is when the additional compensable injuries arise as a natural consequence of the accepted injury. See Campbell v. Workers' Compensation Appeal Bd. (Antietam Valley Animal Hospital), 705 A.2d 503 (Pa.Cmwlth.1998). The court went on to address the precept that the form of the petition is not controlling when a claimant is entitled to relief, which formed the basis for the Board's affirmance of the WCJ. It noted that its decision in Coover was interposed 164 with concerns of prejudice where the claimant was unfairly blindsided when he expected to address one matter and the WCJ decided another. In Coover, the WCJ terminated a claimant's benefits based on the evidence presented, even though the employer had not sought termination before the close of the hearing process. The court reasoned that, even though the Act permits a WCJ to fashion appropriate relief, it was highly prejudicial to a claimant for a WCJ to terminate benefits where a claimant was unaware that benefit termination was an issue. The court observed that the unfair prejudice concern present in Coover was lacking in the instant matter where the Petition filed by Appellant adequately set forth the relief that she was seeking. Finally, in the case at hand, the court reviewed the claim of Employer that the WCJ should have granted its Termination Petition. It recognized that the WCJ credited the testimony of Appellant that she continues to have low back pain and specifically rejected the testimony of Dr. Lipson that Appellant had fully recovered from her work injury. The court opined that, based particularly on these distinct factual findings, the WCJ believed that Appellant had not fully recovered and that she had sustained additional injuries. As such, there was no credible evidence to support a finding that all disability had ceased to sustain Employer's Termination Petition. Appellant sought allowance of appeal asserting that: (1) the Commonwealth Court had deviated from this Court's holding in Commercial Credit Claims v. Workers' Compensation Appeal Bd. (Lancaster), 556 Pa.325, 728 A.2d 902 (1999); (2) the court erred in determining that a claim petition must be filed to add additional injuries; and (3) if a claim petition was required, whether it was time barred. We granted her Petition, limited to the issue of whether the appropriate filing is a Claim Petition or a Petition to Review. DISCUSSION It is fundamental to the sequence of events in a workers' compensation matter, that the process is initiated by injury to the employee and notice to the employer.[6] Like a flow chart, the path taken following this notice depends on whether voluntary acceptance of liability for the injury is assumed by the issuance of an NCP, or a Claim Petition is filed to adjudicate liability. The paths converge when liability is established, and the employee receives medical and wage loss benefits, as applicable, for the established and accepted injury. Problems arise, however, when the injured employee develops additional physical or psychological maladies, because an employer is responsible not only for the direct and immediate consequences of a work-related injury, but also for injuries that are causally related to the accepted work injury. 77 P.S. § 411.[7] The essence 165 of this controversy is whether a claimant who develops a subsequent physical or psychological condition is required to file a Claim Petition seeking an adjudication that the condition is compensable or a Review Petition seeking to amend the NCP to reflect further injuries. The same dilemma is faced when the NCP does not reflect all of the injuries sustained by the claimant. The Commonwealth Court has been less than consistent in addressing this issue. Beginning with AT & T v. Workers' Compensation Appeal Bd. (Hernandez), 707 A.2d 649 (Pa.Cmwlth.1998), the Commonwealth Court determined that the only way to correct an NCP to add an injury, was to file a Claim Petition. There the court stated: We note that the [Act] makes no provision for a claimant to amend a notice of compensation payable to include an additional injury not admitted to by the employer at the time the employer initially issued the notice of compensation payable. A notice of compensation payable is not an agreement between the parties, but, rather, is a voluntary admission by the employer; in an effort to avoid litigation, the employer admits responsibility, and assumes liability, for the employee's injury as specifically described in the notice of compensation payable. Because there is no right to appeal from a notice of compensation denial, and because there exists no authority that would permit any entity other than the employer itself to add to the employer's admission in the notice of compensation payable, Claimant here should have filed a claim petition in order to receive benefits for the hip injury which he alleges also resulted from his April 8, 1989 work incident. We now take this opportunity to caution practitioners against the inappropriate filing made here.... Id. at 650 n. 2. In AT & T, Ruben Hernandez (Hernandez) sustained a work-related injury when a cabinet full of computers fell on his hip and side, pinning him to the floor. The employer accepted liability for a "back sprain" and Hernandez collected benefits for a little over three months. During this timeframe, Hernandez developed bilateral aseptic necrosis of his hips. The employer then filed a Termination Petition alleging that Hernandez had recovered from his "back strain" and could return to work except for his non-work-related aseptic necrosis. Hernandez filed a Petition to Review, seeking to amend the incomplete description of the work injury contained in the NCP. The Commonwealth Court permitted the amendment and treated the filing as a claim petition because the employer failed to challenge the legitimacy of the Petition to Review. In doing so, the court cautioned future claimants that filing a claim petition was the appropriate action when seeking benefits for conditions other than those delineated in the NCP. The following year, this Court decided Commercial Credit Claims v. Workmen's Compensation Appeal Bd. (Lancaster), 556 Pa.325, 728 A.2d 902 (1999).[8] There, an employee fell twenty-eight feet from a catwalk while taking photographs in his occupation as a claims adjuster. The employer accepted liability for the physical injuries and, three years later, sought to terminate benefits because of full recovery. In opposition, the employee testified that 166 he continued to experience pain. The employer's medical expert stated that the original injuries could not justify the continued level of pain as expressed by the employee, and that, in his opinion, the cause of the continuing pain was psychological. The WCJ concluded that, because the employer's medical expert could not rule out a connection between the work injury and the disabling psychological condition, the employer was not entitled to a termination of benefits. The Board and the Commonwealth Court affirmed. This Court granted allowance of appeal in that case to determine whether an employer attempting to terminate workers' compensation benefits must disprove a causal relationship between the injury and the subsequently alleged psychiatric overlay where the employer had accepted liability only for physical injuries. After reviewing the modification procedures provided by the Act, the Court determined that the psychiatric overlay could form the basis for continued benefits only if the NCP had been properly modified. We noted that either party may file a Petition to Modify pursuant to Section 413(a) of the Act, and the party so moving has the burden of proving the grounds for modification. In dicta, the Court observed that the claimant was not without a remedy as he could file a Petition to Modify the NCP to add the additional injury. In effect, our decision in Commercial Credit Claims disapproved of the concepts expressed by the Commonwealth Court in footnote two of AT & T. Subsequently, the court followed Commercial Credit Claims in such cases as Westinghouse Electric Corp./CBS v. Workers' Compensation Appeal Bd. (Korach), 829 A.2d 387 (Pa.Cmwlth.2003), and Westinghouse Electric Corp./CBS v. Workers' Compensation Appeal Bd. (Burger), 838 A.2d 831 (Pa.Cmwlth.2003), yet AT & T in the instant matter, prompting our review. Appellate review in workers' compensation matters is limited to determining whether constitutional rights were violated, whether an error of law was committed, whether the practices and procedures of a Commonwealth agency were followed, and whether the findings of fact made by the WCJ and necessary to support its decision were supported by substantial evidence. 2 Pa.C.S. § 704; Gunter v. Workers' Compensation Appeal Bd. (City of Philadelphia), 573 Pa.386, 825 A.2d 1236, 1238 (2003). Substantial evidence is such relevant evidence as a reasonable mind might accept as adequate to support a conclusion. Bethenergy Mines v. Workmen's Compensation Appeal Bd. (Skirpan), 531 Pa.287, 612 A.2d 434, 436 (1992). Because this appeal raises questions of law, our standard of review is plenary. Rossa v. Workers' Compensation Appeal Bd. (City of Philadelphia), 576 Pa.349, 839 A.2d 256, (2003). Modification of the NCP to reflect further injuries is governed by Section 413(a) of the Workers' Compensation Act (Act).[9] Section 413(a) of the Act reads in pertinent part: A workers' compensation judge may, at any time, review and modify or set aside a notice of compensation payable ... or upon petition filed by either party with the department, or in the course of the proceedings under any petition pending before such workers' compensation judge, if it be proved that such notice of 167 compensation payable or agreement was in any material respect incorrect. (77 P.S. § 771.) A workers' compensation judge designated by the department may, at any time, modify, reinstate, suspend, or terminate a notice of compensation payable... upon petition filed by either party with the department, upon proof that the disability of an injured employe has increased, decreased, recurred, or has temporarily or finally ceased .... Such modification, reinstatement, suspension, or termination shall be made as of the date upon which it is shown that the disability of the injured employe has increased, decreased, recurred, or has temporarily or finally ceased ... Provided, That, except in the case of eye injuries, no notice of compensation payable, agreement or award shall be reviewed, or modified, or reinstated, unless a petition is filed with the department within three years after the date of the most recent payment of compensation made prior to the filing of such petition.... And provided further, That where compensation has been suspended because the employe's earnings are equal to or in excess of his wages prior to the injury that payments under the agreement or award may be resumed at any time during the period for which compensation for partial disability is payable, unless it be shown that the loss in earnings does not result from the disability due to the injury. (77 P.S. § 772.) The workers' compensation judge to whom any such petition has been assigned may subpoena witnesses, hear evidence, make findings of fact, and award or disallow compensation, in the same manner and with the same effect and subject to the same right of appeal, as if such petition were an original claim petition. (77 P.S. § 773.) 77 P.S. §§ 771, 772, 773 (emphasis added). The import of these paragraphs is clear. The WCJ may amend an NCP if it is materially incorrect or if the disability status of the injured employee has changed. An NCP is materially incorrect if the accepted injury (or injuries) does not reflect all of the injuries sustained in the initial work incident. Conversely, and also covered by Section 413(a), injuries that result or flow from the original injury, represent an increase in disability.[10] The often overlooked third paragraph of Section 413(a) requires that petitions filed pursuant to this section be treated the same "as if such petition were an original claim petition." 77 P.S. § 773. It is, therefore, unnecessary, as the Commonwealth Court held, for a claimant to file a new claim petition for additional injuries not accepted by the employer, because the WCJ is empowered to and must treat a modification petition alleging those additional injuries as if it were a claim petition. Stated another way, a Petition to Modify an NCP functions as a claim petition for the purpose of adding additional injuries. Because it functions "in the same manner and with the same effect," the burdens of proof for the respective parties are the same as if an actual claim petition had been filed. This provision is critical because the employer has not heretofore accepted liability voluntarily for the additional injury. Despite the concept espoused in 168 AT & T, and followed in the instant matter, that the Act provides no mechanism for amending an NCP, Section 413(a) establishes the limits of authority for amendment by the WCJ and the burdens of the respective parties. With the foregoing in mind, we turn to the specifics of the matter under review. Having established that the appropriate filing to seek a modification of the NCP to correct the description of the work injury is a Petition to Review, we note that Appellant made the correct filing. The Petition alleges a material mistake of fact in that "The NCP fails to reflect claimant's work-related shoulder injuries, fibromyalgia, Thoracic Outlet Syndrome and depression." (Original Record, Petition to Review dated September 21, 1999, side 1.) The burden belonged to Appellant to satisfy her burden that there was a material mistake as to the work injury description. To that end, Appellant testified that she injured her shoulder during the same incident and sought treatment within two days of the injury. The record also reflects that Dr. Williams treated Appellant conservatively with physical therapy and site injections before performing surgery five months after the injury. The WCJ found the testimony of Appellant completely credible and sufficient evidence supports the conclusion of the WCJ that the NCP was materially incorrect when it was issued and subject to modification to add the shoulder injury. Dr. Franklin, who is currently treating Appellant, testified that he diagnosed fibromyalgia based on his examination, her medical history, and her symptomology in October of 1998. The WCJ credited this testimony, which was unequivocal. Employer argues that the NCP could not have been materially incorrect at the time it was issued for failing to include this condition because Appellant's fibromyalgia developed some time after the initial incident. While Employer is correct, Section 413(a) permits the WCJ to modify an NCP whenever it is shown that disability increased. Appellant's increasing levels of pain as evidenced by the difficulty that Dr. Rodgers and Dr. Franklin have experienced in finding a treatment regimen that will restore her quality of life, make reinstatement of Appellant's earning capacity less than likely. Further, Dr. Franklin's credible testimony established that Appellant's fibromyalgia flowed directly from her work-related shoulder injury. We see no error in modifying the NCP to include fibromyalgia. Appellant sought to modify the NCP to add coverage for Thoracic Outlet Syndrome. Notably, the WCJ made no findings as to whether Appellant satisfied her burden of proving this condition. However, the WCJ did not include this condition in the modification and Appellant has not cross-appealed this determination.[11] Finally, Appellant sought to have the NCP reflect the depressive state that has developed as a result of, and is now a part of, the work injury. Both Dr. Rodgers and Dr. Fenischel testified that Appellant was depressed; the difference was in the degree. The WCJ credited the testimony of Dr. Rodgers, which was sufficient to undergird the conclusion of the WCJ that Appellant's depression was a direct result of the work injury. Further, Appellant testified that she was depressed because she could not return to work as a critical care nurse. Based on the foregoing, we find that the WCJ properly amended the NCP to add 169 Appellant's shoulder injury, fibromyalgia, and psychiatric overlay. CONCLUSION Within the workers' compensation scheme, we have recognized a number of important public policies. Among those are the positives attendant to the voluntary payment of medical expenses, the appropriateness and desirability of limiting, through statutes of limitations and repose, the time during which claimants must act, and the humanitarian goals that are realized when the system works as intended. When an NCP description of injury does not correctly reflect the actual injury or enumerate all of the injuries sustained in a work-related incident, Section 413(a) sets forth the procedure by which the NCP is modified. Pursuant to Section 413(a), a claimant must file a Petition to Review Notice of Compensation Payable, which is treated like a claim petition. As in a claim petition, the claimant has the burden of proving all elements to support the claim for benefits. In the instant matter, Appellant filed a Petition to Review Notice of Compensation Payable and sustained her burden of demonstrating a material misstatement of fact. Accordingly, the Order of the Commonwealth Court is reversed. Justice BAER concurs in the result. Justice EAKIN files a dissenting opinion. Justice EAKIN dissenting. We accepted review of this case to determine whether a claim petition or review petition is the proper filing to add injuries that arise subsequent to the original injury. Unlike the majority, I do not believe a claimant may merely file an amendatory review petition in order to receive benefits for injuries not included in the original NCP. Unless these arise as a natural consequence of the original injury, I believe the law requires filing of a new claim petition for injuries not accepted by the employer in the original NCP. See AT & T v. Workers' Compensation Appeal Bd. (Hernandez), 707 A.2d 649, 650 n. 2 (Pa.Cmwlth.1998) (claim petition must be filed when seeking benefits for additional injuries).[1] Pursuant to § 413(a) of the Workers' Compensation Act, a WCJ may only amend the NCP when it is materially incorrect or when an employee's disability has increased. See 77 P.S. § 771-772; Westinghouse Elec. Corp./CBS v. Workers' Compensation Appeal Bd. (Burger), 838 A.2d 831, 837 (Pa.Cmwlth.2003) ("Section 413(a) of the Act requires the moving party to prove that a disability has `increased,' and to prove the causal relationship between the original injury and the amending disability."). Here, no material mistake of fact existed; claimant's shoulder injury, fibromyalgia, and depression were not claimed at the time the NCP was issued, and they are not "increases" of the claimed injury. As the employer did not (indeed, could not) acquiesce to liability for these unclaimed ailments, there was no mistake in excluding them. Any "mistake" lies in claimant's failure to mention them until years later when employer alleged an end to the only injury of which it had notice. Requiring a claim petition allows the procedure contemplated by the statute to *170 take place, with full and timely attention to the claim. This also prevents the unfair result here employer had no notice of these claimed injuries until years after the fact, yet must address them as mere "amendments" claimed only upon cessation of the original injury. Requiring a claimant to give notice to the employer within two years of these additional injuries is explicitly called for by the statute, for reasons of fundamental fairness. This basic requirement is hardly onerous to claimant. Allowing new claims for a different, long-standing injury is not a mere modification. Claimant was not alleging her original low back disability had increased, and the subsequent injuries were not a natural consequence of the low back disability; accordingly, the WCJ had no authority to amend the NCP. Therefore, I am compelled to dissent. NOTES [1] A Hoyer lift is a brand name used to refer generically to a mechanical (hydraulic or electric) lift device that provides total lift to a patient and prevents injury during transfer. A sling is placed underneath the patient's body, which can be either manually or electrically elevated. This lift is used when a patient cannot provide any assistance in his or her transfer or when his or her body cannot be manipulated in a manual lift. A Hoyer lift transfer requires at least two people to assist in the transfer: one to operate the mechanical lift and the other to guide the patient, as in the instant matter, into the chair. [2] Fibromyalgia is a syndrome of unknown etiology characterized by chronic pain, both generalized and located at one or more identifiable "tender points." Other symptoms that frequently accompany this painful condition include depression, irritable bowel syndrome, tingling and numbness in the hands and feet, urinary frequency, and menstrual problems. Especially affected are the occiput, low back, neck, and shoulders. The Merck Manual 1369-70 (16th Ed. 1992). [3] According to the National Institute of Neurological Disorders and Stroke, "`Thoracic outlet syndrome' consists of a group of distinct disorders that affect the nerves in the brachial plexus (nerves that pass into the arms from the neck) and various nerves and blood vessels between the base of the neck and axilla (armpit). For the most part, these disorders have very little in common except the site of occurrence. The disorders are complex, somewhat confusing, and poorly defined, each with various signs and symptoms of the upper limb." National Institute of Neurological Disorders and Stroke, Health Information, Disorders, Thoracic Outlet Syndrome at http://www.ninds.nih.gov/health_and_medical/disorders/thoracic_doc.htm (last visited August 3, 2004). [4] Appellant's testimony apparently describes the shoulder operation incorrectly as "in January of 1995." (Notes of Testimony dated May 31, 2000 at page 22.) She later testified that the surgery occurred in January of 1996, prior to her back surgery in September of 1996. Because Appellant testified that she treated with Business Health for the first six months after the injury and did not seek outside treatment until after her care by Business Health ended, the timeframe gets a little murky. No records from Business Health were entered into evidence to enable us to corroborate the dates independently. However, Employer has not disputed this factual information, and we will accept it for purposes of this Opinion. [5] Section 315 states in pertinent part: In cases of personal injury all claims for compensation shall be forever barred, unless, within two years after the injury, the parties shall have agreed upon the compensation payable under this article; or unless within two years after the injury, one of the parties shall have filed a petition as provided in article four hereof.... Where, however, payments of compensation had been made in any case, said limitations shall not take effect until the expiration of two years from the time of making of the most recent payment prior to date of filing such petition.... 77 P.S. § 602. [6] The record does not show that formal notice of the additional injuries was provided to the employer prior to the filing of the Petition to Review on September 21, 1999, particularly the advent of fibromyalgia and depression, although there is some evidence that Employer was made aware of Claimant's shoulder injury. However, Employer has not raised an issue of lack of notice and we will not pursue it. At the same time, we find the prevailing custom of delaying notification of additional injuries, such as the fibromyalgia and depression, until the employer files a Termination or Suspension Petition troubling. [7] Section 411 defines the covered events and states in pertinent part: The terms "injury" and "personal injury," as used in this act, shall be construed to mean an injury to an employe, regardless of his previous physical condition, arising in the course of his employment and related thereto.... 77 P.S. 411(1). [8] The work injury in Commercial Credit Claims occurred in 1983. The WCJ stayed the proceedings because of the employee's illness and the matter was not resumed until approximately 1995. As a result, sixteen years elapsed between the date of the work injury and the decision of this Court. [9] Act of June 2, 1915, P.L. 736, as amended, 77 P.S. §§ 1-1041.4; 2502-2626. Section 413(a) has been divided by Purdon's Pennsylvania Consolidated Statutes Annotated into three separate sections, 77 P.S. §§ 771, 772, and 773, representing each of the three paragraphs contained in the actual Section 413(a). [10] Within the workers' compensation scheme, disability is the loss of earning power as expressed in diminished earning capacity. Woodward v. Pittsburgh Engineering & Construction Co., 293 Pa. 338, 143 A. 21 (1928). An increase in the extent or severity of the injuries increases the length of impairment that will be reflected in an overall reduction in earnings and, therefore, the increase, decrease, recurrence, or cessation of the injury has a direct impact on earning capacity, viz. disability. [11] Our review of the record discloses that Appellant produced no expert medical testimony that she suffered from Thoracic Outlet Syndrome. [1] The exception announced in Campbell v. Workers' Compensation Appeal Bd. (Antietam Valley Animal Hospital), 705 A.2d 503, 507 (Pa.Cmwlth.1998), is inapplicable where there was no indication that the subsequent injuries arose as a natural consequence of the original injury.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532368/	831 S.W.2d 491 (1992) Jesse GONZALES, Appellant, v. The STATE of Texas, Appellee. No. B14-91-00905-CR. Court of Appeals of Texas, Houston (14th Dist.). May 21, 1992. Discretionary Review Refused September 30, 1992. 492 Joe W. Varala, Houston, for appellant. Ernest Davila, Houston, for appellee. Before PAUL PRESSLER, MURPHY and CANNON, JJ. OPINION CANNON, Justice. Appellant entered a plea of not guilty before a jury to the offense of aggravated robbery. TEX.PENAL CODE ANN. § 29.03(a)(2). He was convicted and the jury assessed punishment, enhanced under TEX.PENAL CODE ANN. § 12.42(d), at imprisonment for seventy-five years. Appellant raises five points of error. We affirm in part and reverse and remand in part. On April 28, 1991, at about 2:00 p.m., Vivian Medard, a security officer for "Home Depot," observed appellant place a potted plant in a store shopping cart and then, without paying for the plant, exit the store while pushing the cart. The shopping cart was later found to contain, in addition to the plant, a chainsaw, power painter, and saw blades. Appellant did not pay for any of these items. Medard followed appellant outside the store. She tapped appellant on the shoulder, identified herself, and showed him her badge. Appellant pushed Medard and took a swing at her before he ran away leaving behind the shopping cart. As Medard gave chase, she was joined by two other Home Depot employees, Joseph Bloom and Aaron Milburn. During his flight, appellant jumped on top of a car, took off his shoes, and threw them at Bloom and Milburn. He then pulled out a knife and jumped from the car. As appellant jumped, he slipped and dropped the knife. Bloom attempted to grab the knife but appellant grabbed it first and swung it at Bloom, cutting him on the hand. Bloom and Milburn eventually wrestled appellant to the ground, where he was handcuffed and detained until police arrived. The police arrested appellant and seized the knife. In his first and second points of error, appellant contends that the trial court erred by allowing into evidence for purposes of enhancement a prior conviction that was not proven to be final. Appellant pled "not true" to the two enhancements included in the indictment. The jury found both enhancements to be "true." The first enhancement alleged that "... on April 10, 1986, in Cause No. 436046, in the 339th District Court of Harris County, Texas, the Defendant was convicted of the felony of robbery." The pen packet, i.e., State's Exhibit 6, contains the judgment in cause number 436046. 493 That judgment states that a notice of appeal was given but does not show that a mandate of affirmance was issued. A conviction from which an appeal has been taken is not considered to be final until the conviction is affirmed and the court's mandate of affirmance becomes final. Russell v. State, 790 S.W.2d 655, 657 (Tex.Crim. App.1990) (citing Jones v. State, 711 S.W.2d 634, 636 (Tex.Crim.App.1986)). The burden is on the State to make a prima facie showing that any prior conviction used for enhancement became final before the commission of the primary offense. Id. (citing Jones, 711 S.W.2d at 635). Since the State failed to meet its burden to prove the enhancing conviction's finality, the proper remedy is reversal and remand. Id. (citing Jones, 711 S.W.2d at 636); Tucker v. State, 811 S.W.2d 694, 696 (Tex.App.Houston [1st Dist] 1991, no pet); Tex.Code Crim. ProcAnn. art. 44.29(b). We sustain appellant's first and second points of error. In his third point of error, appellant contends that the trial court erred in admitting into evidence three pen packets, i.e., State's Exhibits 4, 5, and 6, because they violated the "best evidence rule." Tex. R.Crim.Evid. 1001-1008. Appellant contends that the pen packets contained copies of copies rather that copies of originals and, therefore, were relevant only to identify appellant as the individual shown to be convicted in the certified copies of the originals. This contention is without merit. Tex.R.Crim.Evid. 1005 provides that a copy of a public record will be admissible in place of the original where the copy is certified in accordance with Rule 902. Reed v. State, 811 S.W.2d 582, 585, n. 11 (Tex.Crim.App.1991) (opinion on State's motion for rehearing). Rule 902(4) provides that "a copy of an official record ... certified by the custodian ... by certificate complying with paragraph (1), (2) or (3) of this rule" is self authenticating. Tex. R.Crim.Evid. 902(4). Paragraph (2) of Rule 902 provides that a document certified in accordance with paragraph (4), but not under seal, will be self-authenticating if a public officer having a seal certifies that "the signer has official capacity and that the signature is genuine." Reed, 811 S.W.2d at 585; TEX.R.CRIM EVID. 902(4). Here, the copies of the photographs, fingerprints, and commitments, including judgments and sentences, contained in the pen packets are certified as copies of the originals by the record clerk of the Texas Department of Criminal Justice, Institutional Division (TDCJID) and his certification is attested by the presiding judge of the county court in Walker County where the TDCJID is located. The judge certified under seal that the record clerk of TDCJID is the legal custodian of the records and that the clerk's signature is genuine. The judge's certificate is further attested by the county clerk's certification that the judge is authorized by law to execute the certificate. The pen packets were properly certified and admitted into evidence. See Reed, 811 S.W.2d at 855-56; Tex.R.Crim. Evid. 1005, 902; see also Gutierrez v. State, 745 S.W.2d 529, 530 (Tex.App.Corpus Christi 1988, pet. ref'd) (holding that best evidence of contents of judicial act or proceeding is record or certified copy and that parole officer's testimony identifying appellant as former parolee who reported to him under certified copy of judgment and probation commitment order introduced by State without photograph or fingerprint, did not violate best evidence rule). We overrule appellant's third point of error. In his fourth and fifth points of error, appellant complains of improper jury argument by the prosecutor. Appellant complains of the following argument: Now Mr. Varela has tried what is usually done by the defense lawyer. We call them bunny trials, rabbit trails. They want to get you off on(Emphasis added). This argument was in response to the following argument by defense counsel: This is not like the examples of aggravated robbery that we can all agree on, this aggravated robbery that I just talked about. The theftessentially the theft was completed at the time that this 494 Home Depot officer, Ms. Medard, showed her badge. * * * * * The subsequent events were divorced from thefrom the events that gave rise to them. They were divorced from the theft or attempt to commit theft as the State's evidence brought out. * * * * * * I want you to focus on whether you think that the subsequent events were in the course of committing theft after an attempt to commit theft or a commission of theft. And it's our position that they weren't. It's our position that the events were completely divorced. * * * * * * Can you find him guilty of all those elements beyond a reasonable doubt? it's our position you can't because it wasn't in the immediate flight. It was shoplifting, and then it was something else. But it doesn't all aggregate to aggravated robbery because there was a distance. There was a separation between the two events. The scope of proper jury argument is (1) summation of the evidence, (2) reasonable deduction from the evidence, (3) answer to the argument of counsel and (4) plea for law enforcement. Whiting v. State, 797 S.W.2d 45, 47 (Tex.Crim.App. 1990). Appellant asserts that defense counsel merely argued that the State failed to carry its burden with respect to the element of immediate flight and asked the jury to apply the law to the facts in a manner favorable to appellant. While that may be true, defense counsel also argued that the theft or "shoplifting" was complete before the flight and exhibition of the knife and, thus, constituted separate offenses. The prosecutor argued to the jury that they should follow the law and not be led astray by defense counsel's argument. See Tex.Penal Code Ann. § 29.01(1). The prosecutor's comments were plainly in response to defense counsel's remarks. In fact, in overruling defense counsel's objection, the trial court specifically noted that the prosecutor was answering defense counsel's argument. See Banks v. State, 643 S.W.2d 129, 134 (Tex.Crim.App.1982), cert, denied, 464 U.S. 904, 104 S. Ct. 259, 78 L. Ed. 2d 244 (1983) (prosecutor's reference to "rabbit trails" and "all those smoke screens that [defense counsel] wants you to hide behind and chase down" not considered improper). Appellant also complains of the following argument: Well, you see, I don't have to prove whether Joseph got a cut finger or not because that's absolutely immaterial. I mean, a mere display of this thing, this deadly weapon right here made it an aggravated robbery. But if you still got any questions, you know that one of these four guys got cut by him. What would have been the difference if [appellant] was two steps closer when he slashed(Emphasis added). Appellant contends that the prosecutor's last statement was improper because it caused the jury to speculate on what might have happened. Such argument is not improper. The prosecutor simply asked the jury to consider the circumstances around the crime. See Gonzales v. State, 807 S.W.2d 830, 836 (Tex.App. Houston [1st Dist.] 1991, pet.ref'd) (prosecutor's argument to jury to consider what would have happened if grandmother and aunt of deceased had arrived at murder scene five minutes earlier held permissible). That appellant's swinging of the knife could have caused further injury, was as the trial court observed, a reasonable deduction from the evidence. See Hudson v. State, 675 S.W.2d 507, 511 (Tex.Crim.App. 1984) (in criminal mischief case, prosecutor's argument that "if the police had not responded within five minutes, [defendant] would have watched the house to see what happened and would have gone back" and that "this is not a simple cutting the telephone wire type case ... this man had in mind different things for [the complainants]..." held a reasonable deduction from evidence). Even if the arguments complained of by appellant were improper, any error was harmless because the prosecutor *495 made similar arguments without objection by defense counsel. See Womble v. State, 618 S.W.2d 59, 63 (Tex.Crim.App. [Panel Op.] 1981); Tex.R.App.P. 52(a), 81(b)(2). We overrule appellant's fourth and fifth points of error. Accordingly, we affirm the trial court's judgment of conviction and reverse and remand for a hearing on punishment.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532382/	872 A.2d 720 (2005) 386 Md. 386 ATTORNEY GRIEVANCE COMMISSION OF MARYLAND v. Wayne M. MITCHELL. Misc. Docket AG No. 10, September Term, 2004. Court of Appeals of Maryland. April 15, 2005. Glenn M. Grossman, Deputy Bar Counsel (Melvin Hirshman, Bar Counsel for Atty. Grievance Com'n), for petitioner. 721 Wayne Maurice Mitchell, Gaithersburg, for respondent. Argued before BELL, C.J., RAKER, CATHELL, HARRELL, BATTAGLIA, GREENE and JOHN C. ELDRIDGE (Retired, specially assigned) JJ. BELL, C.J. The Attorney Grievance Commission of Maryland (the "Commission"), through Bar Counsel and pursuant to Maryland Rule 16-751,[1] as a result of two complaints received with respect to Wayne M. Mitchell, the respondent, filed against him a Petition for Disciplinary or Remedial Action. In that petition, it was alleged that the respondent violated Rules 1.1 (Competence);[2] 1.3 (Diligence);[3] 1.4 (Communication);[4] 1.15 (Safekeeping Property);[5] 5.4 (Professional Independence of a Lawyer);[6] 5.5 (Unauthorized Practice of 722 Law);[7] 7.1 (Communications Concerning a Lawyer's services);[8] 7.5 (Firm Names and Letterheads);[9] 8.1 (Bar Admission and Disciplinary Matters);[10] and 8.4 (Misconduct),[11] of the Rules of Professional Conduct, Appendix: Rules of Professional Conduct of the Maryland Rules, see Maryland Rule 16-812, Maryland Rules 16-603 (Duty to Maintain Account)[12] and 16-604 (Trust Account-Required Deposit)[13] and 723 Maryland Code (1989, 2000 Replacement Volume) § 10-306[14] of the Business Occupations and Professions Article. We referred the matter, pursuant to Rule 16-752(a),[15] to the Honorable Durke G. Thompson of the Circuit Court for Montgomery County, for hearing pursuant to Rule 16-757(a).[16] After conducting a hearing, the hearing judge issued Findings Of Fact And Conclusions Of Law, making findings of fact and drawing conclusions of law in accordance with Maryland Rule 16-757(c),[17] as follows: "Upon the testimony heard and the exhibits admitted, this Court, by clear and convincing evidence, makes the following findings of fact: "1. The Respondent was admitted to practice in Maryland in 1999. The Adeyosoye Matter "2. The Respondent undertook the representation of Olusolape Michelle Adeyosoye in connection with her personal injury automobile accident claim arising from an accident occurring on July 3, 2001. "3. In January 2002, the Respondent settled the Adeyosoye claim with the defendant, USA Truck for $3,547.28. On January 29, 2002, at the behest of the Respondent, Adeyosoye executed the release of all claims. The Respondent, by letter dated January 30, 2002 to USA Truck, confirmed and accepted the offer of settlement in the above amount. "4. After January 29, 2002, Adeyosoye spoke to the Respondent on several occasions by telephone. The calls from Adeyosoye were for the purpose of checking the status of the settlement. Not only did the Respondent fail to advise that the settlement proceeds check had been 724 received and deposited, but the Respondent falsely advised Adeyosope that the proceeds check had not been received and that it might become necessary to go to court to resolve the matter. "5. That at all times pertinent to this matter, the Respondent did not maintain a trust or escrow account and testified that he was unaware that he needed to have such an account. "6. The Respondent, in fact, had received the proceeds check and had deposited the check in his law firm's operating account on or about February 12, 2002. The deposited check required endorsement by Adeyosoye. Ms. Adeyosoye denied endorsing any check for deposit and this Court accepts the testimony of Ms. Adeyosoye as fully credible. At the time of the check deposit, both Alma Lopez-Martin and Scott, partners of the Respondent, had left the firm. The Respondent or someone acting at his direction endorsed and deposited the proceeds check in the operating account. The Respondent denies forging Adeyosoye's name to the check and generally denies stealing the money. Respondent suggests that if the endorsement was false, it was the work of one Rodney Lee, who was a long time friend of the Respondent who was helping the Respondent with office matters. "7. Thereafter, the Respondent appropriated the funds that had been deposited, for his personal or business purposes, including the purchase of a motor vehicle. "8. Adeyosoye never received any monies from the Respondent or the law firm. "9. A[d]eyosoye eventually contacted USA Truck and learned that a check had been sent to the Respondent and negotiated through a bank. Eventually Adeyosoye made a claim against USA Truck and the bank and settled the matter. "10. The Respondent moved his office and changed his phone number and never informed Adeyosoye of the truth of the matter. "11. When contacted by Bar Counsel, Respondent repeatedly gave false and misleading statements about the matter, claiming that Adeyosoye['s] assertions were `preposterous and clear attempts on her behalf to extort or otherwise secure monies from [the Respondent] not due her.' The Respondent further claimed that neither he nor anyone in his office had forged Ms. Adeyosoye's signature on the proceeds check and that he "ensured" that the check was signed by the client. All of these statements repeatedly made to Bar Counsel were false and completely contrary to the evidence before this Court. "12. The Respondent was unable to produce any documentation or files on the Adeyosoye matter. Ayala Matter "13. In March 2001, Carla V. Ayala, an immigrant from Bolivia working as a dental assistant, contacted Alma Lopez-Mitchell at the Respondent's office, for the purpose of having an attorney represent her in connection with an immigration matter. Lopez-Mitchell 725 was the Respondent's wife. Lopez-Mitchell was a law graduate, but was not admitted to the bar. "14. Ayala contacted Lopez-Mitchell because Lopez-Mitchell was a patient of the dental practice where Ayala was employed. Ayala had been given a business card by Lopez-Mitchell. The business card shows Lopez-Mitchell's name followed by "J.D." and the Respondent's name followed by "Esq.". Ayala believed that Lopez-Mitchell was an attorney who was going to represent her. "15. Ayala made an appointment to meet with Lopez-Mitchell. Ayala decided to go to Lopez-Mitchell because Lopez-Mitchell was fluent in Spanish. At the appointed time, she came to the Respondent's law office where she discussed the change of her immigration status with Lopez-Mitchell in her separate office and presented her with paperwork from Bolivia. While at the office, Ayala signed a contract with Lopez-Mitchell, which bore no other signatures. Ayala was never told that Lopez-Mitchell was not an attorney. "16. Ayala paid a total fee of $3,000.00 by making monthly payments of $500.00. Her payments were timely made. She was told the immigration matter would be completed in one year. "17. Due to a lack of progress in her matter, Ayala called the office on several occasions and was advised by Lopez-Mitchell that she was working on the matter. Ayala wanted to see the paperwork that was being prepared. "18. Ayala eventually came to the office and met with the Respondent in early 2001. The Respondent advised her that Lopez-Mitchell was no longer employed with the firm. Ayala asked for her paperwork and Respondent promised to gather it and send it to Ayala. "19. When she did not receive the promised paperwork, Ayala called the Respondent's office several times a month. She did not receive any return calls and eventually no one answered the phone. Ayala then went to the location of Respondent's office and found that it was closed. "20. Ayala located the Respondent at a Lanham, Maryland address in 2002. She went twice to the location and both times did not find anyone at the office and subsequently left a note under the door. Ayala wanted to obtain a receipt for the fee payments she had made. As a result, Ayala finally reached the Respondent who agreed to meet with her. "21. At their meeting, Ayala was told by the Respondent that the U.S. Immigration and Naturalization was intending to close her case without action. Ayala states [that] Respondent told her the U.S. Department of Labor was to blame for the delays. Thereafter, Ayala had no further contact with the Respondent until after disciplinary proceedings had been initiated. Respondent testified that he does not remember this meeting and says he was not even in Lanham at that time. "22. Ayala's signature appears on some of the immigration paperwork, but Ayala testified that it was not signed by her and bears an incorrect address. Ayala's testimony is 726 fully credible. Respondent acknowledged that Ayala was not properly represented and many mistakes were made and that there was a lack of communication. Firm Ownership and Management "23. The Respondent testified that his law firm was created on January 1, 2001 under the name of Lopez, Mitchell & Scott, L.L.C. The Respondent did the necessary legal work to create the limited liability corporation. He and Lopez-Mitchell controlled two-thirds of the firm's equity. At the time of the creation of the firm, Lopez-Mitchell was not an attorney nor is there any evidence that she has ever been an attorney, only a law school graduate. At the time of the hearing before this Court, the Respondent was unable to produce any of the organizing documents for the firm. "24. Scott left the firm in September or October 2001. The Respondent's wife stopped working at the firm in March 2001. "25. The only income to the firm came from legal fees. Lopez-Mitchell shared in the division of the fees with the Respondent and Scott. The Respondent did not understand at the time of the creation of the firm that non-lawyers could not own an equity interest in the firm. Instead, the Respondent felt that Lopez-Mitchell was working in the same `industry' and that the ownership prohibition applied to ownership combinations involving persons of other professions. The Respondent did not consult the Rules of Professional Conduct prior to the creation of the law firm. The Respondent states that the business cards originally did not have anything following Lopez-Mitchell's name, but were changed to include the `J.D.' designation to protect Lopez-Mitchell from liability. "Other Matters "26. The Respondent and Lopez-Mitchell experienced marital difficulties and separated in March 2001. They are currently reconciled. "27. The Respondent acknowledged that he has suffered from substance abuse in the past, but asserts he is dealing with the issue at present. "... Conclusions of Law "What undoubtedly commenced as a hopeful enterprise by the Respondent and others, was doomed from the start when viewed from ethical considerations. The actual operation of the law firm for which the Respondent was responsible further violated the Rules of Professional Conduct, which was followed by a period of inaction and avoidance of responsibility to clients and the profession. "Maryland Rules for Professional Conduct 5.4(a) and (d) "Respondent erred when he agreed with a non-lawyer to form a law firm and to share fees with the non-lawyer. The excuse for the violation, that of ignorance of the limitation of the participation in this manner with non-lawyers, is to be viewed with the participation of Lopez-Mitchell in the operation of the firm as well in the context of other rule violations. The organizational structure of the firm, which was created by the Respondent, constitutes 727 a violation of Rules 5.4(a) and (d) of the Maryland Rules of Professional Conduct. "The Petitioner alleges the sharing of legal fees by Lopez-Mitchell and the Respondent, but the specific fees were not identified. The proof in this case is derivative of the co-ownership, but there was no evidence that any fee was divided between an attorney and a non-attorney. This is due in no small measure to the paucity of records retained and produced by the Respondent. It is the finding by this Court that Petitioner has not sustained its burden on this specific allegation. "Maryland Rules of Professional Conduct 7.1 and 8.4(c) "The Petitioner alleges that by permitting Lopez-Mitchell to hold herself out as an attorney, the Petitioner was a part of making false and misleading communications about the legal services being rendered. In this case, the Respondent's culpability lies with permitting Lopez-Mitchell to relate to the client, Ms. Ayala, without an attorney being present and by implying to clients that Ms. Lopez-Mitchell was an attorney. The proof in the case is that Lopez-Mitchell conducted the Ayala legal matter until she left the firm in March 2001. This included giving the firm business card to Ayala, with Lopez-Mitchell's name without any indication of status, and later using a card indicating `J.D.' Lopez-Mitchell did not testify either by deposition or directly in court. However, there was no rebuttal to Ms. Ayala's testimony that until Lopez-Mitchell left the firm, she was the only person with whom Ayala had contact, the person who gave advice and handled conferences in her own office within the firm location, set the fee, and executed the retainer agreement. The evidence before the Court is clear and convincing that the Respondent knew, and in fact, sponsored the arrangement undertaken in the Ayala case. Only when Lopez-Mitchell left, did the Respondent become involved in the matter, [in] which [his] involvement was also problematic. The use of the business card, the retainer agreement and the fee setting was a violation of Rules 7.1 and 8.4(c). "Maryland Rules 16-603 and 16-604; Maryland Rules of Professional Conduct 1.15(a) and (b) "The Adeyosoye matter presents glaring examples of misconduct. By his own admission, the Respondent acknowledged that he failed to establish and maintain an attorney trust or escrow account. When the proceeds payable in settlement for the USA Truck case were sent to the Respondent, they were deposited in the firm's operating account. The failure to establish a proper trust account and the failure to use such an account as the depository for the recovery proceeds constitutes violations of Maryland Rules 16-603 and 16-604. The Respondent's actions also constitute a violation of Maryland Rule of Professional Conduct 1.15(a) and (b) by the failure to safeguard the property of others entrusted to the Respondent and the failure by the Respondent to notify Ms. Adeyosoye of the receipt of the settlement proceeds. "Maryland Rules of Professional Conduct 1.3 and 1.4(a), and 8.4(a) and (c) "The Respondent could not have been less diligent in the Adeyosoye matter. Not only did the Respondent not inform his client properly as stated above, he closed his firm's location, took the totality of the assets, and did not give any notice or indication as to where he could be found. The fact that Ms. Adeyosoye was not further damaged in this matter is due 728 solely to Ms. Adeyosoye and her resourcefulness in eventually holding others to account for her loss. None of that redounds to the Respondent's credit whose actions made a bad situation worse. The proof was irrefutable that the Respondent took the proceeds for his own use, thereby denying to Adeyosoye that which was justly hers. In short, the Respondent stole his client's money. "The Respondent's actions are clear violations of Maryland Rules of Professional Conduct 1.3 and 1.4(a). The theft constitutes a violation of Maryland Rule 8.4(a) and (c). "Maryland Rules of Professional Conduct 8.1 and 8.4(a) "During the course of the investigation and at the time of trial, the Respondent asserted that the complaint and testimony of Ms. Adeyosoye was preposterous and false. He even went so far as to suggest that Ms. Adeyosoye was perpetrating a scam to obtain double recovery and that she was attempting to extort funds from the Respondent when she knew she had been paid. These statements were made when the Respondent had full knowledge that he had taken the monies for his own use in buying a motor vehicle, had not properly accounted to the client, and tried to avoid any responsibility in the matter. The Respondent's alternative theory is that a nonlawyer, childhood friend who was helping out in the office probably was responsible for the mishandling of the monies. Given the powerful proof elicited by Bar Counsel, such statements are pure nonsense and were made out of desperation and to obfuscate the investigation and the trial. Accordingly, the Respondent violated Maryland Rules of Disciplinary Conduct 8.1 and 8.4(a). Mitigation "No evidence in mitigation was offered by the Respondent in explanation of his acts other than ignorance and confusion. In fact, the Respondent denied many of the allegations made against him. However, it is the belief of this Court that the Respondent was then and may still be suffering from the effects of substance abuse. The evidence that this circumstance might be involved came to light only with the Court's specific questions and was not volunteered. Because there was so little evidence on this point other than a candid admission by the Respondent in his testimony, not much more can be said on the point." The petitioner has filed a Recommendation for Sanction, in which it urges disbarment as the appropriate sanction.[18] To support that recommendation, the petitioner emphasizes that the hearing court "determined that there was clear and convincing evidence that the Respondent stole his client's money," that "[t]he proof was irrefutable that the Respondent took proceeds of his client's case for his own use, thereby denying his client that which was justly hers," and that the respondent made misrepresentations to Bar Counsel in an effort to thwart the investigation. Thus, it submits: "This Court has stated that `absent compelling extenuating circumstances, misappropriation by an attorney is an act infected with deceit and dishonesty and 729 ordinarily will result in disbarment." Attorney Grievance Commission v. Vlahos, 369 Md. 183, 186, 798 A.2d 555, 556 (2002). See Attorney Grievance Commission v. Herman, 380 Md. 378, 400-401, 844 A.2d 1181, 1195 (2004); Attorney Grievance Commission v. Vanderlinde, 364 Md. 376, 413-14, 418-19, 773 A.2d 463, 485, 488 (2001) (disbarment should be the sanction for intentional dishonest conduct absent compelling extenuating circumstances). It is readily apparent that the Respondent's misconduct is not mitigated[.] Opinion at 11. Petitioner's recommendation is therefore entirely warranted." We agree. The respondent, consequently, is ordered disbarred. IT IS SO ORDERED; RESPONDENT SHALL PAY ALL COSTS AS TAXED BY THE CLERK OF THIS COURT, INCLUDING COSTS OF ALL TRANSCRIPTS, PURSUANT TO MARYLAND RULE 16-715.C., FOR WHICH SUM JUDGMENT IS ENTERED IN FAVOR OF THE ATTORNEY GRIEVANCE COMMISSION AGAINST WAYNE M. MITCHELL. NOTES [1] Maryland Rule 16-751, as relevant, provides: "(a) Commencement of disciplinary or remedial action. (1) Upon approval of the Commission. Upon approval or direction of the Commission, Bar Counsel shall file a Petition for Disciplinary or Remedial Action in the Court of Appeals." [2] Rule 1.1 Competence A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation. [3] Rule 1.3 requires "[a] lawyer [to] act with reasonable diligence and promptness in representing a client." [4] Rule 1.4 provides: "(a) A lawyer shall keep a client reasonably informed about the status of a matter and promptly comply with reasonable requests for information. "(b) A lawyer shall explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation." [5] Maryland Rule 1.15 provides, as relevant: "(a) A lawyer shall hold property of clients or third persons that is in a lawyer's possession in connection with a representation separate from the lawyer's own property. Funds shall be kept in a separate account maintained pursuant to Title 16, Chapter 600 of the Maryland Rules. Other property shall be identified as such and appropriately safeguarded. Complete records of such account funds and of other property shall be kept by the lawyer and shall be preserved for a period of five years after termination of the representation. "(b) Upon receiving funds or other property in which a client or third person has an interest, a lawyer shall promptly notify the client or third person. Except as stated in this Rule or otherwise permitted by law or by agreement with the client, a lawyer shall promptly deliver to the client or third person any funds or other property that the client or third person is entitled to receive and, upon request by the client or third person, shall promptly render a full accounting regarding such property." [6] Rule 5.4 provides: "(a) A lawyer or law firm shall not share legal fees with a nonlawyer, except that: (1) an agreement by a lawyer with the lawyer's firm, partner, or associate may provide for the payment of money, over a reasonable period of time after the lawyer's death, to the lawyer's estate or to one or more specified persons; (2) a lawyer who purchases the practice of a lawyer who is deceased or disabled or who has disappeared may pursuant to the provisions of Rule 1.17, pay the purchase price to the estate or representative of the lawyer. (3) a lawyer who undertakes to complete unfinished legal business of a deceased lawyer may pay to the estate of the deceased lawyer that proportion of the total compensation which fairly represents the services rendered by the deceased lawyer; and (4) a lawyer or law firm may include nonlawyer employees in a compensation or retirement plan, even though the plan is based in whole or in part on a profit-sharing arrangement. "(b) A lawyer shall not form a partnership with a nonlawyer if any of the activities of the partnership consist of the practice of law. "(c) A lawyer shall not permit a person who recommends, employs, or pays the lawyer to render legal services for another to direct or regulate the lawyer's professional judgment in rendering such legal services. (d) A lawyer shall not practice with or in the form of a professional corporation or association authorized to practice law for a profit, if: "(1) a nonlawyer owns any interest therein, except that a fiduciary representative of the estate of a lawyer may hold the stock or interest of the lawyer for a reasonable time during administration; (2) a nonlawyer is a corporate director or officer thereof; or (3) a nonlawyer has the right to direct or control the professional judgment of a lawyer." [7] Rule 5.5(b) prohibits a lawyer from "assist[ing] a person who is not a member of the bar in the performance of activity that constitutes the unauthorized practice of law." [8] Rule 7.1 provides, as relevant: "A lawyer shall not make a false or misleading communication about the lawyer or the lawyer's services. A communication is false or misleading if it: "(a) contains a material misrepresentation of fact or law, or omits a fact necessary to make the statement considered as a whole not materially misleading...." [9] Rule 7.5 provides, as pertinent: "(a) A lawyer shall not use a firm name, letterhead or other professional designation that violates Rule 7.1. A trade name may be used by a lawyer in practice if it does not imply a connection with a government agency or with a public or charitable legal services organization and is not otherwise in violation of Rule 7.1." [10] Rule 8.1 Bar Admission and Disciplinary Matters, provide in pertinent part: An applicant for admission or reinstatement to the bar, or a lawyer in connection with a bar admission application or in connection with a disciplinary matter, shall not: * * (b) fail to disclose a fact necessary to correct a misapprehension known by the person to have arisen in the matter, or knowingly fail to respond to a lawful demand for information from an admissions or disciplinary authority, except that this Rule does not require disclosure of information otherwise protected by Rule 1.6. [11] Rule 8.4 states, in pertinent part: "It is professional misconduct for a lawyer to: * * * "(d) engage in conduct that is prejudicial to the administration of justice." [12] Maryland Rule 16-603 provides: "An attorney or the attorney's law firm shall maintain one or more attorney trust accounts for the deposit of funds received from any source for the intended benefit of clients or third persons. The account or accounts shall be maintained in this State, in the District of Columbia, or in a state contiguous to this State, and shall be with an approved financial institution. Unless an attorney maintains such an account, or is a member of or employed by a law firm that maintains such an account, an attorney may not receive and accept funds as an attorney from any source intended in whole or in part for the benefit of a client or third person." [13] Maryland Rule 16-604 provides: "Except as otherwise permitted by rule or other law, all funds, including cash, received and accepted by an attorney or law firm in this State from a client or third person to be delivered in whole or in part to a client or third person, unless received as payment of fees owed the attorney by the client or in reimbursement for expenses properly advanced on behalf of the client, shall be deposited in an attorney trust account in an approved financial institution. This Rule does not apply to an instrument received by an attorney or law firm that is made payable solely to a client or third person and is transmitted directly to the client or third person." [14] Section 10-306. Limitation on use of trust funds A lawyer may not use trust money for any purpose other than the purpose for which the trust money is entrusted to the lawyer. [15] Rule 16-752(a) provides: "(a) Order. Upon the filing of a Petition for Disciplinary or Remedial Action, the Court of Appeals may enter an order designating a judge of any circuit court to hear the action and the clerk responsible for maintaining the record. The order of designation shall require the judge, after consultation with Bar Counsel and the attorney, to enter a scheduling order defining the extent of discovery and setting dates for the completion of discovery, filing of motions, and hearing." [16] Maryland Rule 16-757(a) provides: "(a) Generally. The hearing of a disciplinary or remedial action is governed by the rules of evidence and procedure applicable to a court trial in a civil action tried in a circuit court. Unless extended by the Court of Appeals, the hearing shall be completed within 120 days after service on the respondent of the order designating a judge. Before the conclusion of the hearing, the judge may permit any complainant to testify, subject to cross-examination, regarding the effect of the alleged misconduct. A respondent attorney may offer, or the judge may inquire regarding, evidence otherwise admissible of any remedial action undertaken relevant to the allegations. Bar Counsel may respond to any evidence of remedial action." [17] Maryland rule 16-757(c) provides: "(c) Findings and conclusions. The judge shall prepare and file or dictate into the record a statement of the judge's findings of fact, including findings as to any evidence regarding remedial action, and conclusions of law. If dictated into the record, the statement shall be promptly transcribed. Unless the time is extended by the Court of Appeals, the written or transcribed statement shall be filed with the clerk responsible for the record no later than 45 days after the conclusion of the hearing. The clerk shall mail a copy of the statement to each party." [18] Although appearing for oral argument before this court, the respondent filed no written exceptions to the hearing court's findings of fact or conclusions of law. Accordingly, pursuant to Maryland Rule 16-759(b)(2)(a), for the purpose of determining the appropriate sanction, we shall deem the findings of fact as established. Moreover, we agree with the hearing court's conclusions of law, having conducted, as we are required to do, a de novo review of those conclusions.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532383/	831 S.W.2d 876 (1992) HARRIS COUNTY HOSPITAL DISTRICT, Appellant, v. Joe ESTRADA, Stella Paredes, Reynaldo Estrada, Mary Elizabeth Landin, Deborah Luna, Anthony Luna, Herman Luna, Armando Luna, Mike Martinez, and John Luna, all Individually and as Surviving Heirs at Law and Next of Kin of Carolina R. Gonzales, Deceased, and Linda Vega, Individually and as Surviving Heir at Law and Next of Kin of Carolina R. Gonzales, Deceased, and as Next Friend of Jesus Gonzales, Jr., and Rebecca Gonzales, Individually and as Surviving Heir at Law and Next of Kin of Carolina R. Gonzales, Deceased and as Personal Representative of the Estate of Carolina R. Gonzales, Deceased, Appellees. No. 01-92-00130-CV. Court of Appeals of Texas, Houston (1st Dist.). May 8, 1992. 877 Mike Driscoll, County Atty., Daniel J. Simms, Asst. County Atty., Houston, for appellant. Patrice M. Barron, Tom Edwards, Houston, for appellee. Before SAM BASS, WILSON and COHEN, JJ. ORDER ON REHEARING COHEN, Justice. This is an appeal from a judgment for the plaintiffs in a wrongful death and survival action. Trial was to the court without a jury. We withdraw our opinion of March 26, 1992 dismissing for lack of jurisdiction and substitute this order. The issue before us is whether the deadline to perfect appeal was extended by a motion for new trial that was both filed and overruled before the judgment was signed. We hold that such a motion extends the time to file the bond to perfect appeal. The chronology of events follows: August 15, 1991 Trial began. August 19, 1991 The judge announced judgment for appellees. September 16, 1991 Appellant filed a motion for new trial. Appellant filed no 878 request for findings of fact and conclusions of law.[1] October 4, 1991 The judge granted appellant's motion for new trial by written order. October 10, 1991 By second written order, the judge set aside his order of October 4 and denied the motion for new trial. October 16, 1991 The judge signed the final judgment. November 19, 1991 Appellant filed written notice of appeal.[2] February 6, 1992 Appellant filed a motion to extend the time for filing the transcript and statement of facts. February 14, 1992 Appellees filed an opposition to appellant's motion for extension of time and a motion to dismiss the appeal for lack of jurisdiction. We must decide whether appellant's prematurely filed motion for new trial, which was also prematurely overruled, extended the appellate timetable for perfecting appeal to 90 days after the October 16 judgment. Appellant had to file its notice of appeal within 30 days of the date the judgment was signed, October 16,1991, unless it filed a timely motion for new trial, which would give it 90 days to file. Tex.R.App.P. 41(a)(1). Appellant filed its notice of appeal 34 days after the judgment was signed. Appellant filed no motion for extension of time. Tex.R.App.P. 41(a)(2). Thus, appellant's notice of appeal was timely only if its premature motion for new trial of September 16 extended the deadline from 30 days to 90 days. Appellees contend that because the motion had been expressly overruled by signed written order before the judgment was signed, it was ineffective to extend the timetable. We hold, however, that the timetable was extended. Therefore, we have jurisdiction. Consequently, we deny the motion to dismiss and grant appellant's motion for extension of time to file the record. The Texas Supreme Court has twice enacted rules specifically designed to avoid dismissals in cases like this. These are Tex.R.Civ.P. 306c and Tex.R.App.P. 58(a). Rule 306c provides: No motion for new trial ... shall be held ineffective because prematurely filed; but every such motion shall be deemed to have been filed on the date of but subsequent to the time of signing of the judgment the motion assails.... Rule 58(a) provides: Proceedings relating to an appeal need not be considered ineffective because of prematurity if a subsequent appealable order has been signed to which the premature proceeding may properly be applied. The "proceedings relating to an appeal" mentioned in rule 58(a) include motions for new trial. Alford v. Whaley, 794 S.W.2d 920, 922-23 (Tex.App. Houston [1st Dist.] 1990, no writ); White v. Schiwetz, 793 S.W.2d 278, 280 (Tex.App. Corpus Christi 1990, no writ). Under rule 306c, the premature motion for new trial filed September 16, 1991, is deemed to have been filed on October 16, 1991, the date the judgment was signed, but after the signing of the judgment. There is no question that the premature motion of September 16 assails the judgment of October 16. Therefore, the premature motion for new trial "may properly be applied" to the October 16 judgment. Tex. R.App.P. 58(a). The two rules "should be construed to accomplish their manifest purpose to eliminate jurisdictional pitfalls that result in dismissals on technical grounds." Miller v. Hernandez, 708 S.W.2d 25, 27 (Tex.App. Dallas 1986, no writ). In our earlier opinion, we concluded that the premature motion did not assail the October 16 judgment because it was overruled on October 10, before that judgment was signed. We held that once it was overruled, the premature motion was no 879 longer a "live" pleading and that only live pleadings were within the meaning of rules 306c and 58(a). For this proposition, we cited three cases. Upon further reflection, we conclude the cases do not support that result. The first is Miller v. Hernandez. The language we relied on in Miller was dicta; the court held that the premature motion for new trial extended the time to appeal "since no order overruling it was signed...." Miller, 708 S.W.2d at 27. The court did not hold and did not cite authority holding that a different result would have been required if, as here, the motion had been overruled before the judgment was signed. The same is true of Robinson v. Chiarello, 806 S.W.2d 304, 306-07 (Tex.App Fort Worth 1991, writ denied). As in Miller, the court held the pending premature motion for new trial extended the deadline and cited no authority that an overruled motion would not have done so. In A.G. Solar and Company, Inc. v. Nordyke, 744 S.W.2d 646 (Tex.App. Dallas 1988, no writ), the court held the deadline to appeal was not extended because the premature motion for new trial was overruled before the court signed a corrected judgment. Id. at 647-48. Thus, because the premature motion was not "live" when the subsequent corrected judgment was signed, it did not "assail" the subsequent judgment under rule 306c, and it could not be "properly applied" to that judgment under rule 58(a). Id. The sole authority cited in Solar for this "live pleading" requirement was the Dallas Court's own no writ case of Brazos Electric Cooperative, Inc. v. Callejo, 734 S.W.2d 126 (Tex.App. Dallas 1987, no writ). That case is distinguishable from Solar for two reasons. First, Callejo did not involve a premature motion for new trial, which is entitled to special treatment under rule 306c. Second, Callejo held the deadline was extended, the opposite result from Solar. Finally, the Callejo opinion cites no authority for its conclusion, in dicta, that only a "live" pleading can extend the appellate timetable under Tex.R.App.P. 58. Id. at 129. Chief Justice Enoch, who wrote both Callejo and Solar, elaborated in Solar on the perceived live pleading requirement. The Solar opinion states: We recognize that Miller [v. Hernandez, cited above] dispensed with the "empty formality" of filing "another motion for new trial in identical language" to the first, within 30 days of a subsequent judgment. Yet, there must be a finality to rulings on motions, no less than to judgments generally. We hold, therefore, that [a live pleading was required.] 744 S.W.2d at 648 (emphasis supplied).[3] We disagree. There is no finality to rulings on motions for new trial because they are subject to change, with or without requests from the parties, for considerable periods of time. Trial judges can grant new trials as long as 105 days after signing a judgment, even though no party requests relief. State v. $50,600.00, 800 S.W.2d 872, 876 (Tex.App San Antonio 1990, writ denied); Gulf Ins. Co. v. Adams, 575 S.W.2d 87, 88 (Tex.Civ.App. Amarillo 1978, no writ); Tex.R.Civ.P. 329b(c), (d), (e). After granting a new trial, a trial judge may, during the period of plenary power, withdraw the order and deny it. Fulton v. Finch, 162 Tex. 351, 346 S.W.2d 823, 826-27 (1961). This case demonstrates that fact. The trial judge first granted appellant's premature motion for new trial on October 4, but then, on October 10, he withdrew that order and denied the motion. If rulings on motions were final, this case would not be here. It would be in the district court for retrial, pursuant to the order of October 4 granting a new trial. If rulings on motions were final, we would not now be rehearing our earlier decision granting appellees' motion to dismiss. The "live" pleadings requirement is especially inappropriate in this case because the premature motion here obviously assails the subsequently signed judgment. The 880 complaints made in appellant's motion about the oral rendition of judgment also applied to the subsequent written judgment. See Alford, 794 S.W.2d at 922-23; Syn-Labs, Inc., v. Franz, 778 S.W.2d 202, 205 (Tex.App Houston [1st Dist.] 1989, no writ) (premature motion extended the deadline because the complaints it raised also applied to the later judgment); Clark v. McFerrin, 760 S.W.2d 822, 825 (Tex. App. Corpus Christi 1988, no writ) (same); Johnson v. Tom Thumb Stores, Inc., 771 S.W.2d 582, 586 (Tex.App. Dallas 1989, writ denied) (distinguishing Solar because "since we have only one judgment in this case, Ms. Johnson's premature motion could only be directed to that judgment."). The Texas Supreme Court has twice enacted rules to assure that cases are not dismissed because the motion for new trial was filed too soon. Neither of those rules limits their application to "live" pleadings. To require a "live" pleading here would defeat the purpose of those rules. Such a requirement may be appropriate in a case where the premature motion for new trial has become moot because all the relief it sought was subsequently granted. But to apply such a requirement here, where the complaints raised in the premature motion were not cured, would nullify two specific rules and result in "technical" dismissals, like those criticized in Miller, 708 S.W.2d at 27. We decline to create such a requirement because, given the reasons for having rules 306c and 58(a), we find no significant difference between a premature motion that has been prematurely overruled, as in this case, and a premature motion that has not been prematurely overruled. We hold that when the trial judge denies some or all relief sought in a premature motion for new trial, the motion can "assail" those particular parts of a subsequent judgment under rule 306c of the Texas Rules of Civil Procedure and can "be properly applied" to the subsequent judgment under rule 58(a) of the Texas Rules of Appellate Procedure. Because the trial judge here did not grant all relief sought in appellant's premature motion, the motion assailed the subsequent judgment, and may properly be applied to it. Consequently, it extends the deadline to appeal to 90 days after October 16, 1991. Therefore, appellant's notice of appeal was timely filed. The motion to dismiss is denied. Appellant's motion for extension of time to file the record is granted. NOTES [1] Therefore, the provisions of the rules discussed herein that are triggered by a party's request for findings of fact and conclusions of law are inapplicable in this case. [2] The Hospital District is exempt from the requirement of filing a bond and files only a notice of appeal instead. Tex.Civ.Prac. & Rem. Code Ann. § 6.001 (Vernon 1986). [3] The Solar opinion cites no authority for its equation of motion rulings with judgments. Solar, 744 S.W.2d at 648.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532369/	872 A.2d 326 (2005) 2005 VT 26 Lesli MAURER v. Niel MAURER. No. 03-572. Supreme Court of Vermont. February 22, 2005. 327 Present: JOHNSON, SKOGLUND, REIBER, JJ., and ALLEN, C.J. (Ret.), and KATZ, Superior Judge, Specially Assigned. ENTRY ORDER ¶ 1. Father appeals from the family court's order modifying parental rights and responsibilities, and awarding sole legal and physical parental rights and responsibilities over the parties' minor child to mother. Mother is proceeding pro se.[] Father argues that the family court erred because: (1) the evidence does not support a finding that there has been a material change in circumstances; (2) the court's findings are insufficient to show that a transfer of custody to mother is in the child's best interests; and (3) the mediation provision in the parties' final divorce decree must be enforced. We affirm the trial court's conclusion regarding changed circumstances, but we reverse the court's conclusion that a transfer of sole custody to mother was in the child's best interests. ¶ 2. Mother and father are the parents of Benjamin Mauer, born in May 1992. Parents separated in 1999, and were divorced in May 2002. At the time of their divorce, they agreed to share legal and physical rights and responsibilities over Ben. They also agreed to attempt to resolve any future disputes through mediation before returning to court. On September 26, 2003, mother, then with 328 counsel, filed a motion to modify parental rights and responsibilities. Mother asserted that father had refused to allow Ben to engage in counseling, which she believed was in Ben's best interest. She also averred that father had discussed the issue of counseling with Ben, thereby putting him in the middle of the decisionmaking process. Mother acknowledged that the parties had agreed to mediate disputes, but stated that father had refused to participate in mediation. ¶ 3. The family court held a hearing on mother's motion on October 21, 2003; father appeared pro se, and mother was represented by counsel. Mother testified that, since October, the parties were no longer evenly sharing physical custody of Ben; instead, Ben was spending most of his time with her and every other weekend with father. Mother explained that in December 2002 father had remarried and moved to a new residence approximately twenty miles away, and recently it had become difficult for father to pick Ben up at mother's home. Mother also stated that Ben was spending less time at father's home because Ben did not feel that he had his own personal space there. Mother testified that, beginning in December 2002, Ben began to have difficulty sleeping and with his schoolwork, and he was suffering from low self-esteem. Mother introduced a recommendation from Ben's pediatrician, dated September 18, 2003, referring Ben for individual counseling. Mother testified that she had informed father of the doctor's recommendation, and father had responded that they should wait six months to see if the situation improved. Mother testified that father had discussed counseling with Ben against her wishes. Mother also stated that she and father disagreed about Ben's involvement in after-school activities. She indicated that her communication with father in this area had been "pretty acrimonious." She also asserted that father had acted unilaterally in making decisions regarding Ben's activities. ¶ 4. Father testified on his own behalf. He stated that he and mother had clear and steady communication about Ben. Father indicated that he was reluctant to engage a mediator over Ben's after-school schedule, instead finding it more appropriate to first attempt to work out the problem themselves. Father stated that mother had first informed him about Ben's self-esteem issues, and her desire that Ben engage in counseling, in late September 2003. Father was concerned that the recommending physician had not seen Ben directly, and felt that a better approach might be to first increase Ben's participation in outside activities to see if this helped boost his self-esteem. Father testified that he called Ben's pediatrician as well as the school guidance counselor to garner more information about Ben's condition. He stated that, while he preferred a different initial approach, he remained open to the use of therapy. ¶ 5. The court rendered its decision on the record at the close of the hearing. The court stated that, although the parties' final divorce order provided that they would have joint legal and physical responsibilities, the parties had modified that agreement through their behavior. The court found that the parties had substantially different parenting styles and methods, and they had demonstrated an inability to share parental rights. The court explained that the parties were unable to agree on transportation and counseling, and both parties were setting up activities for Ben without consulting one another. The court thus concluded that parents' inability to share joint legal and physical responsibilities constituted a substantial and unanticipated change of circumstances. The court found that Ben was suffering as a result of being caught between 329 two different parenting styles, and although it found value in both parenting styles, "somebody's got to make the decision, and you've got to consider the best interest of the child." The court stated that children benefited from being exposed to different activities, including sports, and while mother could consult with father in this regard, "[n]ow mother can make the decisions." A final judgment order was issued transferring sole legal physical rights and responsibilities to mother, and father appealed. ¶ 6. Father first argues that the evidence presented at the hearing was insufficient to support a finding of changed circumstances. Relying on Gates v. Gates, 168 Vt. 64, 716 A.2d 794 (1998), father maintains that the communication problems that arose between mother and father were insufficient to satisfy this threshold requirement. He asserts that this is particularly true where, as here, the parties did not mediate the issues between them before proceeding to court. ¶ 7. The court may modify a parental rights and responsibilities order upon a showing of a real, substantial and unanticipated change of circumstances where the modification is in the children's best interests. 15 V.S.A. § 668. There are no "fixed standards to determine what constitutes a substantial change in material circumstances"; instead, the court should be "guided by a rule of very general application that the welfare and best interests of the children are the primary concern in determining whether the order should be changed." Wells v. Wells, 150 Vt. 1, 4, 549 A.2d 1039, 1041-42 (1988) (citation omitted). The trial court has discretion in making this determination, and we will not disturb the court's determination unless it exercised its discretion on grounds or for reasons clearly untenable, or if it exercised its discretion to a clearly unreasonable extent. Meyer v. Meyer, 173 Vt. 195, 197, 789 A.2d 921, 923 (2001). ¶ 8. Father relies on Gates to support his assertion that a breakdown in communication is insufficient to establish changed circumstances. In Gates, however, our conclusion rested on a finding that communication between parents had been consistently poor since their divorce. 168 Vt. at 68, 716 A.2d at 797. Thus, their ongoing communication difficulties did not constitute an unanticipated and substantial change in circumstances. We recognized that, under different circumstances, a breakdown in communication between parents could suffice as a substantial and unanticipated change. Id. In this case, the record reflects that the parties' inability to share parental rights and responsibilities was a new development. As the court found, parents were unable to agree on transportation or counseling. They were setting up activities for Ben without consulting one another, and they had different parenting styles. Ben was suffering as a result. Additionally, as of October 2003, Ben was spending substantially more time at mother's home than at father's home. The court's findings in this case are supported by the evidence, and they support its conclusion that a substantial and material change of circumstances had occurred since the parties' divorce. See Meyer, 173 Vt. at 197-98, 789 A.2d at 923 (upholding finding of changed circumstances where parties disagreed on major issues involving the children, there had been a significant change in parties' dealings with one another since the divorce, and children were suffering the effects of parties' disagreements). ¶ 9. Moreover, we reject father's assertion that because the parties did not engage in mediation, the family court erred in finding changed circumstances. Father offers no legal support for this assertion, 330 and as discussed above, the court's findings indicate that a substantial change in circumstances had occurred since the parties' divorce. In any event, mother presented evidence that father refused to engage in mediation. Father cannot take advantage of his own refusal to prevent the court from acting. To hold otherwise would permit one parent unilaterally to divest the family court of jurisdiction. For this reason, we also reject father's argument that this case must be remanded to allow the parties to mediate their disputes. ¶ 10. When the family court finds that there has been a real, substantial and unanticipated change of circumstances, it must consider if a change in parental responsibilities is in a child's best interests. 15 V.S.A. § 668. In conducting its analysis, the court must consider the statutory factors set forth in 15 V.S.A. § 665(b). We recognize the trial court's broad discretion in determining a child's best interests. Spaulding v. Butler, 172 Vt. 467, 475, 782 A.2d 1167, 1174 (2001). We will uphold the family court's factual findings if they are supported by credible evidence, and we will uphold the court's conclusions if the factual findings support them. Id. "We will, however, reverse if the court's findings are not supported by the evidence, or if its conclusions are not supported by the findings." Id. (internal citations omitted). ¶ 11. Father argues that the court's findings are insufficient to establish that a transfer of custody to mother was in Ben's best interests. Father asserts that the family court did not consider the best interests standard, or at least not in a way that would allow for appellate review. According to father, the court's findings indicate that it could have just as easily ruled that a transfer to him of sole legal and physical rights was in Ben's best interests. ¶ 12. We agree. Although father did not request findings under V.R.C.P. 52(a), the family court made findings on the record on its own initiative. This is permissible under V.R.C.P. 52(a), but "findings made under these circumstances must still meet the test of adequacy." Mayer v. Mayer, 144 Vt. 214, 215, 475 A.2d 238, 239 (1984). As we explained in Mayer, "[a] major purpose of findings is to enable this Court, on appeal, to determine how the trial court's decision was reached. Therefore, the facts essential to the disposition of the case must be stated." Id. at 216-17, 475 A.2d at 240 (internal citations omitted). We do not require, as the dissent states, that findings be made in all custody cases. Instead, we simply require that when the court makes findings on its own initiative, as in this case, the findings must meet the test of adequacy upon review. Id. at 215, 475 A.2d at 239. The court's findings are inadequate here. ¶ 13. In support of its conclusion, the family court stated: We are not going to dictate parenting styles. And we're not going to select the style that is better for the child or not. This is one of the problems when people get divorced. The children suffer. This child is suffering because of the different parenting styles, and he's caught in the middle. And you have to learn how to avoid that. In many respects we would encourage the parenting style of the father to be observed. In other respects perhaps the mother's parenting style has some attributes to it. However, somebody's got to make the decision, and you've got to consider the best interests of the child. Children need to be exposed to different activities and the different experiences. Sports are important for young boys. You should consult, but you can't do it unilaterally. Now the mother can make the decisions. 331 These findings do not support a conclusion that a transfer of sole custody to mother was in Ben's best interests. Other than its statement that Ben's best interests would be served by vesting sole decisionmaking authority in one parent, the court fails to explain why that parent should be mother. We reject the dissent's assertion that the family court's remarks should be considered as a hortatory utterance rather than as findings of fact. The family court prefaced its remarks with a statement that it "finds on the evidence." While the use of the words "we find" in discussions prior to the formal announcement of a notice of decision does not necessarily transform remarks from the bench into intentional findings within the meaning of V.R.C.P. 52(a), Helm v. Helm, 148 Vt. 336, 339, 534 A.2d 196, 198 (1987), the family court in this case also stated in its written order that its decision was "predicated upon the evidence presented and the findings of the court." Even assuming that the family court's remarks were hortatory, however, they indicate the court's thinking, and they reflect its failure to properly consider Ben's best interests in reaching its conclusion that mother should have sole custody. ¶ 14. We faced a similar situation in Mayer. In that case, neither party requested findings, and the court made findings on its own initiative. We reversed and remanded the family court's custody award because the court simply concluded that it was in the child's best interests to be in the custody of father without making any findings as to why the child would be better off with one parent rather than the other. Mayer, 144 Vt. at 216-17, 475 A.2d at 239-40. As in this case, the court's findings in Mayer indicated that either parent would have been appropriate as the custodial parent. Id. at 215, 475 A.2d at 239. We reiterated that trial courts must "state the dispositive or key facts in close cases." Id. at 217, 475 A.2d at 240. ¶ 15. Similarly, in Jensen v. Jensen, 139 Vt. 551, 433 A.2d 258 (1981), neither party requested findings, and the court made findings on its own initiative. We reversed and remanded the court's custody award because the court had merely concluded that its custody decision was in the children's best interests without offering any factual findings in support of its conclusion. Id. at 553, 433 A.2d at 260. We explained that the court's failure to identify the facts that dictated its conclusion denied this Court the assistance that we needed to engage in meaningful appellate review. Id. As we stated, the family court's failure to make necessary findings left this Court "to speculate as to the basis upon which the trial court made its findings and reached its decision. This we will not do." Id. ¶ 16. In this case, as in the cases discussed above, the family court's findings leave us with no way to determine whether and how the family court applied the best interest factors, or how it reached its conclusion to award mother sole legal rights and responsibilities. See Pigeon v. Pigeon, 173 Vt. 464, 465-66, 782 A.2d 1236, 1237-38 (2001) (mem.) (where family court made no reference to its consideration of the best interest factors, nor stated that its decision was in child's best interests, and also failed to explain what factors made mother the better parent to make medical decisions on child's behalf, Supreme Court could not determine whether or how family court applied best interest factors, or how it reached its conclusion to award mother sole legal rights and responsibilities); see also Nickerson v. Nickerson, 158 Vt. 85, 88-89, 605 A.2d 1331, 1333 (1992) (conclusions of law must be supported by findings of fact and an explanation of how the court reached its decision). We therefore reverse and remand the question of whether the transfer of sole rights and responsibilities 332 to mother was in Ben's best interests to the family court for additional findings. Affirmed in part, reversed and remanded in part. MATTHEW I. KATZ, Superior Judge, Specially Assigned, dissents and files opinion joined by REIBER, J. ¶ 17. MATTHEW I. KATZ, Superior Judge, dissenting. I disagree with the final portion of the majority opinion, remanding the matter for failure of the trial court to make findings of fact regarding the best interests of the child. ¶ 18. There is no question but that the trial court did not make findings on that key issue. It did make rudimentary statements of the facts relied upon in concluding that joint custody was no longer workable, but failed to say anything about which parent was more suited to be the resulting, sole custodian. The majority is quite correct in noting that the quoted statement from the bench does not constitute findings or any analysis of the statutory custody criteria established by 15 V.S.A. § 665(b). Instead, the statement is more properly characterized as a reassuring or hortatory utterance from the court, perhaps made to relieve any hurt on the part of the father. ¶ 19. My disagreement stems solely from the clear words of Rule 52(a) of the civil rules, which require that "the court shall, upon request of a party participating in the trial made on the record or in writing within 5 days after notice of the decision ... find the facts specially and state separately its conclusions of law thereon." V.R.C.P. 52(a)(1). Rule 52(a) applies to family court proceedings. V.R.F.P. 4(a)(1). It is recognized that no such request was ever made by either party here. The majority correctly cites Pigeon v. Pigeon, 173 Vt. 464, 782 A.2d 1236 (2001) (mem.), Nickerson v. Nickerson, 158 Vt. 85, 605 A.2d 1331 (1992), Mayer v. Mayer, 144 Vt. 214, 475 A.2d 238 (1984), and Jensen v. Jensen, 139 Vt. 551, 433 A.2d 258 (1981), as reversing for inadequate findings of fact. But none of these cases discuss the explicit requirement of Rule 52(a) that findings must be made only if timely requested. In failing to address that distinction, the ruling in this case does more than merely follow the cited precedent. Instead, the Court is now specifically departing from the rule. In effect, the law of Vermont now becomes: "At least in custody cases, findings must be made, regardless of whether or not requested." This is a plain overruling of at least several applications of the straightforward wording of the rule: Am. Trucking Ass'ns v. Conway, 152 Vt. 363, 375, 566 A.2d 1323, 1331 (1989); Viskup v. Viskup, 149 Vt. 89, 92, 539 A.2d 554, 557 (1987); Chaker v. Chaker, 147 Vt. 548, 549, 520 A.2d 1005, 1006 (1986); Kaplan v. Kaplan, 143 Vt. 102, 104, 463 A.2d 223, 224 (1983); Moulton v. Moulton, 134 Vt. 125, 127, 352 A.2d 680, 681 (1976). No explanation for this change in course is offered. ¶ 20. It would also be unwise to imply that any statements by the trial court which might constitute findings or reasons behind its decision triggers the duty to make findings as if requested by a party under Rule 52. Although courts may certainly make findings on their own volition, and such should not be discouraged, the implication in the majority decision sends exactly the wrong signal: Better not to say anything, for even a little will trigger some greater duty and thereby lead to reversal. Any statement by the trial court as to the reasons for the decision is generally desirable, but it should be within the sound discretion of that court how far to go. This is particularly true regarding an 333 oral statement from the bench at a time when one or more of the participants may have an emotional response. Just because the trial court here stated its reasons for concluding that joint custody was no longer functioning as it should, it did not thereby become bound to issue detailed findings on the best-interests issue. ¶ 21. Vermont's rule, depending as it does on a request from a party, is different from the federal equivalent. Rule 52(a) of the Federal Rules of Civil Procedure mandates findings in any case heard without a jury. F.R.C.P. 52(a); see generally 9A C. Wright & A. Miller, Federal Practice and Procedure § 2574 (1995) (noting that findings are required in all actions and may not be waived). The Vermont rule was derived from Rule 52 of the Maine Rules of Civil Procedure. Reporter's Notes, V.R.C.P. 52. Like Vermont's Rule 52(a), Maine's rule does not require the court to issue factual findings in all nonjury cases. Me. R. Civ. P. 52(a); Bayley v. Bayley, 602 A.2d 1152, 1154 (Me.1992). Rather, the rule mandates findings only when timely requested by a party. Me. R. Civ. P. 52(a); Bayley, 602 A.2d at 1154. ¶ 22. The distinction between the federal rule and that adopted in Vermont and Maine is an important one because it affects the standard of review on appeal. Maine precedents interpreting Rule 52(a) distinguish between cases where the parties requested findings and cases where no such timely requests were made. When findings are not timely requested and the court's judgment is challenged on appeal, the Maine Supreme Judicial Court assumes the trial court found all facts that are necessary to support the judgment. Powell v. Powell, 645 A.2d 622, 623-24 (Me.1994). The same standard applies if a trial court issues findings that are incomplete, so long as no party timely requested findings pursuant to Rule 52(a). Id.; see also In re Zoe M., 2004 ME 94, ¶ 10, 853 A.2d 762 (addressing grandmother's challenge to custody order as lacking specific finding on child's best interest, court explains that in absence of request for more findings under Rule 52, court assumes that lower court made all of the findings necessary to support its decision); cf. Bayley, 602 A.2d at 1154 (explaining that where party requests specific findings under Rule 52, reviewing court will not assume findings in support of judgment; findings must be sufficient on contested issues to support judgment). Arizona has adopted the same standard under its version of Rule 52(a), with language nearly identical to V.R.C.P. 52(a) and Me. R. Civ. P. 52(a). 16 A.R.S. R. Civ. P., Rule 52(a); see also Pizziconi v. Yarbrough, 177 Ariz. 422, 868 P.2d 1005, 1009 (Ct.App.1993) (reaffirming the principle that in absence of request for findings, appellate court will "assume that the trial court found every controverted issue of fact necessary to sustain its decision and the judgment will be upheld if there is reasonable evidence to support it"). An intermediate appellate court in Arizona explained the standard under Rule 52(a) this way: [A]s a general rule, an appellate court may infer that the trial court has made the additional findings necessary to sustain its judgment. This principle applies as long as the additional findings are reasonably supported by the evidence and are not in conflict with any of the trial court's express findings. However, the principle does not apply when a party has requested findings of fact pursuant to Rule 52(a). Elliott v. Elliott, 165 Ariz. 128, 796 P.2d 930, 937 (Ct.App.1990) (citations omitted). Parenthetically, the standard of review consonant with the present rule does not create work for the appellate court. Whether findings were made or not in the trial court, it remains appellee's duty to 334 point out where the record supports the decision on appeal. ¶ 23. Vermont's Rule 52(a) must provide the basis for decision here. Any view that Rule 52(a) should be altered is best handled straight on, by suggestion to the Advisory Committee and possible amendment. It should not be accomplished by implication or accident. ¶ 24. Reviewing the record in this case under the proper standard, the decision of the family court is well supported. Father conceded at oral argument that the boy was living mostly with his mother, in Vergennes, at the time of trial. Mother would therefore seem to have become the "primary care provider." 15 V.S.A. § 665(b)(6). The record contains numerous references to the child's ties to the Vergennes school and its after-school activities. Id. § 665(b)(4). Finally, the extensive email record father submitted as evidence before the family court demonstrates a failure on his part to foster a positive and cooperative relationship with the mother, relating to the child. Id. § 665(b)(5), (b)(8). Instead, the record shows a father more given to laying down his own point of view as the final word, whether on counseling, mediation, or after-school activities. According the deference to which the family court is due, particularly in the absence of any request for findings, its decision is amply supported by the record. ¶ 25. I would therefore affirm the decision of the family court in full. I am authorized to state that Justice REIBER joins this dissent. NOTES [] We reject father's request that we disregard mother's brief because it fails to comply with V.R.A.P. 28(a)(4). See Beyel v. Degan, 142 Vt. 617, 619, 458 A.2d 1137, 1138 (1983) (we will consider issues raised by pro se litigant even though litigant failed to properly or clearly brief issue on appeal).	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532362/	872 A.2d 25 (2005) 386 Md. 145 Jesse SPAIN, Jr. v. STATE of Maryland. No. 81, September Term, 2004. Court of Appeals of Maryland. April 7, 2005. 26 Peter F. Rose, Asst. Public Defender (Nancy S. Forster, Public Defender, on brief), for petitioner. Steven L. Holcomb, Asst. Atty. Gen. (J. Joseph Curran, Jr., Atty. Gen., on brief), for respondent. Argued before BELL, C.J., RAKER, WILNER, CATHELL, HARRELL, BATTAGLIA and GREENE, JJ. HARRELL, J. I. On Sunday, 3 February 2002, Officer Cornelius Williams, assigned at the time to the Western District FLEX unit[1] of the Baltimore City Police Department, was walking eastbound in the 1900 block of West Baltimore Street, near its intersection with North Monroe Street, when he 27 saw a group of seven men at the corner. As Officer Williams, who was dressed in plain clothes, walked toward the group, one group member, a man wearing a gray sweat suit with a red stripe and later identified as Jesse Spain, Jr. (referred to as "Spain" or Petitioner subsequently), approached the officer and asked, "What do you want?" Interpreting this remark as an inquiry about the possible sale of illegal narcotics, Officer Williams, trained and experienced in matters involving street level narcotics distribution, responded, "What do you have?" Spain responded, "I've got some pills." Officer Williams interpreted this statement to indicate that Spain was offering for sale heroin in gel cap form. Spain then tapped the shoulder of another man in the group (later identified as Petitioner's father, Jesse Spain, Sr.), who advised Spain, "I'm going to take [Officer Williams] up the street." As Officer Williams and Spain, Sr. walked northbound on Monroe Street towards the 1900 block of West Fairmount Avenue, Spain, Sr. stated that he had "a kid on a bike, who's got some pills on him." After walking approximately 90 feet further, Spain, Sr. "whistled out." A young man on a bicycle approached them. Officer Williams recognized the young man on the bicycle as Juan Wilson, whom Officer Williams previously had arrested for street level narcotics distribution. Wilson stopped his bicycle in front of Officer Williams and removed from his pocket a clear plastic bag that contained several gel caps filled with what was later stipulated to be heroin powder. Wilson, at this point, recognized Officer Williams and began to ride slowly away. Officer Williams identified himself as a police officer and arrested Wilson. Meanwhile, Spain, Sr. fled through an alley on West Fairmount Avenue. When a patrol car and wagon responded to the scene of the narcotics transaction, the original group of men on the corner of West Baltimore Street and North Monroe Street dispersed. As Officer Williams was arresting Wilson, he observed Spain walk westbound on West Baltimore Street out of his sight. A few minutes later, as he was riding in a police wagon, Officer Williams arrested Spain, whom he found standing on the front steps of a residence on West Baltimore Street. By criminal information filed in the Circuit Court for Baltimore City, Spain was charged with various violations relating to his role in the drug transaction on 3 February involving Officer Williams.[2] At Spain's jury trial, the State's sole witness 28 was Officer Williams,[3] who testified as both a fact witness and an expert on the packaging, identification, and distribution of street level narcotics in Baltimore City. The defense consisted of only one witness, Spain's sister, Dawn Spain, who testified that she spoke with Spain earlier on 3 February and he told her that he planned to attend a Super Bowl party later that evening at his grandfather's house, which happened to be near the scene of the narcotics transaction. Spain's defense at trial appeared to hinge on the contentions that Officer Williams was mistaken as to the encounter between himself and Officer Williams and that he was in no way involved in the narcotics transaction that followed.[4] Against this backdrop, the State's Attorney advocated during closing argument as follows: [STATE'S ATTORNEY]: The second point I wanted to make to you is that the Officer in this casethe Defense's argument is that Mr. Spain was outside his house. He was going to attend a Superbowl party and was buying beer. Part of what you have to determine is the credibility of the witnesses. The defense put on a witness who testified, and the State put on one witness, the Officer in this case. You have to weigh the credibility of each individual. Who has a motive to tell you the truth. The Officer in this case would have to engage in a lot of lying, in a lot of deception and a conspiracy of his own to come in here and tell you that what happened was not true. He would have to risk everything he has worked for. He would have to perjure himself on the stand. [DEFENSE COUNSEL]: Objection. THE COURT: Basis? [DEFENSE COUNSEL]: Reference to the Officer perjuring himself your Honor. It's as far as credibility. 29 THE COURT: Okay, well the jury understand[s] that this of course is closing argument, and that they will [consider the statements to be] lawyers' arguments. Overruled. [STATE'S ATTORNEY]: So basically you have to determine who has the credibility. Who's telling you the truth. Is the Officer coming here and making up a story? What's his incentive to lie and frame Mr. Spain? The reality is that this Officerthey attempted to sell this Officer drugs on the street. They didn't know he was a police officer. He was out there trying to enforce the law. But, you have to understand that Officer Williams has no motive to lie, because he has everything to risk in this case. Because he doesn't have to go out and make up drug arrests. Because he has plenty of legitimate drug arrests. There's absolutely no incentive for him to come in here and tell a story about Mr. Spain. So is Mr. Spain the victim of circumstance? He was just taken up in front of his house, trying to attend a Superbowl party? That's the defense's theory in the case. You will ultimately have to decide who you want to believe. On 6 March 2003, the jury returned a guilty verdict on all counts.[5] Spain timely appealed to the Court of Special Appeals, which affirmed his conviction in an unreported opinion. He then petitioned this Court for a writ of certiorari, which we granted, 383 Md. 256, 858 A.2d 1017 (2004), in order to consider the following question: Did the trial court properly exercise discretion in regulating the scope of closing argument when it allowed the State's Attorney to argue that the police officer in this case had no motive to lie and would risk his career by testifying falsely? II. In Degren v. State, 352 Md. 400, 722 A.2d 887 (1999), we outlined the "great leeway" attorneys are afforded in presenting closing arguments to the jury: The prosecutor is allowed liberal freedom of speech and may make any comment that is warranted by the evidence or inferences reasonably drawn therefrom. In this regard, [g]enerally, ... the prosecuting attorney is as free to comment legitimately and to speak fully, although harshly, on the accused's action and conduct if the evidence supports his comments, as is accused's counsel to comment on the nature of the evidence and the character of witnesses which the [prosecution] produces. * * * While arguments of counsel are required to be confined to the issues in the cases on trial, the evidence and fair and reasonable deductions therefrom, and to arguments of opposing counsel, generally speaking, liberal freedom of speech should be allowed. There are no hard-and-fast limitations within which the argument of earnest counsel must be confinedno well-defined bounds beyond which the eloquence of an advocate shall not soar. He may discuss the facts proved or admitted in the pleadings, assess the conduct of the parties, and attack the credibility of witnesses. He may indulge in oratorical conceit or flourish and in illustrations and metaphorical allusions. 30 Id. at 429-30, 722 A.2d at 901-902 (citations omitted). Despite this lack of "hard-and-fast limitations" on closing arguments, one technique in closing argument that consistently has garnered our disapproval, as infringing on a defendant's right to a fair trial, is when a prosecutor "vouches" for (or against) the credibility of a witness. See, e.g., Walker v. State, 373 Md. 360, 403-04, 818 A.2d 1078, 1103-04 (2003) (finding improper vouching to have occurred where a prosecutor made assertions, based on personal knowledge, that a witness was lying). Vouching typically occurs when a prosecutor "place[s] the prestige of the government behind a witness through personal assurances of the witness's veracity ... or suggest[s] that information not presented to the jury supports the witness's testimony." U.S. v. Daas, 198 F.3d 1167, 1178 (9th Cir.1999) (citations omitted). The Supreme Court recognizes that prosecutorial vouching presents two primary dangers: [S]uch comments can convey the impression that evidence not presented to the jury, but known to the prosecutor, supports the charges against the defendant and can thus jeopardize the defendant's right to be tried solely on the basis of the evidence presented to the jury; and the prosecutor's opinion carries with it the imprimatur of the Government and may induce the jury to trust the Government's judgment rather than its own view of the evidence. U.S. v. Young, 470 U.S. 1, 18-19, 105 S. Ct. 1038, 1048, 84 L. Ed. 2d 1 (1985). In the present case, Spain argues that the prosecutor, during his closing argument, improperly vouched for the credibility of the State's sole witness, Officer Williams, by implying that the officer 1) did not have a motive to testify falsely, and 2) in fact had a motive to testify truthfully because to testify falsely would expose him to the penalties of perjury and lead to adverse consequences to his career as a police officer. Although we agree that the latter of the prosecutor's comments transcended the boundaries of proper argument, we conclude ultimately that those statements did not mislead or influence the jury unduly to the prejudice of Spain, and therefore constituted harmless error. Degren, 352 Md. at 430-31, 722 A.2d at 902 (citations omitted). A. No one likely would quarrel with the notion that assessing the credibility of witnesses during a criminal trial is often a transcendent factor in the factfinder's decision whether to convict or acquit a defendant. During opening and closing arguments, therefore, it is common and permissible generally for the prosecutor and defense counsel to comment on, or attack, the credibility of the witnesses presented. Part of the analysis of credibility involves determining whether a witness has a motive or incentive not to tell the truth. Cf. Pantazes v. State, 376 Md. 661, 680, 831 A.2d 432, 443 (2003) (describing as important the right to cross-examination because it allows a defendant to demonstrate to the factfinder a witness's bias, interest, or motive to testify falsely); see also Maryland Criminal Pattern Jury Instructions § 3:10 (MICPEL 2003).[6] Attorneys therefore 31 feel compelled frequently to comment on the motives, or absence thereof, that a witness may have for testifying in a particular way, so long as those conclusions may be inferred from the evidence introduced and admitted at trial. See, e.g., U.S. v. Walker, 155 F.3d 180, 187 (3rd Cir.1998) (finding that "where a prosecutor argues that a witness is being truthful based on the testimony given at trial, and does not assure the jury that the credibility of the witness based on his own personal knowledge, the prosecutor is engaging in proper argument and is not vouching"). The prosecutor's comments about Officer Williams's absence of a motive to lie did not implicate any information that was outside the evidence presented at trial. When a prosecutor argues that a particular police officer lacks a motive to testify falsely, such comments do not bear directly on a defendant's guilt or innocence, but are merely an allusion to a lack of evidence presented by the defendant that the officer in this case possessed any motive to lie or devise a story implicating the defendant in criminal conduct. See Walker, 155 F.3d at 187 (finding that "prosecutorial comment that points to a lack of evidence in the record which supports a defendant's argument that the witness is not credible is proper so long as the comment does not constitute an assurance by the prosecutor that the witness is credible"). The prosecutor's invitation for the jury to consider whether the officer had a motive to lie did not amount to improper vouching because the comments did not express any personal belief or assurance on the part of the prosecutor as to the credibility of the officer. See, e.g., Reyes v. State, 700 So. 2d 458, 460-61 (Fla.Dist.Ct.App.1997) (finding that statements such as, "Did it appear as though [the police officer] was trying to lie?" did not "constitute an expression of the prosecutor's personal opinion as to the credibility of the witness"). Nor did such comments, in isolation, explicitly invoke the prestige or office of the State or the particular police department or unit involved. Id. B. The prosecutor continued during closing argument that Officer Williams did not testify falsely because, if he were to do so, he would suffer adverse consequences to his career as a police officer. These comments were improper. Courts consistently have deemed improper comments made during closing argument that invite the jury to draw inferences from information that was not admitted at trial. See Hill v. State, 355 Md. 206, 222, 734 A.2d 199, 208 (1999); Degren, 352 Md. at 433, 722 A.2d at 903. Although the notion of adverse personnel implications flowing from perjured testimony by a police officer resonates at a common sense level, at no time during 32 the trial scrutinized in the present case did the State introduce evidence from which it could be inferred ineluctably that Officer Williams risked his career or any of its benefits if he were to testify falsely. See, e.g., U.S. v. Gallardo-Trapero, 185 F.3d 307, 320 (5th Cir.1999) (finding that a prosecutor's argument that agents of the federal government would not risk their careers by testifying falsely was improper because it referred to evidence not in the record); U.S. v. Martinez, 981 F.2d 867, 871 (6th Cir. 1992) (same); U.S. v. Pungitore, 910 F.2d 1084, 1125 (3rd Cir.1990) (finding improper vouching and bolstering where there was "no evidence backing the prosecutor's comments that the U.S. Attorneys and law enforcement officers could not have behaved as unscrupulously as defense counsel alleged without violating their oaths of office and jeopardizing their careers"). Even if evidence had been admitted from which it could be inferred that a police officer would face serious employment consequences as a result of testifying falsely, we nonetheless would conclude that the prosecutor's comments during closing argument constituted improper vouching because they also implied improperly that the witness's status as a police officer entitled him to greater credibility in the jury's eyes than any other category of witness about which the same might have been argued.[7] Although the State is free to highlight the incentive, or lack of incentive, of a witness to testify truthfully, courts consistently have held that it is improper to argue that a police officer may be deemed more credible simply because he or she is a police officer. See, e.g., Fultz v. Whittaker, 187 F.Supp.2d. 695, 706 n. 5 (W.D.Ky.2001); Reyes, 700 So.2d at 461; see also People v. Clark, 186 Ill.App.3d 109, 134 Ill. Dec. 138, 542 N.E.2d 138, 142-43 (1989) (stating that "[i]t is established that a prosecutor may not argue that a witness is more credible because of his status as a police officer"). By invoking unspecified, but assumed, punitive consequences or sanctions that might result if a police officer testifies falsely, a prosecutor's arguments imply that a police officer has a greater reason to testify truthfully than any other witness with a different type of job. Although the factfinder generally is made aware that a witness who is a police officer is testifying as to events witnessed while on duty as a police officer, a prosecutor must be careful not to insinuate that the credibility of statements made in this capacity may be assessed at a level of scrutiny other than that given to all witnesses. U.S. v. Boyd, 54 F.3d 868, 872 (D.C.Cir.1995); see also People v. Allan, 192 A.D.2d 433, 596 N.Y.S.2d 793, 795 (N.Y.App.Div.1993) (holding that a "trial court's instruction that the jurors could take into account a witness's job, education, and status in the community in assessing credibility diluted 33 its charge that the testimony of a police officer should be evaluated in the same way as that of any other witness"). C. Although we find that the prosecutor's latter comments in this case improperly implied that a police officer be viewed by the factfinder as being more credible as a result of his or her status as a police officer, our inquiry does not end there. When statements made during closing argument stray beyond the outer realm of the latitude afforded prosecutors, we must inquire into the extent of any prejudice suffered by the defendant. As this Court in Degren stated, Not every improper remark [made by a prosecutor during closing argument], however, necessarily mandates reversal, and "[w]hat exceeds the limits of permissible comment depends on the facts in each case." We have said that "[r]eversal is only required where it appears that the remarks of the prosecutor actually misled the jury or were likely to have misled or influenced the jury to the prejudice of the accused." This determination of whether the prosecutor's comments were prejudicial or simply rhetorical flourish lies within the sound discretion of the trial court. On review, an appellate court should not reverse the trial court unless that court clearly abused the exercise of its discretion and prejudiced the accused. 352 Md. at 430-31, 722 A.2d at 902 (citations omitted). When assessing whether reversible error occurs when improper statements are made during closing argument, a reviewing court may consider several factors, including the severity of the remarks, the measures taken to cure any potential prejudice, and the weight of the evidence against the accused. U.S. v. Melendez, 57 F.3d 238, 241 (2nd Cir.1995); see also Henry v. State, 324 Md. 204, 232, 596 A.2d 1024, 1038 (1991) (finding that "[i]n determining whether reversible error occurred, an appellate court must take into account `(1) the closeness of the case, 2) the centrality of the issue affected by the error, and 3) the steps taken to mitigate the effects of the error'" (citations omitted)). In this case, the prosecutor's reference to potential consequences to Officer Williams's career was an isolated event that did not pervade the entire trial. See Wilhelm v. State, 272 Md. 404, 425-26, 326 A.2d 707, 721 (1974) (rejecting the notion that one improper comment by the prosecutor during closing argument "so infected the trial with unfairness as to make the resulting conviction a denial of due process" (citations omitted)); Mazile v. State, 798 So. 2d 833, 834-35 (Fla.Dist.Ct.App. 2001). We note also the likely diminution of prejudice from the prosecutor's comments as a result of the trial judge's contemporaneous reminder that they were only an attorney's argument, not evidence, as well as the pertinent instructions that the trial judge gave to the jury before sending it to deliberate. In response to the objection by defense counsel, the trial judge stated, "Okay, well the jury understand[s] that this of course is closing argument, and that they will [consider the statements to be] lawyers' arguments. Overruled." Although the trial judge did not acknowledge the comments as improper, nor did he explicitly instruct the jury to disregard the comments, he reminded the jury that the prosecutor's statements only should be considered as argument, not evidence. By emphasizing the argumentative nature of closing arguments contemporaneously with the improper comments, the judge took some effort to eliminate the jury's potential confusion about what it 34 just heard and therefore ameliorated any prejudice to the accused. More importantly, however, before jury deliberations began, the trial judge gave, among others, a jury instruction, based on Maryland Criminal Pattern Jury Instructions § 3:10, that emphasized the argumentative nature of closing arguments, and explicitly instructed the jurors as to relevant factors to consider and their roles as the sole judges of the credibility of the witnesses presented at trial. Maryland courts long have subscribed to the presumption that juries are able to follow the instructions given to them by the trial judge, particularly where the record reveals no overt act on the jury's part to the contrary. Wilson v. State, 261 Md. 551, 570, 276 A.2d 214, 223-24 (1971); Brooks v. State, 85 Md.App. 355, 360-61, 584 A.2d 82, 85 (1991). The jury in this case was instructed that it could reject or accept any testimony, and was to subject the credibility of all witnesses to an equivalent level of scrutiny. With these instructions in mind, we are confident that a reasonable jury would be able to fulfill properly its role and discern argument from evidence without undue prejudice to the defendant. Wilhelm, 272 Md. at 425-26, 445, 326 A.2d at 721-22, 732; see also Young v. State, 68 Md.App. 121, 136-37, 510 A.2d 599, 607 (1986) (finding that jury instructions such as those in this case were sufficient to apprise the jury of its duty to weigh testimony of police officers under the same scrutiny as other witnesses). We could find in the record no indicia, nor did Petitioner identify any, of the jury's inability or refusal to follow these explicit instructions given by the trial court. See Brooks, 85 Md.App. at 360-61, 584 A.2d at 85 (finding that when a defendant fails to demonstrate any evidence of the jury's inability or refusal to heed court's instruction, mere speculation that the "jury could not possibly have discharged [its] task appropriately... is totally insufficient"). Many courts finding improper similar comments during closing arguments also have found jury instructions, such as the one in this case, to be ameliorative of any prejudice that resulted from the improper comments. Degren, 352 Md. at 434-35, 722 A.2d at 903-04; Henry, 324 Md. at 232, 596 A.2d at 1038; Boyd, 54 F.3d at 872; Martinez, 981 F.2d at 871. Courts considering the prejudicial impact of improper prosecutorial comments also have examined the weight of evidence of the accused's guilt. See Wilhelm, 272 Md. at 427, 326 A.2d at 722 (finding that "[a]nother important and significant factor where prejudicial remarks might have been made is whether or not the judgment of conviction was `substantially swayed by the error,' or where the evidence of the defendant's guilt was `overwhelming'"). We find this factor, however, to be of somewhat less weight in this case. Although the record contains adequate evidence of Spain's guilt to support the convictions under a sufficiency analysis, we cannot say that the evidence of Spain's guilt is truly overwhelming. Nonetheless, we find that the relative lack of severity of the improper remarks, the lack of potential impact of the erroneous argument (greater veracity of police officer due to adverse employment consequences if he lied) on the defense's theory that Officer Williams' had a faulty memory (not that he lied), and the instruction given by the judge lead us to the conclusion that Spain did not suffer undue prejudice, as a result of the prosecutor's improper comments during closing argument, sufficient to warrant reversal of his convictions. We are convinced beyond a reasonable doubt that the error in no way influenced the verdict. Ragland v. State, 385 Md. 706, 870 A.2d 609 (2005); 35 Dorsey v. State, 276 Md. 638, 659, 350 A.2d 665, 678 (1976). JUDGMENT OF THE COURT OF SPECIAL APPEALS AFFIRMED. COSTS TO BE PAID BY PETITIONER. Dissenting Opinion by BELL, C.J. Jesse Spain, Jr., the petitioner, was convicted, after a jury trial in the Circuit Court for Baltimore City, of various offenses involving a controlled dangerous substance, including the offense of using a minor for the purpose of distributing it. The sole witness for the State at the trial, and through whom all of the State's exhibits were introduced, was Officer Cornelius Williams, who, at the time of the commission of the alleged offenses was working a plain-clothes assignment. Although the petitioner did not testify, his defense, confirmed by his only witness, his sister, was that he did not commit the offenses alleged and, in fact, was not present when they were committed. The majority acknowledges that this was the focus of the petitioner's defense: "Spain's defense at trial appeared to hinge on the contentions that Officer Williams was mistaken as to the encounter between himself and Officer Williams and that he was in no way involved in the narcotics transaction that followed." 386 Md. 145, 150, 872 A.2d 25, 28 (2005). Thus, notwithstanding the majority's "mistake" characterization, the credibility of Officer Williams was placed at issue by the petitioner.[8] Indeed, the petitioner's objection to the State's closing argument referenced Officer Williams'"perjuring himself" and his "credibility." The State certainly understood that to be the case, even before the objection. There is no other logical reason or basis for the Assistant State's Attorney's closing argument to have included the following: "The second point I wanted to make to you is that the Officer in this casethe Defense's argument is that Mr. Spain was outside his house. He was going to attend a Superbowl party and was buying beer. Part of what you have to determine is the credibility of the witnesses. The defense put on a witness who testified, and the State put on one witness, the Officer in this case. You have to weigh the credibility of each individual. Who has a motive to tell you the truth. The Officer in this case would have to engage in a lot of lying, in a lot of deception and a conspiracy of his own to come in here and tell you that what happened was not true. He would have to risk everything he has worked for. He would have to perjure himself on the stand. * * * * * * 36 "So basically you have to determine who has the credibility. Who's telling you the truth. Is the Officer coming here and making up a story? What's his incentive to lie and frame Mr. Spain? The reality is that this Officerthey attempted to sell this Officer drugs on the street. They didn't know he was a police officer. He was out there trying to enforce the law. But, you have to understand that Officer Williams has no motive to lie, because he has everything to risk in this case. Because he doesn't have to go out and make up drug arrests. Because he has plenty of legitimate drug arrests. There's absolutely no incentive for him to come in here and tell a story about Mr. Spain. So is Mr. Spain the victim of circumstance? He was just taken up in front of his house, trying to attend a Superbowl party? That's the defense's theory in the case. You will ultimately have to decide who you want to believe." Id. at 151-52, 872 A.2d at 28-29. As indicated, the petitioner objected. The trial court overruled the objection, observing parenthetically, "Okay, well the jury understand[s] that this of course is closing argument, and that they will [consider the statements to be] lawyers' arguments." The majority agrees with the petitioner that the State's argument that Officer Williams "had a motive to testify truthfully because to testify falsely would expose him to the penalties of perjury and lead to adverse consequences to his career as a police officer,"[9] 386 Md. at 153, 872 A.2d at 29-30, was improper, because it "`vouches,'" i.e., "`place[s] the prestige of the government behind a witness through personal assurances of the witness's veracity... or suggest[s] that information not presented to the jury supports the witness's testimony.'" Id. at 153-54, 872 A.2d at 30, quoting U.S. v. Daas, 198 F.3d 1167, 1178 (9th Cir.1999). Therefore, it holds that the trial court erred in overruling the petitioner's objection and, thus, allowing the prosecutor improperly to vouch for Officer Williams' credibility. Id. at 156-58, 872 A.2d at 31-32. Nevertheless, concluding that the prosecutor's statements concerning the officer's motive to testify truthfully "did not mislead or influence the jury unduly to the prejudice 37 of [the petitioner]," the majority also holds that the error was harmless. Id. at 153-54, 872 A.2d at 30, citing Degren v. State, 352 Md. 400, 430-31, 722 A.2d 887, 902 (1999). I agree that the State improperly vouched for Officer Williams' credibility and that the trial court erred in permitting the State to do so. I do not agree that the court's error was harmless. Accordingly, I dissent. To be sure, as this Court observed in Degren, supra, 352 Md. at 432, 722 A.2d at 903 (quoting Dorsey v. State, 276 Md. 638, 653, 350 A.2d 665, 674 (1976)), "the determinative factor [when the issue is whether an error is prejudicial or harmless] ... has been whether or not the erroneous ruling, in relation to the totality of the evidence, played a significant role in influencing the rendition of the verdict, to the prejudice of the [defendant]." With regard to prosecutorial closing arguments, in particular, we have said: "[T]he mere fact that a remark made by the prosecutor to the jury was improper does not necessarily require a conviction to be set aside. Reversal is only required where it appears that the remarks of the prosecutor actually misled the jury or were likely to have misled or influenced the jury to the prejudice of the accused." Evans v. State, 333 Md. 660, 679, 637 A.2d 117, 126 (1994), quoting Jones v. State, 310 Md. 569, 580, 530 A.2d 743, 748 (1987), vacated and remanded on other grounds, 486 U.S. 1050, 108 S. Ct. 2815, 100 L. Ed. 2d 916, sentence vacated on remand on other grounds, 314 Md. 111, 549 A.2d 17 (1988). The test for assessing that "determinative factor," where closing argument is at issue, for determining whether a remark requires reversal, is also well settled. As enunciated in Dorsey, supra, 276 Md. at 659, 350 A.2d at 678, it is: "when an appellant, in a criminal case, establishes error, unless a reviewing court, upon its own independent review of the record, is able to declare a belief, beyond a reasonable doubt, that the error in no way influenced the verdict, such error cannot be deemed `harmless' and a reversal is mandated." Lest there be any doubt about it, we made clear in Johnson v. State, 325 Md. 511, 521, 601 A.2d 1093, 1097-98 (1992) that harmless error analysis, as applied in Dorsey, applied equally to "arguments of counsel to the jury as part of the usual and ordinary procedures of a criminal trial," and, indeed, that Wilhelm v. State, 272 Md. 404, 326 A.2d 707 (1974), the leading case addressing the limits of argument by counsel to the jury, and Dorsey "are consistent in the philosophy prompting them, comparable in the rationale underlying them, and similar in the test set out in them. Both are concerned primarily with error and the prejudice arising therefrom." See Brown v. State, 339 Md. 385, 397, 663 A.2d 583, 589 (1995). In fact, concluding that "Dorsey aimed at providing one standard to measure an error,"[10] we have specifically rejected the State's argument urging a contrary position, "that the Dorsey test `is meant to apply to those errors affecting an accused's constitutional rights and those other evidentiary, or procedural, errors which may have been committed during a trial'" and not arguments of counsel, which "are not evidence and have no binding force or effect." Johnson, supra 38 325 Md. at 521, 601 A.2d at 1097-98. There simply is no incompatibility, then, between reviewing a trial court's ruling as to the propriety of remarks made during closing arguments for abuse of discretion and applying the Dorsey test when an abuse has been found. As Wilhelm makes clear, there is no error "unless there has been an abuse of discretion by the trial judge of a character likely to have injured the complaining party." 272 Md. at 413, 326 A.2d at 714-15. Moreover, the credibility of witnesses is a matter to be resolved by the trier of fact, in a jury trial, the jury. Robinson v. State, 354 Md. 287, 313-314, 730 A.2d 181, 195 (1999). Thus, in a jury trial, only the jury determines whether to believe any witnesses, and which witnesses to believe. See Bohnert v. State, 312 Md. 266, 278-79, 539 A.2d 657, 663 (1988); Gore v. State, 309 Md. 203, 210, 214, 522 A.2d 1338, 1341, 1343 (1987); Battle v. State, 287 Md. 675, 685, 414 A.2d 1266, 1271 (1980); Wilson v. State, 261 Md. 551, 566, 276 A.2d 214, 221 (1971); Jacobs v. State, 238 Md. 648, 650, 210 A.2d 722, 723-24 (1965). See also Dykes v. State, 319 Md. 206, 224, 571 A.2d 1251, 1260 (1990) (requiring the court to "instruct the jury that it is the sole judge of the facts, the weight of the evidence, and the credibility of the witnesses"); Maryland Rule 4-325(d).[11] The majority does not appear to have applied the Dorsey test; although it cites Dorsey and its requirement that the appellate court be satisfied beyond a reasonable doubt that the error played no role in the verdict, it does so only at the end of the opinion. 386 Md. at 161, 872 A.2d at 34-35. Rather it appears to have reverted to the Wilhelm standard, guided, however, by the analysis in Degren. The latter case cited Dorsey, but not for the "harmless error" test. The Court referenced the Dorsey language identifying the "determinative factor" to be considered in deciding whether any error is harmless or prejudicial, 352 Md. at 432, 722 A.2d at 902, and not the Dorsey Court's pronouncement of the level of certainty required to declare an error, once found, to be harmless. The Court's focus, in short, as is the majority's in this case, was on the Wilhelm formulation of what is required to be shown to render arguments of counsel improper and, therefore, a basis for reversal. See Degren, 352 Md. at 432-33, 722 A.2d at 902-03. In that regard, it emphasized the instructions given the jury that were ameliorative of any error or mistatement, whether recognized by the trial court as such, or not. Id. at 433-34, 722 A.2d at 903-04. The test for prejudice that the Wilhelm Court identified as applicable was "whether we can say, `with fair assurance, after pondering all that happened without stripping the erroneous action from the whole, that the judgment was not substantially swayed by the error.'" 272 Md. at 416, 326 A.2d at 716, quoting Gaither v. United States, 413 F.2d 1061, 1079 (D.C.Cir.1969) Citing Kotteakos v. United States, 328 U.S. 750, 765, 66 S. Ct. 1239, 1248, 90 L. Ed. 1557, 1566-67 (1946). It identified, as well, factors it determined to be decisive on the issue: the closeness of the case, id., citing Cross v. United States, 353 F.2d 454, 456 (D.C.Cir.1965); Jones v. United States, 338 F.2d 553, 554 n. 3 (D.C.Cir.1964); the centrality of the issue affected by the error, id. citing King v. United States, 372 F.2d 383, 395 (D.C.Cir.1967); and the 39 steps taken by the court to mitigate the effects of the error. Id., citing Gaither v. United States, supra., 413 F.2d at 1079. In support of its conclusion that the error was harmless, the majority, pointing out that "the prosecutor's reference to potential consequences to Officer Williams's career was an isolated event that did not pervade the entire trial," 386 Md. at 159, 872 A.2d at 33, a factor that Wilhelm also recognized as important, 272 Md. at 425-26, 326 A.2d at 721, focuses on, and finds solace from, the trial court's comment, made contemporaneously with the petitioner's objection, that the jury understood that it was closing argument and would consider the prosecutor's statements as such, and the pre-argument instructions given the jury. See 386 Md. at 159-60, 872 A.2d at 33-34. These, it claims, ameliorated the error. To be sure, it cursorily addresses the closeness and centrality factors, conceding, as to the former, that the evidence was not "truly overwhelming," 386 Md. at 160-61, 872 A.2d at 34, but relying on the "relative lack of severity of the improper remarks, the lack of potential impact of the erroneous argument (greater veracity of police officer due to adverse employment consequences if he lied) on the defense's theory that Officer Williams' had a faulty memory (not that he lied)and the instruction given by the judge," id. at 161, 872 A.2d at 34-35, concludes that the petitioner was not prejudiced. First, as indicated, it appears that the majority has applied the wrong standard: in addition to citing Dorsey seemingly only in passing, the cases on which it seems principally to have relied, either are not apposite, see Degren, supra, 352 Md. 400, 722 A.2d 887; Henry v. State, 324 Md. 204, 232, 596 A.2d 1024, 1038 (1991), or applied the wrong standard of review, United States v. Boyd, 54 F.3d 868, 872 (D.C.Cir. 1995) and United States v. Martinez, 981 F.2d 867, 871 (6th Cir.1992). For the error to be deemed "harmless, the Court, upon its own independent review of the record, must be able to declare a belief, beyond a reasonable doubt, that the error in no way influenced the verdict." Dorsey, 276 Md. at 659, 350 A.2d at 678. It simply is not sufficient to be "confident that a reasonable jury would be able to properly fulfill its role and discern argument from evidence without undue prejudice to the defendant;"[12] 386 Md. at 160, 872 A.2d at 40 34, the Court has to be satisfied beyond a reasonable doubt that the jury did fulfill its role and discern argument from evidence without prejudicing the defendant. Nor is it sufficient merely to state that "[w]e could find in the record no indicia, nor did Petitioner identify any, of the jury's inability or refusal to follow these explicit instructions given by the trial court." 386 Md. 160, 872 A.2d 34 "Once error is established, the burden is on the State to show that it was harmless beyond a reasonable doubt." Denicolis v. State, 378 Md. 646, 658-59, 837 A.2d 944, 952 (2003). Harmless error cannot be established on an ambiguous record. Taylor v. State, 352 Md. 338, 351, 722 A.2d 65, 71 (1998). In any event, Brooks v. State, 85 Md. App. 355, 360-361, 584 A.2d 82, 85 (1991) is inapposite. That case involved the propriety of the denial of a motion for mistrial "when curative instructions are given, [which] it is presumed ... the jury can and will follow...." Id. 360, 584 A.2d at 85, quoting Brooks v. State, 68 Md.App. 604, 613, 515 A.2d 225 (1986), cert. denied, 308 Md. 382, 519 A.2d 1283 (1987). Affirming the denial, the Court of Special Appeals explained: "There is no doubt but that the court fully apprised the jury of its obligation not to use the co-conspirators' testimony to support a guilty verdict. It did so on more than one occasion and, on each occasion, in a detailed fashion. There is, moreover, nothing in the verdict itself which suggests that the court's instructions were not heeded. Indeed, appellant does not point to any concrete evidence to that effect; he merely speculates, given the complexity of the task with which it was charged, that the jury could not possibly have discharged that task appropriately. That, of course, is totally insufficient. On the contrary, when one considers that the jury is presumed to be able to, and in fact will, follow curative instructions, it becomes manifest that there was no error." There is absolutely no resemblance between that case and this one. In support of its holding that the error in this case is harmless, the majority cites, in addition to Degren, supra, 352 Md. at 434-35, 722 A.2d at 903-04, Henry v. State, 324 Md. 204, 232, 596 A.2d 1024, 1038 (1991); United States v. Boyd, 54 F.3d 868, 872 (D.C.Cir.1995) and United States v. Martinez, 981 F.2d 867, 871 (6th Cir. 1992). None of those cases provides the needed support. In Degren, the defendant argued that the prosecutor's comments that "[t]he number one reason why you should not believe what Sharon Degren says is nobody, nobody in this country has more reason to lie than a defendant in a criminal trial" and "this defendant has every reason to lie. She is a defendant" were erroneously allowed because, by referring to defendants in general and their motives to lie, rather than his motives, they effectively undermined the presumption of innocence, with which every defendant is clothed until proven guilty. 352 Md. at 431, 722 A.2d at 902. We rejected that argument, concluding, on the contrary, that the trial court had not abused its discretion in denying the defendant's motion for mistrial and for a curative instruction. We explained: "The prosecutor's comment that criminal defendants have a motive to lie did not bear directly on petitioner's guilt or innocence. Rather, the comment was made in response to the defense counsel's comments during closing argument that the jury should not believe the State's witnesses because they had various motives to lie. The prosecutor went on, after she made her remarks at issue, 41 to argue other motives petitioner might have to lie. This Court has held that, under certain circumstances, a prosecutor's argument during rebuttal and in response to comments made by the defense during its closing are proper. See Blackwell v. State, 278 Md. 466, 481, 365 A.2d 545, 553-54 (1976), cert. denied, 431 U.S. 918, 97 S. Ct. 2183, 53 L. Ed. 2d 229 (1977). But see Johnson v. State, 325 Md. 511, 517, 601 A.2d 1093, 1096 (1992). The trial court evidently determined that the prosecutor's comments were not improper, at least to the extent that they did not subvert the presumption of innocence, the only ground for mistrial argued by petitioner's counsel. Given the broad discretion afforded trial courts in making such determinations, we do not believe it abused this discretion in denying petitioner's motions for mistrial and for a curative instruction." Id. at 431-32, 722 A.2d at 902. Later, to be sure, but only in dicta did the Court comment on the effect of the jury instructions given in the case on the presumption of innocence, concluding that the instructions so "clearly defined the jury's role, the presumptions afforded the defendant, how to consider comments by the attorneys, and how to judge witness testimony," Id. at 435, 722 A.2d at 904, as to result in the prosecutor's comments, even if inappropriate, having no effect.[13] Henry is to like effect. The challenged argument was: "Ladies and gentlemen, I didn't make up a theory out of thin air and present it about ballistics. [Defense Counsel], if you don't like my theory and you come up with a theory, then let's see how it flies. Let's put our theories before these good people and let them decide. I didn't hear his theory. "I put a theory before you, ladies and gentlemen, based upon the evidence in this case, and I am willing to let you examine it and stand here and stand by it. If you reject my theory, fine, so be it, but I put it up here. "I submit to you that it is based upon the evidence in this case. It is not something that was dreamed up. If they have a theory I'm more than willing to hear it." 324 Md. at 229, 596 A.2d at 1036-37. The challenge was that the argument created the impression that the defense had some obligation to prove a "theory" of the case and, thus, its effect was "to indicate that the defense carries a burden which the law does not impose." Id. at 232, 596 A.2d at 1038. Upholding the trial court's overruling of the defendant's objection, the Court opined: "We do not find that the prosecutor suggested that Henry had the burden to prove any element of the charges against him. The court thoroughly instructed the jury on the State's burden of proof and told them that their verdicts should be based on the evidence. "When viewed in its entire context, the prosecution's rebuttal in the instant case does not warrant a finding of reversible error. The State's Attorney was responding 42 directly to remarks made by defense counsel in closing argument and was asking the jury to accept his theory of the case. See Denny v. State, 404 So. 2d 824, 826 (Fla.App.1981). The judge properly instructed the jury on the applicable law, including the State's burden of proof. The prosecutor's rebuttal remarks could not have misled or prejudicially influenced the jury." Id. Boyd is particularly inapposite. There, although the defendant objected to the Government's closing argument, he did not state the specific ground. Therefore, concluding that "nothing in the context of defense counsel's unexplained objection made obvious the ground therefor," the court applied the plain error standard of review. Id. at 54 F.3d at 872. Certainly, that standard does not apply here. Similarly, a different standard than the Dorsey standard, required in Maryland, whether the "prosecutorial impropriety" "was so `gross as probably to prejudice the defendant,'" was applied in Martinez. 981 F.2d at 871, quoting United States v. Ashworth, 836 F.2d 260, 267 (6th Cir.1988). Applying that standard, noting that the prosecutor's comment was simply an isolated misstatement, the court stated its belief that: "It is unlikely that it prejudiced [the defendant].... Any possible prejudice that [the defendant] might have suffered was ameliorated by the trial court's instruction to the jury that `the lawyers' statements ... and their arguments are not evidence.'... This instruction was sufficient to neutralize the prosecutor's slight impropriety.... Therefore, we conclude that the district court's ruling was not reversible error." Id. The factors identified by Wilhelm, the closeness of the case, the centrality of the issue affected by the error and the steps taken to mitigate its effect, all militate against a finding of harmless error. There was only one witness who testified for the State and against the petitioner and it was through that witness that all of the evidentiary exhibits were introduced against the petitioner. The State's only witness did not go unchallenged; indeed, the thrust of the petitioner's defense was that the witness was not credible with respect to the petitioner's involvement in the crimes with which he was charged. The only issue in the case, in short, was whether the jury should believe Officer Williams's testimony. That issue is also the issue affected by the State's improper argument; it was the purpose of the argument to buttress the credibility of the Officer. And, as the majority concedes, the court never acknowledged that the argument was error; consequently, the court did absolutely nothing to mitigate the effect of the error. We have stated frequently that where credibility is an issue and, thus, the jury's assessment of who is telling the truth is critical, an error affecting the jury's ability to assess a witness's credibility is not harmless error. Martin v. State, 364 Md. 692, 703, 775 A.2d 385, 391 (2001) (denial of opportunity to establish the bias or pecuniary interest of the witness); Howard v. State, 324 Md. 505, 517, 597 A.2d 964, 970 (1991) ("In a case that largely turned on whom the jury was going to believe, the improperly admitted evidence of the defendant's prior conviction may have been the weight which caused the jurors to accept one version rather than the other"); State v. Cox, 298 Md. 173, 185, 468 A.2d 319, 324-25 (1983) (error not harmless where, although some corroborating physical evidence, the prosecution's case was based on the testimony of the victim, on the basis of which, if shown not to be credible, the jury might not have been able to find guilt beyond a reasonable doubt). See Newman 43 v. State, 65 Md.App. 85, 98, 499 A.2d 492 (1985) (when the State's case depends virtually exclusively on the credibility of a witness, the bolstering of the witness's credibility by prior consistent statements cannot be harmless error). This is so because the court reviewing the trial court error for prejudice plays a significantly different role and has a function distinct from that of the trier of fact. I addressed that distinction, albeit in dissent, in Ware v. State, 360 Md. 650, 716-17, 759 A.2d 764, 799 (2000) (Bell, C.J., dissenting): "Once it has been determined that error was committed, reversal is required unless the error did not influence the verdict; the error is harmless only if it did not play any role in the jury's verdict. The reviewing court must exclude that possibility `beyond a reasonable doubt.'" "Moreover, an appellate court reviewing a trial court verdict must apply the harmless error rule consistently with its role; it should not take on the role of the trier of fact and substitute its judgment for that of the jury or the trial court whose verdict is under review. That would be to usurp the function of the trier of fact and that is not allowed.... See, e.g., Daniels v. State, 24 Md.App. 1, 7, 329 A.2d 712, 716 (1974) (`We may not usurp the function of the jury by holding that the eyewitnesses should be believed over the alibi evidence.'). See also Shelton v. State, 198 Md. 405, 412, 84 A.2d 76, 80 (1951) (`This Court will not inquire into or measure the weight of the evidence, and will not reverse the judgment if there is any proper evidence before the jury on which to sustain a conviction.'); Alexander v. Tingle, 181 Md. 464, 467, 30 A.2d 737, 738 (1943) (`The Court had not the authority to direct the jury that the evidence established a certain fact even though the evidence was uncontradicted and highly persuasive. The Court could not thus usurp the function of the jury to weigh the credibility of the evidence.'); Collins v. State, 14 Md.App. 674, 679, 288 A.2d 221, 224 (1972) (`The weight of the evidence and the credibility of witnesses are matters within the realm of the jury.'); Wilkins v. State, 11 Md.App. 113, 127, 273 A.2d 236, 243 (1971) (`The weight of evidence and the credibility of the witnesses [are] for the jury.')." (Footnote omitted). In addition, "No matter how strong a case for conviction the State may present, even when the defense presents no evidence, the court may not direct a verdict for the State. See Maryland Rule 4-324, which, while providing that a defendant may move for judgment of acquittal, Rule 4-324(a), ... and the court may direct the entry of judgment in his or her favor if there is insufficient evidence, as a matter of law, Rule 4-324(b), makes no provision for the making of a motion for judgment by the State. Compare Maryland Rule 2-519, ... the civil counterpart. [State v. Lyles], 308 Md. 129, 135, 517 A.2d 761, 764 (1986). This is so because it is the trier of fact, whether the court or a jury, that must determine if the State has met its burden of proof. To make that determination, the trier of fact is required to find the facts and when, as is usually the case, there are credibility issues, to resolve them. That, in turn, involves weighing the evidence. Appellate courts do not find facts or weigh evidence, `what evidence to believe, what weight to be given it, and what facts flow from that evidence are for the jury ... to determine.' Dykes v. State, 319 Md. 206, 224, 571 A.2d 1251, 1260-[6]1 (1990). See Gore v. State, 309 Md. 203, 214, 522 A.2d 1338, 1341 (1987); Wilson v. State, 261 Md. *44 551, 566, 276 A.2d 214, 221 (1971); Jacobs v. State, 238 Md. 648, 650, 210 A.2d 722, 723-[2]4 (1965). Even when an appellate court assesses the sufficiency of the evidence, it does not weigh it, see Clemson v. Butler Aviation-Friendship, 266 Md. 666, 671, 296 A.2d 419, 422 (1972); Gray v. Director, Patuxent Institution, 245 Md. 80, 84, 224 A.2d 879, 881 (1966), it only determines if any evidence exists, on the basis of which a rational trier of fact could find the elements of the crime beyond a reasonable doubt. See Jackson v. Virginia, 443 U.S. 307, 319, 99 S. Ct. 2781, 2788, 61 L. Ed. 2d 560, 573 (1979); Bloodsworth v. State, 307 Md. 164, 167, 512 A.2d 1056, 1057 (1986). There is no reason that a harmless error analysis should permit it to do more." Rubin v. State, 325 Md. 552, 596-97, 602 A.2d 677, 698-99 (1992) (Bell, J., dissenting) (footnotes omitted). All of what the majority points to, and on which it relies, occurred prior to the error occurring. I confess to having difficulty understanding how instructions given with the expectation that there will be compliance and no error can moderate an error subsequently made. More difficult to accept, or even understand, is the majority's reliance on the court's comment, made when the petitioner objected, stating the obvious, that the State's argument vouching for the State witness's credibility was argument of counsel and that the jury would take it as such. Argument of counsel may be proper or it may be, as in this case, improper. There is, or should be, a consequence when a party engages in improper argument; when it is a jury trial and the jury may well have been misled, that consequence is to order a new trial. That the jury is told that argument is not evidence does not address the effect that the improper argument may have had on the jury. This is of particular significance where, as in the case of a jury, it is impossible to determine whether and, if so, how, particular arguments affect, or may have affected, the jury's verdict. I have often questioned this Court's application of the "harmless error" rule, believing both that it is over-used and misused. On the prior occasions, there has been evidence of the defendant's guilt in addition to the testimony, admitted or excluded, being challenged. E.g., Rubin, 325 Md. at 578-580, 589-590, 602 A.2d 677 (evidence so overwhelming that excluding the offending evidence would have made no difference in verdict); Jensen v. State, 355 Md. 692, 716, 736 A.2d 307, 320 (1999)(indicating, among other references to the evidence, that "four individuals testified that Jensen told them, or that they overheard him, either revealing the details or bragging about the killing"); Ware, 360 Md. at 679, 759 A.2d at 779 (in addition to the holding that the "form of the evidence reduced [the] prejudicial impact" of an erroneously admitted statement of a State's witness, there was considerable other evidence supporting the defendant's guilt). I had thought, until now, that, where the only issue was credibility and it had to be resolved by the jury believing one witness over another, "harmless error" would not, and indeed, could not apply. Applying the Dorsey test to the facts in this case, there simply is no logical basis on which any rational reviewing court could be persuaded beyond a reasonable doubt that the State's improper closing argument, vouching, as it does, for the credibility of Officer Williams, the State's only witness, whose credibility was challenged, did not contribute to the guilty verdict returned against the petitioner. It was not harmless error. I dissent. NOTES [1] The FLEX unit is a plain clothes squad within the Baltimore City Police Department that responds to varying locations during different time periods depending on crime trends. [2] Spain was charged with one count of distribution of a controlled dangerous substance ("CDS") in violation of Md.Code (1957, 1996 Repl.Vol.), Art. 27 § 286 (now codified, without substantive change, at Md.Code (2002), § 5-602 of the Criminal Law Article), one count of using a minor for distribution of a CDS in violation of Md.Code (1957, 1996 Repl.Vol.), Art. 27 § 286C (now codified, without substantive change, at Md.Code (2002), § 5-628 of the Criminal Law Article), one count of possession of a CDS with intent to distribute in violation of Md.Code (1957, 1996 Repl.Vol.), Art. 27 § 286 (now codified, without substantive change, at Md.Code (2002), § 5-602 of the Criminal Law Article), one count of possession of a CDS in violation of Md.Code (1957, 1996 Repl.Vol.), Art. 27 § 287 (now codified, without substantive change, at Md.Code (2002), § 5-601 of the Criminal Law Article), and three counts of conspiracy relating to the distribution of a CDS in violation of Md.Code (1957, 1996 Repl.Vol.), Art. 27 § 290. Spain was charged with using a minor for distribution of a CDS because Wilson's birthday was 1 June 1985, making him under the age of 18 at the time of the narcotics transaction. At the close of the State's case, Spain moved for judgment of acquittal on Count I relating to the charge of distribution of a CDS, which the trial court granted. [3] The defendant stipulated that the substance in the gel caps was heroin, excusing the need for the State to call a witness to testify as to the identity of suspected CDS. Spain also did not object to the admission of the State's documentary exhibits offered through Officer Williams. [4] The Dissent would have us believe that the thrust of Spain's defense at trial focused on urging the jury to disbelieve Officer Williams because he lied about Spain's involvement ("Thus, notwithstanding the majority's `mistake' characterization, the credibility of Officer Williams was placed at issue by the petitioner. Indeed, the petitioner's objection to the State's closing argument referenced Officer Williams' `perjuring himself' and his `credibility'." Dissent at 1). To believe so would be wrong. Although the defense at trial surely wanted the jury to believe its sole defense witness (Spain's sister) and its theory that Spain, while in transit to a Super Bowl party at his grandfather's home, was caught up in a drug transaction conducted by others, it's rationale offered in closing argument for reaching that view was that Officer Williams' memory was unreliable due to passage of time and mental commingling of similar events, to wit: And let's remember again, this case happened over a year ago. The officer that is testifying-officers, like any other people who testify can make mistakes. Does he remember exactly what was said to him a year ago? I would submit to you ladies and gentlemen, that probably since that incident, Officer Williams has probably had hundreds of arrests. He's an expert in drugs activity. He's working on the street. Does he remember, verbatim exactly what my client said to him that day? It is enough that he [Spain] may have directed the officer to where drugs were being sold, to find if he was working with these people in an agreement. It is not. Trial transcript, 6 March 2003, Page 35, lines 9-20. Consistently, Spain's appellate counsel argued before us that Officer Williams' "veracity" was not challenged, rather the "accuracy" of his memory was at issue. We were informed that the "defense from the minute of opening all the way through the end was he may have made a mistake." [5] The trial judge sentenced Spain to 10 years imprisonment for the conviction of using a minor to distribute, and 10 years imprisonment, to run concurrently, for the conviction of possession with intent to distribute. The trial judge merged all of the other convictions for sentencing purposes. [6] Before sending the jury to deliberate, the trial judge in Spain's trial gave, among others, the following jury instruction, which, for the most part, mirrors Maryland Criminal Pattern Jury Instructions § 3:10: You are the sole judges of whether a witness should be believed. In making this decision, you may apply your own common sense and everyday experiences. In determining whether a witness should be believed, you should carefully judge all the testimony and evidence and the circumstances under which the witness testified. You should consider such things as: the witness' behavior on the stand and manner of testifying; did the witness appear to be telling the truth; the witness' opportunity to see or hear the things about which testimony was given; the accuracy of the witness' memory; does the witness have a motive not to tell the truth; does the witness have an interest in the outcome of the case; was the witness' testimony consistent; was the witness' testimony supported or contradicted by evidence that you believe and whether and the extent to which the witness' testimony in the Court was different from any statement the witness made on any previous occasion. You need not believe any witness, even if the testimony is uncontradicted. You may believe all, part or none of the testimony of any witness. [7] We reserve for another day whether comments such as those made in this case would be allowed under the "invited response doctrine" as a response to a direct and specific attack on a police officer witness's veracity. The "invited response doctrine" suggests that "where a prosecutorial argument has been made in reasonable response to improper attacks by defense counsel, the unfair prejudice flowing from the two arguments may balance each other out, thus obviating the need for a new trial." Walker, 155 F.3d at 186 n. 5 (citations omitted); see also Degren, 352 Md. at 431-32, 722 A.2d at 902 (finding comments by the prosecution during closing argument, though "unprofessional and injudicious," to be nonetheless acceptable when "made in response to the defense counsel's comments during closing argument that the jury should not believe the State's witnesses because they had various motives to lie"). In this case, the defendant made no such specific and direct attack on Officer Williams's veracity. [8] Credibility is implicated however and in whatever manner it is argued that a witness's testimony ought not be credited; it may be a matter of academic interest or affect only the reprehensibility of the action, but to the factfinder, it matters not whether the basis of the unreliability of the witness's testimony is mistake or intentional fabrication. Either way, as indicated, the testimony is unreliable, lacks credibility. Moreover, in this case, it does not matter how the petitioner characterized Officer Williams' testimony, or why, whether diplomatic, perhaps tactical, given the position of the State's only witness. The State was clear in its closing argument that it perceived the issue to be a credibility issueit told the jury, "You have to weigh the credibility of each individual," it had to "determine who has the credibility. Who's telling you the truth." It was the State's intention, and it had the desired effect, I submit, to enhance the Officer's credibility and to do so by emphasizing his position and, thus, vouching for the Officer. How effective it was, the impact it had on the jury, is a matter to be determined by the jury, not by this Court. [9] The petitioner argued that the State vouched for the credibility of its only witness, Officer Williams, in two ways: one, by arguing that Officer Williams had no motive to testify falsely, and two, that he, on the contrary, had a motive to testify truthfully by virtue of what he stood to lose, i.e., "he would have to risk everything he has worked for. He would have to perjure himself on the stand." The majority rejects the former, observing that "[t]he prosecutor's comments about Officer Williams's absence of a motive to lie did not implicate any information that was outside the evidence presented at trial," 386 Md. at 155-56, 872 A.2d at 31, and, therefore, were not error. As we have seen, it concluded otherwise with respect to the comments referencing the officer's motive to testify truthfully. I am not at all convinced that the majority is correct as to the absence of a motive to lie comments. The support that Reyes v. State, 700 So. 2d 458, 460-61 (Fla.Dist.Ct.App.1997) and U.S. v. Walker, 155 F.3d 180, 187 (3rd Cir.1998) provide in that regard is tenuous, at best. Reyes, in fact, condemned the very conduct engaged in in this case and Walker's analysis was largely semantic, essentially turning on the meaning of the phrase, "I submit to you." The real question is, whether the two kinds of comments may be parsed, as the majority has done, so that those that do not offend, when considered in context and with the instructions, so overshadow the offending ones that it can be said, beyond a reasonable doubt, that the offending comments had no effect on the verdict. It is simply inconceivable that any objective reviewer could. That is especially the case where the reviewer's function is not to weigh the evidence. [10] In Dorsey v. State, 276 Md. 638, 658, 350 A.2d 665, 677 (1976), we said: "Regardless of the generic nature of the error, we believe that upon appellate review, a uniform test should be applied in all criminal cases to determine the effect the error may have had on the verdict." [11] Maryland Rule 4-325(d) permits the trial court, in instructing the jury, to "refer to or summarize the evidence in order to present clearly the issues to be decided," but "[i]n that event, the court shall instruct the jury that it is the sole judge of the facts, the weight of the evidence, and the credibility of the witnesses." [12] The majority cites for this proposition Young v. State, 68 Md.App. 121, 510 A.2d 599 (1986) and Wilhelm v. State, 272 Md. 404, 425-26, 445, 326 A.2d 707, 721-22, 732 (1974). Young does not stand for that proposition. At the outset, it is important to note that the Young court did not find harmless error. For the benefit of the trial court on remand, however, the intermediate appellate court considered the correctness of jury instructions concerning the evaluation of the credibility of police officers. The defendant wanted the court to endorse the following instruction and, in fact, argued that the instruction was required to be given: "A police officer's testimony should be considered by you just as any other evidence in this case, and in evaluating his credibility, you should use the same guidelines which you apply to the testimony of any other witness. In no event should you give any greater or lesser credence to the testimony of any witness merely because he is a police officer." Id. at 136, 510 A.2d at 607. The Court of Special Appeals did not agree. Instead, it endorsed a portion of the instruction the trial court had given: "You are the sole judges of whether a witness should be believed, and in making this decision, you should apply your own common sense and everyday experiences in life. In determining whether a witness should be believed and what weight to give the testimony of that witness, you should carefully judge all the testimony and evidence and circumstances under which each witness has testified." Id. at 136-37, 510 A.2d at 607. [13] The Court had earlier commented in a footnote that it harbored concern about the appropriateness of the prosecutor's remarks: "In so holding, we, like the Court of Special Appeals, believe this comment may have been inappropriate. Under the facts of this particular case, the issue of motive to lie had been brought up first by the defense. We do not believe the State's Attorney's intent in stating criminal defendants have a motive to lie was nefarious. Nonetheless, it was an unprofessional and injudicious remark. We do not condone such comments and do not hold that in future cases and under different facts, such remarks always will be acceptable." Degren v. State, 352 Md. 400, 432 n. 14, 722 A.2d 887, 902 n. 14 (1999).	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532394/	831 S.W.2d 891 (1992) John Terry KING, Appellant, v. STATE of Texas, Appellee. No. C14-91-00402-CR. Court of Appeals of Texas, Houston (14th Dist.). May 28, 1992. 892 David Cunningham, Houston, for appellant. Mary Lou Keel, Houston, for appellee. Before JUNELL, PRESSLER and DRAUGHN, JJ. OPINION DRAUGHN, Justice. Appellant was charged with four counts of arson. He entered a plea of no contest to one count. The trial court sentenced him to five years confinement and granted the State's motion to dismiss the remaining three counts. In ten points of error, appellant challenges the admissibility of his confession due to his mental retardation. We affirm. On July 18, 1990, Ricky King, Mount Houston Fire Department Chief, telephoned Richard Bailey, Chief Arson Investigator for the Harris County Fire Marshal's Office and discussed bringing in appellant, Chief King's brother, to talk about a fire. Appellant was a volunteer fireman for the Mount Houston Fire Department. At 6 p.m., appellant and Chief King arrived at Bailey's office and Bailey advised appellant of his constitutional rights. When Bailey asked appellant if he understood these rights, appellant replied yes. Bailey asked appellant about a particular fire and appellant admitted his participation in starting the fire. Bailey began taking notes and Chief King left the office and sat in the waiting room. Bailey also questioned appellant about other fires in that area. Bailey explained that it would be easier to talk about all the fires at one time rather than requiring him to file additional charges at a later date. Since appellant could not remember the correct addresses of the other fires, he offered to take Bailey to the sites. At approximately 8:15 p.m., Bailey and appellant drove around while appellant pinpointed the locations where he had set fires. Afterwards, appellant asked to talk to Chief King and Bailey drove him to the Mount Houston fire station. Around 9:50 p.m., Chief King came out to the car and spoke to appellant for around 15 minutes. When appellant mentioned he was hungry, Bailey stopped at a fried chicken restaurant. They ate the food in the fire marshals break room and then Bailey finished writing up appellant's written statement. Around 12:30 a.m., a secretary typed up appellant's statement from Bailey's handwritten notes. Around 2 a.m., Bailey took appellant to the District Attorney's Intake Division and spoke to Assistant District Attorney Joe Owmby. Bailey explained that he needed to find a magistrate to read the confession to appellant because appellant could not read and had not signed the confession. Owmby suggested he read the statement to appellant to guarantee that appellant understood the contents of his statement and that his statement was voluntary. Owmby tape recorded the entire conversation with appellant. As Owmby reviewed each Miranda warning with appellant, he indicated he understood each of his rights and waived them. Appellant then placed his initials at the end of each confession page and signed the confession with his full name, "John Terry King." In ten points of error, appellant disputes the admissibility of his confession. In the first two points of error, appellant alleges his statement violates his right against self-incrimination guaranteed by the U.S. and Texas Constitutions. In his third and fourth points of error, he contends his statement obstructs his right to due process and due course of law as guaranteed 893 by the U.S. and Texas Constitutions. Appellant, in points of error five and six, claims his statement violates his rights under the "totality of the circumstances" test as established by the U.S. and Texas Constitutions. Next, he complains that the admission of his statement violates articles 38.21 and 38.22 of the Texas Code of Criminal Procedure. In his last two points of error, he contends he did not freely, intelligently and voluntarily waive his rights due to his mental retardation. Appellant groups the first eight points of error together by acknowledging that the argument is essentially the same. Although he claims that the waiver question is distinct from the other issues, we fail to see any notable difference as each point of error pertains to the admissibility of his confession. Therefore, we will treat all his points of error together in our analysis. The trial court held a pre-trial hearing on January 22, 1991, in compliance with Jackson v. Denno, 378 U.S. 368, 84 S. Ct. 1774, 12 L. Ed. 2d 908 (1964), and Tex.Code Crim. ProcAnn. art. 38.22, section 6 (Vernon 1979), to determine whether appellant's confession was voluntary. Besides hearing the testimony of Bailey and Owmby, the trial court listened to the testimony of Dots Carter, appellant's special education teacher, James Gaskin, a volunteer fireman, and three members of appellant's family. On October 18, 1991, the court entered detailed findings of fact which state in pertinent part: 8. Prior to and during the making of the above statement (admitted into evidence as State's exhibit 1-A), the defendant knowingly, intelligently and voluntarily waived his constitutional rights and voluntarily, knowingly and understanding made State's exhibit 1-A. 10. Owmby read the defendant's statement to the defendant. Owmby began by reading the defendant's rights (contained in Article 38.22, Section 2(a) of the Texas Code of Criminal Procedure). After each right, the defendant indicated to Owmby that the defendant fully understood the right. There was nothing that the defendant did that indicated that the defendant did not understand his rights. After reading the rights listed on State's exhibit 1-A, the defendant indicated to Owmby that the defendant wanted to waive his rights. There was nothing that the defendant did that indicated to Owmby that the defendant did not knowingly and intelligently waive his rights. 14. At all times during Owmby's contact with the defendant, the defendant appeared mentally capable of understanding Owmby. Owmby noted that the defendant's responses were appropriate, that the defendant understood what the situation was, and that the defendant had a clear understanding of everything that was going on that night. The trial court's conclusions of law relevant to this issue are as follows: 1. The defendant made State's exhibit 1-A after the defendant knowingly, intelligently and voluntarily waived his right to remain silent and his right to counsel as required in Article 38.22 Section 2(a) of the Texas Code of Criminal Procedure. 2. State's exhibit 1-A was not made by the defendant as a result of any promises or coercion. 5. This court therefore denied defendant's Motion to Suppress his statements. At a hearing on a motion to suppress, the trial court is the exclusive trier of fact and judge of the credibility of the witnesses as well as the weight to be given their testimony. Romero v. State, 800 S.W.2d 539, 543 (Tex.Crim.App.1990). On appeal, the appellate court does not engage in its own factual review, but decides whether the trial judge's fact findings are supported by the record. Id. (footnote omitted). If the trial court's findings of fact are supported by the record, the only inquiry on appeal is whether the trial court improperly applied the law to the facts. Zwarst v. State, 782 S.W.2d 906, 909 (Tex. App Houston [14th Dist.] 1989, no pet.). Upon review, the evidence adduced at the suppression hearing is viewed in the light most favorable to the trial court's ruling in determining whether the trial court abused its discretion. Walker v. State, 588 S.W.2d 920, 924 (Tex.Crim.App.1989); Dotson v. State, 785 S.W.2d 848, 851 (Tex.App. Houston [14th Dist.] 1990, pet. refd). 894 Determination of whether a confession is voluntary must be based on examination of the totality of the surrounding circumstances. Barney v. State, 698 S.W.2d 114 (Tex.Crim.App. 1985); Zwarst, 782 S.W.2d at 910. Relevant circumstances to evaluate if a defendant's will has been overborne include: [LJength of detention, incommunicado or prolonged interrogation, denying a family access to a defendant, refusing a defendant's request to telephone a lawyer or family, and physical brutality ... A defendant's characteristics and status, as well as the conduct of the police, are important concerns. Armstrong v. State, 718 S.W.2d 686, 693 (Tex.Crim.App.1985). Here, we need to ascertain whether the circumstances were sufficient to render appellant's confession involuntary. Appellant contends his mental retardation precluded him from comprehending the consequences of his affirmative responses to Bailey and Owmby that he understood and waived his rights. He notes there is nothing in the record to convey he has ever been arrested or had any prior experience with law enforcement interrogation. Since appellant did not testify, he argues that the trial court had no opportunity to assess his demeanor and credibility. Finally, he complains that Bailey deliberately circumvented his goal of finding a magistrate to warn appellant of his rights by acceding to Owmby's decision to tape record the interview and read the statement to appellant instead. The record reveals conflicting evidence on the severity of appellant's mental retardation. Appellant concedes he provided no expert testimony from a psychiatrist or psychologist to indicate he was incapable of understanding the implications of the warnings. Although appellant's special education teacher testified about the extent of appellant's mental deficiency, she admitted she was not qualified to administer IQ tests. Appellant's family testified that his drastic mental deficiency hindered him from concentrating on simple tasks or remembering past events. However, Dr. Jaime Ganc, a court-appointed psychiatrist, conducted a competency evaluation of appellant before the hearing. The evaluation provided in part: Mr. King discussed the charges of Arson of a Building and Habitation as well as the circumstances leading up to his arrest in a logical, coherent, and relevant fashion. Mr. King discussed his past and present personal history ... He comes from a complete family ... Although he quit school when he was coursing the 8th grade, they accepted his work as part of his school and graduated him. He states he can not [sic] read and write and always has had problems with his academic work. He has done painting, forklift operating and has been a security for Mustang Security Company. He married his first wife when he was 23 years of age. His marriage lasted less than [sic] a year. He has been out of this marriage. When he was around 25, he married his second wife and this marriage lasted about three years. He has a child age 4 out of this marriage ... Mr. King states that he started drinking when he was around 17. He drinks about a case or more of beer a day. He also states that when he gets drunk he can get into fights quite easily ... Mr. King states that his court appointed lawyer is "Mr. Patkelly." He discussed his functions as well as discussing the role of the judge, the jury, and the D.A. He appeared to have sufficient understanding of the criminal justice system. MENTAL STATUS: Mr. King is an adult who appears to be in good physical health. He is clean, cooperative and alert. He expresses himself in a logical, coherent and relevant fashion... He was oriented to person, place and time. His cognitive functioning was intact. CONCLUSION: Mr. King has sufficient present ability to consult with his attorney with a reasonable degree of rational understanding and has a rational as well as a factual understanding of the proceedings against him. He is therefore COMPETENT to stand trial. 895 Other evidence supporting the trial court's finding of voluntariness includes the fact that appellant came to Bailey's office of his own free will. During the interrogation with Bailey, appellant was taken to see his brother when he asked to speak with him and was provided food. Bailey and Owmby testified that appellant confessed of his own volition. Both immediately informed appellant of his rights before questioning him. In fact, Owmby purposely read appellant's Miranda rights and his statement aloud to appellant to ensure that he waived his rights voluntarily and totally understood his confession. Appellant even corrected his statement to accurately reflect the number of girls in the car during one of the arson offenses. The trial court also listened to the tape recording of Owmby's conversation with appellant before rendering its decision. Balancing the above factors, we find the trial court did not abuse its discretion by concluding that appellant intelligently and voluntarily waived his constitutional rights and gave his confession. While an appellant's limited intelligence is a factor to be considered, that alone does not mandate a finding of involuntariness of a confession as a matter of law. See Smith v. State, 779 S.W.2d 417, 428-429 (Tex.Crim.App.1989). A confession is not inadmissible merely because the accused, who is not claimed to be insane, is of less than normal intelligence. Rodriguez v. State, 666 S.W.2d 305, 313 (Tex.App. San Antonio 1984, no pet.). Notwithstanding the fact that appellant is of low mentality, we cannot find, as a matter of law, that this factor precluded him from knowingly, intelligently and voluntarily waiving his rights and providing his confession. Viewing the totality of the circumstances, we find that the record supports the trial court's ruling, and we will not disturb it on appeal. We overrule appellant's ten points of error. We affirm the trial court's judgment.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532611/	368 S.W.2d 94 (1963) Claire BENZ-STODDARD et al., Petitioner, v. ALUMINUM COMPANY OF AMERICA, Respondent. No. A-9137. Supreme Court of Texas. May 8, 1963. Rehearing Denied June 12, 1963. 96 Waggoner Carr (Will Wilson), Attys. Gen., H. Grady Chandler, Linward Shivers, Asst. Attys. Gen., Austin, Carter, Gallagher, Jones & Magee, Dallas, William E. York, McAllen, Hart & Hart, Austin, for petitioners. Vinson, Elkins, Weems & Searls, H. Raybourne Thompson, James E. Allison, Jr., James W. McCartney, with above firm, Houston, Clark, Thomas, Harris, Denius & Winters, James H. Keahey, with above firm, Austin, for respondents. HAMILTON, Justice. This is a suit brought by Aluminum Company of America to cancel a Railroad Commission order granting a Rule 37 exception permit to prevent confiscation of the minerals underlying Claire Benz-Stoddard's.115-acre town lot. The trial court sustained special exceptions to the petition and, when Aluminum Company refused to amend, dismissed on the ground that the petition did not state a cause of action for cancellation. The Court of Civil Appeals reversed and remanded. Tex.Civ.App., 357 S.W.2d 809. Claire Benz-Stoddard and the Railroad Commission are petitioners. We reverse the judgment of the Court of Civil Appeals and affirm the judgment of the trial court. Since this case comes to us on a special exception in the nature of a general demurrer we must accept respondent's allegations as true. The allegations are as follows: Underlying Claire Benz-Stoddard's .115-acre tract are ten vertically separated gas reservoirs, or horizons, among which there is no communication of gas. Multiple completion techniques make it possible to produce gas from as many as six of these reservoirs through only one well bore. The Commission's order granted Claire Benz-Stoddard's request for permit to drill one well and to make multiple completions in as many reservoirs as were productive. The order recites that the permit is granted to prevent "confiscation and/or waste", but the parties agree that there was no issue of waste in this case, only of confiscation. Respondent alleged that because of the proration order in effect at this field at the time the permit was granted (1/3 of the allowable allocated on a per well basis and 2/3 allocated on a per acre basis), a single completion well during its life would make it possible for petitioner to recover more than her equivalent of the minerals in place in all ten reservoirs under her land, thus would fully protect her against confiscation. Respondent further alleged that petitioner has in fact made triple completions and has already recovered more than seven times the gas in place beneath her tract in all ten reservoirs, 84% of which has been drained from respondent's portion. Respondent did not allege that petitioner has access to any one of the ten reservoirs by means of another well on another tract. Respondent alleged that this was a voluntary subdivision but expressly waived and abandoned that allegation before the trial court. The Court of Civil Appeals held that petitioner was entitled to an opportunity to recover the equivalent of her share in the ten reservoirs beneath her tractnot the 97 specific mineralsand that since under the proration order in effect at the time the permit was granted she could with a completion in only one reservoir recover more than enough gas to make up her equivalent in all ten reservoirs, she was as a matter of law not entitled to multiple completions. In support of this holding the Court of Civil Appeals cites Gulf Land Co. v. Atlantic Refining Co., 134 Tex. 59, 131 S.W.2d 73; Atlantic Refining Co. v. Railroad Commission of Texas, 162 Tex. 274, 346 S.W.2d 801; Railroad Commission of Texas v. Williams, Tex., 356 S.W.2d 131; and Halbouty v. Darsey, 326 S.W.2d 528 (Tex. Civ.App.1959), writ ref'd n. r. e. Petitioner Claire Benz-Stoddard contends that it is immaterial that she could with one completion recover from a single reservoir an equivalent of her fair share of the gas in all ten reservoirs lying beneath her tract. She further argues that if allowing multiple completions will cause unreasonable drainage of respondent's lands, respondent has recourse by way of attack on the proration order, not by attack on the exception permit. Respondent argues that our decisions in Williams, supra, and Coloma Oil & Gas Corp. v. Railroad Commission of Texas, Tex., 358 S.W.2d 566, compel us to hold that once it has been shown that a single completion will afford petitioner an opportunity to recover her fair share of the gas in all ten reservoirs, there is not as a matter of law substantial evidence to support a finding of necessity for multiple completions to prevent confiscation. In other words, respondent contends the Commission must treat petitioner's fair share of the gas in ten separate reservoirs as if it were all contained in one reservoir. Respondent does not contend that Claire Benz-Stoddard is not entitled to a "first well", only that she is not entitled to completions in more than one reservoir. The question before us is: Where a tract of land overlies several vertically separated gas reservoirs, shall the Railroad Commission, in applying the exception to Rule 37, treat the several reservoirs separately or as one? We hold that the Railroad Commission was correct in treating them separately and therefore the facts alleged by respondent do not state a cause of action for cancellation of the permit allowing multiple completions. Petitioner Claire Benz-Stoddard has mineral property in ten separate reservoirs and is entitled to a Rule 37 exception permit in each reservoir if she has shown that confiscation will result. We must presume that the Railroad Commission has found that confiscation would result. Article 6049c, Vernon's Ann.Tex.St. Respondent does not allege that there will be no confiscation in each reservoir when considered separately. The Williams and Coloma cases, supra, upon which the Court of Civil Appeals relies, do not support respondent's contention here. We wish to point out that in each of those cases this court held in effect that the applicant for the exception to Rule 37 already had a well within the same reservoir and drainage area as the second tract for which the permit was sought, and that the well already in existence could produce and drain from the second tract the oil or the equivalent of the oil in place under such tract, and that the second well was not necessary to prevent confiscation of applicant's oil in the common reservoir. The distinction is simple. In each of those cases there was one common reservoir, while in the case before us there are several separate reservoirs. We think that Article 6008, V.A. T.S., which authorizes the Railroad Commission to regulate the production of gas contemplates that the Railroad Commission will treat reservoirs of gas underlying the same tract of land separately. Section 4(a), reads as follows: "If oil and/or gas be produced through different strings of casing set in the same well bore, the inner string through which oil and/or gas be produced 98 shall be regarded as one well, and each successive additional string of casing through which oil and/or gas shall be produced, from a different producing horizon, the others producing through the same well bore, shall be regarded as another well." We think this section authorizes the Railroad Commission to treat a completion in each reservoir as a "first well". In Section 12, Article 6008, we find this language: "The monthly reservoir allowable shall be allocated among all wells entitled to produce gas therefrom so as to give each well its fair share of the gas to be produced from the reservoir, * ." (Emphasis added.) The granting or denial of a Rule 37 exception permit in a "first well" situation has never been held to depend upon the quantity of gas which may be allowed to be produced from the well or whether the granting of such permit may result in drainage from adjoining owners. See Atlantic Refining Co. v. Railroad Commission of Texas, 330 S.W.2d 494 (Tex.Civ.App.1959), writ ref'd n. r. e.; Halbouty v. Darsey, 326 S.W.2d 528 (Tex.Civ.App.1959), writ ref'd n. r. e.; Foster v. Railroad Commission, 326 S.W.2d 533 (Tex.Civ.App.1959), writ ref'd n. r. e. We realize that the granting by the Railroad Commission of the multiple completion order under the general proration order in effect in the field does create a situation in which grave injustice may be done the respondent. However, we do not feel that the solution of the problem lies in denying the application of the exception to Rule 37 to each separate reservoir underlying petitioner's land. In the case of Brown v. Humble Oil & Refining Company, 126 Tex. 296, 83 S.W.2d 935, at page 944, this court, in discussing the validity of Rule 37 said: "Conditions may arise where it would be proper, right, and just to grant exceptions to the rule so as to permit wells to be drilled on smaller tracts than prescribed therein. * * but in all such instances it is the duty of the commission to adjust the allowable, based upon the potential production, so as to give to the owner of such smaller tract only his just proportion of the oil and gas. * * * "* * * This right to control the rate of flow in order to prevent waste also enables the commission to offset the advantage obtained by one who is given an exception to the spacing rule by limiting his allowable production to the extent necessary to overcome this advantage. In this way the commission, by controlling the oil stored in the common reservoir, is enabled to carry out the dominant purpose of preventing waste, and, at the same time, permit each owner to enjoy the opportunity fully to realize upon his estate by developing and recovering his oil and gas. We therefore hold that the Railroad Commission has the power, under the conservation statutes, to promulgate a spacing rule, as was done, regulating the drilling of oil wells, and to provide for an exception to the rule to protect vested rights and to prevent waste; and the exception to the rule is not too uncertain or indefinite so as to render the rule invalid. No unreasonable hardships need result, if the rule is faithfully and impartially applied by those authorized by law to administer it." It can be seen that the very validity of Rule 37 and the exception thereto is based upon the principle that the Railroad Commission can so regulate the flow of the gas that no unreasonable hardship need result from its application. This court reiterated this principle in Atlantic Refining Company v. Railroad Commission of Texas, 162 Tex. 274, 346 S.W.2d 801, and Halbouty v. Railroad Commission of Texas, Tex., 357 S.W.2d 364. *99 We hold, therefore, that since the Commission is authorized to treat each completion in a separate reservoir as a separate well, it may grant multiple completions in each reservoir in which it finds there will be confiscation. The allegation that under the existing proration order petitioner will recover more gas from her land through one completion than underlies her land in all the reservoirs does not amount to a denial of the presumed finding by the Commission that there will be confiscation in each reservoir. We therefore reverse the judgment of the Court of Civil Appeals and affirm that of the trial court dismissing respondent's cause of action.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532627/	383 B.R. 366 (2008) In re Kevin Charles WHITE, Debtor. Wendy Wisler a/k/a Wendy White, Movant, v. Kevin Charles White, Respondent. No. 07-24702-MBM. United States Bankruptcy Court, W.D. Pennsylvania, March 10, 2008. 367 Brian P. Cavanaugh, Stewart McArdle & Sorice, LLC, Greensburg, PA, for Debtor. MEMORANDUM Related to Doc. No. 18. M. BRUCE McCULLOUGH, Bankruptcy Judge. AND NOW, this 10th day of March, 2008, upon, consideration of (a) the Motion for Relief [from] Stay and Bankruptcy Discharge, which motion is filed by Wendy Wisler (hereafter "Wisler"), wherein Wisler essentially seeks (i) relief from stay so that the Pennsylvania Court of Common Pleas, Beaver County, may then adjudicate equitable distribution rights regarding, inter alia, real property located at 667 Ridge Road, Georgetown, PA 15043, and (ii) to have the Chapter 7 discharge of Kevin White, the instant debtor (hereafter "the. Debtor"), either denied (and then have his bankruptcy case dismissed) or revoked; and (b) the response to Wisler's motion by the Debtor, wherein the Debtor (i) consents to the grant of the stay relief sought by Wisler, (ii) concedes that there may be certain obligations that are owed to Wisler by, the Debtor that stem from their marriage, and that such obligations are not dischargeable pursuant to 11 U.S.C. § 523(a)(5) and (a)(15), and (iii) thus consents to the entry of an order by this Court to the effect, inter alia, "that any domestic support obligation owed' by the . . . [Debtor] to . . . [Wisler] AND any equitable award of marital/non-marital property 368 determined by the Court of Common Pleas of Beaver County, Pennsylvania . . . [is] non-dischargeable;" and after notice and a hearing on Wisler's motion, which hearing was held on March 6, 2008; and in light of the following findings of fact, statements of relevant law, and/or conclusions of law, to wit: (a) pursuant to. 11 U.S.C. § 362(c)(2)(C), the automatic stay in a bankruptcy case provided that such case remains open is generally terminated when a Chapter 7 discharge is granted; (b) the Debtor has already been granted a Chapter 7 discharge, which discharge (i) was granted on October 24, 2007, see Doc. No, 15, (ii) has not been rescinded to date even though the Court, by Order dated October 24, 2007, vacated the entry of the final decree in, and thereby reopened, the instant bankruptcy case, see Doc. No. 19 (the Court did not, by such October 24, 2007 Order, rescind the grant of the Debtor's Chapter 7 discharge), and (iii) thus remains, and shall remain, effective; (c) therefore, the automatic stay in the instant bankruptcy case, as a general matter, has already terminated; (d) pursuant to 11 U.S.C. § 362(c)(1), the automatic stay in a bankruptcy case as it regards, in particular, acts against property of a debtor's bankruptcy estate, terminates when such property ceases to constitute property of such estate; (e) the Georgetown, PA realty in question no longer constitutes property of the Debtor's bankruptcy estate such realty ceased to constitute such estate property when it was abandoned out to the Debtor pursuant to 11 U.S.C. § 554(c), which abandonment (i) occurred when the Debtor's bankruptcy case was initially closed and such realty had not then been administered by the Chapter 7 Trustee in such case, and (ii) was not negated, reversed, or revoked merely on account of the instant case being reopened, see In re Woods, 173 F.3d 770, 777 (10th Cir.1999); (f) therefore, the automatic, stay in the instant bankruptcy case, as the same pertains, in particular, to acts against the Georgetown, PA realty, has also already terminated; (g) such termination of the automatic stay in the instant bankruptcy case, as just set forth, renders moot Wisler's stay relief request at this time (i.e., without a stay that exists and is in place, there is no stay from which to grant relief); (h) Wisler contends that the Debtor's Chapter 7 discharge should be denied or revoked on the ground that the Debtor allegedly committed fraud when he entered into an alleged pre-petition contract with Wisler, which contract was entered into, if at all, indisputably years prior to the commencement of the instant bankruptcy case; (i) such alleged fraud as just described pertains to a matter that and thus such alleged fraud itself is entirely unrelated to, and thus has nothing to do with, the bankruptcy process in general or, in particular, any of the grounds for a denial or revocation of a Chapter 7 discharge as set out in 11 U.S.C. § 727(a); and (j) such alleged fraud, as a matter of law, consequently cannot constitute a ground for denial or revocation of the Debtor's Chapter 7 discharge under 11 U.S.C. § 727(a); *369 the Court determines that it shall issue an order that grants, in Part, Wisler's motion, and denies with prejudice, in part, the same motion, as follows: (a) Wisler's motion shall be DENIED, WITH PREJUDICE to the extent that Wisler thereby seeks (i) relief from the automatic stay because, as set forth above, such request is now moot, and (ii) to obtain a denial or revocation of the Debtor's Chapter 7 discharge because, as set' forth above, Wisler, as a matter of law, lacks a viable basis for obtaining the same; and (b) Wisler's motion shall be GRANTED to a limited extent such that any domestic support obligation owed by the Debtor to Wisler and any equitable award of marital/non-marital property determined by the Court of Common Pleas of Beaver County, Pennsylvania is henceforth determined to be non-dischargeable. The Court shall, upon the entry of the instant Memorandum and accompanying Order of Court, immediately enter once again, by separate order, the Final Decree that closes out the instant bankruptcy case. ORDER OF COURT AND NOW, this 10th day of March, 2008, for the reasons set forth in the accompanying Memorandum of same date, it is hereby ORDERED, ADJUDGED, AND, DECREED that the motion of Wendy Wisler is granted, in part, and denied with prejudice, in part, as follows: (a) Wisler's motion is DENIED WITH PREJUDICE to the extent that Wisler thereby seeks (1) relief from the automatic stay because such request is now moot, and (ii) to obtain a denial or revocation of the Debtor's Chapter 7 discharge because Wisler, as a matter of law, lacks a viable basis for obtaining the same; and (b) Wisler's motion is GRANTED to a limited extent such that any domestic support obligation owed by the Debtor to Wisler and any equitable award of marital/non-marital property determined by the Court of Common Pleas of Beaver County, Pennsylvania is henceforth determined to be non-dischargeable.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532615/	383 B.R. 221 (2008) 2008 BNH 001 In re Tina Mae PAGEAU, Debtor. No. 07-11366-JMD. United States Bankruptcy Court, D. New Hampshire. February 21, 2008. 222 223 Stanley H. Robinson, Esq., Franklin, NH, for Debtor. Ann Marie Dirsa, Esq., Manchester, NH, for United States Trustee. MEMORANDUM OPINION J. MICHAEL DEASY, Bankruptcy Judge. I. INTRODUCTION The Court has before it the Motion of United States Trustee for Order Dismissing Case under 11 U.S.C. § 707(b)(2) or 11 U.S.C. § 707(b)(3) (Doc. No. 17) (the "Motion"). After a preliminary hearing on November 5, 2007, the Court denied the Motion in part with respect to certain claims of the United States Trustee (the "UST") under 11 U.S.C. § 707(b)(2)[1] (Doe. No. 23). The Court held a further hearing on January 8, 2008, on the remaining issue under § 707(b)(2), i.e., whether the Debtor has rebutted the presumption of abuse by establishing special circumstances warranting the inclusion of the Debtor's 224 monthly student loan obligation of $170.00 (the "Student Loan") listed on line 56 of Form B22A (the "Means Test Form") as an additional expense for which there is no reasonable alternative. The Court finds that the Debtor has not rebutted the presumption of abuse. 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). II. FACTS On June 29, 2007, the Debtor filed a chapter 7 bankruptcy petition. On August 13, 2007, the UST filed a statement indicating the Debtor's case should be presumed to be an abuse under § 707(b), and on September 10, 2007, the UST filed the Motion seeking to dismiss the Debtor's case under § 707(b)(2) or (b)(3). The Debtor filed a statement under oath to rebut the presumption of abuse as well as an objection to the Motion. As amended by the Debtor, and in accordance with rulings made by the Court at the preliminary hearing on November 5, 2007, the Means Test Form presently shows the Debtor's monthly disposable income on line 50 as $240.62. Monthly disposable income in what., amount results in a presumption oft abuse as the disposable income the Debtor could pay through a five-year plan totals $14,427.20 as shown on line 51 of the Means Test Form, which is more than $10,950.00, the amount necessary to establish a presumption, of abuse pursuant to § 707(b)(2)(A)(i).[2] The parties agree that the Debtor obtained student loans through the New Hampshire Higher Education Assistance Foundation during the period of January 1994 through May 1998, totaling $14,875.00. In September 2001, the Debtor was able to consolidate these loans into the Student Loan at an interest rate of 6.79%. The current principal balance on the Student Loan is $13,449.16, and the Debtor's monthly payment on the Student Loan is $170.00. The remaining term of the Student Loan exceeds sixty months. The parties agree the Student Loan is non dischargeable pursuant to 11 U.S.C. § 523(a)(8), and payments on the Student Loan cannot be deferred. The Debtor listed the Student Loan payment on line 56 of the Means Test Form as an additional monthly expense. III. DISCUSSION The Debtor seeks to rebut the presumption of abuse arising under § 707(b)(2)(A) on the grounds that the Student Loan constitutes a "special circumstance" within the meaning of § 707(b)(2)(B). The Bankruptcy Code specifically provides at § 707(b)(2)(B): (i) In any proceeding brought under this subsection, the presumption of abuse may only be rebutted by demonstrating special circumstances, such as a serious medical condition or a call to active duty in the Armed Forces, to the extent such special circumstances . . . justify additional 225 expenses or adjustments of current monthly income for which there is no reasonable alternative. (ii) In order to establish special circumstances, the debtor shall be required to itemize each additional expense or adjustment of income and to provide (I) documentation for such expense or adjustment to income; and (II) a detailed explanation of the special circumstances that make such expenses or adjustment to income necessary and reasonable. (iii) The debtor shall attest under* oath to the accuracy of any information provided to demonstrate that additional expenses or adjustments to income are required. (iv) The presumption of abuse may only be rebutted if the additional expenses or adjustments to income referred to in clause (i) cause the product of the debtor's currently monthly income reduced by the amounts determined under clauses (ii), and (iv) of subparagraph (A) when multiplied by 60 to be less than the lesser of (I) 25 percent of the debtor's nonpriority unsecured claims, or $6,575, whichever is greater; or (II) $10,950. 11 U.S.C. § 707(b)(2)(B). Section 707(b)(2)(B) sets forth both procedural and substantive requirements. In re Haman, 366 B.R. 307, 312 (Bankr.D.Del.2007). A. Procedural Requirements for Establishing Special Circumstances The procedural requirements for establishing special circumstances are set forth in § 707(b)(2)(B)(ii), (iii), and (iv), and they require a debtor (1) to "itemize" each additional expense or income adjustment by setting forth the nature of the suggested adjustment, its amount, and its impact on the debtor's finances and the means test calculation; (2) to provide "documentation" of the additional expense or income adjustment; (3) to provide a "detailed explanation" of the "special circumstances" that make the additional expense or income adjustment "necessary and reasonable;" and (4) to "attest under oath" to the accuracy of the information the debtor provides. See In re Littman, 370 B.R. 820, 830 (Bankr.D.Idaho 2007); Haman, 866 B.R. at 312. The Debtor has satisfied the procedural hurdles of § 707(b)(2)(B). Through her verified statement of rebuttal, the parties' agreed statement of facts which had attached to it copies of the Debtor's student loan applications and promissory notes, and her offer of proof at the hearing, the Debtor provided the Court with sufficient documentation demonstrating she is liable for the Student Loan in the amount of $170.00 per month." In addition, she explained that the Student Loan expense is necessary and reasonable in her view because the Student Loan is nondischargeable and she will be required to make ongoing payments until the Student Loan is paid in full. The Debtor further demonstrated that if she were allowed to deduct the Student Loan expense of $170.00 from her current monthly income of $240.62, her monthly disposable income would be reduced to $70.62, which when multiplied by sixty totals `$4,23720, or less than $6,575.00, the threshold amount for finding a presumption of abuse. B. Substantive Requirements for Establishing Special Circumstances The substantive requirements of § 707(b)(2)(B) are set forth in § 707(b)(2)(B)(i), and they require a debtor (1) to demonstrate "special circumstances" that justify the additional expense or income adjustment; and (2) to demonstrate `that there is "no reasonable alternative" to making the additional expense or income adjustment. Haman, 366 B.R. at 312. 226 The term "special circumstances" is not defined in the Bankruptcy Code. In re Martin, 371 B.R. 347, 352 (Bankr.C.D.Ill. 2007). Rather, the statute provides two examples of special circumstances: a serious medical condition and a call or order to active duty in the Armed Forces. 11 U.S.C. § 707(b)(2)(B)(i). Courts confronting the issue of what constitutes special circumstances have concluded that the examples listed in the statute are non-exclusive and merely illustrative. In re Vaccariello, 375 B.R. 809, 813 (Bankr.N.D.Ohio 2007); In re Templeton, 365 B.R. 213, 216 (Bankr.W.D.Okla.2007); In re Armstrong, No. 06-31414, 2007 WL 1544591, at 2 (Bankr.N.D.Ohio May 24, 2007). Further, courts have held that determining whether special circumstances exist is a fact-specific determination that should be made on a case-by-case basis. In re Robinette, No. 7-06-10585 SA, 2007 WL 2955960, at 4 (Bankr.D.N.M. Oct.2, 2007); In re Turner, 376 B.R. 370, 378 (Bankr.D.N.H.2007); Vaccariello, 375 B.R. at 813; In re Knight, 370 B.R. 429, 437 (Bankr.N.D.Ga.2007); In re Pampas, 369 B.R. 290, 298 (Bankr.M.D.La.2007); Templeton, 365 B.R. at 216. "Congress gave courts broad discretion to determine whether a particular set of facts constitute special circumstances." Pampas, 369 B.R. at 298; see Templeton, 365 B.R. at 216. Courts disagree whether the language of the statute requires the circumstances to be unanticipated, unforeseeable, or outside the debtor's control. Compare Robinette, 2007 WL 2955960, at 4 ("Nothing in the language of the statute requires that the circumstances be an act outside of a debtor's control. . . . Nor must the special circumstances be unanticipated."); Turner, 376 B.R. at 378 ("[T]he court declines to adopt a rule that, for example, a special circumstance must be `beyond a debtor's reasonable control,' . . . or `truly unavoidable,' . . .") with In re Lightsey, 374 B.R. 377, 381-82 (Bankr.S.D.Ga.2007) ("The exception does not permit every conceivable unfortunate or `unfair' circumstance to rebut the presumption of abuse, but includes only those circumstances that cause higher household expenses or adjustments of income `for which there is no reasonable alternative,' i.e., they are unforeseeable or beyond the control of the debtor."). "[T]he plain meaning of `special' provides some instruction to the Court that the expense or adjustment to income in question must be out of the ordinary or exceptional in some way." In re Delbecq, 368 B.R. 754, 756-57 (Bankr.S.D.Ind.2007). A special circumstance has been described further as "one that is out of the ordinary for an average family and leaves the debtor with no reasonable alternative but to incur the expense," Armstrong, 2007 WL 1544591, at 2, or "one that, if the debtor is not permitted to adjust her income or expenses accordingly, results in a demonstrable economic unfairness prejudicial to the debtor," Knight, 370 B.R. at 437. C. Arguments of the Parties In the Debtor's view the mere fact that she is required to make monthly payments of $170.00 per month on the nondischargeable Student Loan constitutes "special circumstances" within the meaning of § 707(b)(2)(B)(i). The Debtor argues that there is no reasonable alternative to paying the Student Loan each month as she has no ability to pay the Student Loan in full, she has no basis for seeking further deferral of the loan, and she already has consolidated her educational debt. According to the Debtor, the federal government encourages students to borrow money to fund a college education, and it expects such loans to be repaid, excepting them from discharge in bankruptcy in most cases. The Debtor 227 contends it is the nature of the Student Loan itself that is special, making § 707(b)(2)(B)(i) applicable. Additionally, the Debtor suggests that no purpose would be served by requiring dismissal of her case as an abusive filing because she likely would convert her case to chapter 13. In chapter 13, the funds available under a plan for her non-student loan, general unsecured creditors would be negligible, according to the Debtor, as the administrative expenses of a chapter 13 case would be higher than those in a chapter 7 case and the Student Loan creditor would receive the bulk of any funds paid out in a chapter 13 plan in any event. The UST disputes the Debtor's contentions. According to the UST, the Debtor has failed to demonstrate how circumstances giving rise to the Student Loan qualify as special or how they differ from the "general financial problems that precede almost every bankruptcy filing." Turner, 376 B.R. at 379. In the UST's view, the examples of special circumstances listed in the statute, i.e., a serious medical condition or a call to armed services, demonstrate that the phrase means more than just ordinary financial struggles. In addition, the UST further challenges the notion that a debt's status as nondischargeable should govern whether a particular expense constitutes "special circumstances." According to the UST, Congress could have included nondischargeable debt as a deductible expense under the means test but it did not. See Lightsey, 374 B.R. at 382 n. 3. D. Analysis To date, the courts considering the issue of whether the presumption of abuse can be rebutted under the provision of 707(b)(2)(B), en the basis of student loan debt, have reached different results. Several courts have held that student loans do constitute special circumstances. Robinette, 2007 WL 2955960, at 4 ("The Court agrees with the cases that have found these expenses, to be special circumstances, because there is no reasonable alternative to making the payments"); Martin, 371 B.R. at 356 (deciding that the existence of student loan debt "is a distinct, particular, additional, and extra factor which this Court should consider in determining whether abuse exists here" and concluding that the student loan debt was a "special circumstance"); Knight, 370 B.R. at 438-39 (ruling the unique characteristics of student loan debt may qualify it as a special circumstance warranting its inclusion as an expense and deduction from a debtor's projected disposable income in chapter 13 as such debt is nondischargeable and is incurred due to the high cost of education and as a result of public policy that encourages the pursuit of education by providing loans to students); Delbecq, 368 B.R. at 761-62 (indicating that the debtor did not have a meaningful ability to repay her debts outside of bankruptcy or under chapter 13 because of her student loan and therefore she had rebutted the presumption of abuse by demonstrating special circumstances); Haman, 366 B.R. at 318 (concluding the debtor had no reasonable alternative but to incur the monthly expense for her son's student loan obligation); Templeton, 365 B.R. at 216-17 (ruling the debtors had no reasonable alternative other than to pay the student loans as they are nondischargeable and therefore the debtors rebutted the presumption of abuse). Other courts have concluded that student loans do not fall within the special circumstances provision. Vaccariello, 375 B.R. at 814-15 (deciding the debtors failed to meet the requirement of § 707(b)(2)(B)(ii)(II) to provide "a detailed explanation of the special circumstances 228 that make such expenses or adjustment to income necessary and reasonable" and further stating the court "is not persuaded that merely because a debt is not dischargeable it can or should constitute a special circumstance"); Lightsey, 374 B.R. at 381 n. 3 ("I reject the notion that student loan payment obligations can be utilized to adjust a debtor's expenses upward to reduce net income and avoid the means test threshold because they are non-dischargeable debts."). In this Court's view, the Debtor's Student Loan should not be included as an additional expense on the Means Test Form. The examples in § 707(b)(2)(B)(i), which provide guidance as to what may constitute special circumstances, do not identify specific expenses, but rather identify some circumstances that give rise to such expenses. Turner, 376 B.R. at 378. It is not the obligation to repay a loan itself that qualifies such an expense as a special circumstance under § 707(b)(2)(B)(i), but rather it is the circumstances that lead to incurring a loan that must be special and justify the inclusion of this additional expense item in the means test, as long as the debtor has no reasonable alternative but to make monthly payments on such loan. Eisen, 370 B.R. at 773. For that reason, the Court shall focus on the reasons the Debtor borrowed money for her education and incurred the Student Loan debt. See Turner, 376 B.R. at 379. Educational loans incurred in pursuit of education and training that is necessitated by permanent injury, disability or an employer closing might constitute special circumstances because such events are outside the control of a debtor as are the two examples in the statute. However, the Court need not explore such questions in this case. Here, the Debtor provided no evidence as to any special circumstances that caused her to borrow money to fund her education. Rather, the record before the Court supports a finding that the Debtor incurred the Student Loan in the ordinary course of acquiring her education and without any special circumstances, See Vaccariello, 375 B.R. at 816. Payments on student loans, business loans or equipment loans, incurred solely to secure a more advantageous income or to enter a different vocation, are not special circumstances. Similar to retirement plan loans, which some courts find do not satisfy the special circumstance provision, the Student Loan payments in this case are neither extraordinary nor rare. See Eisen, 370 B.R. at 773. Without more, a situation as common as borrowing money to fund an education cannot be a "special circumstance" within the statutory meaning of the term. See id.; Vaccariello, 375 B.R. at 816 ("Similarly, funding higher education through the use of student loans is becoming ubiquitous. It cannot be argued that having a student loan is rare or unusual; therefore, Debtors' obligation to repay their student loans, standing alone, cannot constitute special circumstances.") In addition to the lack of special circumstances demonstrated by the Debtor in this particular case, the Court further finds that the nondischargeable nature of the Student Loan cannot constitute special circumstances. If non-dischargeability was the standard for a special circumstance, Congress would have said so. Those courts concluding that "special circumstances" include non-dischargeable student loan obligations arguably will have to apply this standard to every other non-dischargeable obligation from long-term auto lease payments that exceed the IRS standards . . . to debts arising from fraud, embezzlement, 229 DUI, and the like. Every one of these non-dischargeable obligations could qualify as debts for which a debtor has no reasonable alternative but to continue payments to avoid economic harm, and there is no suggestion in Section 707(b)(2)(B) that courts have been delegated the policy decision of deciding that some non-dischargeable debts are "good" and some are "bad" so as to" permit treating some but not all as a "special circumstance." The premise that educational loans are a "special circumstance" for which there is no alternative but to raise a debtor's expenses by a sufficient amount to escape the means test' presumption, in order to avoid long-term economic harm, is misplaced. Student loan repayments are authorized by Code-based provisions that authorize debtors to maintain regular student loan payments as part of a Chapter 13 plan and avoid the perceived economic hardships recited by Knight and Delbecq. . . . Chapter 13 repayment provides the "reasonable alternative" to engaging in a strained reading of what constitutes a special circumstance in order to adjust the income or expense calculations of the means test. Lightsey, 374 B.R. at 381 n. 3 (citations omitted). In this district, student loan debts may be paid directly and, separately during a debtor's chapter 13 plan in accordance with § 1322(b)(5) as long as payments are to maintain and keep current long-term student loan debt, i.e., loans that mature after plan completion, with no acceleration of that debt. In re Chandler, 210 B.R. 898, 904 (Bankr.D.N.H.1997). The Court acknowledges that this may not be the rule in other jurisdictions. See, e.g., Marshall v. Belda (In re Belda), 315 B.R. 477 (N.D.Ill.2004) (denying confirmation of a sixty-month plan on the basis of "unfair discrimination" wherein the Debtor would cure his prepetition defaults on long-term student loan debt and continue to make regular monthly payments on his student loans outside his plan, which would result in a 62% dividend to the student loan creditor over the life of the plan and a dividend of only 10% to other unsecured creditors); In re Simmons, 288 B.R. 737 (Bankr.N.D.Tex.2003) (concluding that the debtors' thirty-sixth-month plan, under which a student loan creditor would receive a 65.5% dividend outside the plan while other general unsecured creditors would, receive only a 6.35% return, was unfairly discriminatory and could not be confirmed, as not providing other general unsecured creditors with dividends to which they would otherwise have been entitled if there were no such discrimination); In re Colley, 260 B.R. 532 (Bankr.M.D.Fla. 2000) (indicating a plan discriminates unfairly under § 1322(b)(2) and may not be confirmed if it provides for full contractual payments on a student loan creditor's claim while also providing for a lower percentage of other unsecured creditors' claims to be paid off through pro rata distribution). Therefore, the Debtor's argument that she has no reasonable alternative to paying the Student Loan is unavailing because she could, at least in part, pay it through a chapter 13 proceeding. The Debtor argues that the Court should examine what, might happen if the Debtor were to convert to chapter 13 in determining the existence of special circumstances, contending the dividend to non-student loan, unsecured creditors will be negligible. The Court does not believe that it should engage in the type of analysis advocated by the Debtor in determining special circumstances under § 707(b)(2)(B)(i) as this would involve hypothetical postpetition events and the 230 analysis of a chapter 13 plan that has yet to be filed with the Court. See In re Ries, 377 B.R. 777, 783 (Bankr.D.N.H.2007) (explaining that the mechanical test of § 707(b)(2)(A) does not allow for consideration of postpetition events); In re Hartwick, 359 B.R. 16, 21 (Bankr.D.N.H.2007) (stating "consideration of postpetition developments in the application of the means test would be contrary to Congressional intent as expressed in the amendments to § 707(b)" and concluding that courts must examine the circumstances that exist on the petition date in applying the means test). Consideration of the possible dividend in any hypothetical chapter 13 plan as part of determining the existence of substantial abuse under the chapter 7 means test would require the Court to determine a chapter 7 debtor's hypothetical "projected disposable income" in order to determine whether a hypothetical chapter 13 plan would be confirmable. See 11 U.S.C. § 1325(b)(1)(B). Such a determination is inconsistent with the statutory mandate that the chapter 7 means test is based upon a snapshot of a debtor's financial circumstances on the petition date in comparison to the debtor's disposable income over the previous six months, Ries, 377 B.R. at 783, as distinguished from the determination of the debtor's "projected disposable income" anticipated in the future, during the term of a chapter 13 plan, id. at 786-87.[3] Because the Debtor filed chapter 7 bankruptcy, the Court must limit its examination to the Debtor's circumstances under § 707(b)(2)(B) as of the petition date to determine whether she has overcome her burden in rebutting the presumption of abuse in this case. See Johns, 342 B.R. at 629; see also Haman, 366 B.R. at 317-18 (discussing whether conversion to chapter 13 is a "reasonable alternative" within the meaning of § 707(b)(2)(B)(i) and stating that "[c]alculations under the means test have been purposefully circumscribed by Congress and should not include future or foreseeable circumstances, including what could or would happen to a debtor's income and expenses in a case under chapter 13. If the means test includes these circumstances, it would no longer act as a mere `mathematical estimate' using the income and expense figures provided for on Form B22A, but rather, would necessitate a review of a proposed chapter 13 plan."). The Court need not determine what possible return the Debtor's unsecured creditors might receive in chapter 13. See Johns, 342 B.R. at 629 ("The potential payback of zero percent to unsecured creditors in a Chapter 13 is not a special circumstance contemplated under § 707(b)(2)(B).").[4] The record demonstrates that the Debtor borrowed money to fund her education in the ordinary course. The Debtor has not demonstrated that the circumstances giving rise to the Student Loan were special in any way or that any unique factors in her case would justify an expense adjustment to her current monthly income *231 for the Student Loan on the Means Test Form. The Debtor's obligation to repay the Student Loan, standing alone, does not constitute special circumstances. The' act that unsecured creditors Might receive a minimal dividend in a hypothetical chapter 13 plan is not relevant to the determination of special circumstances under the Bankruptcy Code. Chapter 13 plans that provide de minimis dividends to unsecured creditors are neither barred from confirmation under the Bankruptcy Code nor by the practice in this district. IV. CONCLUSION For the reasons set forth above, the Court concludes the Debtor has not rebutted the presumption of abuse under § 707(b)(2)(A)(i) as the Debtor has not established special circumstances within the meaning of § 707(b)(2)(B)(i) warranting the inclusion of the Student Loan as a deductible expense, which would cause the Debtor's monthly disposable income to fall below the threshold amount establishing abuse under § 707(b)(2)(A)(i). Accordingly, the Court shall issue a separate order consistent with this opinion granting' `the UST's Motion seeking dismissal under § 707(b)(2), denying as moot the UST's Motion seeking dismissal under § 707(b)(3), and providing the Debtor with an opportunity to convert her case to chapter 13 if she chooses. This opinion constitutes the Court's findings of fact and conclusions of law in accordance with Federal Rule of Bankruptcy Procedure 7052. NOTES [1] In this opinion the terms "Bankruptcy Code," "section, or "§" order to title 11 of the United States Code, 11 U.S.C. §§ 101-1532, as amended by the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, Pub.L. No. 109-8 ("BAPCPA"). [2] If a debtor's monthly disposable income is less than $109.58 (i.e., less than $6,575.00 over sixty months), the presumption of abuse does not arise. If a debtor's monthly disposable income is equal to or exceeds $182.50 (i.e., at least $10,950.00 over sixty months), the presumption of abuse arises. If a debtor's monthly disposable income is between $109.58 and $182.50, the presumption arises if that amount, over sixty months, is sufficient to pay at least 25% of the debtor's nonpriority unsecured debt. 11 U.S.C. § 707(b)(2)(A)0); see Eisen v. Thompson, 370 B.R. 762, 765-66 (N.D.Ohio 2007). [3] In addition, the Debtor appears to be inviting the Court to formulate a hypothetical chapter 13 plan for the Debtor, evaluate the Debtor's "projected disposable income" for a hypothetical confirmation, and then evaluate the level of return to creditors, all without notice and a hearing. See 11 U.S.C. § 1325(b)(1). The Court declines any such invitation. [4] This is not to say, however, that a debtor may not complete such an analysis and argue that it is relevant to the separate "reasonable alternative" analysis required by § 707(b)(2)(B)(i) as noted by the Lightsey court. 374 B.R: at 381 n. 3. Such an argument may well be material if the amount of a debtor's monthly student loan payment exceeded her monthly projected disposable income.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532591/	368 S.W.2d 713 (1963) Elizabeth FESTE, Appellant-Respondent, v. Billy M. NEWMAN, Respondent, and Jean Denton, Appellant. No. 49143. Supreme Court of Missouri, En Banc. June 4, 1963. 714 David G. Dempsey, Richard B. Dempsey, Eaker, Dempsey, Heath & Dempsey, Clayton, for plaintiff-appellant. Derrick & Holderle, St. Louis, for defendant-appellant. Gray & Jeans, Charles E. Gray, St. Louis, for defendant-respondent, Billy M. Newman. STOCKARD, Commissioner. In Elizabeth Feste's suit against Jean Denton and Billy M. Newman, wherein she sought $50,000 for personal injuries arising out of an automobile accident, the jury verdict was in favor of plaintiff and against her host driver, Jean Denton, in the sum of $10,000, but in favor of defendant Billy Newman, the operator of the other automobile. Jean Denton appealed to the St. Louis Court of Appeals "from the verdict and judgment" against her, and plaintiff appealed to this court "from the verdict and judgment entered in this action." When the transcript was filed in the St. Louis Court of Appeals and it was noted that plaintiff's appeal had been taken here the Court of Appeals properly transferred the appeal of Jean Denton to this court. Jean Denton contends that the trial court erred in giving two instructions, one of which was Instruction No. 5, and in refusing an instruction requested by her. The one and only point in plaintiff's brief is as follows: "Plaintiff's sole ground for reversal of the judgment of the trial court in favor of defendant Newman is conditioned on this Court's reversal of the judgment in favor of plaintiff against defendant Denton for alleged error in the giving of Instruction Number 5, a sole cause instruction, on behalf of defendant Newman. Plaintiff submits that Instruction Number 5 properly states the law and requires findings of all facts necessary to the verdict. But if this Court should decide, contrary to the position of plaintiff and defendant Newman, that the trial court erred in giving Instruction Number 5, then plaintiff submits that because of any such error the judgment of the trial court should be reversed and she should be granted a new trial of the issues between her and defendant Newman." In her point plaintiff sets forth no action or ruling of the trial court which is contended to be erroneous. In fact, in the argument she states that she "is frankly and openly arguing that she should lose her appeal." She only contends, as stated in her point, that if Jean Denton prevails on her appeal, there should be a new trial of the issues not only between her and Jean Denton but also between her and Billy Newman. However, she is entitled to such new trial only for error prejudicial to her, and after she has properly preserved and presented her contention of error for appellate review. A contention of error not preserved for appellate review in the appellant's brief must be regarded as abandoned. Heuer v. Ulmer, Mo., 273 S.W.2d 169; Crampton v. Osborn, 356 Mo. 125, 201 S.W.2d 336, 172 A.L.R. 344. We conclude that plaintiff has presented no assignment of error in the point in her brief for appellate review. Billy Newman has filed a motion to dismiss the appeal of plaintiff for the reason that her brief fails to comply with Civil Rule 83.05, V.A.M.R., in that it presents no assignment of error for appellate review. For the reasons previously set forth we agree and conclude that the appeal should be dismissed. See Turner v. Calvert, Mo., 315 S.W.2d 118; Walker v. Thompson, Mo., 338 S.W.2d 114. This leaves for decision only the issues presented by the appeal of Jean Denton, but if this court has jurisdiction of that appeal it is only because it is an appeal from a judgment from which another appeal has been taken which involves more than the minimum jurisdictional amount. See Morton v. Southwestern Telegraph & Telephone Co., 280 Mo. 360, 217 S.W. 831, and Sandusky v. Sandusky, 265 Mo. 219, 177 S.W. 390, which hold that the same case cannot be pending on appeal in two appellate courts through appeals of different parties to the action, and that where more 715 than one party appeals and the amount in dispute in either appeal gives this court jurisdiction, both appeals should be sent to this court for final determination. This presents the question whether appellate jurisdiction is irrevocably established as of the time the appeal is taken, or whether if jurisdiction in a court of limited jurisdiction is established by the record at the time of taking the appeal it may subsequently be lost by failure to preserve or present for appellate review an issue within the scope of the limited jurisdiction. This court has exclusive appellate jurisdiction in all cases, among others, "involving the construction of the Constitution of the United States or of this state, * * * the title to real estate, * * * and * * * in all cases where the amount in dispute, exclusive of costs, exceeds the sum" of $15,000. Section 3, Article V, Constitution of Missouri V.A.M.S.; Section 477.040 RSMo 1959, V.A.M.S. Cases may be found in which it is stated that "appellate jurisdiction over the subject matter is determined upon the record in the trial court at the time the appeal is granted and that nothing subsequently occurring will defeat or confer jurisdiction on this court." Hunter v. Hunter, 355 Mo. 599, 197 S.W.2d 299, 300. For similar statements see Snowbarger v. M. F. A. Central Cooperative, Mo., 317 S.W.2d 390; Little River Drainage Dist. v. Houck, 282 Mo. 458, 222 S.W. 384; Hardt v. City Ice & Fuel Co., 340 Mo. 721, 102 S.W.2d 592; Tant v. Gee, 348 Mo. 633, 154 S.W.2d 745; State ex rel. Brenner v. Trimble, 326 Mo. 702, 32 S.W.2d 760; McGregory v. Gaskill, 317 Mo. 122, 296 S.W. 123. However, as stated in Hunter v. Hunter, supra, 197 S.W.2d at p. 300, "This statement of the rule may be too broad if taken literally." A correct statement, as evidenced by the rulings of this court, is that appellate jurisdiction of this court of a case must exist at the time of taking the appeal, Trokey v. United States Cartridge Co., Mo., 214 S.W.2d 526; Snowbarger v. M. F. A. Central Cooperative, Mo., 317 S.W.2d 390; Paisley v. Liebowits, Mo., 347 S.W.2d 178, and if it does not then exist nothing occurring subsequently will result in this court acquiring jurisdiction. Snowbarger v. M. F. A. Central Cooperative, Mo., 317 S.W.2d 390. However, even though the record indicates that appellate jurisdiction exists in this court at the time the appeal is taken, the failure to preserve and keep alive for appellate review issues essential to the exercise of jurisdiction will result in the lack of jurisdiction of this court to rule the case on appeal. It has repeatedly been held that in order to vest this court with jurisdiction on the basis that the case involves the construction of the Constitution the question must be raised at the first available opportunity, the sections of the Constitution claimed to have been violated must be specified, the point must be presented in the motion for new trial, if any, and it must be briefed on appeal. City of St. Louis v. Butler, 358 Mo. 1221, 219 S.W.2d 372; McGuire v. Hutchison, 356 Mo. 203, 201 S.W.2d 322, 327; Mooney v. County of St. Louis, Mo., 286 S.W.2d 763; State ex rel. Barnett v. Sappington, Mo., 260 S.W.2d 669. It is thus apparent that if there is compliance with the first three requirements at the time the appeal is taken jurisdiction of the case would appear to be in this court, but by the subsequent failure to comply with the fourth requirement jurisdiction in this court to rule the case is lost. In Ewing v. Kansas City, 350 Mo. 1071, 169 S.W.2d 897, 900, it was stated that the "jurisdiction * * * [of this court] depends upon live issues being presented on matters within [its] jurisdiction." The same result is reached when jurisdiction in this court is dependent only on the basis of the amount in dispute. In Heuer v. Ulmer, Mo., 273 S.W.2d 169, the plaintiff's petition involved an amount less than the minimum amount necessary to vest this court with appellate jurisdiction, but the counterclaim of defendant involved a sufficient amount. The judgment was for the defendant on the petition and for the plaintiff 716 on the counterclaim and both appealed. At the time the appeal was taken the amount in dispute appeared to be within the jurisdiction of this court. However, there was no point in defendant's brief presenting for appellate review any issue as to the counterclaim. In that case, the contention of the defendant was that "the trial was properly conducted and that no error was committed," but that "in the event the court should find some prejudicial error in the conduct of the trial and require that another trial be held, * * defendant feels that if there should be any prejudicial error discovered * * * such error would require a retrial of the counterclaim, also." This court held that for the purposes of determining jurisdiction of the appeal "`The amount in dispute * * * is determined by the amount that actually remains in dispute between the parties on the appeal, and subject to the determination by the appellate court of the legal question raised by the record.'" Heuer v. Ulmer, supra at p. 170. This rule is applicable to the pending case. Mention must be made of Tant v. Gee, 348 Mo. 633, 154 S.W.2d 745, because it may appear to present a different rule. In that case the plaintiff sought specific performance of a contract to convey real estate upon the payment of $2,400, but he also sought a credit of $1,320 on the aforesaid consideration. The trial court "decreed specific performance, conditioned upon the payment of $1,350.55 by plaintiff." It was stated in the opinion that on appeal the defendant presented only issues questioning the propriety of the credits allowed the plaintiff, and from that statement alone it might appear that title to real estate was not involved. However, the decree of specific performance was conditioned upon the payment of what was determined to be the correct amount, and the judgment of this court was that "The judgment is reversed and the cause remanded with directions to condition the decree of specific performance upon a credit to plaintiff of $40 only * * ." Thus the judgment of the trial court from which the appeal was taken, and which was subject to affirmance or reversal, operated directly on the title to real estate. The statement in that opinion that "appellate jurisdiction over the subject matter is determined upon the record in the trial court at the time the appeal is granted" is correct as far as it goes, but it is subject to the observations previously made. The factual situation of this case falls precisely within the rule announced in Heuer v. Ulmer, supra, that "Issues involving amounts in excess of [minimum jurisdictional amount of the Supreme Court] which stand abandoned on appeal have been considered colorable and meritless, and insufficient to vest appellate jurisdiction here." There are no issues pending between plaintiff and Billy Newman because they were abandoned by plaintiff and her appeal is dismissed. The only issues for decision are those presented by the appeal of Jean Denton and they involve less than $15,000. The appeal of plaintiff is dismissed, and since this court does not have jurisdiction of the appeal of Jean Denton it is transferred to the St. Louis Court of Appeals. PER CURIAM. The foregoing opinion by STOCKARD, C., is adopted as the opinion of the Court en Banc. All of the Judges concur except STORCKMAN, J., who dissents in separate opinion filed. STORCKMAN, Judge (dissenting). There are two principal reasons why I cannot concur in the adoption of the divisional 717 opinion as the opinion of the court en banc. First, this procedure overlooks and fails to consider and dispose of the plaintiff-appellant's point to be argued as restated in her supplemental brief filed and presented to the court en banc for decision. Second, multiple appeals in the same case do not make separate cases in the appellate court and the appeals must be considered as "one case". The result of dismissing one of the appeals (once well vested in this court) and of transferring the other is the fragmentation of the "one case on appeal" and a piecemeal disposition which is not necessary under the law and is not desirable in that it is likely to result in injustices that the "one case on appeal" rule was designed to avoid. The two appeals here involved were taken in the same case from the Circuit Court of the City of St. Louis. One was lodged in this court initially; it was taken by the plaintiff from an adverse judgment in her suit for $50,000 against the defendant Newman. The other defendant, a Mrs. Denton, appealed to the St. Louis Court of Appeals from the $10,000 judgment against her and in favor of the plaintiff. The Denton appeal was properly transferred to this court by the St. Louis Court of Appeals. The appeals were briefed, argued and submitted first in Division Two then on transfer in the court en banc where the plaintiff filed a supplemental brief as appellant. For brief and convenient distinction, we will sometimes refer to plaintiff's appeal as the $50,000 judgment or appeal and the defendant Denton's appeal as the $10,000 judgment or appeal. The majority opinion in Division Two as originally written held that plaintiff's assignment of error (which was conditional or in the alternative) must be considered abandoned because it was defectively briefed. In transferring the case however, the opinion made no specific disposition of the $50,000 appeal. A dissenting opinion was filed pointing out that there was no such disposition of a case on appeal known as "abandonment", but that appeals could only be disposed of in accordance with Civil Rule 83.13(c), V.A.M.R., and § 512.160, subd. 3, RSMo 1959, V.A.M.S., or Civil Rule 83.09. The dissenting opinion also opposed the transfer on the ground that any disposition of the $50,000 appeal was in effect an affirmance of the judgment, was a partial exercise of this court's jurisdiction, and that this court should dispose of the entire case on appeal. Thereafter, without granting a rehearing, the divisional opinion was modified in several respects and concluded with the dismissal of the $50,000 appeal and the transfer of the $10,000 appeal to the St. Louis Court of Appeals. The case was then transferred to the court en banc. In the court en banc, as she had a right to do, the plaintiff filed a supplemental brief and argument as appellant. She restated the point which had been held defective in Division Two and cited authorities. As presented in the court en banc, plaintiff's point reads as follows: "In the event that this Court should find that the trial court erred in giving Instruction No. 5, a sole cause Instruction, offered by defendant Denton [Newman], for the reason that this Instruction was erroneous in: (1) failing to hypothesize the relative positions of the two automobiles and defendant Denton's ability to see the Newman automobile, and (2) enlarging Denton's duty to yield the right of way by requiring her to yield the right of way regardless of whether she saw or could have seen the Newman automobile, then in that event it necessarily follows that Instruction No. 5 was prejudicially erroneous not only as to defendant Denton, but also as to plaintiff, and for these same reasons plaintiff should be granted a new trial on her claim against Newman. Snider v. King, Mo.App., 344 S.W.2d 265; Happy v. Blanton, Mo., 303 S.W.2d 633; Schmittzehe v. City of Cape Girardeau, Mo., 327 S.W.2d 918." Thereafter 718 the respondent Newman also filed a supplemental brief in the court en banc. The plaintiff's assignment of error in the form presented in Division Two is set out in the second paragraph of the majority opinion. This is the point relied on which the majority opinion says "sets forth no action or ruling of the trial court which is contended to be erroneous", which is the requirement of Civil Rule 83.05(a) (3). The restatement of the point as presented in the court en banc has not been ruled. Both statements of the point are sufficient in my opinion to tell the court what relief the plaintiff seeks and why. This is not an unusual practice; it has been recognized in numerous cases. For instance, in the recent case of Nuchols v. Andrews Investment Co., Mo.App., 364 S.W.2d 128, 131, the court states that "plaintiffs, admittedly solely as a precautionary measure, and only in the event of success in this appeal by Andrews Investment Company, seek to have the judgment amended or modified so as to make it a joint judgment against all the defendants or in the alternative seek a new trial as to defendants Johnson on the question of liability alone." Italics added. Civil Rule 41.03 provides: "These rules shall be construed to secure simplicity and uniformity in civil procedure, fairness in the administration of justice, and the elimination of unjustifiable expense and delay." Civil Rule 83.24 provides: "These rules shall be liberally construed to promote justice, to minimize the number of cases disposed of on procedural questions and to facilitate and increase the disposition of cases on their merits." Contrary to the letter and spirit of these rules, the majority opinion places an unusually strict construction on plaintiff's statement of her point which prevents a review on the merits and produces far-reaching disorders. The appellate courts of this state have encouraged compliance with the rules in briefing appellate cases, but if the strictness applied in the majority opinion were to be enforced in all cases before this court few of them would be disposed of on the merits. Plaintiff's restatement of her point for the hearing by the court en banc is a decided improvement and about as good as can be done with the alternative or conditional plea that plaintiff is making. It is certainly understandable and is consistent with our rules and decisions that permit statements of claims and relief to be made "alternately and hypothetically." Civil Rules 55.06 and 55.12, V.A.M.R.; Gomillia v. Missouri Pacific R. Co., Mo., 345 S.W.2d 202, 209 [4]. The divisional opinion which the court en banc adopted is unsuited for the determination of the case presented in the court en banc. Thus, the opinion of the court en banc is erroneous in that it overlooks and fails to consider plaintiff's point as restated in her supplemental brief filed and presented in the court en banc. Civil Rule 83.16. If the majority opinion stands, there will be two mandates issued with respect to a single judgment of the trial court and at different times. One will issue from the supreme court on the dismissal of the $50,000 appeal and the other at some future time from the court of appeals on its action with respect to the $10,000 appeal. This will be contrary to a long-established practice hitherto considered satisfactory. In an action there can be only one final judgment which must dispose of the case as to all parties and the same case cannot be pending on appeal in different appellate courts. Morton v. Southwestern Telegraph & Telephone Co., 280 Mo. 360, 217 S.W. 831, 833 [1]. Where more than one party appeals and the amount in dispute in either appeal gives the supreme court jurisdiction, both appeals should be sent to that court for final determination in order to avoid inconsistent judgments in the same case. Morton v. Southwestern Telegraph & Telephone Co., supra. 719 The rule has heretofore been well settled that separate appeals must be disposed of by one appellate court since they constitute but one case on appeal. Walsh v. Southwestern Bell Telephone Co., 331 Mo. 118, 52 S.W.2d 839, 840 [2]; Ruehling v. Pickwick-Greyhound Lines, 337 Mo. 196, 85 S.W.2d 602 [1]; Punch v. Hipolite Co., 340 Mo. 53, 100 S.W.2d 878, 880 [1]; Flynn v. First National Safe Deposit Co., Mo., 284 S.W.2d 593, 597 [12]; Coonce v. Missouri Pacific R. Co., Mo.App., 347 S.W.2d 242, 243 [2]. The Flynn case states, 284 S.W.2d loc. cit. 597: "No provision exists for a party to `split' a judgment and to take separate appeals from each part." In order to preserve the integrity of the one-case rule and maintain orderly procedure in the disposition of cases, the propriety of defendant Newman's Instruction No. 5 should have been considered and the result applied to the Denton appeal and plaintiff's appeal in accordance with the determination made. At that point there could have been a dismissal of the plaintiff's appeal if the court considered that appropriate. Civil Rule 83.13(c), V.A.M.R., and § 512.160, subd. 3, RSMo 1959, V.A. M.S. Civil Rule 83.09 provides that if an appellant fails to comply with certain rules required to perfect the appeal, the court may "dismiss the appeal or affirm the judgment" at the time "the cause is called for hearing." A dismissal is usually employed where there is a total failure, such as not filing a transcript. In the present case a judicial determination was necessary. The opinion relies on Heuer v. Ulmer, Mo., 273 S.W.2d 169, which case was transferred on a somewhat similar set of facts without a dismissal. I think Heuer is subject to the same criticism as the present case and should not be followed. Nor can I agree with the distinction attempted to be made regarding Tant v. Gee, 348 Mo. 633, 154 S.W.2d 745. It could have been as logically said in Tant that there was no live issue in this court regarding that part of the decree which granted specific performance of a contract to sell real estate; that the only issue remaining for decision was the amount of the credits on the purchase price; and that such issue should be transferred since the amount thereof did not exceed the jurisdiction of the court of appeals. The majority opinion discloses what appears to be two lines of authority as to when appellate jurisdiction is determined. One is that appellate jurisdiction is determined upon the record in the trial court at the time the notice of appeal is filed and that nothing occurring subsequently will defeat or confer jurisdiction. The other is that jurisdiction may be lost or shifted by reason of appellant's failure to brief the issues which vested the supreme court with jurisdiction at the time the appeal was taken or by briefing such issues defectively. This decision creates further jurisdictional problems by placing the imprimatur of the court en banc upon the fragmentation of an appellate case with consequent exposure to gross injustices due to piecemeal decisions by different appellate courts. This is not only contrary to well-established principles, but it also is an unnecessary waste of manpower that could better be spent writing the case on the merits. The problems connected with appellate jurisdiction have been of concern to the Bench and Bar for some time. Judges of the appellate courts are acutely aware of the waste of manpower and delay arising under present constitutional provisions relating to appellate jurisdiction. The chief concern of lawyers is the expeditious disposition of their appeals rather than which appellate court decides them. Changes in the constitutional provisions relating to appellate jurisdiction are perhaps the most satisfactory solution; but the possibility of changes are matters for the distant future. In the meantime the decisions of the appellate courts can be clarified and simplified so as to alleviate somewhat the duplication of effort and delay now involved. For these reasons I respectfully dissent.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532619/	383 B.R. 139 (2008) In re BRIDGE INFORMATION SYSTEMS, INC., Debtor. Scott P. Peltz, Plan Administrator, Plaintiff, v. Merisel Americas, Inc & MOCA, Defendants. Bankruptcy No. 01-41593-293, Adversary No. 04-4007-293. United States Bankruptcy Court, E.D. Missouri, Eastern Division. March 3, 2008. 140 141 142 Gregory D. Willard, Bryan Cave, Jennifer A. Merlo, Rosenblum, Goldenhersh, Silverstein & Zafft, P.C., St. Louis, MO, Thomas J. Moloney, New York, NY, for Debtor. Cynthia A. Fonner, David B. Goroff, Foley and Lardner, Joanne Lee, Chicago, IL, for Plaintiff. Gary Lee Vincent, Husch and Eppenberger, St. Louis, MO, Jeffrey M. Galen, Galen and Davis, LLP, Encino, CA, for Defendants. MEMORANDUM OPINION DAVID P. McDONALD, Bankruptcy Judge. Scott A. Peitz, the Plan Administrator for the estate of Bridge Information Systems, Inc. ("Bridge"), brought this adversary proceeding seeking to avoid as preferential under 11 U.S.C. § 547(b), 15 transfers totaling $24,100,522.74 that Bridge remitted to MOCA. MOCA concedes that the payments were preferential under § 547(b), but nonetheless argues that Plan Administrator may not avoid at least some of the transfers for one of two reasons. First, MOCA contends that Plan Administrator may not avoid all but the last two payments because Bridge made those payments in the ordinary course of business under 11 U.S.C. § 547(c)(2). MOCA argues in the alternative that even if Bridge did not make the payments in the ordinary course of business, Plan Administrator may not avoid $11,566,317.41 of the payments in questions under 11 U.S.C. § 547(c)(4) because MOCA provided subsequent new value in that amount to BridgeVAR, one of Bridge's operating units, in the form of computer equipment. For the following reasons, the Court finds that MOCA failed to establish its ordinary course defense under § 547(c)(2), but MOCA did prove its subsequent new value defense under § 547(c)(4). The Court, therefore, will enter judgment in 143 favor of Plan Administrator in the amount of $12,534,197.33. JURISDICTION AND VENUE This Court has jurisdiction over the parties and subject matter of this proceeding under 28. U.S.C. §§ 1334, 151, and 157 and Local Rule 9.01(B) of the United States District Court for the Eastern District of Missouri. This is a core proceeding under 28 U.S.C. § 157(b)(2)(F), which the Court may hear and determine. Venue is proper in this District under 28 U.S.C. § 1409(a). FINDINGS OF FACT Bridge, through its subsidiaries and operating units, was a leading provider of financial information to large financial institutions. BridgeVAR was one of Bridge's operating units. BridgeVAR was in the business of selling mid-range to high-end computer systems to Bridge's large institutional customers. Such sophisticated computer systems are referred to as Enterprise Systems. BridgeVAR was a value added reseller ("VAR") of Enterprise Systems. The three primary manufacturers of Enterprise Systems, Hewlitt-Packard ("HP"), IBM and Sun Microsystems ("Sun"), all utilize VARs to distribute their products to end users. HP, IBM and Sun all utilize the same general distribution model. First, the manufacturer sells the Enterprise System directly to one of its master distributors. A VAR will then purchase the Enterprise System from the master distributor, add software and other components to the systems, and then sell the reconfigured system to the end user. In the Enterprise Systems industry, a VAR may only resell a computer systems if it is licensed by the manufacturer to do so. Additionally, the typical agreement between the manufacturer and the VAR prohibits the VAR from selling another manufacturer's product without first terminating the original agreement. As will be pointed out below, however, these agreements generally contain a term that allows either the manufacturer or the VAR to terminate the agreement without cause with 90 days notice. BridgeVAR's predecessor, EJV Partners, entered into an agreement with Sun that allowed EJV to purchase Enterprise Systems directly from Sun and then resell the product to end users. Sun, however, advised EJV in 1995 that EJV would have to purchase its product through Sun's distribution channel. Sun, therefore, required EJV to purchase its Sun Enterprise Systems from one of Sun's master distributors, Merisel Americas or Arrow Electronics. EJV selected to purchase its Sun products from Merisel and entered into an agreement with Merisel in January 1995 (the "Agreement"). Under the terms of the Agreement, EJV had the right to purchase Sun manufactured Enterprise Systems from one of Merisel's divisions, MOCA. Additionally, the Agreement provided that EJV would have an open credit line of $10,000,000.00. The Agreement remained in effect without substantial modification until Bridge filed its petition for relief on February 15, 2001. Bridge purchased EJV in May 1997 and integrated EJV's VAR business by creating BridgeVAR. BridgeVAR had approximately 15 employees who worked out of Bridge's office in the World Trade Center. Additionally, because BridgeVAR was simply an operating unit of Bridge, BridgeVAR's director, Paul Frankel, was not a member of Bridge's management team and was not privy to discussions relating to key strategic decisions of the firm. At all times relevant to this dispute, BridgeVAR generated and remit a purchase 144 order to MOCA upon receiving an order from one if its end-user customers. MOCK would then ship the product to BridgeVAR, who would then configure the Sun product for the particular needs of the end user. MOCA would also generate an invoice and ship that invoice along with the Sun product to BridgeVAR. BridgeVAR, after receiving the invoice from MOCA, would submit a check requisition to Bridge's corporate office in St. Louis for payment to MOCA. BridgeVAR had no control over how fast Bridge's office in St. Louis remitted payment to MOCA. Also, if BridgeVAR returned a product to MOCA, MOCA would issue a credit memo, crediting BridgeVAR's account in an amount equal to the invoice price of the returned product. Merisel began looking for a buyer for MOCA in mid-2000. MOCA enlisted the help of an investment banker to shop MOCA to potential bidders. The investment banker presented MOCA to several large computer distribution companies that had operating divisions or subsidiaries that were master distributors of IBM and HP. The investment banker conducted an auction for MOCA in October 2000 and Arrow Electronics, a large broad-line distributor of computer systems and products, was the winning bidder. Arrow closed on its purchase of MOCA on October 17, 2000. At that point, MOCA became an operating unit within Arrow's North American Computer Products ("NACP") division. Arrow had other operating units within its NACP division that were master distributors of both HP and IBM. Specifically, Support Net was Arrow's operating unit that was a IBM master distributor and SBM was a HP master distributor. The various agreements between the parties in Sun's distribution channel were terminable, without cause, with 90 days notice. This term was also common in the IBM and HP distribution channels. Thus, as Frankel observed at trial, master distributors and VARs within one manufacturer's distribution channel could somewhat easily change to another manufacturer's distribution channel. The ability of VARs to switch distribution channels is evidenced by the fact that Arrow desired to have a Sun, IBM and HP master distributor within its NACP division. The evidence adduced at trial established that one of Arrow's primary motives in acquiring MOCA was to ensure that Arrow's VAR customers' had complete flexibility within the Arrow NACP division to purchase IBM, HP or Sun Enterprise Systems. In fact, many of Arrow's VAR customers did purchase products from all three of the operating units within Arrow's NACP division. Accordingly, MOCA faced competition for VAR customers not only from other Sun master distributors, but also from the master distributors within the IBM and HP distribution channels. Also, although the design and architecture of each manufacturer's Enterprise System differed, the IBM and HP systems had the same basic functionality as the Sun system and all three utilized the same basic operating systems, Unix and Linux. Many end-users of Enterprise Systems, therefore, over time purchased systems manufactured by HP, IBM and Sun. Thus, BridgeVAR's competitors included not only other Sun VARs, but also the VARs of IBM and HP. Sun had two other master distributors during 2000 and early 2001, GE Access and Ingram Micro. Additionally, there were a number of master distributors in the IBM and HP distribution channels during this time frame. At trial, MOCA produced the testimony of Peter Frankovsky, who was GE Access's 145 director of financial planning during the 2000 to 2001 time frame. Frankovsky testified that while at GE Access, he benchmarked GE Access's financial performance against master distributors in the Enterprise Systems market, including those distributors in the IBM and HP distribution channels. Frankovsky remarked that he benchmarked GE Access's financial performance against these companies because they were in "close proximity" to GE Access's business. MOCA also adduced the testimony of Dorothy Sullivan, its credit manager, at trial. Sullivan testified that a significant number of MOCA's larger customers, which she defined as annual purchases in excess of $3,000,000.00, had payment terms of either 45 or 60 days net of invoice. Sullivan also stated that she became familiar with the payment terms that GE Access and Avnet, an IBM master distributor, offered their VAR customers while attending meetings held by the National Association of Credit Managers ("NACM"). Sullivan stated that GE Access had payment terms raging from prepay to 90 days net of invoice and that Avnet's terms ranged from 30 to 60 days. Sullivan, however, on cross-examination could not identify the particular persons at either GE Access or Avnet that gave her this information. Sullivan additionally could not state with certainty on cross-examination whether the information relating to payment terms offered by GE Access or Avnet covered the 2000 and 2001 time frame. Further, Sullivan could not testify as to the DSO for either GE Access or Avnet during the relevant time frame, which would reflect how quickly those companies' customers were actually paying the invoices. The Court, therefore, does not find her testimony credible as it relates to the credit terms offered by either GE Access or Avnet At the time Arrow acquired MOCA in October 2002, Arrow's leader of its NACP division, Kathleen Norris, notified its CFO, Paul Reilly, that three of MOCA's VAR customers needed some attention due to MOCA's accounts receivables exposure to those customers. One of the customers that Norris identified was BridgeVAR. BridgeVAR's total outstanding accounts receivable balance to MOCA in October 2000 was approximately $15,500,000.00, which was more than $3,000,000.00 over its credit limit. Additionally, $2,500,000.00 of the receivables due from BridgeVAR were past due under the terms of the Agreement. Arrow's concern over Bridge's financial position was well founded. Bridge's CFO, Steve Wilson, warned of a significant looming liquidity crisis in the early part of 2000. Wilson ordered that, because of Bridge's liquidity issues, the operating units would need to stretch payables to their vendors. Bridge's liquidity position temporarily improved in June of 2000 with the sale of assets and additional debt instruments. Bridge, however, quickly burned through this infusion of cash. Bridge's Execute Team, in an e-mail dated August 30, 2000, remarked that the cash infusion from the sales in June would last only approximately 90 days and that the operating units would once again need to stretch their payables to their vendors beginning in October 2000. Bridge's liquidity position continued to deteriorate to a point where it could no longer service its crushing debt load and pay its vendors. Accordingly, one of Bridge's primary creditors, Highland Capital, filed an involuntary petition against Bridge on February 2, 2001. Bridge then filed a voluntary petition for relief under Chapter 11 of the Code on February 15, 2001, which rendered the involuntary petition 146 moot. Thus, the 90 day preference period began on November 15, 2000: During the preference period, Bridge remitted 13 checks and 2 wires transfers to MOCA totaling $24,100,522.74 (the "Transfers"). Bridge remitted the Transfers to MOCA in payment of 517 invoices. The head of MOCA, Richard Severa, met with Frankel on February 7, 2001, which was in the interim between Highland's involuntary petition, and Bridge's voluntary petition. Both Severa and Frankel testified that they did not discuss Highland's involuntary petition at this meeting. In fact, both stated that they were not even aware of Highland Capital's involuntary petition at the time. They also both remarked at trial that the terms of the Agreement, including the payment term of net 60 days, were not discussed at the meeting and that those terms remained the same until Bridge filed the voluntary petition. Bridge, however, remitted two payments to MOCA by wire transfer after the February 7 meeting. Specifically, Bridge remitted a payment by wire transfer to MOCA of $208,093.81 on February 12, 2001, and then another payment of $84,098.27 the following day (collectively the "Wire Transfers"). These were the last two payments made by Bridge to MOCA before Bridge filed its voluntary petition. Additionally, the six invoices generated by MOCA that Bridge paid by the Wire Transfers reflected that MOCA had changed Bridge's account from an open account with a payment term of net 60 days to a "pre-pay" account. Bridge's payments to MOCA had always been by check from the date the original parties executed the Agreement in 1995 until it made the two Wire Transfers. Frankel conceded on cross-examination that Bridge would not have made a payment to a vendor by wire transfer unless he directed the corporate office in St. Louis to do so. Frankel further admitted that he would not have requested a payment by wire transfer unless the vendor threatened to stop shipping product. Frankel, however, continued to maintain that there were no changes in BridgeVAR's credit terms with MOCA, and that he had no explanation as to why Bridge made the Wire Transfers. Sullivan and Severa also testified at trial that MOCA never altered Bridge VAR's payment terms and the term was always payment within 60 days of invoice. Sullivan remarked that had MOCA altered the payment terms with BridgeVAR, she would have been aware of the modification because she would have changed the terms in MOCA's computer system. Sullivan, however, could not explain why the last six invoices that MOCA generated with respect to the Wire Transfers reflected a payment term of "pre-pay". MOCA produced the testimony of Dr. Julie Rainbolt, a statistician, at trial. Dr. Rainbolt examined whether Bridge's payments to MOCA during the preference period were statistically similar to the payments during the one year period before the preference period. Dr. Rainbolt found that Bridge remitted payment to MOCA on average 64 days after invoice during the preference period as compared to 63 days during the pre-preference period. Dr. Rainbolt also examined the standard deviation of the number of days Bridge paid MOCA after the invoice date for the pre-preference and preference periods. Dr. Rainbolt concluded that the standard deviation was 10 days in the pre-preference period versus 8 days in the preference period. This result suggests that Bridge's payments to MOCA during the preference period were marginally less 147 variable around the mean as compared to the pre-preference period. Dr. Rainbolt further examined the average days sales outstanding ("DSO") for each check Bridge issued to MOCA during both the pre-preference and preference periods. This analysis demonstrated that both periods, Bridge paid several invoices with one check. Further, the DSO testing revealed that in both period, the majority of checks paid invoices with an average DSO in the 60-67 days range. Dr. Rainbolt's DSO findings suggest that Bridge batched invoices for payment of roughly the same age in the preference period as in the pre-preference period. Dr. Rainbolt's report also demonstrates that Bridge remitted payment to MOCA with the same frequency during the two periods, approximately every 7 days. Although the timing and frequency of Bridge's payments to MOCA were similar in both periods, Bridge batched fewer invoices per payment in the preference period. Dr. Rainbolt's analysis demonstrated that during the preference period, 52% of Bridge's payments batched fewer than 40 invoices compared to only 19% in the pre-preference period. Additionally, Bridge did not batch more than 80 invoices in any payment during the preference period but batched more than 80 invoices with almost a third of its payments to MOCA during the pre-preference period. Frankel explained that because BridgeVAR was placing fewer orders with MOCA in late 2000 and early 2001, MOCA was generating fewer invoices to BridgeVAR during that time frame. Frankel contended at trial this dynamic was the reason Bridge was paying fewer invoices with each payment during the preference period. Frankel asserted that BridgeVAR's reduction in its orders to MOCA was simply part of the overall decline in BridgeVAR's business during the last half of 2000 and early 2001. Regardless of the reason for the decline in the number of invoices MOCA generated to BridgeVAR, however, Bridge's payment to MOCA at the same frequency and amount during the preference period resulted in a dramatic decrease in MOCA's accounts receivable exposure to BridgeVAR during the preference period. Specifically, BridgeVAR made nearly $24,100,000.00 in payments to MOCA during the preference period but MOCA shipped only approximately $12,200,000.00 in product to BridgeVAR. Thus, MOCA's account receivable exposure with BridgeVAR declined by nearly $12,000,000.00 during the preference period. The Court notes that MOCA's reduction in its accounts receivables exposure to BridgeVAR coincides with Arrow's identification of BridgeVAR as one of the three MOCA customers whose accounts receivables position warranted some attention. As just illustrated, MOCA did continue to ship computer products to BridgeVAR during the preference period. In fact, MOCA shipped $12,210,868.00 worth of product to BridgeVAR after MOCA received the first of the Transfers on November 20, 2000 but before receiving the last Wire Transfer on February 13, 2001. Bridge, as of the petition date, had paid MOCA for approximately $4,243,000.00 worth of the invoices generated with respect to these shipments. These payments from Bridge to MOCA comprise a portion of the Transfers that Plan Administrator seeks to avoid. MOCA additionally issued approximately $1,900,000.00 worth of credit memos to BridgeVAR during the preference period for goods that BridgeVAR, returned. Only $922,000.00 of these credit memos, however, represent computer products that MOCA shipped to BridgeVAR during the preference period. 148 Plan Administrator brought this adversary complaint on January 9, 2004, seeking to avoid the Transfers as preferential under 11 U.S.C. § 547(b) and to recover the value of the Transfers from MOCA under 11 U.S.C. § 550(a)(1). MOCA filed an answer to the adversary complaint and asserted two affirmative defenses. First, MOCA argues that Plan Administrator cannot avoid the Transfers because they were made in the ordinary course of business as provided in 11 U.S.C. § 547(c)(2). MOCA additionally contends that Plan Administrator cannot avoid the Transfers to the extent that MOCA provided new value to BridgeVAR subsequent to receiving the Transfers. The Court conducted a trial in April 2007. The Court then established a schedule allowing the parties to submit post-trial briefs. The parties completed their post-trial briefing on October 22, 2007. MOCA conceded before trial that the Transfers were preferential under 11 U.S.C. § 547(b). MOCA additionally admitted prior to trial that Bridge did not remit the Wire Transfers to it in the ordinary course of business as provided in 11 U.S.C. § 547(c)(2). CONCLUSIONS OF LAW A. Introduction As stated above, MOCA has stipulated that the Transfers were in fact preferential under § 547(b). Also, there is no question that MOCA was the initial recipient of the Transfers. Thus, unless MOCA can establish that one of the affirmative defenses contained in § 547(c) applies, Plan Administrator may recover the value of Transfers from MOCA under § 550(a)(1). MOCA contends that two of the affirmative defenses listed in § 547(c) applies. First, MOCA maintains that all of the Transfers, apart from the two Wire Transfers, were made in the ordinary course of business under § 547(c)(2). MOCA argues in the alternative that if Bridge did not remit the Transfers in the ordinary course, MOCA advanced $11,566,325.11 of subsequent new value, net of certain of the credit memos, to BridgeVAR after MOCA received the Transfers under § 547(c)(4). Thus, MOCA maintains that if it does not prevail on its ordinary course defense, Plan Administrator may not avoid $11,566,317.51 worth of the Transfers under § 547(c)(4). MOCA bears the burden of establishing each of its affirmative defenses by a preponderance of the evidence. 11 U.S.C. § 547(g); Shodeen v. Airline Software, Inc. (In re Accessair, Inc.), 314 B.R. 386, 392 (8th Cir. BAP 2004). The Court finds that MOCA failed to establish its ordinary course of business under § 547(c)(2). MOCA, however, did establish that it remitted $11,566,317.41 in subsequent new value to BridgeVAR under § 547(c)(4). Thus, the Court finds that Plan Administrator is entitled to recover $12,534,197.33 from MOCA. B. MOCA failed to establish by a preponderance of the evidence that Bridge remitted the Transfers in the ordinary course of business pursuant to § 547(c) (2). 1. Elements of the Ordinary Course Defense The version of Section 547(c)(2) of the Code in effect at the time Bridge filed its petition in 2001 provided that a trustee could not avoid a preferential transfer: (2) to the extent that such transfer was (A) in payment of a debt incurred by the debtor in the ordinary course of business or financial affairs of the debtor and the transferee; and 149 (B) made in the ordinary course of business or financial affairs 04 the debtor and the transferee; and. (C) made according to ordinary business terms. Because the relevant version of § 547(c)(2) is written in the conjunctive, MOCA must establish all three of the statutory elements of its ordinary course defense by a preponderance of the evidence.[1]Concast Canada, Inc. v. Laclede Steel Co. (In re Laclede Steel Co.), 271 B.R. 127, 130 (8th Cir. BAP 2002). Here, although Plan Administrator does not concede that MOCA has met its burden of proof under § 547(c)(2)(A), there is no question that BridgeVAR remitted the Transfers to MOCA in the ordinary course of the business affairs of both parties. The evidence adduced at trial unequivocally established that BridgeVAR was in the business of buying Enterprise Systems and then reselling those systems to end users. Also, MOCA, as a Sun Master Distributor, was in the business of selling Sun Enterprise Systems to VARs. Accordingly, the Court finds that MOCA established that the Transfers were in payment of debts incurred in the ordinary course of business of both MOCA and BridgeVAR. The two real issues in dispute on MOCA's ordinary course defense, are whether MOCA produced sufficient evidence to establish that the Transfers were subjectively ordinary as between BridgeVAR and MOCA as required by § 547(c)(2)(B) and objectively ordinary with respect to the relevant industry under § 547(c)(2)(C). The Court finds that MOCA has failed to meet its burden of proof on both issues. 2. MOCA failed to establish that the Transfers were subjectively ordinary as between Bridge and MOCA. As the Eighth Circuit has noted, there is no precise test to determine whether a particular transaction is subjectively ordinary between the debtor and transferee under § 547(c)(2)(B). Lovett v. St. Johnsbury Trucking, 931 F.2d 494, 497 (8th Cir.1991). Rather, the court must employ a "peculiarly factual" analysis to determine whether the transfers in question are subjectively ordinary. Id. The central focus of the fact intensive analysis under § 547(c)(2)(B) is to ensure that neither the creditor nor debtor engaged in unusual activity during the debtor's slide into bankruptcy to benefit the transferee creditor. Central Hardware Co., Inc. v. Sherwin-Williams Co. (In re Spirit Holding Co.), 153 F.3d 902, 904 (8th Cir.1998) (quoting S.Rep. No. 95-989 at 88 (1978), U.S.Code Cong. & Admin.News 1978, p. 5787). Here, MOCA argues that all of the Transfers, except the two Wire Transfers, were subjectively ordinary. MOCA premises its argument on Rainbolt's conclusion that the payments during the preference period were statistical similar to the payments in the pre-preference period in timing, amount, and frequency. The Court disagrees with MOCA's position. It is true that a debtor's consistent payment history to the creditor in question is an important factor in determining whether a payment is subjectively ordinary under § 547(c)(2)(B). See Lovett, 931 F.2d at 499. But as noted above, the policy objective underlying the ordinary course defense is to discourage unusual activity of either the debtor or creditor during the preference period. Therefore, 150 evidence that either party undertook some unusual activity to benefit the preferred creditor during the preference period will take the payments outside of the ordinary course of business. Central Hardware, 153 F.3d at 905. This is true even if the timing of the payments during the preference period was statistically consistent with the timing during the pre-preference period. Frank v. Volvo Penta of the Am. (In re Thompson Boat Co.), 199 B.R. 908, 913-14 (Bankr.E.D.Mich.1996). Here, the Court agrees with MOCA that Rainbolt's testimony established a statistical similarity between Bridge's payment to MOCA in the preference and pre-preference periods. But the Court finds that given the unique facts surrounding the business relationship between MOCA and BridgeVAR, there is a substantial likelihood that the parties undertook some action to substantially reduce MOCA's account receivable exposure to BridgeVAR just prior to and during the preference period. .MOCA argued at trial that the parties never altered the payment terms of the Agreement and that MOCA's reduced accounts receivable exposure to BridgeVAR during the preference period was simply a coincidence. MOCA proffered the testimony of Frankel and Sullivan to support this claim. Frankel testified that the reduction in BridgeVAR's orders to MOCA was the result of a general decline in BridgeVAR's business and that the parties did not alter the terms of the Agreement. Sullivan also testified that there was no change in the payment terms between BridgeVAR and MOCA. Neither Frankel nor Sullivan, however, were able to `explain on cross-examination why Bridge began to pay by wire transfer at the end of the preference period or why the invoices generated by MOCA reflect a term of "pre-pay". Frankel testified that Bridge would only pay by wire transfer if he authorized such a payment and that he would only request a wire transfer if the vendor threatened to stop shipping product. Frankel maintained that he did not authorize a payment by wire transfer to MOCA, and he could not explain why in fact Bridge's office in St. Louis made those payments. Sullivan similarly testified that only she could change the payment terms in MOCA's computer system, but she had no explanation why the terms with BridgeVAR had changed to pre-pay on MOCA's invoices. While it may be true that Frankel and Sullivan subjectively believed that the parties did not alter the terms of the Agreement, it is clear from the evidence that those terms were in fact altered. The Wire Transfers and the corresponding invoices that reflect a term of prepay are the only examples in the parties' long relationship where Bridge did not pay by check after BridgeVAR received an invoice from MOCA. Additionally, both MOCA anal BridgeVAR were simply operating units of Arrow and Bridge respectively, so neither Frankel nor Sullivan were privy to top level management discussion and decisions. Further, just prior to the preference period, the Vice President of Arrow's NACP division, which included MOCA, noted that BridgeVAR's accounts receivable position was a potential problem and needed additional attention. Given this evidentiary record, despite both Frankel and Sullivan's testimony, there is no doubt that at some point the parties altered the payment terms of the Agreement so that BridgeVAR was a "prepay" customer.[2] It is also clear from the 151 evidence adduced at trial that Bridge would have acquiesced to this change only if MOCA, or someone at Arrow, threatened to stop shipping product to BridgeVAR. Additionally, because MOCA failed to offer any evidence at trial as to when or how this change occurred, it is unclear as to when the parties actually altered the terms of the Agreement or what discussions between Arrow and Bridge precipitated the change. Further, it is uncertain from the record as to whether the parties altered their course of dealing prior to explicitly altering the payment terms, especially given Arrow's identification of BridgeVAR's outstanding receivable balance as an area of concern. The Court, therefore, finds that MOCA failed to establish by a preponderance of the evidence that the Transfers were subjectively ordinary under § 547(c)(2)(B). 3. MOCA failed to establish by a preponderance of the evidence that the Transfers were objectively ordinary under § 547(c)(2)(C) The statute also requires MOCA to demonstrate that the Transfers were made and received in accordance with the ordinary business terms prevailing in the industry under § 547(c)(2)(C). This analysis is purely objective and is separate and discrete from the subjective inquiry under § 547(c)(2)(B). Jones v. United Say. & Loan Assoc. (In re U.S.A. Inns of Eureka Springs, Inc.), 9 F.3d 680, 685 (8th Cir. 1993). A creditor, in order to meet its burden of proof under § 547(c)(2)(C), must establish that the preferential payments in question are objectively ordinary with respect to the prevailing practice among similarly situated members of the relevant industry. Id. Also, although § 547(c)(2)(C) does not, require the creditor to establish the existence of a uniform set of business terms within the industry, it does require the creditor to demonstrate that the payments in question fit within the general range of terms prevailing among similarly situated firms. Id. The creditor, therefore, must at a minimum produce evidence as to what is the relevant industry and the general range of terms prevailing in that industry. Gulfcoast Workstation Corp. v. Peltz (In re Bridge Info. Sys.), 460 F.3d 1041, 1044-45 (8th Cir.2006). The key question here is what exactly is the industry. The identification of an "industry" for purposes of § 547(c)(2)(C) is often a very difficult endeavor. See In re Tolona Pizza Products Corp., 3 F.3d 1029, 1033 (7th Cir.1993). But the Eighth Circuit, following the Seventh Circuit's decision in Tolona Pizza, has held that objective test of § 547(c)(2)(C) requires the creditor to establish the broad range of term that encompasses the practices of firms similar in some general way to the creditor. Inns of Eureka Springs, 9 F.3d at 685. Here, MOCA argues that the relevant industry consists only of the two master distributors of Sun Enterprise Systems, itself and GE Access, that were in existence in 2000 and 2001. The evidence adduced at trial, however, demonstrates that the master distributors of Enterprise Systems manufactured by Sun's competitors, IBM and HP, were substantially similar to both MOCA and GE Access for the following reasons. 152 VARs, such as BridgeVAR, had the ability to switch the distribution channel in which they bought and sold Enterprise Systems. Additionally, because the systems manufactured by Sun, IBM and HP were functionally similar, VARs did switch to satisfy the particular needs of their end user customers. In fact, the primary reason Arrow purchased MOCA was to have a master distributor of Sun, IBM and HP within its NACP division so as to give its VAR customers complete flexibility to switch distribution channels. Additionally, Frankovsky testified that he benchmarked GE Access's financial performance not only against MOCA, but the master distributors within the IBM and HP distribution channels as well because those firms were in "close proximity" to GE Access. This evidence establishes that the master distributors of IBM and HP were similar in some general way to MOCA. Thus, the relevant "industry" under the Eighth Circuit's definition of that term as outlined in Eureka Springs is not simply the two master distributors within the Sun Enterprise distribution channel, but the master distributors of IBM and HP as well. Here, because MOCA took the position at trial that only it and GE Access constituted the relevant industry, it only adduced evidence of it and GE Access' credit practices by producing the testimony of Frankovsky. Sullivan did testify that the credit practices of Avnet were generally similar to those of MOCA. Sullivan, however, on cross-examination was unable to identify exactly how she gleaned this information or even whether the information pertained to the relevant time frame. Based on this evidence, the Court finds that MOCA failed to offer credible evidence of the credit terms of master distributors of Enterprise Systems apart from itself and GE Access. Thus, the Court finds that MOCA failed to make the threshold showing of what were the range of terms prevailing within the Enterprise Systems distribution industry, Accordingly, MOCA failed to establish that the Transfers were objectively ordinary under § 547(c)(2)(C). C. MOCA may offset $ 11,566,317.51 in subsequent new value it provided to Bridge VAR. Section 547(c)(4) of the Code provides that a trustee may not avoid a transfer to the extent that after the transfer, the transferee gave new value to the benefit of the debtor: "(A) that is not secured by an otherwise unavoidable security interest; and (B) on account of which new value the debtor did not make an otherwise unavoidable transfer to . . . the creditor." § 547(c)(4). A creditor, therefore, in order to meet its burden of proof under § 547(c)(4) must demonstrate by a preponderance of the evidence that: (1) it received a transfer that is otherwise avoidable as a preference under § 547(b); (2) after receiving the preferential transfer, it provided new value to the debtor on an unsecured basis; and (3) the debtor did not compensate it with an "otherwise unavoidable" transfer for the new value. Kroh Bros. Dev. Co. v. Continental Const. Eng'r. (In re Kroh Bros. Dev. Co.), 930 F.2d 648, 652 (8th Cir.1991). Here, MOCA shipped $12,488,597.40 worth of computer products to BridgeVAR after it received the first preferential transfer on November 20, 2000 and before it received the last Wire Transfer. Bridge paid MOCA for approximately $4,200,000.00 of this computer equipment. The approximately $24,100,000.00 in payments that Plan Administrator seeks to avoid under § 547(b), however, includes this $4,200,000.00 worth of payments. MOCA also issued $1,900,000.00 in credit memos to BridgeVAR for computer 153 products that BridgeVAR returned to MOCA during the preference period. These credit memos, however, only include $922,271.49 worth of computer products that MOCA shipped after the first preferential transfer. Thus, only $922,271.49 worth of the credit memos correspond to the computer products that comprise MOCA's subsequent new value. Plan Administrator concedes that the $12,488.597.40 worth of computer products constitutes new value and that MOCA provided this new value to BridgeVAR on an unsecured basis under § 547(c)(4)(A). He argues, however, that this amount should be reduced by the $4,200,000.00 worth of invoices that Bridge paid to MOCA during the preference period and the full $1,900,000.00 in credit memos that MOCA issued to BridgeVAR during the preference period. MOCA counters by pointing out that it has conceded that Plan Administrator can avoid the $4,200,000.00 worth of payments as preferential under § 547(b) and that it can only utilize its new value defense if it fails on its ordinary course defense. MOCA contends, therefore, that the $4,200,000.00 in payments are "otherwise avoidable" and should be included in the new value calculation under § 547(c)(4)(B). MOCA additionally argues that Plan Administrator is only entitled to reduce its new value by the $922,271.99 in credit memos that cover the computer products it shipped to BridgeVAR during the preference period and that comprise a portion of the new value. The Court agrees with MOCA's position. Concerning the $4,200,000.00 worth of payments, there is no question that when a creditor receives payment for the new value, and the payment is not "otherwise avoidable", the creditor may not avail itself of the subsequent new value defense under § 547(c)(2)(B). Kroh Bros., 930 F.2d at 652. But here, the $4,200,000.00 worth of payments are otherwise avoidable because they are preferential under § 547(b) and MOCA did not prevail on its ordinary course defense under § 547(c)(2). Plan Administrator argues, nonetheless, that because MOCA did not concede that it could not prevail on its ordinary course defense before trial and immediately disgorge the Transfers to Plan Administrator, MOCA cannot now argue that the $4,200,000.00 in payments are otherwise avoidable under § 547(c)(4)(B). The Court disagrees with Plan Administrator's reading of the statute. Plan Administrator relies exclusively on Ramette v. Am. Fish & Seafood, Inc. (In re Chez Foley, Inc.), 211 B.R. 25 (Bankr. D.Minn.1997) for its argument that a creditor must concede all of its other affirmative defenses and disgorge the preferential payments before it can avail itself of the subsequent new value defense under § 547(c)(4)(B). In Ramette, however, the creditor asserted both the ordinary course defense and the subsequent new value defense. Id. at 26. Also, like the instant case, the creditor in Ramette provided new value to the debtor and the debtor paid for the new value with a preferential transfer. Id. The question that the court addressed in Barnette. was whether the creditor could utilize the subsequent new value defense even though the debtor paid for the new value with a preferential transfer. Id. at 28. The court held that because § 547(c)(4)(B) only requires that the debtor did not pay for the new value with an "otherwise unavoidable transfer", a creditor may utilize the new value defense if the debtor pays for the new value with an avoidable preference and none of the other 154 affirmative defenses set out in § 547(c) apply. Id. The Ramette court does recite that the creditor must ultimately "disgorge" to the trustee the preferential payment that paid for the subsequent new value. Id. at 28-29. But it is clear from the context of the opinion that the court in Ramette was simply noting the obvious, the trustee could ultimately recover the value of the preferential transfer, which paid for the new value, under § 550(a)(1). In fact, the creditor in Ramette never conceded its ordinary course defense and did not disgorge the preferential payment before filing its motion for summary judgment on its subsequent new value defense. Also, the Ramette court pointed out that both the plain language of § 547(c)(4)(B) and logic does not permit a trustee to both retain the new value and avoid the preferential transfer that paid for it.[3]Id. at 28. Thus, the Ramette decision actually favors MOCA, not Plan Administrator. Here, there is no question that all of the Transfers are preferential under § 547(b) and that none of the other affirmative defenses contained in § 547(c) apply. The Plan Administrator, therefore, can avoid the $4,200,000.00 that Bridge paid to MOCA on the invoices associated with the new value. Accordingly, the Court finds that the $4,200,000.00 in payments from Bridge to MOCA are "otherwise avoidable" under § 547(c)(4)(B) and, therefore, does not reduce the value of MOCA's new value defense. With respect to the credit memos totaling approximately $1,900,000.00, only $922,271.00 worth of the credit memos are for computer products that MOCA shipped subsequent to receiving the first preferential payment. Additionally, only the computers that MOCA shipped during the preference period are included in its new value calculation. MOCA concedes that when a debtor returns a product to the creditor that comprises the new value, the parties have essentially underdone the transaction that resulted in the new value to the debtor's estate, Therefore, the value of any goods that the debtor returns to the creditor that comprises part of the new value must be subtracted from the total amount of new value. In re Precision Masters, Inc., 51 B.R. 258, 261 (Bankr. S.D.Ind.1984). Accordingly, there is no dispute that MOCA's new value must be reduced by the $922,271.00 in returned goods that constitute part of its new value. Plan Administrator, however, contends that MOCA's new value should be reduced by the value of all the computer products that BridgeVAR returned to MOCA during the preference period, including the products MOCA delivered before the preference period. The flaw in Plan Administrator's argument is that the amount of MOCA's new value defense does not include, the value of those products. The Court fails to see, therefore, the rationale as to why the amount of MOCA's new value should be reduced by the value of returned goods that do not comprise part of MOCA's new value.[4] 155 In conclusion, MOCA delivered $12,488,597.40 worth of computer products to BridgeVAR subsequent to the first preferential transfers but before the last Wire Transfer. This amount constitutes new value that MOCA provided to BridgeVAR on an unsecured basis. Additionally, Bridge did not compensate MOCA for this new value with an "otherwise unavoidable" transfer under § 547(c)(2)(B). Finally, BridgeVAR did return $922,271.49 worth of the new Value to MOCA and MOCA may not include this amount in its new value defense. Accordingly, MOCA may utilize $11,566,325.51 worth of subsequent new value under § 547(c)(4) to offset against the amount of the Transfers that Plan Administrator may avoid under § 547(b). D. Plan Administrator is entitled to recover the value of the Transfers, minus the subsequent new value, from MOCA under § 550(a)(1). Section 550(a)(1) provides that a trustee may recover the value of any avoided transfer § 547 from the initial transferee. Here, the parties stipulated that the $24,100,522.72 in Transfers were preferential under 547(b). Also, as discussed above, MOCA provided $11,566,317.41 worth of subsequent new value to BridgeVAR under § 547(c)(4). Accordingly, Plan Administrator may avoid $12,534,197.33 worth of the Transfers. Also, there is no dispute that MOCA was the initial transferee of the Transfers. Plan Administrator, therefore, is entitled to recover $12,534,197.33 from MOCA under § 550(a)(1). E. Plan Administrator is not entitled to recover pre-judgment interest from MOCA. Plan Administrator also request that the Court order MOCA to pay pre-judgment interest on the amount he can recover. There is no statutory requirement that directs a bankruptcy court to award pre judgment interest on a preference claim. Harrah's Tunica Corp. v. Meeks (In re Armstrong), 291 F.3d 517, 528 (8th Cir.2002). Additionally, the rule in this Circuit is that a trustee is only entitled to pre judgment interest on a preference claim if the transferee creditor had the ability to ascertain the amount of its liability on the preference claim without a judicial determination. Bergquist v. Anderson Greenwood Aviation Corp. (In re Bellanca Aircraft Corp.), 850 F.2d 1275, 1281 (8th Cir.1988). Therefore, a trustee is generally not entitled to pre judgment interest if a good faith dispute exists as to the extent of the creditor's liability. Armstrong, 291 F.3d at 528. Here, as discussed above, MOCA prevailed on its subsequent new value defense. Additionally, although the Court rejected its ordinary course defense, MOCA did present evidence, in the form of Rainbolt's expert testimony, that the timing and amount of the payments in the preference period were consistent with the pre-preference period. The Court finds that on this record MOCA needed judicial determination to determine its liability. Plan Administrator, therefore, is not entitled to pre judgment interest. CONCLUSION The parties stipulated that the Transfers were preferential under § 547(b). MOCA failed to demonstrate both that the Transfers were subjectively and objectively ordinary under § § 547(c)(2)(B) and (C) respectively. MOCA did, however, establish that it provided $11,566,317.41 worth of subsequent new value to BridgeVAR under § 547(c)(4). Plan Administrator, therefore can avoid $12,534,197.61 worth of the Transfers under § 547 and can recover *156 the same amount from MOCA under § 550(a)(1). Further, a good faith dispute existed as to the extent of MOCA's liability to Plan Administrator at the time Plan Administrator demanded that MOCA disgorge the entire $24,100,522.74 in October 2002. Plan Administrator, therefore, is not entitled to prejudgment interest on the $12,534,197.33. The Court, therefore, will enter judgment in favor of Plan Administrator in the amount of $12,534,197.33. An Order consistent with this Memorandum Opinion will be entered. NOTES [1] The Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 amended the statute so that the elements are written in the disjunctive. [2] The Court notes that MOCA argues that the Wire Transfers are irrelevant to the analysis because it concedes that those payments were not made in the ordinary course of business. But the key issue here is that Bridge remitted the Wire Transfers to MOCA because the parties altered the payment terms of the Agreement during the preference period, which is an issue that MOCA vigorously denies. [3] Likewise, a creditor may not double dip by both offsetting its preference liability by the new value and retaining the preferential transfer that paid for the new value. Mosier v. Ever-Fresh Food Co. (In re IRFM, Inc.), 52 F.3d 228, 233 (9th Cir.1995). [4] It is true that these credit memos may be preferential transfers under § 547(b) because they are, in essence, a payment on antecedent debt. Plan Administrator, however, does not seek to avoid these credit memos as preferential and that issue is not before the Court. Rather, the question before the Court is whether MOCA's new value should be reduced by the credit memos even though the new value does not include the returned goods.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532631/	383 B.R. 457 (2008) In re Hope P. BLUMEYER, Debtor. Hope P. Blumeyer, Appellant, v. David A. Sosne, Trustee, Appellee. No. 07-6065. United States Bankruptcy Appellate Panel of the Eighth Circuit. Submitted: March 7, 2008. Filed: March 13, 2008. 458 459 David A. Sosne, St. Louis, MO, for appellee. Before KRESSEL, Chief Judge, FEDERMAN and MAHONEY, Bankruptcy Judges. KRESSEL, Chief Judge. Hope Blumeyer appeals the decision of the bankruptcy court[1] which denied her motion to reconsider the denial of her motion to dismiss her case, set aside the dismissal of Arthur Blumeyer's bankruptcy case, set aside the denial of the statutory trustee's motion to dismiss Arthur's case, and set aside the order approving the trustee's compromise and settlement and sale of assets in Arthur's case.[2] We affirm. 460 Background In February of 1994, Arthur Blumeyer was convicted of mail fraud, wire fraud, conspiracy, and money laundering in connection with various companies involved in the insurance business, including Bel-Aire Insurance Company. Bel-Aire and other related companies are currently in receivership and Arthur is incarcerated in a federal penitentiary. On March 23, 1998, Arthur filed a Chapter 11 bankruptcy petition in the Eastern District of Missouri. His wife, Hope Blumeyer filed her own Chapter 11 petition in Florida on June 8, 1998. Her case was transferred to the Eastern District of Missouri. Both cases were converted to Chapter 7 cases and David Sosne was appointed trustee in both cases. During the administration of the cases, the trustee agreed to sell Arthur's and Hope's interests in Bel-Aire and its affiliated entities, and any claims they had against the Missouri Department of Insurance to the department of insurance. On July 6, 1999, the trustee sought approval of this agreement. The statutory trustee, who was appointed by the Circuit Court of Cole County, then brought a motion which claimed that the appointment of the statutory trustee divested Arthur from control of his assets and the ability to file a bankruptcy case, arguing that the bankruptcy trustee could not administer the estate. The bankruptcy court treated the statutory trustee's motion as one to dismiss the bankruptcy case. On August 4, 2003, the bankruptcy court denied the motion. Neither Arthur nor Hope appealed this order. On June 16, 2004, the bankruptcy court granted the trustee's motion to approve a compromise and, settlement with the department of insurance and a sale of estate assets. On June 28, 2004, Arthur brought a motion to dismiss his bankruptcy case or to stay the order which authorized the sale of estate assets. The bankruptcy court denied this motion. Arthur appealed to the district court. His appeal was dismissed for failure to pay the filing fee. On September 12, 2006, the bankruptcy court dismissed Arthur's case for failure to pay the entire filing fee and for failure to file a complete set of schedules and statements. The bankruptcy court retained jurisdiction to permit the trustee to distribute the estate's assets. On August 23, 2007, Hope filed a motion in her bankruptcy case to (1) set aside the order of dismissal of Arthur's case; (2) set aside the order in Arthur's case which denied the statutory trustee's motion to dismiss; (3) set aside the order in Arthur's case which approved the compromise and settlement and authorized the sale of estate assets; and (4) dismiss her bankruptcy case. The bankruptcy court denied her motion on September 14, 2007. Hope filed a motion to reconsider on September 24, 2007, which the bankruptcy court denied on September 27, 2007. She appealed on October 9, 2007.[3] 461 Standard of Review. We review the bankruptcy court's factual findings for clear error And its conclusions of law de novo. DeBold v. Case, 452 F.3d 756, 761 (8th Cir.2006); In re Vondall, 364 B.R. 668, 670 (8th. Cir. BAP 2007). We review issues committed to the bankruptcy court's discretion for an abuse of that discretion. In re Neal, 461 F.3d 1048, 1055 (8th Cir.2006). The bankruptcy court abuses its discretion when it fails to apply the proper legal standard or bases its order on findings of fact that are' clearly erroneous. Id. A decision to grant a motion to voluntarily dismiss a bankruptcy case is reviewed for abuse of discretion. In re Turpen, 244 B.R. 431, 433 (8th Cir. BAP 2000). DISCUSSION The Orders Entered in Arthur's Case. With the exception of the denial of Hope's motion to dismiss her case, the orders at issue in this appeal are all orders entered in Arthur's case. We affirm the bankruptcy court's denial of Hope's motion to reconsider the orders entered in Arthur's case. There are many reasons why we reject Hope's appeal from these orders. We are unclear whether Hope is attempting to appeal the old orders directly, the order denying her motion for relief from those orders, or the order denying her motion to "reconsider" the later order. First, the period for timely filing an appeal is 10 days from the date of the entry of the judgment, order, or decree appealed from. See Fed. R. Bankr.P. 8002(a). As to all of the orders in Arthur's case, Hope's appeals are untimely. The denial of the dismissal of Arthur's case, and the approval of the compromise and settlement and sale of assets, and the dismissal of Arthur's case occurred in 2003, 2004, and 2006 respectively. The orders have long since become final, and Hope may not appeal them years afterwards. Nor has she shown any grounds for revisiting these orders under Rule 60, the only possible rule that could apply. Second, Hope has not demonstrated that she is an aggrieved party who has the right to appeal the orders entered in Arthur's case. The right to appeal is limited to parties who are aggrieved in some appreciable manner by the judgment. A person is aggrieved if the judgment bears directly and injuriously on his or her interests. Because she has not demonstrated how the orders entered in Arthur's case have adversely affected her interests, Hope does not have the right to appeal these orders. Third, Hope lacks standing to appeal the orders in Arthur's case. Federal jurisdiction is limited by Article III, § 2, of the U.S. Constitution to actual cases and controversies. Therefore, the plaintiff must have standing to sue in order for a federal court to have the power to hear and decide the case. See Steger v. Franco, Inc., 228 F.3d 889, 892 (8th Cir. 2000). To show Article III standing, a plaintiff has the burden of proving: (1) that she suffered an injury-in-fact; (2) a causal relationship between the injury and the challenged conduct; and (3) that the injury likely will be redressed by a favorable decision. See Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S. Ct. 2130, 119 L. Ed. 2d 351 (1992). An injury-in-fact is a harm that is "concrete and particularized" and "actual or imminent, not conjectural or hypothetical." Id. Hope has not demonstrated that she has suffered an injury-in-fact with respect to the bankruptcy court's decisions entered in Arthur's case. Thus, she does not have standing to seek, relief from those orders and may not appeal those orders. Fourth, Hope filed the motion to set aside the orders in Arthur's case in the *462 her case when she should have filed the motion in his. Fed. R. Bankr.P. 9004(b) requires motions to include the correct title of the case and bankruptcy docket number. Because Hope's motion contained only the title and docket number for her case, it was not filed in Arthur's case. Therefore, we do not have a proper record the proceedings in Arthur's case. Nor are we certain that the parties in interest in Arthur's case received notice of Hope's motion or this appeal Finally, Hope has failed to show that the bankruptcy court erred with respect to the orders entered in Arthur's case. The bankruptcy court did not abuse its discretion in dismissing Arthur's case for failure to pay filing fees and for failure to file complete schedules. It did not err in ruling that the appointment of the statutory trustee did not divest the debtor of its assets and ability to file bankruptcy. It did not abuse its discretion when it approved the compromise and settlement and sale of assets. For the forgoing reasons, we affirm the bankruptcy court's denial of Hope's motion to reconsider the bankruptcy court's denial of her motion to set aside the dismissal of Arthur's case, the compromise and settlement and order of sale in Arthur's case, and the denial of the dismissal of Arthur's case. The Bankruptcy Court. Did Not Abuse Its Discretion by Denying the Debtor's Motion to Dismiss Her Bankruptcy Case. To the extent that Hope's appeal is from the bankruptcy court's denial of her motion to dismiss her case, we consider the bankruptcy court's order final. See Stuart v. Koch (In re Koch), 109 F.3d 1285, 1288 (8th Cir.1997), Ladika v. Luker (In re Ladika), 1998 WL 665579 (8th Cir. BAP 1998). A debtor has no absolute right to dismissal of a Chapter 7 case. In re Turpen, 244 B.R. 431, 434 (8th Cir. BAP 2000). In order to succeed in a motion to dismiss, the debtor must make a showing of cause and demonstrate why dismissal, is justified. Id. Even if the debtor can show cause, the court should deny the motion if it prejudices creditors. Id. Courts generally consider the following factors when ruling on a debtor's motion to dismiss: (1) whether all of the creditors have consented; (2) whether the debtor is acting in good faith; (3) whether dismissal would result in an prejudicial delay in payment; (4) whether dismissal would result in a reordering of priorities; (5) whether there is another proceeding through which the payment of claims can be handled; and (6) whether an objection to discharge, an objection to exemptions, or a preference claim is pending. Id. Given that Hope has waited until the proverbial eleventh hour to request dismissal of her case that has spanned ten years, we conclude that the bankruptcy court did not abuse its discretion in denying the debtor's motion to dismiss her case. Despite Hope's best efforts to hinder the trustee's collection and distribution of estate assets, the trustee has finally succeeded in gaining approval of his amended final report and proposed distribution. He is now poised to make a distribution to Hope's creditors who have waited a decade to receive payments on their debts. At this juncture, it would not be in the best interests of creditors to dismiss Hope's case. We conclude that the bankruptcy court did not abuse its discretion by denying Hope's motion to dismiss her bankruptcy case. CONCLUSION The orders of the bankruptcy court are affirmed. NOTES [1] The Honorable David P. McDonald, United States Bankruptcy Judge for the Eastern District of Missouri. [2] Hope has also filed for leave to expand the record on appeal. We deny this motion as we find there are no grounds which justify expanding the current record, especially to include events that occurred after the bankruptcy court's decision. We note, however, that nothing in the expanded record would change our decision. [3] The trustee has argued that Hope's appeal is untimely because it was not filed within ten days of the entry of the order denying Hope's motion to reconsider, as required by Fed. R. Bankr.P. 8002(a). However, we conclude that the motion was timely because Monday, October 8, 2007, the tenth day after the entry of the order, was, a legal holiday. Therefore, it was excluded from the calculation of the ten day period under Fed. R. Bankr.P. 9006(a). Hope had until Tuesday, October 9, 2007 to file her appeal.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532618/	414 A.2d 1138 (1980) STATE v. Robert J. HALSTEAD. No. 79-24-C.A. Supreme Court of Rhode Island. May 19, 1980. 1141 Dennis J. Roberts, II, Atty. Gen., Henry Gemma, Jr., Asst. Atty. Gen., for plaintiff. Charles J. Rogers, Jr., Providence, for defendant. OPINION DORIS, Justice. The defendant, Robert J. Halstead, was convicted by a jury in the Superior Court of murder in the first degree and of possessing a firearm. On appeal, he argues that the Superior Court lacked jurisdiction to try him, that the body of the victim should have been suppressed because the police lacked probable cause to arrest him, and that he was denied his right to counsel during a custodial interrogation. We find no substance to these arguments and affirm the judgment of the Superior Court. On March 21, 1976, at 4:30 a.m., two officers of the Rahway, New Jersey police department, Paul Landolt and Edward 1142 Hannan, were on patrol in a high crime area. While they were parked at an intersection, the officers observed a Ryder rental truck with Georgia license plates[1] travel through the intersection some fifteen to twenty miles per hour below the speed limit. As the truck passed in front of the police car, the occupants of the truck stared at the police for approximately five seconds, a length of time both officers thought to be unusually long. Because the officers had not often seen rental trucks in that neighborhood so late at night and thought it unusual that any vehicle would be traveling so slowly on that highway at that time of night, they decided to check the truck. The officers followed the vehicle for a short distance and then ordered the driver to stop the truck at the side of the road approximately one-half mile later. Officer Landolt approached the truck and asked the driver, Joseph Sciotto, for his license and the truck's registration. Sciotto gave Landolt his Rhode Island driver's license and an illegible copy of a Ryder rental contract. Officer Landolt advised Sciotto that he would be arrested unless he had a valid registration for the truck in his possession. When Sciotto could not produce the registration, the police officers ordered both Sciotto and the passenger, Robert J. Halstead, to get out of the truck. Officer Landolt then arrested Sciotto for not having the registration and informed him that the truck would be impounded because it was a hazard to traffic.[2] Upon being told that the truck would be impounded, Sciotto attacked Officer Hannan, striking him in the face with his fist. Halstead then made a movement toward Officer Landolt who, believing Halstead was about to attack him, fired a warning shot, that stopped the altercation. At this time, Halstead, defendant in this appeal, was placed under arrest for assault. In a subsequent search of defendant, the police discovered two spent .45-caliber shell casings in his pocket.[3] The police, in accordance with their inventory procedures and in an effort to find the registration of the truck,[4] forced open the lock on the rear doors. Upon looking inside, they discovered the body of one Edward Palmisciano, within had a number of bullet wounds in it.[5] While in Rahway on March 22, 1976, defendant made a written statement in the presence of three officers of the Providence Police Department. The officers later testified that although they had informed Halstead of his rights several times, he did not request an attorney. When defendant filled out a waiver of rights form prior to making the statement, however, he wrote "Yes" in response to a question asking whether he wanted an attorney. On March 25, 1976, Lieutenant Philip Bathgate of the Providence Police Department and several other officers went to Rahway to return defendant and Sciotto to Rhode Island. During the trip, defendant asked the police whether they had apprehended one Michael Diano. Lieutenant Bathgate informed defendant that they had done so and that they had also recovered the gun that had been used in the murder.[6] The defendant then 1143 asked whether Diano had given a statement to the police and, after learning that Diano had done so, asked to read it. Upon arriving in Providence, the police consulted with their legal advisor who allowed Halstead and Sciotto to read Diano's statement. After reading Diano's statement and being advised of their rights, both Halstead and Sciotto informed the police that they too each wanted to make a statement. Halstead then confessed that he and several others had conspired to rob Edward Palmisciano, that as part of the robbery plan he shot and killed Palmisciano in Providence, and that when they were stopped in New Jersey he and Sciotto had been transporting Palmisciano's body to Pennslyvania in order to conceal the crimes. The defendant subsequently was indicted on four counts: murder in the first degree, possession of a firearm, robbery, and conspiracy to rob. The trial justice denied defendant's motion to suppress the body but granted a judgment of acquittal on the last two counts on the ground that the state had not proved corpus delicti. The justice denied a motion for acquittal on the remaining counts, finding that the state had established corpus delicti with evidence independent of defendant's confession and that the confession, when subsequently admitted, established the jurisdiction of the court. The jury then convicted defendant of both charges, and he now appeals from the judgments of conviction in the Superior Court. The first issue we consider is whether the Superior Court lacked jurisdiction to try defendant because the state allegedly failed to prove that the crimes had occurred within the territorial jurisdiction of the court. The defendant argues that the state offered no evidence other than his confession that the crimes had occurred in Providence and that the confession should not have been admitted because the corpus delicti had not been previously established by independent evidence. Contrary to defendant's argument, we concur with the findings of the trial justice that the state introduced sufficient evidence to establish the corpus delicti of both crimes prior to the admission of the confession and that defendant's confession could be used in conjunction with other evidence to show the jurisdiction of the Superior Court. Before it may obtain a conviction for a criminal offense, the state must prove corpus delicti beyond a reasonable doubt. In re Pereira, 111 R.I. 712, 714, 306 A.2d 821, 823 (1973); State v. Maloney, 111 R.I. 133, 138 n. 1, 300 A.2d 259, 262 n. 1 (1973). The corpus delicti comprises two elements: a penally proscribed act or injury and the unlawfulness of some person in causing the injury. LaFave and Scott, Handbook on Criminal Law § 4 at 16-17 (1972); 1 Wharton; Criminal Law § 28 at 142 (14th ed. 1978). In a homicide prosecution, the state must thus show that a person has died and that the death was caused by the criminal agency of another. The requirement of proving corpus delicti reflects a concern that an accused not be convicted when no crime has in fact been committed. Commonwealth v. Johnson, 235 Pa.Super. 185, 188, 340 A.2d 515, 516 (1975). To this end, a state may not rely solely on a defendant's confession in proving corpus delicti. As we have previously stated, "in [the] absence of some corroborative evidence tending to prove the corpus delicti, a confession or self-incriminating statement will not be admitted into evidence because such an uncorroborated statement is insufficient to prove [the] corpus delicti." State v. Wilbur, 115 R.I. 7, 13, 339 A.2d 730, 734 (1975). Only after the state has introduced some independent evidence of corpus delicti evidence that the crime alleged has been committed by someone may it introduce the confession of an accused. The state need not, however, prove corpus delicti beyond a reasonable doubt prior to introducing an extrajudicial confession. Id. at 14, 339 A.2d at 734; State v. Boswell, 73 R.I. 358, 363, 56 A.2d 196, 198 (1947). The independent evidence 1144 need only be such that if believed, it would indicate that the crime charged had been committed by someone. See State v. Wilbur, 115 R.I. at 14, 339 A.2d at 734. Once a confession is admitted, it may be considered as corroborating evidence to prove corpus delicti beyond a reasonable doubt. State v. Wheeler, 92 R.I. 389, 391, 169 A.2d 7, 9 (1961). In the case before us, the state introduced ample evidence of corpus delicti prior to the admission of defendant's confession. The state first showed that the body of Edward Palmisciano had been found in a truck on a New Jersey highway, that five.45-caliber bullet wounds in the head and chest area of the victim caused his death, that the bullets had been fired from close range through a gun barrel that had been found in Providence, that the truck had been rented by defendant, that defendant had been in the van when the body was found, that defendant had two spent .45-caliber shell casings on his person when arrested and had gunpowder residue on his hands. In our opinion, the condition of the victim's body is consistent only with a homicide, and the discovery of the shell casings and gunpowder residue indicate that defendant discharged a firearm in his possession at some time shortly before his arrest. The state, having established corpus delicti, could properly introduce defendant's confession. The confession could then be used for any legitimate purpose as corroborating evidence showing corpus delicti beyond a reasonable doubt, to identify the accused as the perpetrator,[7] or to prove the jurisdiction of the court. The defendant is incorrect in arguing that the jurisdiction of the Superior Court, like corpus delicti, must be established by independent evidence prior to the admission of his confession. As we have explained, the corpus delicti requirement is intended to prevent a state from convicting persons of nonexistent crimes on the basis of their confessions alone. The rule that a court may hear only those cases arising within its territorial jurisdiction, however, does not concern the question of whether a crime has in fact been committed. This is a limitation on the subject-matter jurisdiction of the Superior Court a constraint imposed on the power of the Superior Court to adjudicate cases. A Superior Court will lack jurisdiction to hear a criminal case if the crime occurred beyond its territorial boundaries. This, obviously, raises a factual question that may be resolved at trial. To the extent that the valid exercise of the Superior Court's subject matter jurisdiction is dependent on a factually determination of where the crime occurred, the trial justice may await the full development of the `state's evidence before ruling on a motion to dismiss. The jurisdictional question need not, as defendant urges, be resolved prior to trial. Such a requirement would constitute an impractical duplication of the trial itself. It is sufficient to prove jurisdiction if the evidence, as viewed by the trial justice, indicates that the crime occurred within the territorial jurisdiction of the court. In this case, the evidence clearly indicated that the crimes had occurred in Providence. The trial justice ruled that defendant's confession alone conclusively established the jurisdiction of the court to try him. We concur with the trial justice. We also note that the evidence introduced prior to the confession, though perhaps inadequate to show guilt beyond a reasonable doubt, would have been sufficient to support the Superior Court's exercise of jurisdiction. The defendant further argues that the body of the victim should have been suppressed as the fruit of an unlawful arrest because the police lacked any reason to suspect defendant and Sciotto of having committed a crime and, therefore, did not have probable cause to stop them. We believe that both the seizure and the search conformed to the Fourth Amendment. In arguing that the body should have been suppressed because the New Jersey 1145 police lacked probable cause to stop the truck, defendant misapprehends the relevant law. When the police stopped the truck, they did not intend to arrest the occupants they intended merely to check them over because the occupants appeared suspicious and the police thought that they might perhaps have been lost.[8] The initial seizure, therefore, was an investigatory stop, which differs from a full arrest both in the duration of the detention and in the quantum of suspicion necessary to conduct it. Probable cause is a prerequisite to a full arrest. Since Terry v. Ohio, 392 U.S. 1, 88 S. Ct. 1868, 20 L. Ed. 2d 889 (1968), however, the Supreme Court has on several occasions sanctioned brief investigatory stops if they are based on a reasonable suspicion that the person detained is involved in criminal activity. In Terry, the Supreme Court first considered the applicability of the Fourth Amendment to brief confrontations between citizens and police officers investigating suspicious circumstances. Id. at 4, 88 S.Ct. at 1871, 20 L.Ed.2d at 896. The issue framed by the Terry Court was whether it was always unreasonable for a 1146 police officer to seize a person and to search him for weapons absent probable cause to arrest.[9]Id. at 15-16, 88 S.Ct. at 1877, 20 L.Ed.2d at 902. The Court held that a brief detention of this sort a "stop and frisk" was constitutional only if it conformed to the "Fourth Amendment's general proscription against unreasonable searches and seizures." Id. at 20, 88 S.Ct. at 1879, 20 L.Ed.2d at 905. The Court stated that the reasonableness of a particular stop and frisk must be determined by balancing the governmental interests in seizing or searching a person against the encroachment on individual rights that the stop and frisk entails. After balancing the state's interest in crime prevention and detection, as well as in the safety of the police officer, against the right of a citizen to be free from unwarranted police interference with his liberty, the Terry Court held that a stop and frisk was permissible only if the police officer had a reasonable belief that the person was engaged in criminal activity and was armed and dangerous. Id. at 30, 88 S.Ct. at 1884-85, 20 L.Ed.2d at 911.[10] The Court cautioned that the police conduct must conform to an objective standard and that police must be able to advance "specific and articulable facts which, taken together with rational inferences from those facts, reasonably warrant [the stop and frisk]." Id. at 21, 88 S.Ct. at 1880, 20 L.Ed.2d at 906. The actual holding in Terry was rather narrow, requiring both a reasonable suspicion of criminal activity as well as a reasonable belief that a suspect was armed and dangerous.[11] The Court, in subsequent opinions, however, has gradually omitted the requirement that a police officer reasonable believe prior to the stop that a suspect is armed and dangerous. Under the Court's evolving stop and frisk analysis, a policeman may conduct an investigatory stop solely on the basis of a reasonable suspicion of criminal activity. In Adams v. Williams, 407 U.S. 143, 92 S. Ct. 1921, 32 L. Ed. 2d 612 (1972), although the police officer had a reasonable belief that the suspect was armed, the Court stated: "A brief stop of a suspicious individual, in order to determine his identity or to maintain the status quo momentarily while obtaining more information, may be most reasonable in light of the facts known to the officer at the time." Id. at 146, 92 S.Ct. at 1923, 32 L.Ed.2d at 617. The Court has continued to test the reasonableness of brief detentions by balancing the governmental interests against the right of the individual to be free from arbitrary intrusions by the police. The Court has also adhered to the requirement that a police officer's reasonable suspicion of criminal activity arise from specific and articulable facts and the reasonable inferences that can be drawn from them. Brown v. Texas, 443 U.S. 47, 52, 99 S. Ct. 2637, 2641, 61 L. Ed. 2d 357 (1979); Delaware v. Prouse, 440 U.S. 648, 654, 99 S. Ct. 1391, 1396, 59 L. Ed. 2d 660, 667-68 (1979); United States v. Brignoni-Ponce, 422 U.S. 873, 880, 95 S. Ct. 2574, 2580, 45 L. Ed. 2d 607, 616 (1975) (quoting Terry v. Ohio, 392 U.S. 1, 88 S. Ct. 1868, 20 L. Ed. 2d 889 (1968)). 1147 In Brignoni, the Court considered whether officers of the Border Patrol near the Mexican border could stop a car and question the occupants simply because they appeared to be of Mexican ancestry. United States v. Brignoni-Ponce, 422 U.S. at 876, 95 S.Ct. at 2578, 45 L.Ed.2d at 614. Although finding the stop unreasonable, the Court declared that an investigatory stop could be conducted on the basis of reasonable suspicion alone. The Court stated that Terry and Adams together established "that in appropriate circumstances the Fourth Amendment allows a properly limited `search' or `seizure' on facts that do not constitute probable cause to arrest or to search." Id. at 881, 95 S.Ct. at 2580, 45 L.Ed.2d at 616. In Brown, the Supreme Court considered whether police could detain a person without having a suspicion of criminal conduct or a belief that the suspect was armed. Because the police could articulate no facts to justify their action, the Brown Court held that the detention violated the suspect's Fourth Amendment rights. The Court stated, however, that a brief detention for questioning without probable cause to arrest would be permissible as long as the police had "a reasonable suspicion, based on objective facts, that the individual is involved in criminal activity." Brown v. Texas, 443 U.S. at 47, 99 S.Ct. at 2641, 61 L.Ed.2d at 362. In the absence of an objectively supportable reasonable suspicion, therefore, police may not stop a person on a mere hunch that the detention will produce some evidence of criminal activity. This, essentially, was the reasoning employed by the Supreme Court in Delaware v. Prouse, 440 U.S. 648, 99 S. Ct. 1391, 59 L. Ed. 2d 660 (1979), a case that is somewhat similar to the one now before us. In Prouse, a police officer, while making a random vehicle stop to check the driver's license and registration, discovered marijuana in the car and arrested the owner, who was a passenger in the car. The arresting officer testified that prior to the stop "he had observed neither traffic or equipment violations nor any suspicious activity, and that he made the stop only in order to check the driver's license and registration."[12] The Supreme Court found that the reasons advanced by the state did not warrant the intrusion on constitutional rights that the random stop entailed. Id. at 659, 99 S.Ct. at 1399, 59 L.Ed.2d at 671. Accordingly, the Prouse Court held that a random license and registration check would be unreasonable "except in those situations in which there is at least articulable and reasonable suspicion that a motorist is unlicensed or that an automobile is not registered, or that either the vehicle or an occupant is otherwise subject to seizure for violation of law * ." Id. at 663, 99 S.Ct. at 1401, 59 L.Ed.2d at 673. Neither Prouse nor any other opinions of the Supreme Court constrain us to hold, as defendant seems to argue, that a seizure based on less than probable cause is necessarily unconstitutional. It is clear from these opinions that a police officer may conduct an investigatory stop, provided he has a reasonable suspicion based on specific and articulable facts that the person detained is engaged in criminal activity. This court has previously held that such a stop must be available to police as an intermediate response when an individual's conduct, though suspicious, does not give police probable cause to arrest. State v. Ramsdell, 109 R.I. 320, 322-23, 285 A.2d 399, 402 (1971). Our present inquiry, therefore, must initially focus on whether the New Jersey police officers had a reasonable suspicion to believe that defendant and Sciotto were engaged in criminal activity at the time the truck was stopped. Viewing the totality of the circumstances of which the officers were apprised at the time of the stop, we believe that they did. We bear in mind that we must be realistic in considering whether the police were justified in their suspicion of defendant. 1148 A reasonable suspicion, like probable cause, is not an abstract principle to be considered in a vacuum; it involves a pragmatic analysis from the vantage point of a prudent, reasonable police officer in light of the facts known to him at the time of the detention. See United States v. Hall, 525 F.2d 857, 859 (D.C. Cir.1976); United States v. Davis, 458 F.2d 819, 821 (D.C. Cir.1972) (per curiam). Any number of factors may contribute to a finding of reasonable suspicion of criminal activity. Additionally, factors that alone do not create a reasonable suspicion may, when combined, warrant a reasonable suspicion of criminal activity. See Ringel, Searches & Seizures, Arrests and Confessions § 13.4 at 13-20 (1979). Among the factors that may contribute to a reasonable suspicion of criminal activity are: the location in which the conduct occurred, United States v. Magda, 547 F.2d 756, 768 (2d Cir.1976) (reputation of area an articulable fact on which police may rely), cert. denied, 434 U.S. 878, 98 S. Ct. 230, 54 L. Ed. 2d 157 (1977); Flores v. Superior Court, 17 Cal. App. 3d 219, 223, 94 Cal. Rptr. 496, 498 (1971) (act of suspect to be examined in environment in which it took place); the time at which the incident occurred, United States v. Constantine, 567 F.2d 266, 267 (4th Cir.1977) (per curiam) (officer justified in stopping unfamiliar person in high-crime area late at night), cert. denied, 435 U.S. 926, 98 S. Ct. 1492, 55 L. Ed. 2d 520 (1978); People v. Damaska, 404 Mich. 391, 394, 273 N.W.2d 58, 59 (1978) (per curiam) (lateness of hour one factor supporting stop of person driving from business parking lot); the suspicious conduct or unusual appearance of the suspect, State v. Woods, 121 Ariz. 187, 189, 589 P.2d 430, 432 (1979) (defendant ran from store while holding something underneath his jacket); United States v. Purry, 545 F.2d 217, 220 (D.C. Cir.1976) (excited appearance of defendant one factor giving rise to reasonable suspicion); and the personal knowledge and experience of the police officer, United States v. Magda, 547 F.2d at 758-59 (conduct of suspect as well as locality and experience of officer created reasonable suspicion); see Terry v. Ohio, 392 U.S. at 27, 88 S.Ct. at 1883, 20 L.Ed.2d at 909 (officer entitled to view conduct in light of his experience); United States v. Simpson, 400 F. Supp. 1396, 1399 (S.D.N.Y. 1975) (behavior of defendants viewed by experienced officers warranted conclusion that crime was imminent, aff'd, 542 F.2d 1166 (2d Cir.1976); Ringel, supra, § 13.4(a) at 13-21 to 13-23 (reasonable suspicion may derive from specific facts viewed in conjunction with experience of police). The circumstances of this case differ from those of Delaware v. Prouse, 440 U.S. 648, 99 S. Ct. 1391, 59 L. Ed. 2d 660 (1979). In Prouse, the police officer decided to stop the car because it was in his area and he was not answering any complaints at the time. Id. at 650-51, 99 S.Ct. at 1394, 59 L.Ed.2d at 665. The Court condemned this sort of stop because it was not predicated on a factual basis, which is necessary to prevent the arbitrary exercise of the officer's discretion. Id. at 661, 99 S.Ct. at 1400, 59 L.Ed.2d at 672. In the case before us, however, there were several specific and articulable facts that prompted the officers to stop the truck. The police observed the truck at approximately 4:30 a.m. in a neighborhood known to them as a high-crime area. The speed at which the truck was traveling some fifteen to twenty miles per hour less than the speed limit differed substantially from the normal traffic speed for that hour. The police also knew that it was unusual to see a rental vehicle in that neighborhood so late at night. Additionally, as the truck passed the police, both occupants simultaneously "gawked" at the police for what seemed to the police to be an unusually long time. These facts, when considered from the vantage point of an experienced police officer whose duty it is to be attuned to unusual circumstances, could very well create a reasonable suspicion that the occupants of the truck were engaged in some sort of criminal activity. The personal knowledge and experience of the officers are important factors that may allow an officer reasonable to infer from observation of otherwise innocuous conduct that criminal 1149 activity is imminent or is taking place. In light of the officers' knowledge of the character of the neighborhood and of the usual traffic patterns for that time of night, as well as the unusual behavior of the occupants, we believe that their suspicions were reasonable. Furthermore, the officers intended only to ask for the driver's license and for the registration of the truck. In doing so they confined their intrusion on the liberty of the occupants to that minimally necessary to determine the driver's identity and the ownership of the truck. See Adams v. Williams, 407 U.S. at 146, 92 S.Ct. at 1923, 32 L.Ed.2d at 617. Given the reasonable suspicion that the officers possessed, in this instance the state's interest in crime detection outweighed the individual's right to be free from the intrusions on his liberty that accompanied the investigatory stop. The officers were therefore entitled to stop the truck in order to ascertain the identity of the occupants and to obtain the registration of the truck. Adams v. Williams, 407 U.S. at 146, 92 S.Ct. at 1923, 32 L.Ed.2d at 617. After the police discovered that Sciotto could not produce a valid registration for the truck, they were entitled to arrest him for that offense and to order both occupants from the truck. N.J. Stat. Ann. §§ 39:3-29, 39:10-6 (West 1973); see Pennsylvania v. Mimms, 434 U.S. 106, 111, 98 S. Ct. 330, 333, 54 L. Ed. 2d 331, 337 (1977) (per curiam) (police making a valid vehicle stop may order occupants out of vehicle). The defendant's threatening movement toward Officer Landolt during the subsequent scuffle between Sciotto and Officer Hannan provided probable cause to arrest him. Because the truck was parked in a travel lane of the highway, it posed a hazard to other traffic and the officers were obliged to have it removed and impounded.[13] As part of the impounding procedure, the Rahway police routinely inventory the contents of a vehicle prior to allowing it to be towed away. This procedure is entirely consistent with the Fourth Amendment. South Dakota v. Opperman, 428 U.S. 364, 376, 96 S. Ct. 3092, 3100, 49 L. Ed. 2d 1000, 1009 (1976). Accordingly, the police officers did not violate defendant's Fourth Amendment rights when they opened the rear of the truck while looking for evidence of ownership and attempting to inventory the personal property inside the truck.[14] The defendant's final argument, though somewhat vague, centers on whether, by filling out the waiver-of-rights form in New Jersey, defendant intended to request an attorney. Prior to making his statement in New Jersey, defendant told the police that he did not want an attorney. A police officer then produced a waiver-of-rights form and read the questions on the form[15] to defendant, who repeated his desire 1150 not to have an attorney. The officer then gave defendant the form to read and to sign. It was at this time that defendant wrote "Yes" following the question that asked whether he wanted an attorney. The defendant also wrote "Yes" after each of the other questions on the form, including the one asking whether he was willing to answer any police inquiries. Immediately after signing the waiver form, defendant informed the police that he wanted to make a statement. At no time, either when he signed the form or wrote the statement, did defendant make any verbal request for an attorney. Considering defendant's response on the waiver form in light of these circumstances, we find that the possibility could exist that defendant never intended to request counsel. Because we are dealing with a constitutional right, however, we assume for the purpose of argument that defendant intended to request counsel by writing "Yes" on the waiver form. Even assuming this, we must now consider whether defendant later waived his rights. Although a criminal suspect may, during a custodial interrogation, terminate the questioning by requesting an attorney, Miranda v. Arizona, 384 U.S. 436, 474, 86 S. Ct. 1602, 1628, 16 L. Ed. 2d 694, 723 (1966), the request does not preclude the suspect from subsequently waiving his right to counsel. Brewer v. Williams, 430 U.S. 387, 405-06, 97 S. Ct. 1232, 1243, 51 L. Ed. 2d 424, 441 (1977); State v. Cline, R.I., 405 A.2d 1192, 1199-1200 (1979). A waiver of a constitutional right requires that a suspect intentionally relinquish or abandon a known right. The state has the burden of proving that the person has knowingly, voluntarily, and intelligently waived the right; and a court will not presume that a waiver has occurred. Johnson v. Zerbst, 304 U.S. 458, 464, 58 S. Ct. 1019, 1023, 82 L. Ed. 1461, 1466 (1938); State v. Innis, R.I., 391 A.2d 1158, 1163 (1978). A waiver of constitutional rights, however, need not be expressed verbally. United States v. Montos, 421 F.2d 215, 224 (5th Cir.), cert. denied, 397 U.S. 1022, 90 S. Ct. 1262, 25 L. Ed. 2d 532 (1970); People v. Brooks, 51 Ill. 2d 156, 164, 281 N.E.2d 326, 332 (1972). If a person has been apprised of his constitutional rights and understands them, he can waive those rights by his conduct. A waiver may be inferred if a suspect acts in a manner that is inconsistent with the exercise of his rights, such as by volunteering information to the authorities without the benefit of counsel when he is aware that he need not do so. Griffin v. Superior Court, 26 Cal. App. 3d 672, 697, 103 Cal. Rptr. 379, 395 (1972); People v. Brooks, 51 Ill.2d at 164, 281 N.E.2d at 332; Commonwealth v. Johnson, 3 Mass. App. 226, 230, 326 N.E.2d 355, 358 (1975). Even after a suspect has requested an attorney, he may still waive his constitutional rights if he knowingly, voluntarily, and intelligently chooses to speak to the police. State v. Graham, 59 N.J. 366, 376, 283 A.2d 321, 327 (1971); see State v. Cobbs, 164 Conn. 402, 421-22, 324 A.2d 234, 245, cert. denied, 414 U.S. 861, 94 S. Ct. 77, 38 L. Ed. 2d 112 (1973). In the case before us, defendant knew and understood his Miranda rights. Despite being informed of his rights on several occasions, defendant repeatedly stated that he did not want an attorney. It was only by his response on the waiver form that defendant expressed any desire to consult with an attorney. Immediately after defendant signed the form, however, 1151 he requested a piece of paper, saying that he wanted to write out a statement for the police. The police asked no questions of defendant between the time he filled out the waiver form and the time he made the statement. We are not here confronted with the question of continued police interrogation of the sort condemned in either Miranda v. Arizona, 384 U.S. at 474, 86 S.Ct. at 1628, 16 L.Ed.2d at 723, or Brewer v. Williams, 430 U.S. at 404-05, 97 S.Ct. at 1242, 51 L.Ed.2d at 439-40. What we are dealing with is a statement voluntarily made by defendant without any prompting by the police. The state introduced considerable evidence that defendant knew the extent of his constitutional rights prior to making the statement. In light of this evidence, we conclude, as the trial justice implicitly did by admitting the statement, that defendant knowingly, voluntarily, and intelligently waived his right to remain silent and his right to counsel by making the statement to the police. As a reviewing court, we owe great deference to the trial justice's findings of fact. State v. Cline, R.I., 405 A.2d 1192, 1196 (1979). The implicit finding of waiver now before us, like the factual findings on a motion to suppress, will not be reversed unless it is clearly erroneous. See State v. Cline, R.I., 405 A.2d at 1196. Considering the circumstances in which the statement was given, the trial justice could find that the defendant had waived his rights by making the statement. After reviewing the evidence, we cannot say that the trial justice was clearly erroneous, and thus we affirm his decision to admit the statement. The defendant's appeal is denied and dismissed, the judgments of conviction are affirmed, and the case is remanded to the Superior Court. NOTES [1] The truck had been rented by defendant in Rhode Island on the previous day. [2] The truck had stopped in a travel lane of the highway because there was no breakdown lane in that area. Officer Landolt testified that the truck could not be driven off the road because the curb was too high. [3] A test administered in New Jersey revealed that defendant also had gunpowder residue on both his hands. [4] Officer Landolt testified that police routinely inventory the contents of vehicles before impounding them and that rental trucks often contain registration information in pockets riveted to the inside wall. [5] A forensic pathologist who examined the body testified that he removed five .45-caliber bullets from the chest and neck area. He further testified that Palmisciano had been shot from close range and that massive bleeding resulting from the gunshot wounds had caused his death. [6] Michael Diano was one of the persons allegedly involved with defendant in the murder of Edward Palmisciano. After he was apprehended by the Providence police, Diano gave a statement to the police in which he admitted his complicity in the crime and identified Robert Halstead as the person who had shot Palmisciano. Diano also directed the police to a location on the Woonasquatucket River where divers recovered parts of a.45-caliber automatic pistol. A ballistics expert later testified that the gun barrel found in the river was the one through which the bullets found in the body of Palmisciano had been fired. [7] The use of the confession as evidence of defendant's guilt, of course, assumes that defendant's constitutional rights have not been violated and that the rules of evidence allow it. [8] Officer Landolt testified as follows: "Q. Did you see something at that time? "A. Yes. "Q. What did you see? "A. A yellow Ryder Rental vehicle going southbound on U.S. 1. "Q. Now, as you were sitting in your car, which way would this vehicle be going? "A. As I was sitting in the car, it was traveling from my right to my left. "Q. Do you know, as a police officer, what the speed limit on U.S. 1 is or was in March of 1976? "A. Yes. "Q. What was it? "A. Forty-five miles per hour. "Q. Now, this vehicle that you saw, this Ryder vehicle that you say [sic] go from right to left, was there anything unusual about that vehicle as you saw it at that time? "A. Yes, there was. "Q. What was that? "A. As the vehicle was going very slow, and both occupants of the vehicle seemed to gaze in the direction, seemed to look right in my direction from the cab of the rental truck. "Q. Was this unusual sir? "A. Yes. "Q. Why was it unusual? " * * "A. Well, most of the trucks that I have observed going down Route 1 usually are doing the speed limit. This vehicle struck me, in my mind, as possibly being lost, because of its speed, or struck me as suspicious. Both occupants of the vehicle looking my way, plus the fact that the vehicle was traveling in what looked to me to be a lot slower than the speed limit. "Q. How fast did it appear to you that the vehicle was traveling? "A. Approximately twenty-five, thirty miles per hour. "Q. As a result of that vehicle going past you at that rate of speed, and both the driver and occupant looking at you, what did you do? "A. I conferred with my partner at that point, and we both agreed that we would check out this vehicle." Officer Hannan testified as follows: "Q. And were you in a police vehicle at that time? "A. Yes. "Q. Who was the driver of that vehicle? "A. Patrolman Paul Landolt. "Q. And where were you? "A. I was in the front right hand seat, sir. "Q. And did you have occassion [sic] to see a yellow truck pass in front of you? "A. Yes, I did. "Q. And was anything about that truck unusual? "A. Yes, there were. "Q. Tell the court and the jury what was unusual about that truck. "A. Yes, what appeared unusual to us, or to myself, was the speed the truck was traveling on that highway that evening, the hour, and as the two as the truck passed in front of us, the two occupants sitting in the front seat glanced in our direction a long glance, towards our radio car. "Q. Now, you say something was unusual concerning the speed that the truck was traveling at. What speed was it traveling at? "A. I would estimate about twenty-five miles per hour, sir. "Q. And why is that unusual? "A. Well, the speed limit on the highway is 45 and we have a problem keeping the speed at that. Usually vehicles go much faster. "Q. As a result of what you testified to, did you and your partner decide to do something? "A. Yes, we did. "Q. And what did you do? "A. Well, I as the truck passed in front of us, you might say simultaneously I looked at Patrolman Landolt, he looked at me, and we stated that perhaps we were going to stop the vehicle." [9] The Court rejected the contention that the Fourth Amendment was inapplicable because a "stop and frisk" was something less than a "technical arrest" or a "full-blown search," and stated that even a brief detention and limited search constituted a "serious intrusion upon the sanctity of the person" and implicated the Fourth Amendment rights of the suspect. Terry v. Ohio, 392 U.S. 1, 16-17, 88 S. Ct. 1868, 1877, 20 L. Ed. 2d 889, 903 (1968). [10] The safety of the police officer was an important consideration in upholding the stop and frisk. The Terry Court was especially concerned that an officer be able "to assure himself that the person with whom he is dealing is not armed with a weapon that could unexpectedly and fatally be used against him." Terry v. Ohio, 392 U.S. at 23, 88 S.Ct. at 1881, 20 L.Ed.2d at 907. For this reason, a cursory search of a suspect for weapons was permissible. Because the Fourth Amendment was implicated, however, the search had to be confined to a pat-down of a suspect's outer clothing for objects that could be weapons. Id. at 30, 88 S.Ct. at 1884-85, 20 L.Ed.2d at 911. [11] The Court reserved the question of whether a police officer could conduct an investigative seizure with less than probable cause for the "purposes of `detention' and/or interrogation." Terry v. Ohio, 392 U.S. at 19 n. 16, 88 S.Ct. at 1879 n. 16, 20 L.Ed.2d at 905 n. 16. [12] The officer testified: "`I saw the car in the area and wasn't answering any complaints, so I decided to pull them off.'" Delaware v. Prouse, 440 U.S. 648, 650-51, 99 S. Ct. 1391, 1394, 59 L. Ed. 2d 660, 665 (1979). [13] The officers testified that they would have impounded the truck regardless of the scuffle because neither occupant had produced a registration certificate. [14] The New Jersey Supreme Court has stated that police officers may search a car for things related to the arrest; if an operator cannot show proof of registration, the police may look for evidence of ownership. State v. Boykins, 50 N.J. 73, 77, 232 A.2d 141, 143 (1967). The trial justice also found that the conduct of Sciotto and Halstead after they were informed that the truck would be impounded created an "irresistible suspicion" that the truck contained evidence of criminal activity and gave the police probable cause to search the truck. Because we find that the police could enter the truck to inventory its contents, we need not consider whether the conduct of the occupants created probable cause to search the truck. [15] All other questions on the form would have required an affirmative answer to waive one's constitutional rights. The questions were as follows: 1. "I wanted [sic] to advise you that you have a right to remain silent, and that you do not have to make an oral or written statement to me concerning this matter. Do you understand that? 2. "I must advise that anything you do that you do [sic] say to me can and will be used against you at anytime in the future, and this includes a court of law. Do you understand that? 3. "I must advise you that you have the right to have an attorney present, if you so desire during this questioning. Do you understand that? 4. "I must advise you that if you cannot afford an attorney and desire to have one present during this questioning, then I will arrange for the court to appoint one for you, and the questioning will not take place until you have consulted with such an attorney. Do you understand that? 5. "I must advise you that you have the right to speak with your attorney even before the questioning commences. Do you understand that? 6. "Now after explaining all those Constitutional rights to you, do you want an attorney to be present when I commence questioning you? 7. "I must also tell you that if at any time you do not wish to answer any questions, then you may tell me this, and I will stop the interview immediately. Do you understand that? 8. "Are you willing to answer the questions that I ask you truthfully and to the best of your ability, after having been told of your Constitutional rights in this matter? 9. "Are you willing to have the questions and answers reduced to typewritten form?"	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532729/	368 S.W.2d 613 (1963) Ronald DUJAY, Appellant, v. The STATE of Texas, Appellee. No. 35653. Court of Criminal Appeals of Texas. April 17, 1963. Rehearing Denied May 29, 1963. Second Rehearing Denied June 26, 1963. Clyde W. Woody, Houston, for appellant. Frank Briscoe, Dist. Atty., Carl E. F. Dally, and Erwin Ernst, Asst. Dist. Attys., Houston, and Leon B. Douglas, State's Atty., Austin, for the State. DICE, Commissioner. The conviction is under Art. 725c, V.A. P.C., for unlawfully being under the influence of a narcotic drug; the punishment, three years in the penitentiary. In view of our disposition of the case, a recitation of the facts is unnecessary other than to observe that appellant was arrested in the city of Houston under a warrant issued 614 out of Justice Court, Precinct No. 1, of Harris County, upon a complaint filed in said court, charging him with violation of the narcotic laws. Following his arrest, appellant was taken to the police department, where he was interviewed and observed by state narcotics officer, R. E. Scholl. Officer Scholl, called as a witness by the state, described certain needle marks on appellant's arm, his physical appearance, and demeanor, and, being qualified as an expert, expressed his opinion that at such time he was under the influence of a narcotic drug. Appellant timely objected to the testimony on the ground that a legal arrest had not been shown. Upon the state's assurance that such arrest would be shown, his objections were by the court overruled. At the conclusion of the testimony when it was shown that the warrant issued for appellant's arrest was invalidnot having been signed by the magistrate issuing the same, as required by Art. 219, V.A.C.C.P., appellant moved for a mistrial. The motion was refused but at the same time the court held the arrest of appellant unauthorized and orally instructed the jury not to consider Officer Scholl's testimony insofar as it related to a physical examination of appellant. Later in his charge, the court by an instruction withdrew from the jury's consideration any testimony in the case relative to a physical examination or observation of appellant while in custody, except the testimony of Chemist Crawford, who had taken a specimen of urine from him. Under the record, the court should have granted a mistrial. As heretofore shown, Officer Scholl's testimony was admitted by the court upon the assurance of state's counsel that a legal arrest would be shown. This the state failed to show. Officer Scholl's testimony consists of 93 pages of the 156-page statement of facts. In his testimony the officer presented to the jury a description of appellant's appearance while in unlawful custody and also expressed his opinion, based upon his observation of appellant, that at such time he was under the influence of a narcotic drug. We are not here dealing with a court's instruction to disregard one improper question and answer of a witness, but an instruction to disregard a large portion of the testimony of a witness which was prejudicial to the appellant. Appellant was assessed the maximum punishment under Art. 725c, V.A.P.C. The officer's testimony was of such nature that the error in its admission could not be cured by the court's instruction. Music v. State, 135 Tex. Crim. 522, 121 S.W.2d 606; Barker v. State, 164 Tex. Crim. 318, 299 S.W.2d 142; Hicks v. State, Tex.Cr.App., 355 S.W.2d 189. Upon another trial, under similar facts, the three photographs of appellant showing needle marks on his arm, which were introduced in evidence by the state, should not be admitted, as it appears that they were made of him while he was under unlawful arrest and detention. Art. 727a, V.A.C.C.P. The judgment is reversed and the cause is remanded. Opinion approved by the Court. ON STATE'S MOTION FOR REHEARING BELCHER, Commissioner. The state contends that, even though the arrest was illegal and the jury instructed not to consider certain evidence, as shown in our original opinion, the portion of the confession introduced and the results of the urine test together with the other evidence remaining before the jury are sufficient to support the conviction, therefore, no reversible error is shown. 615 A reconsideration of the testimony shows that it describes in detail the appearance and condition of the body of the appellant at the police station. Although such testimony was withdrawn at the conclusion of the trial, the pictures showing the appearance and condition of the body were not withdrawn and remained before the jury as evidence which could have been taken to the jury room. Further there was extensive testimony showing the crude, sordid and desperate methods used in preparing and administering narcotics, along with its effects and results, which remained in evidence before the jury. From the nature of all the evidence introduced, it cannot be reasonably said that the jury could wholly disregard and keep the testimony which was withdrawn out of mind while considering that remaining in evidence. The error in admitting the testimony withdrawn could not be cured by the court's instruction. The state and the appellant insist that this Court should here pass on the admissibility of the confession and the urine test. The officers who executed the arrest warrant did not testify and no one present when it was executed was called as a witness. There is no evidence of the exact time or place the appellant was arrested. Further, it is pointed out that the appellant did not testify. It is unknown what the testimony of the arresting officers or that of the appellant would be if they testified in the event of another trial. Therefore it is evident from the record that it would be unwise to here comment on the admissibility of this evidence. This cause was properly considered and disposed of originally. The motion for rehearing is overruled. Opinion approved by the Court.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532733/	368 S.W.2d 210 (1963) Lewis Elmer SPRADLIN, Appellant, v. The STATE of Texas, Appellee. No. 35587. Court of Criminal Appeals of Texas. May 15, 1963. Rehearing Denied June 19, 1963. M. F. Cate, Morris Brin, Terrell, for appellant. Leon B. Douglas, State's Atty., Austin, for the State. MORRISON, Judge. The offense is driving while intoxicated; the punishment, 3 days in jail and a fine of $250.00. The record having been perfected, our prior opinion dismissing the appeal is withdrawn, and we will now consider the case on the merits. Highway Patrolman Peace testified that at approximately 7:00 P.M. on the night in question he met an automobile "driving straddle the center stripe," turned around and gave chase; that as he pursued the automobile it drove completely to the left of the center stripe; that he turned on his siren and red light and was able to bring it to a halt within one half a mile. He stated that appellant, who was the driver, refused to get out, and when he finally succeeded in extricating him appellant had the odor of intoxicants on his breath, was unsteady on his feet, tried to urinate on the pavement in full view of the passing traffic, and expressed the opinion that appellant was intoxicated. He stated that the next day appellant did not recognize him as being the officer who had arrested him. Jailer Calhoun testified that when appellant, whom he had known for more than 20 years, arrived with Officer Peace he observed that he was unsteady on his feet, smelled of alcohol, resisted being placed in jail, expressed the opinion that he was intoxicated. Appellant did not testify in his own behalf but called his son, who saw him last at 4:30 P.M. on the day in question and testified that he had not been drinking at *211 that time. He also called J. R. Bumpass, who testified that he saw appellant at 5:15 P.M. on the day in question and he showed no indication of intoxication. Grady Tait testified that he sold appellant gasoline in the afternoon "somewhere between six and seven o'clock," and stated, "I don't know whether he had a drink or hadn't had, whether he had a drink or not, but I do know that he was not under the influence of liquor." The State called Superintendent Hedrick of the County Farm in rebuttal, and he testified that when appellant was brought to jail he smelled alcohol on his breath, that his assistance was required to place appellant in jail, and expressed the opinion that he was intoxicated. The jury resolved what conflict there was in the evidence against appellant, and we find it sufficient to support the conviction. We find no merit in appellant's motion to quash the indictment because the same does not name the highway on which he is alleged to have driven. We find one formal bill of exception to the following argument of the prosecutor, "When we have a man that is drunk coming through this County he needs to be handled. He needs to be held in offense and tell others that they cannot get up there in a beer joint and come through this County drunk." The objection was made that there was no testimony as to a beer joint, which was overruled. The objection was repeated to any statement that appellant had been to a "beer joint," and the prosecutor replied that he did not say that appellant had been to one, and continued, "I said you can't let anybody get up in a beer joint." We have concluded that the prosecutor violated no mandatory statute and injected no new and harmful fact into the case and, under the holding in Payne v. State, 164 Tex. Crim. 306, 298 S.W.2d 151, and the cases there cited, this was a plea for law enforcement and no reversible error is reflected thereby. Any question about what the witness Calhoun had heard of appellant's drinking was clearly invited by appellant's counsel's question, "You never heard of him taking a drink before, have you?" In connection with appellant's other complaints, we observe that where argument is not objected to, reversible error is not preserved. 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/1532716/	272 Pa. Super. 135 (1979) 414 A.2d 707 COMMONWEALTH of Pennsylvania v. Thomas BRANT, Appellant. Superior Court of Pennsylvania. Submitted September 15, 1978. Filed November 30, 1979. Petition for Allowance of Appeal Denied June 18, 1980. 137 John W. Packel, Assistant Public Defender, Chief, Appeals Division, Philadelphia, for appellant. Eric B. Henson, Assistant District Attorney, Philadelphia, submitted a brief on behalf of the Commonwealth, appellee. Before PRICE, HESTER and HOFFMAN, JJ. 138 HOFFMAN, Judge: Appellant contends, inter alia,[1] that the lower court erred in granting the Commonwealth's two petitions for extension of time pursuant to Pa.R.Crim.P. 1100(c). We agree and, accordingly, vacate the judgment of sentence and discharge appellant. The complaint in this case was filed on April 19, 1977. The trial did not begin until December 9, 1977, 233 days after the complaint was filed. Trial should have begun by October 17, 1977, unless the period of delay beyond 180 days was either excluded under Rule 1100(d) or properly extended by court order under Rule 1100(c). The record indicates that this case was listed for trial on June 13, 1977. On that date, the lower court granted a continuance until July 5, 1977, because the defense was not ready. On July 5, 1977, the court granted a continuance until August 9, 1977, because a Commonwealth witness was on vacation. On August 9, 1977, the Commonwealth and the defense jointly requested a continuance because witnesses were not present. The case was continued until September 26, 1977. There is no indication in the record why trial did not begin on September 26. On October 11, 1977, the Commonwealth was granted a continuance until October 26, 1977, because the arresting officer was out of the country. On October 17, 1977, the Commonwealth filed a timely petition for an extension of time under Rule 1100(c). This petition was a form petition, which merely contained the unsupported assertion that the Commonwealth was unable to try this case within the 180 day period "[d]espite due diligence." On November 3, 1977, appellant filed an answer to the Commonwealth's petition and a motion to dismiss. On November 4, 1977, the lower court held a "hearing." The full discussion at that proceeding concerning the petitions was as follows: THE COURT: 4-19-77, initiation date; 10-17-77, normal run date. Commonwealth filed their petition on 10-17, therefore timely filed. 139 6-13 to 7-5, defense request, not ready, twenty-two days. 8-9 to 9-26, a period of forty-eight days, joint application, a period of twenty-four days. Twenty-two and twenty-four are forty-six; thirty day credit brings you down to sixteen. The petition is timely filed, therefore, I'll make a finding of due diligence. The lower court granted the Commonwealth's petition and extended the time for trial until November 15, 1977. On November 15, 1977, the Commonwealth filed a second petition for extension of time. On November 16, 1977, appellant filed an answer. See note 2 infra. Following a jury trial, appellant was convicted of criminal trespass and possession of instruments of crime. The lower court denied appellant's post-trial motions and imposed sentence. This appeal followed. Rule 1100(d)(2) provides: In determining the period for commencement of trial, there shall be excluded therefrom such period of delay at any stage of the proceedings as results from: ..... (2) any continuance in excess of thirty (30) days granted at the request of the defendant or his attorney, provided that only the period beyond the thirtieth (30th) day shall be so excluded. Where more than one continuance is granted to the defense, 30 days must be subtracted from the length of each continuance in determining whether any period of time is excludable under Rule 1100(d)(2). Commonwealth v. Shields, 247 Pa.Super. 74, 371 A.2d 1333 (1977). See also Commonwealth v. Thomas, 251 Pa.Super. 386, 380 A.2d 833 (1977). Because the continuance obtained by the defense on June 13, 1977, was for less than 30 days, no portion of the continuance can be excluded. The continuance obtained on August 9, 1977, exceeded 30 days, and the period in excess of 30 days clearly could be excluded if the continuance were 140 granted to appellant alone. However, Rule 1100(d)(2) excludes "such period of delay . . . as results from . . any continuance in excess of thirty (30) days granted at the request of the defendant or his attorney . . . ." (emphasis added). The August 9, 1977, continuance apparently was granted because witnesses for appellant and the Commonwealth did not appear for trial. Because the Commonwealth was not prepared to try the case on August 9, 1977, the delay in the proceedings caused by this continuance was not attributable to appellant. See Commonwealth v. Morgan, 484 Pa. 117, 123, 398 A.2d 972, 974-75 (1979) ("the concern of the Rule is the delay in the commencement of trial and section (d) seeks to prevent the Commonwealth from being accountable for those delays in the commencement of trial where they result from actions properly attributable to the defense"). Therefore, no part of the delay caused by this continuance is excludable under Rule 1100(d)(2). "Under Rule 1100(c), the Commonwealth should be granted an extension of time for commencement of trial if it can demonstrate on the record that trial [can]not be commenced within the prescribed period despite its due diligence." Commonwealth v. Brown, 252 Pa.Super. 365, 368, 381 A.2d 961, 963 (1977). In Commonwealth v. Ehredt, 485 Pa. 191, 401 A.2d 358 (1979), our Supreme Court stated: The Commonwealth has the burden, by a preponderance of the evidence, of showing it has met the requirements of Rule 1100(c). . . . Furthermore, in reviewing a hearing court's ruling that the Commonwealth has met its burden, we consider only the evidence presented by the Commonwealth and so much evidence, as fairly read in the context of the record as a whole, remains uncontradicted. Id., 485 Pa. at 194, 401 A.2d at 360. Although a continuance for less than 30 days is not excludable under Rule 1100(d)(2), "defense-requested continuances may realistically obstruct diligent efforts by the Commonwealth to try an accused and 141 may, therefore, justify an extension under Rule 1100(c)." Commonwealth v. Mancuso, 247 Pa.Super. 245, 253-54, 372 A.2d 444, 448 (1977). See also Commonwealth v. Garnett, 258 Pa.Super. 115, 120, 392 A.2d 711, 713 (1978) ("the entire period of delay resulting from a continuance requested by the defense is a factor to be considered in determining whether the Commonwealth has exercised due diligence and is, as a result, entitled to an extension"). "While the unavailability of a witness may be a relevant factor in determining whether an extension should be granted, . . . `[m]ere assertions of due diligence and unproved facts, do not establish cause for an extension under Rule 1100(c).'" Commonwealth v. Ehredt, supra, 485 Pa. at 195, 401 A.2d at 361 (quoting Commonwealth v. Antonuccio, 257 Pa.Super. 535, 537, 390 A.2d 1366, 1367 (1978)). Thus, "a bare statement by the Commonwealth's attorney that several witnesses are `unavailable,' without more, does not establish `due diligence' . . . ." Id., 485 Pa. at 195, 401 A.2d at 360-61. In the instant case, at the November 4, 1977, hearing, the Commonwealth produced no evidence in support of its form petition to extend. The only possible grounds for an extension appearing on the record are the four continuances. We conclude that the Commonwealth has not met its burden of showing due diligence to justify an extension on the basis of any of the continuances. There is no evidence that either the June 13 continuance obtained by appellant or the August 9 joint continuance "obstruct[ed] diligent efforts by the Commonwealth to try [appellant]," Commonwealth v. Mancuso, supra. Moreover, although the absence of a Commonwealth witness may justify an extension under Rule 1100(c), the failure of the Commonwealth in the instant case to demonstrate its due diligence precludes the granting of an extension based on either of the continuances obtained by the Commonwealth. See Commonwealth v. Ehredt, supra. 142 Therefore, the lower court erred in granting the Commonwealth's first extension petition under Rule 1100(c).[2] Judgment of sentence vacated and appellant discharged. HESTER, J., files a dissenting opinion. HESTER, Judge, dissenting: I dissent. Here, appellant does not allege any time is properly excludable under Rule 1100(d), but rather attacks the validity of two orders of the court granting the Commonwealth's applications for extensions of time to commence trial, Rule 1100(c).[1] The first such application was 143 timely filed[2] on the 180th day and appellant's answer opposing such motion followed shortly thereafter. At a hearing on the application held November 4, 1977, it was established the defense had requested two continuances, while the Commonwealth had requested one continuance due to the unavailability of witnesses. The court thus found the Commonwealth could not proceed to trial within the time required, despite due diligence, and granted an extension of time to November 15, 1977. Appellant argues and the majority agrees that the Commonwealth did not sustain its burden of proving due diligence, which it must do by a preponderance of the evidence, Commonwealth v. Mitchell, 472 Pa. 553, 372 A.2d 826 (1977), and that the court should not have extended the time. I disagree. It is well-settled that defense requests for continuances may obstruct efforts by the Commonwealth to try an accused and may, therefore, justify an extension under Rule 1100(c),[3]Commonwealth v. Garnett, 258 Pa.Super. 115, 392 A.2d 711 (1978); Commonwealth v. Brown, 252 Pa.Super. 365, 381 A.2d 961 (1977); Commonwealth v. Mancuso, 247 Pa.Super. 245, 372 A.2d 444 (1977). In Commonwealth v. Brightwell, 486 Pa. 401, 406 A.2d 503 (1979), Justice Nix, writing in support of affirmance by an equally divided court, articulated the common sense rule which ought to be applied in this and in similar cases. "We know of no case," he wrote, "wherein the right to a speedy trial has been violated when the cause for the delay has been properly attributable to the defendant. To the contrary, where the defendant has deliberately caused the delay, he 144 has been prevented from taking advantage of his own wrong." 406 A.2d at page 505. Similarly, the absence of a Commonwealth witness may provide the basis for an extension order. Commonwealth v. Jenkins, 248 Pa.Super. 300, 375 A.2d 107 (1977); Commonwealth v. Lane, 245 Pa.Super. 146, 369 A.2d 335 (1976). Under these facts, we find no abuse of discretion in the 29 day extension granted to the Commonwealth. The prosecution's second request for an extension was filed November 15, 1977 and appellant's answer followed the next day. At the hearing on November 28, 1977,[4] it was established that on the day appellant's trial was listed, November 14, 1977, appellant was in custody on another charge and was "not brought down" by the sheriffs. The court found the Commonwealth had been duly diligent, but through sheriff delay, trial could not commence within the time allotted. I agree. Here the Commonwealth had done all it was required to do in order to bring appellant to trial, yet, through administrative delay it could not have foreseen, the Commonwealth's attempt to commence trial was frustrated. It is well-settled that the Commonwealth may seek an extension if pretrial delay is caused by actions beyond the control of the court system, the defendant, and the prosecution. Commonwealth v. Metzger, 249 Pa.Super. 107, fn. 4, 375 A.2d 781, fn. 4 (1977). This case is thus akin to those where we found a valid Rule 1100(c) extension order due to judicial or other administrative delay in bringing an accused to trial. Commonwealth v. Cimaszewski, 261 Pa.Super. 39, 395 A.2d 931 (1978); Commonwealth v. Vickers, 260 Pa.Super. 479, 394 A.2d 1027 (1978); Commonwealth v. Alvin, 257 Pa.Super. 290, 390 A.2d 827 (1978); Commonwealth v. Brown, 251 Pa.Super. 179, 380 A.2d 436 (1977); Commonwealth v. Rambo, 250 Pa.Super. 314, 378 A.2d 953 (1977). I *145 would rule that the prompt trial mandate of Rule 1100 was satisfied,[5] and affirm the judgment of the court below. NOTES [1] Because of our disposition of the Rule 1100 issue, we need not consider the other issues raised by appellant. [2] Even assuming, arguendo, that the Commonwealth's first extension petition was properly granted, the lower court clearly erred in granting the second extension. The Commonwealth's second petition to extend was, like the first, a form petition which merely alleged that despite its due diligence, the Commonwealth could not commence trial within the Rule 1100 period. As before, the Commonwealth stated no reason why trial could not be timely commenced and cited no facts to support its assertion of due diligence. The only justification for the extension which the record reveals was advanced by the lower court itself at the November 28 hearing on the petition to extend. After being informed that appellant was in custody on the date set for trial, the court stated that "failure to bring down appears to be sheriff delay and would support a finding of due diligence. . . I'm going to take the position that they [the Commonwealth] have been duly diligent." N.T. November 28, 1977 (emphasis added). Such judicial surmise as to the reason for the Commonwealth's failure to bring appellant to trial cannot serve as a substitute for the Commonwealth's affirmative duty to prove, by a preponderance of evidence, that it has met the requirements of Rule 1100(c). Commonwealth v. Ehredt, supra, 485 Pa. at 193, 401 A.2d at 360; Commonwealth v. Miller, 268 Pa.Super. 123, 407 A.2d 860 (1979). [1] Rule 1100(c) provides: At any time prior to the expiration of the period for commencement of trial, the attorney for the Commonwealth may apply to the court for an order extending the time for commencement of trial. A copy of such application shall be served upon the defendant through his attorney, if any, and the defendant shall also have the right to be heard thereon. Such application shall be granted only if trial cannot be commenced within the prescribed period despite due diligence by the Commonwealth. Any order granting such application shall specify the date or period within which trial shall be commenced. [2] Under Rule 1100(c), supra, an application for an extension of time must be filed "prior to the expiration of the period for commencement of trial." See, e.g. Commonwealth v. Bass, 260 Pa.Super. 62, 393 A.2d 1012 (1978); Commonwealth v. Delauter, 257 Pa.Super. 510, 390 A.2d 1354 (1978). There is no provision for the granting of an extension application nunc pro tunc. Commonwealth v. Shelton, 469 Pa. 8, 364 A.2d 694 (1976); Commonwealth v. Mancuso, 247 Pa.Super. 266, 372 A.2d 454 (1977). [3] Both defense continuances were for periods of less than 30 days and hence none of the delay occasioned thereby is excludable under Rule 1100(d)(2). See, e.g. Commonwealth v. Mitchum, 259 Pa.Super. 161, 393 A.2d 767 (1978); Commonwealth v. Shields, 247 Pa.Super. 74, 371 A.2d 1333 (1977). [4] The official transcript of this hearing is not included in the record before us. Appellant has, however, appended a copy thereof to his brief to this Court. The Commonwealth does not dispute the accuracy of the reproduction. [5] Neither do I find persuasive appellant's argument that the Commonwealth's use of form petitions in the instant case requires reversal. Although we have condemned the use of form Rule 1100(c) petitions which allege due diligence without supporting facts, Commonwealth v. Antonuccio, 257 Pa.Super. 535, 390 A.2d 1366 (1978); Commonwealth v. Ray, 240 Pa.Super. 33, 360 A.2d 925 (1976), we have upheld use of such petitions where they are coupled with a hearing in which the Commonwealth proves due diligence. Commonwealth v. Myers, 259 Pa.Super. 196, 393 A.2d 785 (1978). The present case falls squarely within Myers, supra.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532732/	368 S.W.2d 818 (1963) RAILROAD COMMISSION of Texas et al., Appellants, v. ALUMINUM COMPANY OF AMERICA et al., Appellees. No. 11098. Court of Civil Appeals of Texas, Austin. May 29, 1963. Rehearing Denied June 26, 1963. 819 Waggoner Carr, Atty. Gen., Joseph Trimble and Linward Shivers, Asst. Attys. Gen., Austin, Wm. H. Darden, Corpus Christi, Hart & Hart, Austin, William E. York, McAllen, Harry S. Pollard, Austin, Lee Jones, Jr., San Antonio, Miller B. Walker, Jr., Nick C. Nichols, Charles F. Cockrell, Jr., and Levert J. Able, Houston, Wallace H. Scott, Jr., and Houghton Brownlee, Jr., Austin, for appellants. Vinson, Elkins, Weems & Searls, James E. Allison, Jr., Houston, Clark, Thomas, Harris, Denius & Winters, James H. Keahey, Austin, Charles F. Heidrick, Edwin M. Cage, Dallas, for appellees. PHILLIPS, Justice. This is an appeal from the judgment of the District Court setting aside an order of the Railroad Commission of Texas dated April 24, 1961 allocating the allowable production of gas and oil in the Appling Field, in Calhoun and Jackson Counties, Texas, and enjoining the Railroad Commission and its members from enforcing the order. The order under attack, prorates gas on a 1/3 per well, 2/3 acreage basis and the oil on a 50 percent well, 50 percent acreage basis.[1] 820 The suit was filed in April of 1961 by the Aluminum Company of America, Crown Central Petroleum Corporation and Carl E. Siegesmund against the Railroad Commission of Texas and its members. Later in April, 1961, Sun Oil Company intervened adopting for all practical purposes the allegations in the petition filed by the plaintiffs. Thereafter petitions in intervention were filed on behalf of the following persons who aligned themselves with the Railroad Commission in defense of the above mentioned order: Tex-Star Oil and Gas Corporation, Coastal States Gas Producing Company, Claire Benz-Stoddard, Woods Exploration and Producing Company, Inc., David Davidson, Karankawa Producing Company, Navidad Oil Corporation, Yuhl Oil and Gas Company, Ernestine B. Foyles, Audrey Kjorlaug, Thelma V. Bass, Trustee, Mrs. Nora L. Krueger, Charles L. Krueger, Don Culwell, Mrs. Opal B. Williams, Allen Lester, Rosemary Lester, Clifford B. Reneger, John Alexander, Individually and as Trustee, Robert L. Alexander, Thomas P. Alexander, Judd Alexander, J. E. Alexander, and Dr. G. J. Hayes, Southeastern Pipe Line Company, Joe Blalack and Herbert L. Dillon, Jr. Plaintiffs filed a motion to strike the intervention of the Southeastern Pipe Line Company which was granted. Plaintiffs filed a motion to strike defendants' and intervenors' pleas of laches, waiver, estoppel and limitation. The defendants and defendant-intervenors filed a motion for summary judgment urging, principally, that as a matter of law the plaintiffs and Sun Oil Company were barred by unreasonable delay, laches and estoppel from seeking to cancel the allocation formula of the Railroad Commission. The case came to trial in September of 1962 whereupon the court overruled the motion for summary judgment of the defendants and defendant-intervenors, granted the motion of the plaintiffs to strike defendants' and defendant-intervenors' pleas of laches, waiver, estoppel and limitation, to which order the Railroad Commission and defendant-intervenors excepted. The court also, over the objection of the Railroad Commission and defendant-intervenors, entered an order refusing a trial by jury. The court then proceeded to hear evidence from September 12, 1962, until October 1, 1962. Thereafter on October 9, 1962, the court entered judgment that the order of the Railroad Commission was without substantial evidence, should be declared null and void and enjoined the Commission from enforcing it. The Railroad Commission and certain defendant-intervenors have appealed to this Court.[2] We hold that the judgment of the trial court is correct. The parties will be designated here as they were in the Trial Court. 821 Plaintiffs contend that the defendant-intervenors own ½ of 1% of the acreage in the field which amounts to some 25 acres. That in spite of such a small percentage of ownership they are allowed by the order under attack to produce 20% of the gas and condensate. That the plaintiffs own more than 90% of the acreage in the field which consists of approximately 4000 acres. That if the order here attacked continues through the life of the field, defendant-intervenors and other owners of town lot wells will produce in the future gas and condensate having a present value of more than $8,800,000 from beneath plaintiffs' leases in the 9 gas reservoirs in Fault Segment "A", in which both large tract and small tract wells were completed at the time of the Commission's order. That the 57 town lot or small tract wells belonging to defendant-intervenors have been confiscating enormous quantities of gas and condensate from plaintiffs' wells and that such confiscation will continue until the field is exhausted unless this Court holds that the Commission's order of April 24, 1961 is invalid and the Commission is instructed to write an order which will be fair and just and protect the correlative rights of the owners and operators in the field. Plaintiffs cite the case of Atlantic Refining Company v. Railroad Commission, often referred to as the Normanna Case, 162 Tex. 274, 346 S.W.2d 801 (1961) for the proposition that: "The responsibility rests with the Commission to devise some rule of proration which will conserve the gas in the field in question and at the same time be fair and just to all parties without depriving any of them of his property." In the Normanna Case, referred to above, the Court struck down a 1/3-2/3 gas proration formula where the facts disclosed that the owner of a .3 acre tract was draining a substantial amount of gas from the adjoining tracts under the abovementioned formula. The Court said: "Viewing all the facts in the light of the substantial evidence rule, we think the 1/3-2/3 proration formula is an unreasonable basis upon which to prorate the gas production from this reservoir. It does not come close to compelling ratable production; neither does it afford each producer in the field an opportunity to produce his fair share of the gas from the reservoir." The same result was reached in Halbouty v. Railroad Commission, Tex., 357 S.W.2d 364. We hold that the case at bar is controlled by the decisions in the Normanna and Halbouty cases. The order before this Court through its proration formula allows the defendant-intervenors and other small tract operators to confiscate unreasonable quantities of minerals underlying the adjoining land of the plaintiffs, is not supported by substantial evidence and is void. Hawkins v. Texas Company, 146 Tex. 511, 209 S.W.2d 338. The Appling Field was discovered in 1953. The field consists of an extremely complicated multi-zone reservoir principally producing gas with a few relatively unimportant oil reservoirs interspersed in the field. Because these various zones which are separated vertically are broken into separate fault blocks or segments, there are thirty-eight separately prorated gas reservoirs and fourteen separately prorated oil reservoirs in this field. The field operated under statewide rules (25% of open flow potential, regardless of the size of the tract) until June of 1956, when the first special field rules were made applicable to the Middle Kopnicky Sand, Fault Segments A, B and C. The Middle Kopnicky Sand is the deepest producing zone and by far the thickest and most prolific producer and contains more than 80% of the field's gas and condensate reserves. The remaining nine field sands are progressively higher than and overlie the producing area of the Middle Kopnicky Sand. These sands are thinner 822 and less prolific, but all are blanket sands within Fault Segment "A". Besides the major fault which limits Fault Segment "A" on the East in all reservoirs here involved, there are numerous smaller faults crossing Fault Segment "A" of sufficient size to separate the upper sands into separate fault segments or reservoirs but these faults are not of sufficient magnitude to separate the Middle Kopnicky Sand into separate reservoirs. There are 13 such fault segments within Fault Segment "A". The April 24, 1961, order here under attack, promulgated rules for 52 oil and gas reservoirs, of which 38 are Fault Segment "A". Four wells were drilled in 1956 on small tracts in the Port Alto and Karankawa Beach townsite areas. In 1956 plaintiffs sought field rules and urged the Commission to adopt a proration formula on the basis of 100% acreage, that is, that each landowner be allowed to produce only those reserves underlying his land. The Commission denied this request and imposed instead a 1/3-2/3 gas allocation formula. Thereafter the rules promulgated by the Commission in the various reservoirs contained allocation formulas on the basis of 1/3-2/3 for gas and 50-50 for oil. Following the original four wells drilled on the small tracts in 1956, more wells were drilled on town lots in the succeeding years, most of these being multiple completions. After 19 such wells had been drilled plaintiff Aluminum Company of America and others asked for field rules allowing a 1/3-2/3 and 50-50 allocation formula for the first completion; however, they also sought a 100% acreage allocation formula for any subsequent completions in other reservoirs. At a hearing held in March of 1960, plaintiffs made this request of the Commission suggesting that such a formula would protect the correlative rights of the large tract owners and operators as well as those of the small tract owners and operators. Plaintiff Sun has consistently maintained that the field should be prorated on a 100% acreage basis. A total of 38 small tract wells have been drilled since plaintiffs first complained of the blanket application of the proration formula under attack making 57 small tract completions in all. Plaintiffs own approximately 3702 of the 4288 productive acres in the Middle Kopnicky "A" and as of January 1961, had 22 completions therein. At the same time intervenor-defendants and others had 30 completions in the Middle Kopnicky "A" on town lots with a total assigned acreage of 24 acres. Most of these wells are multiple completed, that is, completed in more than one reservoir. Following the abovementioned hearing in March of 1960, the Commission considered the matter for almost a year. In February 1961, the Commission's Chief Engineer advised the plaintiffs that the Commission at a formal conference had adopted the field rules containing the allocation formula here under attack. Since the field rules had already gone into effect, plaintiffs filed this suit on April 3, 1961. On April 24, 1961, the Commission issued the formal order here under attack. A summary of the evidence plaintiffs adduced at the trial is as follows: Under the allocation formula before this Court the average per acre allowable of small tracts is 55 times the average per acre allowable for large tracts and ranges from 43 times as much per acre in the Middle Kopnicky Sand to 154 times in Fault Segment 5 Lower 7600' sand. This discrimination in favor of small tracts over large tracts exists in each of the nine reservoirs. In the nine reservoirs, the defendant-intervenors and other small tract operators own 0.6645% of the total gas in place, yet they are allowed to produce 19.5667% of the gas withdrawn, or 29 times their share of reserves. In every case, more than 96% of the town lot production will be drained from others and in all but one reservoir, more than 80% of the town lot production will be drained from the plaintiffs. In the Middle Kopnicky "A" sand alone, containing more than 80% of 823 the field gas and condensate reserves, 96.05% of the town lot (defendant-intervenors and others) production will be drained from others, 84.44% will be drained from plaintiffs. That the value of the drainage from plaintiffs will be in the neighborhood of $9,000,000 for the life of the field if the present allocation formula is allowed to stand. The evidence presented by the plaintiffs before the Trial Court as to the damage they have already sustained by virtue of the allocation formula in question and the damage that they will sustain in the future if the formula is sustained is largely uncontradicted. Defendant-intervenors and the Railroad Commission defend the order and the allocation formula therein on the theory of laches, waiver and estoppel in that plaintiffs are barred from attacking the allocation formula of the order in question by virtue of the fact that since the first field rules were promulgated in 1956, plaintiffs have at the various hearings held either proposed a formula such as the one before this Court, or acquiesced in it. That the court erred in refusing the Commission and other defendants a jury trial because the evidence raises issues of fact relating to the defenses of unreasonable delay, laches and estoppel. That there were no fair offers on the part of plaintiffs to pool or unitize. That the order before this Court is reasonably supported by substantial evidence. That the Trial Court erred in sustaining plaintiffs' motion to strike a plea of the four year statute of limitations. A further defense of the order is based on the contention that while the Railroad Commission has no power to enforce the antitrust laws of the State of Texas, it has the right to consider a statutory expression of the policy of the State as respects antitrust violations. That the Commission, by promulgating the allocation formula here under attack, prevents the furtherance of a conspiracy by the plaintiffs to restrict production and eliminate the competition of the small tract operators. It is also contended that the Trial Court erred in striking the intervention of the Southeastern Pipe Line Company because this intervenor owned a pipe line that had been constructed for the sole purpose of enabling the small tract operators to produce and sell the gas from their wells. The evidence presented by defendants in support of their theory of waiver, laches and estoppel was the introduction of some eight orders of the Railroad Commission from the time that the first hearing was held in 1956 through an order dated March 1, 1960. All of these orders which were in effect special field rules dealing with the various producing segments of the Appling Field contained a 1/3-2/3, 50-50 allocation formula. Defendants further presented evidence from the various hearings held to the effect that plaintiffs either proposed or acquiesced in said formula. At a hearing held February 27, 1957, with reference to the adoption of field rules for the Upper Kopnicky Gas Sand defendants contend that the attorney for the Aluminum Company of America stated to the Commission that he would recommend the abovementioned formula which would be in keeping with the Middle Kopnicky Gas Sand rules previously adopted. This attorney was quoted as saying: "Anyway, we believe that the rules we have recommended are fair and equitable and they will not require the drilling of any unnecessary wells." Defendants further contend that at a hearing held on July 9, 1957, with reference to the adoption of field rules for the Broughton Sand, Fault Segment No. 6, the attorney for Aluminum Company of America recommended to the Railroad Commission that field rules be adopted which would be the same rules as those in effect for the Appling (Upper Kopnicky Gas) Field and recommended 824 the abovementioned allocation formula. That at a hearing held February 18, 1958, relating to four other separate reservoirs in the field, the attorney for Crown Central Petroleum Corporation recommended that as to these reservoirs the Commission adopt the same allocation formula previously adopted for application to other reservoirs. In this connection he said: "While Crown Central is and has been generally in favor of 100% acreage allocation formula, in view of the fact that the Commission has set a precedent in numerous fault segments and in numerous reservoirs in the Appling Field, we will recommend that that precedent be followed, and that a 2/3 acreage-1/3 per well allocation formula be adopted." It is contended that at this same hearing the representative of the Aluminum Company in effect concurred with the recommendation made by Crown Central Petroleum Corporation: "The Aluminum Company of America has interests in various leases within the limits of the scope of this hearing and is in agreement with Crown Central Petroleum Corporation's request. We favor an allocation formula based on 100% acreage, but in line with all the previous rules which the Commission has adopted in this area, and since the Railroad Commission has set this pattern, we will abide with the 1/3 per well-2/3 acreage allocation formula." Defendants point out that with the exception of the order of January 30, 1961, there were no motions for rehearing on the abovementioned orders and no other appeals to the courts have been taken for any of the allocation orders of the Railroad Commission concerning the Appling Field. Defendants contend further that beginning in 1959, the plaintiffs started attacking the drilling permits granted by the Railroad Commission for wells upon town lots or other small tracts. The basis for such attacks was that the Railroad Commission included in the permits the clause granting multiple completion authority which permitted the completion of each well in all of the separate reservoirs penetrated by the well, which were found to be productive. In such suits the allocation formulas were not attacked; on the contrary, the petitions in some rule 37 cases, after referring to the orders of the Commission adopting field rules, including the allocation formulas for gas and oil production affirmatively alleged that the orders of the Railroad Commission were valid and binding insofar as they regulated the production of oil and gas. Defendants also presented evidence to the effect that they were unable to reach any pooling agreements with the plaintiffs herein. In their arguments before this Court, defendants contend that the following language from the Normanna Case is not mere dictum but that the Court had a situation such as this in mind when they wrote: "* * * where producers have acquiesced in and have failed to complain of the Commission's proration orders for a long period, during which time other operators have expended vast sums in exploration and drilling operations, such producers should not be heard to complain." Our attention is called to the equitable doctrine of estoppel in pais as defined in 22 Tex.Jur.2d, Estoppel, Section 4, at page 664: "Equitable estoppel is the effect of the voluntary conduct of a party whereby he is absolutely precluded, both at law and in equity from asserting the rights that might perhaps have otherwise existed, either of property, of contract, or of remedy, as against another person who has, in good faith, relied on that conduct, and has been led thereby to change his position for the worse, 825 and who on his part acquires some corresponding right either of property, of contract or of remedy." We do not believe that the defendants herein can bring themselves under the equitable cloak that they attempt to spread over themselves for several reasons. In the first place they cannot show the proper damages. They have not shown under the definition of estoppel to have been led to change their positions for the worse. There is no showing that anyone who drilled a well prior to the attack on the order in question has lost money. The history of the Appling Field as shown above is not the history of an old field but that of a relatively new, complex and developing field with not only new horizons and segments being brought in from time to time but an ever changing density of wells in respect to the ratios between large and small tracts. In this ever changing situation we are not asked to balance any equities where parties have been damaged in reliance on well established rules, agreed to or acquiesced in by all concerned and debatable in respect to their fairness, but we are asked to "freeze" an order of the Commission that has not only allowed the small tract operators to produce more than their fair share of the oil or gas that originally underlay their tracts, but would continue to allow them to so produce for the life of the field. We are, in effect, being asked to do by indirection that which we would not have the authority under the law to do directly. Art. 6008, 6049c, Vernon's Civil Statutes. In the second place, the defendants had no right under the very nature of the orders attacked to rely on them as bringing into effect some "vesting" of rights, immutable and unchangeable. Chenoweth v. Railroad Commission, Tex.Civ.App., 184 S.W.2d 711, writ ref., w. m. In this connection see Railroad Commission of Texas v. Shell Oil Company, 369 S.W.2d 363 handed down by this Court the same day as this opinion for a distinction with respect to estoppel in Rule 37 cases. Commenting on the authority of the Commission as respects the conservation statutes, this Court in Railroad Commission v. Humble Oil and Refining Company, Tex. Civ.App., 193 S.W.2d 824, writ ref., n. r. e. stated: "The Commission's power to regulate oil production in the interest both of conservation and of protecting correlative rights is a continuing one, and its proration orders are subject to change, modification or amendment at any time, upon due notice and hearing, either upon the Commission's own motion or upon application of an interested party. This principle is now so well established as to require no citation of authority." In Magnolia Petroleum Company v. New Process Production Company, 129 Tex. 617, 104 S.W.2d 1106, the Court said: "If conditions change, rights change, and the governing statutes place the matter of ascertaining such rights and determining the facts relating thereto in the first instance under the jurisdiction of the Railroad Commission." In this connection, see a recent opinion of this Court in Railroad Commission of Texas v. Phillips, Tex.Civ.App., 364 S.W.2d 408, no writ history. For the reasons discussed above we also overrule defendant-intervenors' contention that this suit is barred by the four year statute of limitations. Art. 5529, V.C. S. See this Court's opinion in Galveston Chamber of Commerce v. Railroad Commission, Tex.Civ.App., 137 S.W. 737, reversed on other grounds, 105 Tex. 101, 145 S.W. 573. We hold that the Trial Court had the validity of a particular order before it which is to be tested under the substantial evidence rule, that such test is a matter of law, that the Trial Court found this specific order to be confiscatory and properly held it invalid. Gulf Land Company v. Atlantic 826 Refining Co., 134 Tex. 59, 131 S.W.2d 73, The Normanna Case cited above, Halbouty v. Railroad Commission, Tex., 357 S.W.2d 364. There were no facts to be determined by a jury. The facts that the defendants rely on in an attempt to show estoppel are not materially controverted. In any event, the court heard them out and had a jury been impaneled, it would have been proper for the court to take the case from the jury and rule as he did. There is conflicting evidence as to pooling offers. We hold that in this case such evidence is immaterial as proof for the validity or invalidity of this particular order. Here the question of pooling could only relate to access to the minerals involved. We do not have the question of access but that of a fair allocation of existing production. See the recent opinion of Claire Benz-Stoddard v. Aluminum Company of America, Tex., 368 S.W.2d 94. In its second amended petition in intervention Intervenor Woods Exploration and Producing Company, Inc. alleged that the Railroad Commission of Texas could take into consideration, the anti-trust laws of Texas, Title 126, Vernon's Civil Statutes, in writing an order, and that the proration order under attack here was in the public interest and prevented plaintiffs from conspiring to fix production in the fields. It was further alleged that Section 19 of Article 6049e of the Conservation Acts states that nothing in the conservation laws shall affect or impair the anti-trust Acts of Texas. Aluminum Company of America excepted to this portion of Intervenor's pleadings, stating: "* * * the sole issue in this case is whether the April 24, 1961, order is confiscatory. If it is confiscatory, then it cannot be sustained as necessary to encourage competition under either the State or Federal Anti-Trust Laws." The Trial Court sustained this exception. We hold that the ruling of the Trial Court was correct. See Eastern Railroad President's Conference v. Noerr Motor Freight, Inc., 365 U.S. 127, 81 S. Ct. 523, 5 L. Ed. 2d 464, which established the rule that a combination to influence governmental action does not violate the anti-trust laws. It is not necessary here for us to pass on the question of the Railroad Commission's authority to consider the anti-trust laws when writing an order. We hold that the anti-trust Act has no bearing on the validity of the order before us. Defendants contend that the court erred in striking down the proration order because, and here they list some 26 segments or reservoirs of the Appling Field, there was no evidence that there was any drainage of gas from the properties of the plaintiffs and Sun in any of these reservoirs or that the plaintiffs or Sun have been deprived of a fair chance to recover the equivalent of the gas in place in any of these reservoirs. We cannot sustain this contention. If part of the order is invalid, the entire order must fall. Railroad Commission v. Rowan Oil Company, 152 Tex. 439, 259 S.W.2d 173. It is further contended that the Trial Court erred in entering judgment for plaintiffs and Sun in cancelling the order in question and in not limiting the judgment to the application of the Commission's proration formula to the production of gas from one completion in a single reservoir in each well because the plaintiffs in the hearing before the Railroad Commission attacked the formula only insofar as it applied to multiple completions and did not attack it as it applied to one completion in each separate reservoir in each well. This argument was raised in the Halbouty case cited above and was rejected. The court pointed out that proceedings before the Railroad Commission are informal and their validity will not be tested by the technical rules of pleading and practice that obtain in court trials; and the fact that one *827 formula is proposed before the Commission does not foreclose one's right to complain of a formula which they consider inequitable and confiscatory of their property nor does it limit the Commission solely of either accepting or rejecting the proposed formula in toto. We have considered the assignments of error as to the admission of plaintiffs' Exhibit No. 75 allegedly containing hearsay testimony and also the failure of the court to allow the intervention of Southeastern Pipeline Company. In view of the extensive development of this case in the Trial Court, if these assignments constitute error, it was not such error as would require the reversal of the judgment. Rule 434, Texas Rules of Civil Procedure. The judgment of the Trial Court is affirmed. Affirmed. NOTES [1] The proration formula for the Commission's order of April 24, 1961 is as follows: "RULE 4: The daily total field oil allowable, as fixed by the Commission after deductions have been made for marginal wells, high gas-oil ratio wells and wells which are incapable of producing their allowables as determined hereby, shall be distributed among the remaining producing wells in the field on the following basis: "(a) The daily acreage allowable for each well, after said deductions have been made shall be that proportion of fifty (50) per cent of the daily field allowable which the acreage assigned to the well bears to the remaining acreage assigned to all the wells in the field. "(b) The daily per well allowable for each well, after said deductions have been made shall be determined by dividing fifty (50) per cent of the total field daily allowable by the number of producing wells in the field. "(c) The total daily oil allowable for each well shall be the sum of its per well and acreage allowables. "RULE 5: The daily allowable production of gas from individual wells completed in a non-associated gas reservoir of the subject field shall be determined by allocating the allowable production after deductions have been made for wells which are incapable of producing their gas allowables, among the individual wells in the following manner: "(a) Two-thirds (2/3) of the allowed gas production from a non-associated gas reservoir shall be allocated to the individual wells completed therein in that proportion that the acreage assigned to each such well bears to the sum of the acreage in the reservoir. "(b) One-third (1/3) of the allowed gas production from a non-associated gas reservoir shall be allocated equally among the individual wells completed therein. "(c) The total daily non-associated gas allowable for each well shall be the sum of its acreage and per well allowables." [2] Not all defendants appealed. Appellants include: Coastal States Gas Producing Co.; Claire Benz-Stoddard; Karankawa Producing Company; Navidad Oil Corporation; Edgar B. Yuhl, dba Yuhl Oil and Gas Co.; Ernestine B. Foyles; Audrey Kjorlaug; Thelma V. Bass, Trustee; Mrs. Nora L. Krueger; Charles L. Krueger; Don Culwell; Mrs. Opal B. Williams; Allen and Rosemary Lester; Clifford B. Renegar; John Alexander, Ind. and as Trustee; Robert L. Alexander; Thomas P. Alexander; J. E. Alexander; Dr. G. J. Hayes; Tex-Star Oil and Gas Corporation; H. L. Dillon, Jr.; Woods Exploration and Producing Co., Inc.; Southeastern Pipeline Co.; Railroad Commission of Texas.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532737/	368 S.W.2d 655 (1963) TENEHA OIL COMPANY, Appellant, v. W. A. BLOUNT, Appellee. No. 6625. Court of Civil Appeals of Texas, Beaumont. May 9, 1963. 656 Joe Davis Foster, Center, for appellant. Richard McDaniel, Center, for appellee. McNEILL, Justice. The action was instituted by appellant in a district court to recover upon an open account for goods, wares and merchandise sold to appellee. In defense appellee pleaded in bar the two year statute of limitations, Art. 5526, Vernon's Ann.Civ.St. Thereupon appellant filed its first amended original petition again pleading said account, but alleging that said merchandise was consigned to appellee, and that appellee received such merchandise and promised and agreed to sell the same for appellant, and to account to it therefor and pay it the proceeds from the sale of such merchandise at the prices agreed to set opposite each item as shown on "Exhibit A" attached to and made a part of the amended petition. Appellee having filed his motion for summary judgment on the ground that said account was barred by the two year statute of limitation and a hearing thereon having been held, the court sustained the motion and decided that the account was barred by limitation and rendered judgment against appellant thereon. The petition also contained a count for a balance of $181.66 due on a check executed by appellee to appellant. After granting summary judgment on the account, the court dismissed the count for $181.66 for want of jurisdiction to hear it. Appellant asserts that the court was in error in holding the account barred by the two year statute of limitation for the reason that "Exhibit A" was a written contract. This exhibit consists of three forms, all of like import, one of which follows: TENEHA OIL CO. consignment Distributor Skelly Oil Company Products Telephone 77 Teneha, Texas Consigned Soldto: H. D. Carroll Sta. 8/25/1958 Address Joaquin Del. To Same Description Quantity Price Price w/Tax (Here follows list of tires) (2 of (price of (price of each each each tire kind) tire) w/tax) Total $391.54 /s/W.A. Blount 2/2/59 Received /s/Robert B. King Delivered /s/ B. M. Bowlin /s/Buck Daw It is claimed, since the word "sold" was erased from the form used and the word "consigned" written above it, and the word "consignment" written to the right of appellant's name on the form, that this clearly shows the transaction was a consignment and, being in writing, takes it out of the application of Art. 5526 and places it under Art. 5527. We hold that this written statement, whether called a sales slip, consignment slip, or by other name, is not a written contract within the meaning of Art. 5527. 657 Appellant emphasizes the words "consigned to" and "consignment". But standing alone they offer little help in solving the real, actual relationship existing between two or more persons. As said in In re Wells, 3 Cir., 140 F. 752: "There is no particular magic in the term `consigned' or `consigned account.' In a sense all goods shipped to another are consigned to him. The question is what was the inherent character of the transaction, which depends upon the purpose of it. Were the goods put in the hands of the one party by the other, to be sold for him and on his account, creating the relation of principal and factor; or were they turned over to such party, to be treated and disposed of as his own, being responsible to the other simply for the price?" In Falls Rubber Co. v. La Fon (Tex.Com. App.), 256 S.W. 577, involving the question whether the contract was one of sale or consignment, it was held that the use of the legal term "agent" was not controlling but the contract as a whole must determine the relationship and, although invoices were sent under the contract stating the goods were "sold to W. E. La Fon", this was of no significance in determining the question. See also 25 Tex.Jur.(2) 212. When embodied in a full, written contract between merchants, the terms "consigned to" and "consignment" have a definite legal meaning, Charles M. Stieff, Inc. v. City of San Antonio, 130 Tex. 594, 111 S.W.2d 1086. But even so, it is recognized that there are many different classes of and provisions in contracts relating to consigned merchandise, as an examination of the Stieff case above, as well as Falls Rubber Co. v. La Fon (Tex.Com.App.), 256 S.W. 577, and Milburn Manufacturing Co. v. Peak, 89 Tex. 209, 34 S.W. 102, will illustrate. The test, we think, to be applied in determining whether "Exhibit A" makes a contract in writing between appellee and appellant is found in Cowart v. Russell, 135 Tex. 562, 144 S.W.2d 249 at p. 250: "It is well settled that `in order for an action to be one for an indebtedness evidenced by or founded upon a contract in writing, as referred to in the above quoted statute (Art. 5527), the action must be between the immediate parties to the contract, or those for whose benefit it was made, or their privies, and the written instrument relied upon must itself contain a contract to do the thing for the nonperformance of which the action is brought.' Shaw v. Bush, Tex.Civ.App., 61 S.W.2d 526, 528, writ refused." Does the instrument presently considered meet this test? Does it contain a contract to do the thing for the nonperformance of which the action is brought? First, consider whom the goods were "consigned to": to "H. D. Carroll Sta." This is an ambiguous name or place. Next, at the bottom of the writing apparently were signatures of four persons: Robert B. King, Buck Daw, B. M. Bowlin and W. A. Blount. Did either or all of these persons represent H. D. Carroll Sta.; or is it the assumed name of one or more of them? Who is actually the purchaser or consignee of the goods? The writing gives one party's name, Teneha Oil Co., but who was the other party or partiesand upon what terms? Appellant admits in its brief that the exact terms of the consignment sued upon are not to be found in "Exhibit A" in the following language: "Although the exact terms of the consignment as alleged by appellant do not appear on the face of each instrument, the very use of the term consignment on each one clearly expresses the agreement of the party." In order to answer the questions raised parol evidence must be relied upon. Without this evidence no contract exists. A contract that rests, at least in major part upon parol evidence as this one must to exist, is *658 construed to be, when applied to the law of limitation, an oral contract and actions thereon are, therefore, barred by the two year statute, Art. 5526, V.A.C.S. Crockett v. Union Terminal Co., Tex.Civ.App., 342 S.W.2d 129; Barbier v. Barry, Tex.Civ. App., 345 S.W.2d 557. Appellant also says that since the motion for summary judgment was filed before it filed its first amended original petition, the trial court erred in sustaining the motion. The motion was in general terms and was treated by the court as applicable to appellant's amended petition. Under the circumstances, this was proper. Woods v. Kiersky, Tex.Civ.App., 297 S.W. 518 (Rev. on other grounds, Tex.Com.App., 14 S.W.2d 825). No objection or exception to such consideration by the court was made in the trial court. The question, therefore, if material, was waived. 4 Tex.Jur.(2) 270. The judgment is affirmed.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532750/	368 S.W.2d 27 (1963) TEXAS INTERNATIONAL PRODUCTS et al., Appellants, v. MUSTEX, INC., Appellee. No. 16420. Court of Civil Appeals of Texas, Fort Worth. April 26, 1963. Rehearing Denied May 24, 1963. 28 LeLaurin, Chamberlin, Guenther & Murry, San Antonio, Rodgers & Stephens and Ronald Stephens, Graham, for appellants. Jennings, Montgomery & Dies, and Elton Montgomery, Graham, for appellee. MASSEY, Chief Justice. The appeal is from an order overruling pleas of privilege of the corporate defendant and of two individual defendants. Judgment is reversed and the cause remanded for another trial. Mustex, Incorporated, plaintiff in the cause, was at all times domiciled in Young County, Texas. Defendant Texas International Products, a Texas Corporation, had its domicile in Harris County. Defendants Herman Keuhn and Zelman Keuhn, officers of Texas International Products, had their domicile in Harris County. In the plaintiff's petition were allegations that plaintiff, "at the special instance and request of defendants, sold and delivered to them certain goods, wares and merchandise more particularly described in the verified account heretofore referred to, in consideration whereof defendants promised and became bound and liable to pay to plaintiff the prices charged therefor in said account set out, * ." Thereafter plaintiff alleged that "A portion of the account sued upon is secured by a mechanic's lien fixed by affidavit made pursuant to Article 5483 et seq. of the Revised Civil Statutes of the State of Texas, * . The plaintiff would show the court that the above described mechanic's and materialmen's lien was established in accordance with the laws of the State of Texas; that it furnished certain goods, wares and merchandise to the defendants under contracts and agreements entered into at various times; that the lien is in full force and effect, is now valid and subsisting, and is subject to being foreclosed in Young County, Texas." Prayer for relief in plaintiff's petition sought judgment in sworn account against all and several of the defendants, for foreclosure of the alleged lien against the goods, wares and merchandise, for attorney's fees and costs. Each of the defendants filed a plea of privilege. By its controverting affidavit to the plea of privilege of the corporate defendant plaintiff realleged the lien asserted against the property in question and for which foreclosure was sought, and in connection therewith asserted that venue was properly fixed in the county of the suit under the provisions of Vernon's Ann.Tex. St. art. 1995, "Venue, general rule", and the exception thereto recited in subdivision 12, "Lien.A suit for the foreclosure of a mortgage or other lien may be brought in the county where the property or any part thereof subject to such lien is situated." 29 Additionally, plaintiff alleged that the "sales made by plaintiff" were actually made and contracted for in the county of the suit, and asserted that venue was properly fixed in the county of the suit under exception 23, "Corporations and Associations", to the statute's general venue provisions. The same character of claim of venue was asserted under exception 5, "Contract in writing". To the pleas of privilege of the individual defendants plaintiff asserted that venue was properly fixed in the county of the suit, in view of its right to maintain venue therein as to the corporate defendant, under exception 29a, "Two or more defendants", to the statute's general venue provisions, as well as under the exceptions pleaded in its controverting affidavit to the plea of privilege of the corporate defendant, except exception 23, "Corporations and Associations", obviously inapplicable. From the statement of facts it appears that the corporate defendant, Texas International Products, is or was in the business of marketing premolded fiberglass fallout shelters. The "molds", or part thereof, used in the manufacture of the shelters were apparently the property of the corporate defendant. Through some arrangement Mustex, Inc., the plaintiff, manufactured the shelters. Under the direct testimony introduced by plaintiff a number of shelters manufactured by it were "sold" to the defendants. Some shelters so manufactured had been "taken" by the defendants and removed from the premises of the plaintiff or had been "accepted" on out-of-county deliveries. Approximately twelve shelters had been manufactured by plaintiff which remained in its warehouse in Young County. It was on these shelters that plaintiff had attempted to fix the lien upon which its suit sought foreclosure. It is obvious from the record that the corporate and individual defendants are contending they never contracted to receive any of the twelve shelters, nor to have the plaintiff manufacture them and that the shelters ever were and remained the property of plaintiff. Under the proof of the plaintiff there was no evidence whatever of any "delivery" to defendants, or any of them, of any of the twelve shelters. Plaintiff's witness was allowed to testify over objection that plaintiff "sold" them to defendants. There was no proof that defendants, or any of them, had so contracted with the plaintiff that they held title to or the right of possession of the shelters before there had been any actual physical delivery thereof, or any act of acceptance by defendants. Without regard to any importance of the state of the record for purposes of the pleas of privilege, it is obvious therefrom that it would be more profitable to plaintiff to have the shelters sold by legal process, with a credit thereby placed against the account it is claiming against the defendants, than would be the case were it to agree with the defendants that the shelters were its own property. Upon the matter of the lien which plaintiff purported to have fixed in accordance with law, and on the strength of which it sought to effect a foreclosure by its suit, we necessarily must examine the same. V.A.T.S. Title 90, "Liens", Ch. 5, "Farm, Factory and Store Operations", Art. 5483, "Lien prescribed", reads in part as follows: "Whenever any * * * artisan, craftsman, factory operator, mill operator, mechanic * * * may labor or perform any service in any * * * factory, mine, quarry or mill of any character * * * under or by virtue of any contract or agreement, written or verbal, with any person, employer, firm or corporation * * , in order to secure the payment of the amount due or owing under such contract or agreement * * the hereinbefore mentioned employees shall have a first lien upon all products * * * goods, wares, merchandise * * , or thing or things of value of whatsoever character that may be created in whole or in part by the labor * ." (Emphasis supplied.) Art. 5486, "Liens, how fixed", prescribes the 30 method by compliance with which such character of lien may be lawfully fixed. The method was that with which plaintiff complied. Employers of labor are not afforded any right to a lien because of the labor of employees. The only right to a lien as prescribed by Art. 5483 is one in behalf of an individual who has performed labor or rendered personal services. A corporation cannot perform personal services. "Labor done" is but one form of "personal services rendered". Van Zandt v. Fort Worth Press, 1962, Tex., 359 S.W.2d 893. Since a corporation can neither perform labor nor render personal services Mustex, Inc., plaintiff in the suit under consideration, is effectively precluded from claiming any right to any lien contemplated by the article. Plaintiff's pleadings, even if conceded to allege that it "labored" or "performed some service" in the manufacture of the shelters for the defendants, or any of them, cannot be given any effect for the "lien" thereby purportedly alleged does not fulfill the requirements of the venue statute's exception 12, "Lien", in that it does not allege a lien which is a legally valid lien. The lien purportedly fixed and which plaintiff sought to have foreclosed was not one of which it could claim any benefit, for Mustex, Inc., was not within the class of persons contemplated by Art. 5483. Furthermore, we believe that plaintiff's suit on sworn account is necessarily inconsistent with any claim for the character of right contemplated to be secured by any lien predicated upon the provisions of Art. 5483. Also, since the defendants disclaimed any title or interest in the property upon which lien foreclosure was sought and there was no proof that any defendant ever held title to any interest therein we seriously doubt the efficacy of plaintiff's proof in respect to the property phase. The Supreme Court has now given its express approval to the line of cases which hold that a plaintiff who pleads a lien and shows the location of the property, or a part thereof, in the county need not establish by extrinsic evidence that he has a lien enforceable against the defendant. Morgan Farms v. Murray, 1950, 149 Tex. 319, 233 S.W.2d 123. The lien so plead, however, must be a lien of which the plaintiff is entitled to claim protective benefit. On submission of the case before this court it was conceded by the attorney for the plaintiff that on the record presented to us he had not established a right to hold venue in the county of the suit unless we agreed upon the applicability of the general venue statute's exception 12, "Lien". We have not agreed. Plaintiff's attorney insisted in that event that a remand was proper rather than a rendition directing change of venue. It is particularly noted that plaintiff claimed a right to retain venue under exception 23, "Corporations and Associations". The case of Jackson v. Hall, 1948, 147 Tex. 245, 214 S.W.2d 458, dealt with a case where such was the exception relied upon but where the plaintiff had failed to show that his cause of action or a part thereof arose in the court of suit. It was held therein that the case was not fully developed and was tried upon the wrong theory, not only by the attorneys but by the trial judge, for otherwise the trial court would have transferred the cause. We agree that as applied to the corporate defendant, Texas International Products, our obedience to the principle of law declared in Jackson v. Hall will require a remand rather than a reversal. Any right the plaintiff might have to hold the corporate defendant under exception 23, "Corporations and Associations", could not carry with it any subsidiary right to hold the individual defendants under exception 29a "Two or more defendants", unless they were shown to be "necessary parties" along with the corporate defendant in the same manner as required under exception 12 "Lien". What we mean to say is that the plaintiff had the duty on the hearing already had to show its 31 right to hold the individual defendants, and that the duty would not differ in any way on any new hearing. This duty was not discharged on the hearing already had, and plaintiff's pleadings do not show that the individual defendants are necessary parties to its suit against the corporate defendant. See Clark, Venue in Civil Actions, Ch. 29a, p. 179, "Two or More Defendants", § 6, "Proof Necessary to Sustain Venue". However, by the plaintiff's pleadings and controverting affidavit a direct cause of action against the individual defendants was alleged under the general venue statute's exception 5, "Contract in writing". This was not proved. The trial was on the lien theory. This we have held was the wrong theory. A correct theory would be that the individual defendants were bound on an instrument in writing. It may be that plaintiff will be able on the occasion of another trial to establish venue under exception 5, "Contract in writing". Under the principle of law adhered to in Jackson v. Hall, supra, it appears that plaintiff is entitled to make the attempt at another hearing. Judgment is reversed and the cause remanded for a new trial. ON MOTION FOR REHEARING In our opinion we directed a remand of the case for further development, if within the power of Mustex, Incorporated. Appellants have filed a motion for rehearing in which they level a strenuous attack upon our interpretation of Jackson v. Hall, 1948, 147 Tex. 245, 214 S.W.2d 458, and insist that our judgment should be one of reversal and rendition rather than one which merely remands the case for another trial. In connection therewith appellants point out that Mustex was not prevented from fully developing its case on the plea of privilege, nor did it omit to do so as a result of an erroneous decision of the trial court, but that any failure on the part of Mustex in relation to development of its evidence was the result of a decision or election on its own part. It is worthy of note that this court had occasion to write on this same question on May 10, 1963, in the case of Central Surety and Insurance Corporation v. First National Bank of Fort Worth.[] The opinion in that case has not yet had time to appear in the reporter. It may well be that it will be published about the same time as our opinion in the instant case. Therein we stated, "It is to be noted that the Supreme Court's action in Jackson v. Hall was taken pursuant to its having granted leave to file a petition for mandamus against the Justices of the Court of Civil Appeals to compel a judgment of remand upon reversal of a trial court's judgment overruling a plea of privilege, rather than the rendition by which the case was ordered transferred. "Our interpretation of the holding in Jackson v. Hall is that as applied to appeals in general, and those from orders overruling pleas of privilege in particular, any proper judgment of an appellate court which reverses the judgment of the trial court should be one which incorporates therein an order remanding the cause to the trial court, rather than one of rendition, when the reversal is occasioned by a lack of evidence in support of the judgment of the trial court,unless it clearly appears that the case was fully developed, i. e., unless it clearly appears that there was no evidence available to be introduced in the trial court which would have supplied such `lack'." The statement quoted has complete application to the question in the instant case. If we err the law affords a method of obtaining a remedy. Motion for rehearing is overruled. No additional motion for rehearing will be entertained. NOTES [*] [Ed. note. Reported at 367 S.W.2d 377.]	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532744/	368 S.W.2d 265 (1963) Alton VIRE, Appellant, v. Alice VIRE, Appellee. No. 5-3011. Supreme Court of Arkansas. June 3, 1963. Robert E. Irwin, Russellville, for appellant. D. B. Bartlett, Clarksville, for appellee. HARRIS, Chief Justice. Appellant and appellee were married in Johnson County on June 9, 1962. The instant suit for divorce was instituted by appellee on August 30, 1962, a few days after the parties had separated, in which she alleged general indignities. Appellant answered with a general denial, specifically pleaded condonation, and filed a "counterclaim" for divorce, likewise alleging general indignities pursued until his condition in life had become intolerable.[1] Following the filing of amendments to the pleadings, the cause proceeded to trial. At the conclusion of the evidence, the court entered its decree, granting appellee an absolute divorce, and from such decree, appellant brings this appeal. We are unable to consider this appeal on its merits since appellant has failed to comply with Rule 9(d) of the rules of this court. We have stated numerous times that we are not required to explore a record that is presented to us, but that the duty rests on appellant to furnish this court such an abridgment of the record as will enable us to understand the matters presented. See Allen v. Overturf, 236 Ark. 387, 366 S.W.2d 189, and cases cited therein. The pleadings and decree in this case are abstracted, but there is no abstract whatsoever of the testimony and exhibits which cover approximately 65 pages. A few references are made, in the brief itself, to isolated portions of the testimony, but not to a sufficient extent that we can comprehend the full nature of the evidence. As stated in Reeves v. Miles, 236 Ark. 261, 365 S.W.2d 460: "Although the record contains more than fifty pages of pleadings, exhibits, and testimony, appellant has presented us with no abstract of the same. The casual references in the argument to this testimony are not sufficient for us to formulate an informed opinion on the merits of the case. In such a situation this Court has heretofore uniformly affirmed the trial court's decree or judgment. See: Ellington v. Remmel, 226 *266 Ark. 569, 293 S.W.2d 452; Porter v. Time Stores, Inc., 227 Ark. 286, 298 S.W.2d 51; Farmers Mutual Ins. Company v. Watt, Et Ux., 229 Ark. 622, 317 S.W.2d 285; and, Anderson v. Stallings, 234 Ark. 680, 354 S.W.2d 21." Affirmed. NOTES [1] According to appellant's statement of the case, this "counterclaim" was dismissed prior to the trial. It is not involved in this appeal.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/4215792/	Affirmed and Memorandum Opinion filed October 26, 2017. In The Fourteenth Court of Appeals NO. 14-16-00695-CR WILLIE THOMAS, Appellant V. THE STATE OF TEXAS, Appellee On Appeal from the 185th District Court Harris County, Texas Trial Court Cause No. 1483177 MEMORANDUM OPINION Appellant Willie Thomas appeals his conviction for possession with intent to deliver a controlled substance, 4–200 grams. Tex. Health & Safety Code Ann. § 481.112 (a), (d) (West 2016). Appellant’s appointed counsel filed a brief in which he concludes the appeal is frivolous and without merit. The brief meets the requirements of Anders v. California, 386 U.S. 738 (1967), by presenting a professional evaluation of the records and demonstrating why there are no arguable grounds to be advanced. See High v. State, 573 S.W.2d 807, 811–13 (Tex. Crim. App. 1978). A copy of counsel’s brief was delivered to appellant. Appellant was advised of his right to inspect the appellate record and file a pro se response to the brief. See Stafford v. State, 813 S.W.2d 503, 512 (Tex. Crim. App. 1991). As of this date, more than 60 days have passed and no pro se response has been filed. We have carefully reviewed the record and counsel’s brief and agree the appeal is frivolous and without merit. Further, we find no reversible error in the record. We are not to address the merits of each claim raised in an Anders brief or a pro se response when we have determined there are no arguable grounds for review. See Bledsoe v. State, 178 S.W.3d 824, 827–28 (Tex. Crim. App. 2005). Accordingly, the judgment of the trial court is affirmed. PER CURIAM Panel consists of Chief Justices Frost and Justices Boyce and Jewell. Do Not Publish — Tex. R. App. P. 47.2(b). 2	01-03-2023	10-30-2017
https://www.courtlistener.com/api/rest/v3/opinions/1532437/	831 S.W.2d 548 (1992) Winston THORPE, Appellant, v. The STATE of Texas, Appellee. No. 3-91-117-CR. Court of Appeals of Texas, Austin. June 3, 1992. Connie J. Kelley, Austin, for appellant. Ronald Earle, Dist. Atty., Frank W. Bryan, Jr., Asst. Dist. Atty., Austin, for the State. Before POWERS, JONES and KIDD, JJ. JONES, Justice. A jury found Winston Thorpe, appellant, guilty of aggravated possession of a controlled substance, cocaine. See Tex. Health § 481.102(3)(D), 481.-115 (Pamph.1992). The trial court sentenced appellant to twenty-five years' confinement in the Institutional Division of the individual may be punished by a fine not to 549 Texas Department of Criminal Justice. On appeal, appellant asserts two points of error: (1) the evidence was legally insufficient to support the jury's guilty verdict; and (2) the trial court erred in overruling appellant's motion for new trial based on newly discovered evidence. We will reverse the conviction and reform the judgment to reflect an acquittal. BACKGROUND Noel Palmer, appellant's brother-in-law, notified police that appellant was in possession of illegal drugs. Palmer made the phone call from a convenience store located across the street from appellant's apartment. On receiving the phone call, the police met Palmer at the convenience store, briefly questioned him, and then accompanied him to appellant's apartment. When Palmer opened the apartment door, the police saw appellant standing in the hall of the apartment holding bags that contained crack cocaine. A grand jury indicted appellant for the offense of intentionally and knowingly possessing cocaine, plus adulterants and dilutants, in the amount of twenty-eight grams or more but less than 400 grams. A jury convicted appellant of that offense, and the trial court sentenced him to twenty-five years' imprisonment. DISCUSSION In his first point of error, appellant claims that the evidence was legally insufficient to prove that he was in possession of at least twenty-eight grams of cocaine, including adulterants and dilutants. In addressing a sufficiency-of-the-evidence challenge, we must determine, after viewing the evidence in the light most favorable to the prosecution, whether any rational trier of fact could have found the essential elements of the offense beyond a reasonable doubt. Reeves v. State, 806 S.W.2d 540, 543 (Tex.Crim.App.1990) (citing Jackson v. Virginia, 443 U.S. 307, 99 S. Ct. 2781, 61 L. Ed. 2d 560 (1979)), cert, denied, ___ U.S. ____, 111 S. Ct. 1641, 113 L. Ed. 2d 736 (1991). We must "review the entire body of evidence to determine whether the State has proven beyond a reasonable doubt each and every element of the alleged crime and not just a plausible explanation of the crime." Butler v. State, 769 S.W.2d 234, 239 (Tex.Crim.App. 1989). At trial the State introduced into evidence four exhibits that police officers had seized at appellant's apartment and that the State's chemist had tested for the presence of controlled substances. Two of the tested exhibits, numbers 6 and 7, contained no controlled substances; however, the other two exhibits, numbers 4 and 5, tested positively for cocaine. Exhibit number 4 included 101 small ziplocked bags, each of which contained a solid granular substance. The State's chemist tested 10 of these 101 small bags and found that the substance in each of the 10 small bags contained cocaine. The combined weight of all 101 small bags was 16.93 grams; however, there was no evidence as to the weight of the 10 small bags that the State's chemist tested. Exhibit number 5 consisted of a single bag containing two large chunks of solid material. The State's chemist determined that these chunks contained cocaine. The weight of exhibit number 5 was 27.00 grams; therefore, the aggregate weight of both exhibits 4 and 5 was 43.93 grams. As discussed above, the State's chemist testified that the substances in exhibits 4 and 5 "contained" cocaine; however, there is no evidence as to how much of the 43.93 grams of substance contained in those exhibits was cocaine, as opposed to some other substance. In response, the State correctly asserts that when it is proving the amount of cocaine possessed by a defendant, it is allowed to include not only the pure cocaine, but also any adulterants and dilutants present. See Tex.Health & Safety Code Ann. § 481.115 (Pamph.1992). Therefore, the State argues that the evidence is sufficient to prove that the 43.93 grams of substance seized at appellant's apartment consisted entirely of cocaine and adulterants and dilutants. We disagree. In McGlothlin v. State, 749 S.W.2d 856 (Tex.Crim.App.1988), the court defined 550 the terms "adulterants" and "dilutants" to mean "compounds, substances or solutions added to the controlled substance with the intent to increase the bulk of the product. Or, increase the quantity of the final product `without affecting its activity.'" Id. at 860. The court recently elaborated on this definition in Cawthon v. State, No. 1170-90, 1992 WL 73489 (Tex.Crim.App. April 15, 1992), stating that the chemical activity of the controlled substance and the added substance is paramount; therefore, "[i]f the added substance changes the [controlled substance's] chemical activity, it is not an adulterant or dilutant, even if it does increase the bulk or quantity of the product." Id., slip op. at 2. The court then quoted the following from its opinion in Reeves, adding the bracketed phrase "without affecting its activity": [W]here the State attempts to obtain a conviction for an aggravated offense under the theory that the aggregate weight of the controlled substance, including adulterants or dilutants, is over 28 grams, the State first must prove the existence of any adulterants or dilutants, i.e., compounds, substances, or solutions added to the controlled substance to increase the bulk or quantity of the final product [without affecting its activity]. The State must then show that the controlled substance, plus any adulterants or dilutants, if proven to exist, weighs more than 28 grams. Cawthon, slip op. at 2-3 (quoting Reeves, 806 S.W.2d at 542). Relying on Reeves, McGlothlin, Engelking v. State, 750 S.W.2d 213 (Tex.Crim.App.1988), and Sloan v. State, 750 S.W.2d 788 (Tex.Crim.App. 1988), the court then summarized the elements that the State must prove beyond a reasonable doubt when adulterants and dilutants constitute a part of the weight utilized to increase punishment: (1) the identity of the named illegal substance, (2) that the added remainder (adulterants and/or dilutants) has not affected the chemical activity of the named illegal substance, (3) that the remainder (adulterants and/or dilutants) was added to the named illegal substance to increase the bulk or quantity of the final product, (4) the weight of the illegal substance, including any adulterants and/or dilutants. Cawthon, slip op. at 3-4. In the present case, the State presented two witnesses who testified both about crack cocaine in general and about the crack cocaine seized in appellant's apartment. One of the witnesses, a police officer, testified that he knew the basics of "crack-cocaine" manufacturing, which he described as a "boiling down process with baking soda that's mixed with cocaine with whateverit's called cut that you're using.... You cut it down." When asked what "cut" means, the officer described it as anything added to the pure cocaine to dilute it. The officer also testified that crack cocaine is soft immediately after being made, hardening as it dries out, and that the crack cocaine from appellant's apartment was soft when seized. The other witness presented by the State was the chemist who tested the substances seized at appellant's apartment. As discussed above, the chemist testified that both exhibits 4 and 5 contained cocaine. The following exchange then occurred: Q: Let me ask you aboutLet me also ask you quickly about State's Exhibit No. 7 and State's Exhibit No. 6. Did you also take a look at those substances? A: Yes, sir, I did. Q: And did you run any tests on those substances? A: Yes, sir, I did. Q: Okay. And what were the results of those tests? A: They were negative for any controlled substances. That's really about as far as we go on negative substances. We don't continue to specifically identify them. Q: Okay. Do you have any opinion as to what it might be or what it would be used for? A: It's very possible that it is something similar to like baking soda. A basic type compound. * * * * * * 551 Q: Did you also weigh the substances that you said tested positive for cocaine? A: Yes, sir. Q: And what was the weight of the 101 rocks? A: 16.93 grams. Q: What was the weight of the two larger rocks? A: 27.00 grams. * * * * * Q: And does that weight include adulterants and dilutants? A: Yes, sir, it would. Q: What do you mean by adulterant and dilutant? A: That would be something that was not cocaine that might be present in the sample. Q: Okay. Baking soda, for example? A: Very, very possibly, yes. Q: Something that's added to the cocaine to dilute it? A: That could be, also. Q: So the total amount of the cocaine for this particular case is what amount? A: The total amount would be 43.93 grams. Obviously, the State presented sufficient evidence of the identity of the named illegal substance; exhibits 4 and 5 contained at least some cocaine. However, there is no evidence that the remainder of the substance was adulterants and dilutants. The State's chemist testified only that exhibits 4 and 5 could include adulterants and dilutants. Under the teaching of Reeves and Cawthon, this is not sufficient. "Absent facts to show that the remainder of the material consisted of substances intended to increase the bulk or quantity of the final product, [crack cocaine], it cannot be said that the remainder was an adulterant or dilutant." Reeves, 806 S.W.2d at 544 (emphasis added). Even if we assume, therefore, that the State's evidence was sufficient to establish that exhibits 4 and 5 "contained" cocaine and adulterants and dilutants, there was absolutely no evidence that that was all the exhibits contained. Thus, no rational juror could determine beyond a reasonable doubt that of the 43.93 grams of substance seized in appellant's apartment, at least 28 grams was cocaine plus adulterants and dilutants; based on the evidence presented, it could have been more or it could have been less. Further, as shown above, the State presented general testimony about how crack cocaine is manufactured and about how certain substances are generally added to the cocaine to dilute it and increase its bulk; however, the State presented absolutely no evidence that the substances added to the cocaine during the manufacturing process in the present case did not affect the chemical activity of the cocaine. Therefore, the State failed to prove beyond a reasonable doubt at least three of the four elements listed in Cawthon. Consequently, we conclude that the evidence is legally insufficient to show that the aggregate weight of the controlled substance, including any adulterants or dilutants, was 28 grams or more. Our conclusion also finds support in the Court of Criminal Appeals' analysis in Reeves and Cawthon. In Reeves the State's expert testified that the entire contents of a bag containing amphetamine weighed 29.76 grams. However, he also stated that he did not determine the weight of the amphetamine in the bag or the nature or weight of the other substances in the bag. The Court of Criminal Appeals held that the evidence was insufficient to prove delivery of more than 28 grams of amphetamine. Reeves, 806 S.W.2d at 543-45. In the present case, the State's expert testified that the entire contents of two exhibits containing cocaine weighed 43.93 grams. However, there was no testimony as to the weight of the cocaine in the exhibits, nor was there testimony as to the identity or weight of the other substances in the exhibits. In Cawthon the State's expert testified that the weight of the total substance was 128.76 grams. He also testified that of that substance twenty percent [25.752 grams] was amphetamine with the rest *552 being adulterants and dilutants. However, when asked about the adulterants or dilutants, [the expert] responded that he `did not run a specific analysis to determine the adulterants or dilutants.' See Cawthon, slip op. at 1 (emphasis added). The court determined that this evidence was insufficient. See Cawthon, slip op. at 4. The evidence in the present case does not even rise to the level of the evidence presented in Cawthon. The State's expert in the present case did not testify as to the quantity of cocaine contained in exhibits 4 and 5, nor did he testify that all the remainder of the substance was adulterants and dilutants. CONCLUSION We conclude that the evidence is legally insufficient to show that appellant possessed at least 28 grams of cocaine, plus adulterants and dilutants; therefore, we sustain appellant's first point of error. Accordingly, we need not address his second point of error. We reverse the conviction and reform the judgment to reflect an acquittal.[1] NOTES [1] In Bigley v. State, 831 S.W.2d 409 (Tex.App. Austin, 1992, no pet. h.), this Court found the evidence insufficient to support a conviction for possession of methamphetamine in an amount exceeding 400 grams; however, instead of acquitting the defendant, we reformed the judgment to reflect a conviction for the lesser included offense of possession of 28 grams or more, but less than 400 grams, of methamphetamine. We did this in light of the fact that there was ample evidence that the defendant was guilty of the lesser included offense and that the trial court had charged the jury on the lesser included offense. In the present case, while there was evidence that appellant was guilty of the lesser included offense of possession of cocaine in an amount less than 28 grams, the trial court did not charge the jury on that offense. The trial corut cahrges the jury only oon the offense of possessoin of cocaine in an amount of 28 grams or more but less than 400 grams. The trial coourt then charged "unless you so find beyond a reasonable doubt, or if you have a reasonable dout thereof, you will acquit the defendant and say by yur verdict `not guilty.'" Therefore, unlike the jury in Biglye, the jury in the present case had only two choices: (1)convict oof possession of 28 grams or more but less that 400 grams of cocains; or (2) acquit. Having concluded that the evidence is insufficent to support a conviction for possession of 28 grams or more of cocaine, we must neter the only other judment authorized by the trial court's charge: acquittal. See Boozer v. State, 717 S.W.2d 608 (Tex.Crim.App.1984), and its progeny.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532475/	489 Pa. 485 (1980) 414 A.2d 625 WESTINGHOUSE ELECTRIC CORPORATION, Appellant, v. Commonwealth of Pennsylvania, WORKMEN'S COMPENSATION APPEAL BOARD and Margaret L. Pollard, Widow of Walter H. Pollard, Deceased, Appellees. Supreme Court of Pennsylvania. Argued March 11, 1980. Decided April 25, 1980. Reargument Denied June 2, 1980. 486 William Alvah Stewart, III, Mark A. Willard, Eckert, Seamans, Cherin & Mellott, Pittsburgh, for appellant. Samuel J. Goldstein, Pittsburgh, for Margaret L. Pollard. Before EAGEN, C.J., and O'BRIEN, ROBERTS, NIX, LARSEN, FLAHERTY and KAUFFMAN, JJ. OPINION OF THE COURT LARSEN, Justice. This is a workmen's compensation case wherein the Westinghouse Electric Corporation (appellant) appeals from an order of the Commonwealth Court affirming an award by the Workmen's Compensation Appeal Board (The Board) to Margaret L. Pollard, appellee. Appellee's husband, the decedent Walter H. Pollard, III, was employed by appellant as an internal consultant. On October 7, 1974, the decedent joined his superior for a five-day assignment at appellant's facility located in Hampton, South Carolina. After a brief tour of this facility, decedent and his superior were invited by a Westinghouse division manager to stay at the appellant's lodge, a ranchtype house used to provide overnight accommodations for its employees and customers. Arriving at the lodge at approximately 6:30 p.m., decedent requested a scotch whiskey. Shortly thereafter, decedent and several others who were present at the lodge departed for dinner at a Holiday Inn where one round of drinks was ordered. The evening was largely social in nature and the party returned to the lodge at approximately 9:00 p.m. The decedent then went to the lodge game room to continue drinking and socializing. By approximately 9:45 p.m. decedent's speech became noticeably slurred and incoherent; he stumbled and fell when attempting to rise from his seat. Believing that decedent was intoxicated, two of his co-workers assisted decedent to 487 his room, placed him in bed without removing his clothing, and left him there for the night. The next morning, decedent was found dead, lying fully-clothed on the floor near to his bed. An autopsy and subsequent toxological examination indicated that decedent died from asphyxia due to aspiration of his gastric contents caused by "multiple depressant drug and ethanol overdose."[1] On the basis of such evidence and testimony, the referee concluded as a matter of law: FIRST: On October 7, 1974, the decedent, Walter H. Pollard, III, died during the course of his employment on premises of the employer due to asphyxia caused by the aspiration of gastric contents into the respiratory tract produced by vomiting following the ingestion of ethanol and drugs and medications which severely depressed his Central Nervous System setting in motion the events which caused death, compensable under the terms and provisions of the Workmen's Compensation Act as amended and the judicial interpretations thereof. This conclusion of law was accepted by both the Workmen's Compensation Appeal Board and the Commonwealth Court.[2] Appellant now appeals to us arguing that decedent's death was not the result of an injury related to the course of the decedent's employment as required under the Workmen's Compensation Act. We agree and reverse the Commonwealth Court. This Court has stated that "[t]he referee is the finder of fact and the scope of appellate review is confined to an examination of the record to determine whether those findings 488 of fact are supported by substantial evidence, and whether any constitutional rights were violated or error of law committed". Workmen's Comp. Appeal Bd. v. Pincus Company, 479 Pa. 286, 291, 388 A.2d 659, 661 (1978) (emphasis supplied). In applying this standard to the instant case, we find that it was an error of law for the referee to conclude from the facts that decedent's death was compensable under the Workmen's Compensation Act. Section 301(c) of the Act,[3] states in pertinent part: "The terms `injury' and `personal injury', as used in this Act, shall be construed to mean injury to an employee, regardless of his previous physical condition, arising in the course of his employment and related thereto . . .; and wherever death is mentioned as a cause for compensation under this Act, it shall mean only death resulting from such injury and its resultant effects . . . ." (Emphasis supplied). This provision makes it clear that injury, or death resulting from such injury, is compensable only if it is work-related, i. e. causally connected to one's course of employment.[4] In the instant case, decedent's death occurred as a result of voluntary ingestion of a massive quantity of alcohol and multiple depressant drugs.[5] There was no evidence 489 relating this ingestion to decedent's course of employment. By itself, drug abuse certainly bears no causal connection to decedent's course of employment. Accordingly, his death is not compensable under the Pennsylvania Workmen's Compensation Act. We reverse the order of the Commonwealth Court affirming the order of the Workmen's Compensation Appeal Board which granted judgment in favor of the claimant Margaret L. Pollard. NOTES [1] The toxological report of October 16, 1974 revealed that decedent's blood alcohol level was .322; also decedent's urine contained the presence of three separate depressant drugs: Pentobarbital, Propoxyphene, and Phenothiazine. Neither decedent's own medical records nor the testimony of his physicians show that he had prescriptions for any of these drugs. [2] The opinion of the Commonwealth Court and the vigorous dissent of Judge Mencer are set forth in Westinghouse Electric Corp. v. Workmen's Comp. Appeal Bd., 42 Pa.Cmwlth. 147, 400 A.2d 1324 (1979). [3] The Act of June 2, 1915, P.L. 736, Act III, § 301(c), 77 P.S. § 411(1), as amended. [4] This principle was recognized in Workmen's Comp. Appeal Bd. v. Borough of Plum, 20 Pa.Cmwlth. 35, 38-9, 340 A.2d 637, 639 (1975) where the court stated, in reference to Section 301(c) that "the . . addition of the phrase `and related thereto' which follows `arising in the course of his employment' to us means that the injury, whether it occurred on or off the premises, must to some degree be causally connected to the course of employment." See also Workmen's Comp. Appeal Bd. v. Jeddo Highland Coal Co., 19 Pa.Cmwlth. 90, 338 A.2d 744 (1975). [5] As noted in footnote one, decedent's blood alcohol level was .322. Appellant contends that this evidence and consumption of three separate depressant drugs show that decedent's death was voluntarily and intentionally self-inflicted (a suicide) and thus not compensable pursuant to Section 301(a) of the Act, 77 P.S. § 431 which prohibits compensation in such cases. The decedent's taking of his own life was previously placed at issue in Pollard v. Metropolitan Life Insurance Company, 598 F.2d 1284 (3rd Cir. 1979), a companion case to the matter before this Court, wherein Judge Weiner, speaking for the majority, affirmed a jury verdict denying decedent's widow accidental death insurance benefits. The policies in question barred payment of said benefits when death is caused by or results from "intentional self-destruction or intentionally self-inflicted injury." Because of our disposition of this case, we do not need to decide whether or not decedent's death was intentional.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532480/	368 S.W.2d 270 (1963) Roy STILLMAN, Appellant, v. JIM WALTER CORPORATION et al., Appellees. No. 5-3026. Supreme Court of Arkansas. June 3, 1963. 271 McMath, Leatherman, Woods & Youngdahl and John P. Sizemore, Little Rock, for appellant. Wright, Lindsey, Jennings, Lester & Shults, Little Rock, for appellees. ROBINSON, Justice. On August 13, 1959, appellant, Roy Stillman, and appellee, Jim Walter Corporation, entered into a written contract, Jim Walter Corporation being designated as "contractor" and appellant, Roy Stillman, designated as "sub-contractor", whereby the Jim Walter Corporation engaged Stillman to build houses for a specified consideration, the amount of the consideration depending on the type of house constructed. Stillman was to furnish only the labor. Item 5 of the contract provides: "Sub-Contractor shall furnish Contractor a Certificate of Workmen's Compensation coverage on Sub-Contractor and all employees of Sub-Contractor or, in the absence of such Certificate, all payments hereunder shall be subject to a 3% deduction and Contractor will furnish such Workmen's Compensation coverage." Subsequently, Stillman was injured on the job. His medical expenses were paid by the insurance carrier, but when it was determined that he needed an operation due to the condition of his back, no further payments were made. Stillman filed a claim with the Workmen's Compensation Commission. The matter was heard and the Commission denied compensation on the ground that under the terms of the contract of employment Stillman was an independent contractor, not an employee, and therefore he could not collect under the workmen's compensation law for his injury. The Commission never reached the issue of whether the claimant was injured in the course of his employment, nor the extent of his injuries. The parties had entered into a valid agreement whereby for the consideration of 3% of the contract price payable to Stillman for building the houses, Walter agreed to furnish workmen's compensation coverage for Stillman and his employees. With Stillman's consent, the 3% was deducted and the coverage furnished. If Stillman had suffered the loss of a leg, or other very serious injury through the negligence of agents or servants of the Jim Walter Corporation, the employer or insurance carrier could have claimed that recovery could be had only according to the terms of the workmen's compensation law; that Stillman was estopped to contend otherwise. Regardless of whether Stillman was, in fact, an independent contractor or an employee, under the facts in this case, the Jim Walter Corporation is estopped to say that he is not entitled to workmen's compensation. Carpenter v. Madden, La.App., 149 90 So. 2d 508 (1956). And in Garner v. Southern Pulpwood Ins. Co., La.App., 149 So. 2d 157 (1963), the court pointed out that in the Carpenter case the employer was bound to furnish workmen's compensation coverage because he had obligated himself to do so, and had collected money purportedly to pay for compensation insurance. That is the exact situation in the case at bar. Here, after the injury occurred, the employer and the insurance carrier attempted to rescind the coverage. Ark.Stat.Ann. § 81-1305 (Repl.1960) provides: " * * The primary obligation to pay compensation is upon the employer and the procurement of a policy of insurance by an employer to cover the obligation in respect to this act shall not relieve him of such obligation." The contract to furnish insurance was between the Jim Walter Corporation and Stillman. The Corporation was *272 bound by its contract, and had no right to repudiate its obligation regardless of the attitude of the insurance carrier. It was the employer's contract, not the insurance company's. In support of its position that the employer is not estopped to deny liability for workmen's compensation, appellee cites Smith v. West Lake Quarry & Material Co., 231 Ark. 294, 329 S.W.2d 167. We did touch on the question to some extent in that case; however, there, the employer made no deduction from the worker's earnings for workmen's compensation; there was no contract to furnish workmen's compensation, and apparently no insurance coverage was provided. In the cases of Farrell-Cooper Lumber Co. v. Mason, 216 Ark. 797, 227 S.W.2d 445, and Ozan Lumber Co. v. McNeely, 214 Ark. 657, 217 S.W.2d 341, 8 A.L.R. 2d 261, we said that the fact that workmen's compensation coverage was provided could be considered in determining whether an employer-employee relationship existed. The cases did not turn on the question of estoppel. And, it was specifically pointed out in the Ozan Lumber Company case that in the circumstances of that case it was not necessary to decide whether the procurement of insurance in itself was sufficient to establish the relationship of master and servant. There, the court said: "[I]t is unnecessary to decide whether the procurement of such insurance [workmen's compensation insurance] is sufficient in itself to establish the relationship of master and servant." In view of the written contract, supported by a valuable consideration which was paid, obligating appellee to furnish workmen's compensation coverage on Stillman and the other workers, we do not reach the question of whether the mere deduction of the 3%, plus the actual procurement of coverage by the employer, estopped the Jim Walter Corporation from denying that Stillman and the other men working with him were employees. In recent years, however, several courts have dealt with the proposition of whether the payment of an insurance premium for coverage under the workmen's compensation law on a particular person estops the employer and insurance carrier from denying that such person on whom the insurance is paid is an employee. The weight of authority appears to be that in circumstances of that kind, the doctrine of estoppel is applicable. Hall v. Spurlock, Ky., 310 S.W.2d 259; Ham v. Mullins Lumber Co., 193 S.C. 66, 7 S.E.2d 712; Nash v. Meguschar, Ind.App., 89 N.E.2d 227; Herndon v. Slayton, 263 Ala. 677, 83 So. 2d 726; Hano v. Kinchen, La.App., 122 So. 2d 889; Southern Underwriters v. Jones, Tex.Civ.App., 125 S.W.2d 393; Smith Coal Co. v. Feltner, Ky., 260 S.W.2d 398. Reversed and remanded for the determination of the questions of whether Stillman was injured in the course of his employment, and, if so, the extent of his injuries.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/727101/	96 F.3d 1451 NOTICE: Ninth Circuit Rule 36-3 provides that dispositions other than opinions or orders designated for publication are not precedential and should not be cited except when relevant under the doctrines of law of the case, res judicata, or collateral estoppel.Rosa SARAUSAD, Plaintiff-Appellant,v.UNIVERSITY OF WASHINGTON, Defendant-Appellee. No. 95-35930. United States Court of Appeals, Ninth Circuit. Argued and Submitted Aug. 9, 1996.Decided Sep. 10, 1996. Before: ALARCON, NORRIS, and KLEINFELD, Circuit Judges. 1 MEMORANDUM* 2 We affirm the summary judgment in favor of the University on the ground that appellant Sarausad's action is precluded by prior state court litigation. 3 We review de novo the district court's determination that claim and issue preclusion are available. Guild Wineries and Distilleries v. Whitehall Co., Ltd., 853 F.2d 755, 758 (9th Cir.1988). If we determine that issue preclusion is available, we review under an abuse of discretion standard the district court's decision to accord issue preclusive effect to the relevant decision. Plaine v. B.C. McCabe, 797 F.2d 713, 718 (9th Cir.1986). 4 Sarausad concedes that her employment discrimination litigation in state court precludes any federal discrimination claims she may raise regarding the same events. See Kremer v. Chemical Construction Corp., 456 U.S. 461 (1982) (state court determination of state law employment discrimination claim precludes Title VII claim in federal court when state court decision would be preclusive in state's own courts). However, Sarausad argues that her federal claims are based on events that occurred, or continued to occur, after the conclusion of her state court litigation, and therefore are not barred by claim preclusion. The University argues that Sarausad's federal claims are identical to her state claims because they are "claims of continuing violations" which are "no different than the original conduct" addressed in the state court. 5 Sarausad has already litigated the issue of discriminatory intent in state court and such intent is an essential element of her discrimination and retaliatory termination claims. Instead of presenting new facts to show discriminatory intent, Sarausad admits that "some of the evidence [presented to the state court] of her prior treatment may be relevant as a factual predicate for the pattern it may or may not disclose [in federal court]." Appellant's Brief at 13. In addition, Sarausad simply alleges that the present action implicitly raises new issues because it addresses a different time period than the state court action did. However, bald allegations of continuing misconduct are insufficient to raise new issues. See Dual-Deck Video Cassette Recorder Antitrust Litig., 11 F.3d 1460 (9th Cir.1993) (holding allegations of continuing conspiracy precluded under federal preclusion law); Green v. Illinois Dept. of Transp., 609 F. Supp. 1021, 1026-27 (D.C.Ill.1985) (finding plaintiff's claims that his employer continued to harass him were precluded under federal preclusion law because they were "based on a continual course of conduct which occurred before judgment had been entered in a previous suit"). Since the state court has already litigated and determined the issue of discriminatory intent based on the same allegations underlying the present action, Sarausad's claims of continuing discrimination and retaliatory termination are barred. 6 Sarausad claims she has no new evidence of discriminatory intent because she was pro se in the proceedings below and did not, therefore, have sufficient discovery. However, the perils of proceeding pro se cannot serve as a defense to summary judgment. 7 Since we affirm based on the preclusive effect of Sarausad's prior state court litigation, we need not reach the preclusive effect of the PAB proceedings. 8 The judgment of the district court is AFFIRMED. * This disposition is not appropriate for publication and may not be cited to or by the courts of this circuit except as provided by Ninth Circuit Rule 36-3	01-03-2023	04-17-2012
https://www.courtlistener.com/api/rest/v3/opinions/1532569/	368 S.W.2d 560 (1963) GOVERNMENT SERVICES INSURANCE UNDERWRITERS et al., Relators, v. Honorable Herman JONES, District Judge, Respondent. No. A-9590. Supreme Court of Texas. May 22, 1963. Rehearing Denied June 12, 1963. Franklin Spears, Perry Rowan Smith, San Antonio, Heath & Davis, Austin, John Peace and J. B. Langham, San Antonio, for appellant relators. Waggoner Carr, Atty. Gen., Austin, Joe R. Long and Dudley D. McCalla, Asst. Attys. Gen., for respondent. NORVELL, Justice. The sole question involved in this proceeding is whether or not Article 2168a, Vernon's Ann.Tex.Stat., which provides for a mandatory continuance of pending lawsuits upon application of a member of the Legislature is invalid because it is violative of Article II, § 1, of the Constitution of Texas Vernon's Ann.St., relating to the division of the powers of government into three distinct departments. No other constitutional basis for the invalidity of the statute is here urged. In our opinion this question was determined contrary to the respondent's 561 position in Mora v. Ferguson, 145 Tex. 498, 199 S.W.2d 759, decided by this Court in 1947 and on authority of this case relators are entitled to the mandamus they pray for. The essential facts are these: An insurance company liquidation proceedings is now pending in the District Court of Travis County, Texas, styled, State of Texas v. Government Services Insurance Underwriters, Inc., et al. Some time in October, 1962, Honorable Franklin Spears, an attorney at law and member of the State Senate, was employed as counsel by one or more of the defendants in said cause. The defendants in the case mentioned are now the relators before this Court. The defendants in the district court case filed a motion for continuance based upon various grounds such as inability to complete the taking of the depositions of the statutory liquidator because of illness and the like. The only ground which is pertinent here, however, is that portion of the motion which is styled "Alternative Motion for Continuance" wherein Senator Spears by a sworn pleading states that he is a member of the State Senate which is presently in session and prays that the cause be continued in accordance with the provisions of Article 2168a. This "Alternative Motion for Continuance" was originally filed on April 8, and the grounds therein set forth were again urged in a pleading filed on April 25, 1963. Article 2168a reads as follows: "In all suits, either civil or criminal, or in matters of probate, pending in any court of this State at any time within thirty (30) days of a date when the Legislature is to be in Session, or at any time the Legislature is in Session, it shall be mandatory that the court continue such cause if it shall appear to the court, by affidavit, that any party applying for such continuance, or any attorney for any party to such cause, is a Member of either branch of the Legislature, and will be or is in actual attendance on a Session of the same. Where a party to any cause is a Member of the Legislature, his affidavit need not be corroborated. On the filing of such affidavit, the court shall continue the cause until thirty (30) days after the adjournment of the Legislature and such affidavit shall be proof of the necessity for such continuance, and such continuance shall be deemed one of right and shall not be charged against the party receiving such continuance upon any subsequent application for continuance. It is hereby declared to be the intention of the Legislature that the provisions of this Section shall be deemed mandatory and not discretionary." The wording of the statute makes clear the Legislative intent that the court in which a statutory motion is filed shall have no discretion to grant or refuse the motion. It is expressly stated that, "it shall be mandatory that the court continue such cause" and that "It is hereby declared to be the intention of the Legislature that the provisions of this Section shall be deemed mandatory and not discretionary." The Honorable Herman Jones, respondent here, and the judge of the court in which the liquidation proceedings are pending, overruled the motion for continuance and held that the mandatory nature of the statute rendered the same unconstitutional under Article II, § 1 of the Texas Constitution relating to the division of governmental powers which provides that: "The powers of the Government of the State of Texas shall be divided into three distinct departments, each of which shall be confided to a separate body of magistracy, to wit: Those which are Legislative to one; those which are Executive to another, and those which are Judicial to another; and no person, or collection of persons, being of one of these departments, 562 shall exercise any power properly attached to either of the others, except in the instances herein expressly permitted." The order of the district court rests squarely upon the proposition that the portion of the statute which undertakes to deprive a district court of all discretion in granting a continuance regardless of whether in fact the presence of the attorneylegislator is essential to a fair trial of the cause amounts to an invasion of the judicial realm by the Legislature and hence comes under the constitutional proscription embodied in Article II, § 1 of the Constitution.[1] No other basis for the refusal of the continuance is set forth in the order of the trial judge and it is not urged by the Attorney General who is here representing the respondent that the granting of a continuance would result in any person being deprived of a remedy by due course of law, or that anyone would be deprived of equal protection of the laws contrary to the provisions of the Fourteenth Amendment to the Constitution of the United States or Article I, §§ 13 and 19 of the Texas Constitution; or that any constitutional provision other than Article II, § 1 would prevent Article 2168a from being fully operative under the facts of this particular case. Upon Judge Jones' refusal to grant the statutory continuance, the relators applied to this Court for a peremptory writ of mandamus directing said District Judge to enter an order continuing the cause pending in his court in accordance with the holdings and practices outlined in Mora v. Ferguson, supra. Express provisions similar to that contained in the Texas Constitution relating to the division of governmental powers are found in many state constitutions. Undoubtedly, as pointed out by counsel, such a provision is implicit in all written constitutions patterned after that of the United States of America. However, the problem of determining that which is judicial and that which is legislative is often difficult of statement under varying factual circumstances. Classification may depend upon the particular nomenclature and definitions employed in the field of learning with which one is concerned. To a political scientist who regards the legislative power as that authority which determines those rules of conduct which will be supported by governmental sanctions, the action of a court in declaring a law passed by a Legislature to be null and ineffective might appear to be a clear exercise of legislative power. As mentioned by this Court in Goode v. McQueen's Heirs, 3 Tex. 241, the power of the judicial branch to set aside and hold for naught an act of the legislative branch has been regarded by foreigners as an anomaly and a somewhat dangerous one at that (p. 257). Yet, as pointed out by the Attorney 563 General in his brief, Alexander Hamilton, in the Federalist Papers (No. 78), clearly anticipated Marbury v. Madison, 1 Cranch 137, 2 L. Ed. 60, when he asserted that the judicial branch of government must necessarily possess the power to declare those acts invalid which are contrary to the Constitution upon the theory that the judiciary must follow fundamental law and disregard non-fundamental law which is contrary thereto. Proceedings in which a court is involved are not necessarily classified as judicial in character under any and all circumstances. This is recognized by the terms of the Constitution itself in various instances. For example, Article V, § 8 of the Constitution vests the District Court with original jurisdiction of contested elections. In De Shazo v. Webb, 131 Tex. 108, 113 S.W.2d 519, it was said, "The jurisdiction conferred upon the district courts to hear and determine `contested elections' is legislative in its nature. * * In other words * * * the power and jurisdiction to hear and determine a contested election action is the power and jurisdiction to exercise a legislative function, and * * * it is not a civil suit." See also, Williamson v. Lane, 52 Tex. 335, and Gonzales v. Laughlin, Tex.Civ.App., 256 S.W.2d 236, no writ history. In determining whether or not the exercise of a power by one branch of government is an unauthorized invasion of the realm or jurisdiction of another branch, we must consider the relationship of the various governmental departments as set forth and defined in the Texas Constitution, for that which is permitted by the Constitution cannot be unconstitutional. The power and authority of a state legislature is plenary and its extent is limited only by the express or implied restrictions thereon contained in or necessarily arising from the Constitution itself. State v. Brownson, 94 Tex. 436, 61 S.W. 114. Insofar as procedure is concerned, the 1891 amendment to the judicial article of the Constitution vesting the Supreme Court with rule-making power expressly recognizes that such power is subordinate to that of the Legislature. Article V, § 25 of the Constitution, reads as follows: "The Supreme Court shall have power to make and establish rules of procedure not inconsistent with the laws of the State for the government of said court and the other courts of this State to expedite the dispatch of business therein." See also, Golden v. Odiorne, 112 Tex. 544, 249 S.W. 822.[2] The right of the Legislature to adopt rules of evidence for the government of judicial proceedings has never been questioned. Articles 3713-3737, incl., Vernon's Ann.Tex.Stat. The Legislature creates district courts and sets the terms for said courts. See, Apportionment Statute relating to district courts, Article 199, and Article 1919 providing for continuous terms. Numerous other examples of legislative control of judicial procedures could be given; and when we examine the matter which is specifically involved here, we find that the Legislature controls the granting of continuances in criminal cases by provisions which have been codified in the Code of Criminal Procedure, Articles 538 to 551 inclusive. In civil cases, provisions governing such matters were also enacted by the Legislature prior to the 1939 Act which repealed all laws or parts of laws governing the practice and procedure in civil actions in order to relinquish full rule-making power to the Supreme Court in such suits. Acts 1939, 46th Leg., p. 201, Article 1731a, Vernon's Ann.Tex.Stat. See also Rules 251 and 252, which adopt in rule form the provisions of Articles 2167 and 2168 of the 1925 Revised Statutes. 564 A rule prescribed by the Legislature which deprives a trial judge of all discretion in granting or refusing a continuance is not a novel development in the jurisprudence of this State. Article 2, § 1 of the Constitution of 1845 is practically identical in wording with Article 2, § 1 of the present Constitution, and in Prewitt v. Everett, 10 Tex. 283, Mr. Justice Lipscomb on authority of Hipp v. Bissell, 3 Tex. 18, and Hipp v. Hutchett, 4 Tex. 20, said: "The statute prescribes what shall be sufficient grounds for a first and second continuance, but is silent as to a subsequent application to continue, and it has been decided by this court that, if the terms of the statute are complied with on the first and second application, the court can exercise no discretionary power; that it must be granted." See also, Cleveland v. Cole, 65 Tex. 402, Lillard v. State, 17 Tex. Crim. 114. The Attorney General in a well-prepared brief cites a number of general authorities relating to the doctrine of separation of powers and specially calls our attention to two cases decided since this Court's decision in Mora v. Ferguson. These are McConnell v. State (1957), 227 Ark. 988, 302 S.W.2d 805, by the Supreme Court of Arkansas, and Booze v. District Court of Lincoln County (1961) Okl.Cr., 365 P.2d 589, by the Oklahoma Criminal Court of Appeals. The Oklahoma case follows and quotes from the McConnell decision and is persuasive authority in support of respondent's position. The opinion therein quotes with approval the following statement from American Jurisprudence, viz: "The fundamental principle running throughout the subject of continuances is that the granting or refusal of a continuance rests in the discretion of the court to which the application is made." 12 Am.Jur. 450, Continuances § 5. The Court then pointed out that under a long line of decisions in Oklahoma "an application for a continuance is addressed to the sole discretion of the trial court," and followed with a holding that a statute which provides for a mandatory continuance which places the matter beyond the discretion of the trial judge violates the Oklahoma constitutional provision relating to the division of governmental powers. It seems that the difference in the holding of the Oklahoma Court in the Booze case and the holding of this Court in the Mora case stems from an underlying divergence of view as to legislative authority over the subject of continuances from the constitutional standpoint. Under the Oklahoma Constitution as construed by the Criminal Court of Appeals of that state, the matter of continuance lies within the sole discretion of an officer of the judicial department. When this Court in Mora v. Ferguson upheld the legislatively prescribed mandatory continuance, it necessarily held that the matter of continuance did not rest solely within the discretion of the trial judge. There is a clear conflict of principle between the Booze and Mora cases and this is seemingly recognized by the Attorney General for he argues that in Mora this Court did not pass upon the contention that the mandatory continuance statute was violative of Article II, § 1 of the Constitution. We are unable to agree with the argument presented. In stating our reasons for disagreement, some repeating of what was said in Mora is unavoidable. We speak of the American system of separation of powers and checks and balances. These are seemingly contradictory terms and it should be recognized that all three branches of government are to some extent interdependent.[3] A mandatory continuance by 565 legislative enactment will undoubtedly interfere somewhat with the operations of the judicial department of government. On the other hand when a court requires that the legislator-attorney be in attendance upon it while the Legislature is in session, some interference with the legislative process necessarily takes place. The statutory right or privilege of the legislator is undoubtedly subject to abuse, but so is the discretion of the judge.[4] It is primarily the responsibility of the respective branches of government to curb abuses within their particular spheres. While a continuing failure to meet this responsibility may indicate a need for constitutional change, the circumstance that a power may be abused is not a valid basis for arguing that the power is non-existent. In upholding the mandatory continuance this Court in Mora quoted with approval the following from Bottoms v. Superior Court, 82 Cal. App. 764, 256 P. 422, 424: "The purpose of the provision of Section 1054 of the Code of Civil Procedure [providing for a mandatory continuance] is obvious. It will readily be conceded that there is no activity connected with and essential to the preservation and maintenance of the social fabric of greater importance than that of the functioning of the legislative department of a state. In exercising and administering that branch of the sovereign powers of a state that is appropriated to it by the people, in a government such as ours, in which the sovereign powers are divided into and assigned to three different, distinct, and independent departments, the Legislature is required to deal with the most sacred of human rightsrights which directly affect the life, the liberty, and the property of the citizen. The members of that body, therefore, must give constant and uninterrupted attention to their duties as such while it is in session lest there be either advertently or inadvertently bad legislation put over or good laws repealed, the effect of which would necessarily be to work, for the time, irreparable damage to the state. But these propositions are well understood and their soundness will be conceded, since it cannot possibly be doubted that the members of the Legislature, particularly such members as may belong to the legal profession and engaged actively in the practice thereof, should be relieved by the law from concerning themselves with extraneous matters or interests not pertaining to their legislative duties while they are in attendance on sessions of the Legislature and actually prosecuting their duties as such. On the other hand, the suggestion may be ventured, significant in the present connection, that a practicing lawyer deals with a science involving the most abstruse learning, in its remedial and procedural as well as its substantive branch, and in conserving or preserving, or protecting or defending the rights of his clients when such rights are questioned in the judicial tribunals, the demand for his undivided attention to those causes is as necessary or imperative as is the demand 566 upon him for like attention while he is engaged in performing the duties of a member of the Legislature." In substance, the argument of the California Court is that the mandatory continuance would tend to prevent rather than bring about conflicts between the legislative and judicial departments of government. In referring to the California opinion in Mora, it seems clear that this Court was considering the problem of the division of governmental powers and necessarily must have had in mind the constitutional provision here urged to invalidate the statute. This view is strengthened when we consider the contentions urged by the respondent in the Mora case together with what was said by this Court in disposing of the case contrary to these contentions. In his answer to the petition for mandamus, the Honorable Bryce Ferguson, one of the abler lawyers occupying the district bench at that time (1947), asserted: (1) that insofar as Article 2168a[5] seeks to "set up any right, immunity or privilege which members of the legislature would be entitled to in the case, wholly apart from the existence of such statute, the same is to such extent unconstitutional as being an attempt on the part of the legislature to add to its immunities and privileges, * " and, (2) that "to the extent that Article 2168a undertakes to impose upon the judiciary any rule or principle of procedure concerning the governing of our judicial branch of the government different from which ordinary principles of fairness, public consideration, public welfare, waiver and estoppel would dictate under the same circumstances, then to that extent such article constitutes an unwarranted invasion by the legislative branch of the duties and function of the separate and distinct judicial branch of government." In the Mora opinion, Mr. Justice Brewster writing for this Court stated Judge Ferguson's position as follows: "Then respondent urges that if Art. 2168a, supra, undertakes to impose upon the judicial branch of the government any rule of procedure different from the ordinary rule of waiver and estoppel, it constitutes an unwarranted invasion by the Legislature of the functions of the judiciary. He asserts, also, that the statute in question is unconstitutional in that it undertakes to add to the privileges and immunities given members of the Legislature by express constitutional provision." It seems abundantly clear that Judge Ferguson raised the question of an unlawful invasion of the judicial realm by the Legislature, i. e., that a violation of the principle of division of governmental powers had occurred. This Court was reasonably accurate in stating Judge Ferguson's position although the statement thereof in the opinion was in somewhat briefer form than that set forth in respondent's reply to the petition for mandamus. In our opinion the scope of the Mora decision cannot be restricted to the narrow holding 567 that Mora and his attorney were not estopped from claiming the benefits of the mandatory continuance statute. The quotation from the California case set forth in the Mora opinion does not deal with estoppel nor does it discuss an allegedly unwarranted expansion of the privileges and immunities given to members of the Legislature by express constitutional provision. It discusses the separate departments of government and the position of the attorney-legislator with reference thereto. The position taken by Judge Ferguson in Mora was the same as that which was sustained by the Oklahoma court in Booze v. District Court of Lincoln County. In Mora, however, Judge Ferguson's contention was decided adversely to him. In view of the issues raised in the Mora case and the opinion of this Court disposing of such issues, we must conclude that the holding of the Court was that the mandatory continuance statute did not violate Article 2, § 1 of the Constitution. See, King v. State, 160 Tex. Cr.R.R. 556, 273 S.W.2d 72, 49 A.L.R. 2d 1071. We anticipate that the respondent District Judge will vacate his present order setting the case of State of Texas v. Government Services Insurance Underwriters et al. for trial and grant a statutory continuance therein. Only in the event of a failure to take action as indicated in this opinion will mandamus actually issue. Mandamus conditionally granted. MOTION FOR REHEARING This Court's original opinion adequately disposes of the issues raised by the petition for mandamus and the answer thereto. It was stated in the opinion that questions involving the Fourteenth Amendment to the Constitution of the United States and Article I, Sections 13 and 19, of the Texas Constitution were not raised. They are not effectively raised now despite the Attorney General's attempt to expand his original position in his motion for rehearing. The order of Judge Jones denying Senator Spears' application for a statutory continuance is based solely upon Article II, Section 1, of the Texas Constitution and the record in this Court is not developed so as to support any other constitutional position or contention. The motion for rehearing is overruled. NOTES [1] The order entered by Judge Jones recited that the court "is of the opinion and finds that Article 2168a, V.A.C.S., undertakes to make the court's postponement of a case mandatory upon the filing of an affidavit that an attorney in such case is a member of the Legislature and that the Legislature is in session, regardless of whether in fact the presence of such attorney is necessary for a fair trial to be had; that it is the intent of Article 2168a that no discretion be vested in the Court upon the filing of such an affidavit; that defendants upon the trial of this case will be fairly and properly represented by other counsel without the necessity for the presence of the attorney-legislator in this case; that the determination of whether or not a trial should be continued in the interest of justice is an elementary judicial duty and must, under Article II, Section I of the Constitution of the State of Texas, be exercised by the judicial branch of our government; that insofar as Article 2168a undertakes to divest the Court of all discretion to determine when it shall be necessary in the administration of justice, for a postponement to be allowed, said Article violates Article II, Section I of the Constitution of the State of Texas and is, therefore, unconstitutional to that extent; that in view of such unconstitutionality, this Court may exercise its discretion in determining whether defendants' alternative motion for continuance should be granted." [2] In connection with the power to promulgate rules of procedure, see, Acts 1939, 46th Leg., p. 201, Art. 1731a, Vernon's Ann.Tex.Stat. Denbow v. Standard Accident Insurance Company, 143 Tex. 455, 186 S.W.2d 236. [3] In Story on Constitutional Law, it is said: "But when we speak of a separation of the three great departments of government, and maintain, that that separation is indispensable to public liberty, we are to understand this maxim in a limited sense. It is not meant to affirm, that they must be kept wholly and entirely separate and distinct, and have no common link of connection or dependence, the one upon the other, in the slightest degree. The true meaning is, that the whole power of one of these departments should not be exercised by the same hands, which possesses the whole power of either of the other departments; and that such exercise of the whole would subvert the principles of a free constitution. * * *" Story, Commentaries on the Constitution of the United States (3rd ed. 1858), Vol. I, p. 368, § 525. [4] In Sweeney v. Jarvis, 6 Tex. 36, 1. c. 40, Mr. Justice Wheeler referred to the dictum of Lord Camden wherein "arbitrary discretion" in a judicial officer was characterized as being "the law of tyrants; always unknown; different in different men; casual; depending upon constitution, temper, passion." [5] Under the 1929 Act (Acts 1929, 41st Leg., p. 17) the continuance because of attendance upon the Legislature was discretionary in that it was necessary that the applicant show that the presence of the attorney-legislator was necessary to a fair and proper trial of the case. Burkhart v. State, 114 Tex. Crim. 462, 26 S.W.2d 238; Davis v. State, 120 Tex. Cr.R. 330, 49 S.W.2d 805; Burton v. State, 129 Tex. Crim. 238, 86 S.W.2d 768; Mora v. Ferguson, 145 Tex. 498, 199 S.W.2d 759. With the adoption of the Texas Rules of Civil Procedure by the Supreme Court as authorized by the 1939 Rule Making Act, the provisions of the statute were written into Rule 254 with minor textual changes and the statute (Art. 2168a) insofar as it related to civil actions was listed as repealed. In 1941, the statute was re-enacted in mandatory form. (Acts 1941, 47th Leg. p. 69.) In 1949 the statute was amended and placed in its present form (Acts 1949, 51st Leg. p. 1111).	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532583/	120 N.H. 333 (1980) ROBERT B. MONIER President of the Senate and individually, & a. v. HUGH J. GALLEN, GOVERNOR. No. 80-020. Supreme Court of New Hampshire. May 5, 1980. Richard A. Hampe, of Concord, by brief and orally, for plaintiffs Robert B. Monier and Alan D. Rock. Frederick J. Griffin, Jr., of Concord, by brief and orally, for plaintiffs George B. Roberts, Jr. and John B. Tucker. 334 Paul McEachern, legal counsel to the Governor, by brief and orally, for defendant Hugh J. Gallen, Governor. Thomas D. Rath, attorney general (Steven J. McAuliffe, assistant attorney general, orally), for the State. BROCK, J. This is a petition for declaratory judgment brought against Hugh Gallen, as Governor, by certain members of the General Court in their capacity as president of the senate, speaker of the house, chairman and vice-chairman of the legislative fiscal committee and as individual taxpayers. The plaintiffs seek a judicial declaration that the creation of twelve new positions within the Governor's office, proposed in connection with a federally funded comprehensive children and youth project, is unlawful absent prior legislative fiscal committee review and approval. See RSA 14:30-a; Laws 1979, 434:22. The case is before this court on an interlocutory transfer by the Superior Court (Johnson, J.) pursuant to RSA 491:17 and our Rule 9. In March 1979, the Governor submitted "the state of New Hampshire's proposal to create a comprehensive youth service agency" to federal authorities. (Emphasis added.) On June 1, 1979, the Governor's office was awarded $286,000 in federal funds for that purpose by the Office of Juvenile Justice and Delinquency Prevention, Law Enforcement Assistance Administration, Department of Justice. On September 6, 1979, the Governor, pursuant to Laws 1979, 434:22, submitted a request to the legislative fiscal committee for approval of twelve new personnel positions which would result from the acceptance of the federal funds. The fiscal committee denied the Governor's request, and the Governor now seeks to establish the same positions without the approval of the fiscal committee. On October 10, 1979, the Governor requested the executive council to approve acceptance of the federal grant under RSA 124:4. The executive council approved the fund request on October 16, and designated the office of the Governor as the appropriate recipient with certain conditions. The comptroller of the State of New Hampshire then issued a warrant appropriating funds for the grant, specifying that the funds be added to the program appropriation unit for the Governor's office. The Governor proposes to appoint to his personal staff, to supervise and to control, those persons employed to fill the positions established by receipt of the federal grant funds. In addition, the Governor 335 intends that these persons will not only carry out the terms of the grant, but also be assigned by the Governor the principal duties of reviewing current State policies and programs affecting the lives of New Hampshire youth, analyzing the need for alternate or additional policies or programs on a statewide basis, and advising the Governor as to the most effective means of improving and developing State policies and programs related to youth. The questions of law transferred to this court without ruling are: I. Do the proposed new federally funded positions in the office of the Governor related to children and youth fairly come within the meaning of the exception for the Governor's "personal staff and consultants" found in Laws 1979, 434:22 so as to make legislative fiscal committee approval of those positions unnecessary to their valid establishment? II. If the answer to question I is "No," are the provisions of Laws 1979, 434:22 void as an unconstitutional encroachment by the legislature upon the powers vested in the chief executive by the New Hampshire Constitution? We first consider the question of whether the establishment of the new federally funded positions relating to children and youth within the Governor's office comes within the "personal staff and consultants" exception to required legislative fiscal committee approval. Laws 1979, 434:22. Laws 1979, 434:22 provides that "no new personnel positions, except those ... for personal staff and consultants, may be created by the acceptance of federal monies ... unless such positions are approved by the fiscal committee of the general court ...." It is clear, therefore, that the Governor, with the concurrence of the executive council, can apply for, receive and use federal funds to establish new positions on his "personal staff" without the need for fiscal committee approval. Plaintiffs claim, however, that the "personal staff and consultants" exception does not apply to the de facto creation of a "state agency" within the Governor's office. Relying upon legislative history, they argue that the exception was intended to apply only to persons acknowledged as being on the Governor's staff, within his office, performing administrative, receptionist and clerical tasks, not those performing essentially "agency" functions within agencies created by gubernatorial executive order. 336 [1] Proper interpretation of this statute, Laws 1979, 434:22, requires both an understanding of its constitutional context and the history surrounding its adoption. This court has recognized the Governor's constitutional power to create "agencies" by executive order. Opinion of the Justices, 118 N.H. 582, 587, 392 A.2d 125, 129 (1978); Jeannont v. N.H. Personnel Comm'n, 116 N.H. 376, 359 A.2d 638 (1976). The exercise of that power, however, cannot "exceed the Governor's constitutional authority or conflict with appropriate legislative mandates...." Opinion of the Justices, 118 N.H. at 587, 392 A.2d at 129; O'Neil v. Thomson, 114 N.H. 155, 316 A.2d 168 (1974). The General Court, having the authority under N.H. CONST. pt. 2, art. 5, to create or abolish nonconstitutional agencies, officials or positions, enacted Laws 1979, 434:22. The effect of this statute is to place limitations upon the power of the executive branch to accept federal grants-in-aid under RSA ch. 124 when acceptance will result in the creation of new personnel positions. It was adopted as a result of the legislature's concern that the executive could, without prior legislative approval, create State agencies by executive order, thereby creating new positions entailing express or implied future burdens upon the State budget. [2] The transcript of the committee of conference on the 1978-1979 State budget contains extensive discussion by its members regarding the intent behind Laws 1977, 600:112. Such discussions can often serve as an aid to the courts in construing a statute. See 2A SUTHERLAND, STATUTORY CONSTRUCTION § 48.10 (4th ed. 1973). Speaker Roberts said the concern was not with personal staff but "the concern is about the creation of agencies ... [with] some continuing obligations to pay for them." After preparing language to deal with this problem, the legislators permitted the Governor only to hire "personal staff and consultants." The president of the senate, in response to a question from Chairman Tucker of the house appropriations committee as to the "legislative intent," said that while "a new agency" would need fiscal committee approval, gubernatorial "personal staff and consultants" would not. While recognizing the reasons for legislative concern in this area, the Governor responds that in this instance he has not created an executive order agency and argues that, unlike persons hired to fill newly created agency positions, appointees to his "personal staff" do not represent a potential burden on the State 337 treasury. This is so because they have no expectation of continued employment beyond the present Governor's term of office; they have no rights, privileges or permanent benefits under the classified system and are not unclassified employees subject to removal proceedings in accordance with RSA 4:1 (Supp. 1979). Cf. Jeannont v. N.H. Personnel Comm'n, 116 N.H. 376, 359 A.2d 638 (1976). There is, however, in the record before us an abundance of evidence which indicates that the closely integrated positions to be created under the comprehensive youth services grant are, because of their unitary purpose, scope and number, in fact an entity more analogous to a State agency, created either by executive order or statute, than to individual members of a gubernatorial staff. The grant as approved by federal authorities pledges "complete state financial support" beginning with fiscal year 1982. Further, the program and office being created would exist for a period of three years, a period transcending both gubernatorial and legislative terms of office. We further note that the 1979 legislature reenacted with substantial amendments specific authorization for an executive branch agency to deal with the problems of children and youth. RSA 170-D:4 (Supp. 1979) provides that the commission on children and youth shall: I. Research and identify the needs of children and youth in New Hampshire. II. Review state services and policies affecting children and youth, identify problems, and recommend solutions. III. Review and recommend appropriate legislative initiatives to promote the welfare of children and youth. IV. Assist other agencies and individuals in assessing and improving the quality and availability of services to children and youth in New Hampshire. V. Promote participation by young people and parents in all commission activities. Money was appropriated and then the legislature provided in section 5 that "every effort shall be made to apply for federal funds for carrying out the purposes of RSA 170-D ...." Laws 1979, 472:5. These purposes closely parallel those of the grant at 338 issue. The scope and kind of "legislative activity" that we find here distinguishes this case from that found in Opinion of the Justices, 118 N.H. 582, 392 A.2d 125 (1978). It is not unlike that found to exist in O'Neil v. Thomson, 114 N.H. 155, 316 A.2d 168 (1974), which required us to void certain executive actions found to conflict with legislative intent. The Governor's actions in effect create another agency to deal with children and youth, thereby circumventing the power of the legislature to oversee federal funds. See Opinion of the Justices, 118 N.H. 7, 15-16, 381 A.2d 1204, 1209 (1978). This court has cautioned that: Unless proper regard is given to the respective roles of the policy-making legislature and the administrative Governor, the "legislative branch of our State government would have little or no role to play with respect to Federal aid programs with the corollary result that the executive branch in the name of supreme executive power would not be faithfully executing the laws of this Commonwealth but rather, as it saw fit, seeking and administering Federal aid programs free of any check or balances and with little political accountability for such actions." Opinion of the Justices, 118 N.H. at 15, 381 A.2d at 1209; citing Shapp v. Sloan, 27 Pa. Commw. Ct. 312, 367 A.2d 791, 797 (1976). However commendable the Governor's purpose in initiating this project, the executive cannot act so as to "conflict with appropriate legislative mandates...." Opinion of the Justices, 118 N.H. at 587, 392 A.2d at 129; see Opinion of the Justices, 116 N.H. 406, 413, 360 A.2d 116, 122 (1976); O'Neil v. Thomson, 114 N.H. at 163, 316 A.2d at 173. [3] We hold that the Governor is, in fact, creating a State "agency" under the protective umbrella of a narrow exception that is intended to apply only to his personal staff. A finding by this court that the agency established by the executive under this grant properly falls within the Laws 1979, 434:22, exception for "personal staff" would set a precedent whereby the executive could, through the tandem use of RSA ch. 124 and RSA 4:12, proceed to establish, without any legislative action or oversight, an entirely separate entity of State government on his "personal 339 staff." We find that such a result would be contrary to the laws of the State of New Hampshire. The answer to the first question is "No." We now consider the question whether the provisions of Laws 1979, 434:22 unconstitutionally encroach upon powers vested in the chief executive pursuant to N.H. CONST. pt. 2, art. 41. In recent years, there has been a rapid and dramatic growth in federal funds coming into the State. Opinion of the Justices, 118 N.H. at 13, 381 A.2d at 1207. Because much of this money is received during the year-and-a-half interim when the General Court is not in session, the executive has taken a greater role in policy decisions. It was this development which, in part, resulted in the enactment of Laws 1977, 600:112 reenacted verbatim as Laws 1979, 434:22. This court has recognized the power of the legislature to adopt legislation in order to preserve its function as the policy-making branch of our State government. Opinion of the Justices, 118 N.H. at 15, 381 A.2d at 1209, citing with approval Shapp v. Sloan, 27 Pa. Commw. Ct. 312, 367 A.2d 791, 797 (1976). In that opinion, this court cited the predecessor to the provision under consideration as one of a variety of legislative approaches to the structuring and spending of federal funds. Opinion of the Justices, 118 N.H. at 15-16, 381 A.2d at 1209. [4] It is clear that N.H. CONST. pt. 1, art. 37 provides that the three branches of government ought to be kept as "separate from, and independent of, each other, as the nature of a free government will admit." It has long been recognized in this State, however, that the three branches of government cannot be completely separate and that there must be some overlapping. Opinion of the Justices, 118 N.H. at 585, 392 A.2d at 127-28. With that in mind, this court has specifically found the fiscal committee of the General Court to be a proper administrative committee to act as a legislative watchdog and that said committee is not unconstitutional merely because it is composed of members of the General Court. Opinion of the Justices, 110 N.H. 359, 364-65, 266 A.2d 823, 826-27 (1970). In Laws 1979, 434:22, the General Court has authorized the fiscal committee to be its administrative arm for purposes of ensuring its role in policy-making. [5, 6] Because Laws 1979, 434:22 specifically exempts new positions on the personal staff of the Governor from the 340 requirement of fiscal committee approval, it does not constitute an unconstitutional encroachment by the legislature on the power of the chief executive to fulfill "his constitutional functions and duties." See Opinion of the Justices, 118 N.H. at 587, 392 A.2d at 129. The majority recognizes the issue presented is a difficult one and that any administrative activities delegated to the legislative fiscal committee come within the twilight zone of constitutionality. N.H. CONST. pt. 1, art. 37. The answer to the second question is "No." We are, of course, not unmindful of the need for cooperation between the legislative and executive branches of government to assure that the best interests of our State's children and youth are met. Remanded. GRIMES, C.J., and KING, J., dissented; the others concurred. GRIMES, C.J., dissenting: Ten years ago in Opinion of the Justices, 110 N.H. 359, 266 A.2d 823 (1970), I expressed the opinion that the use of the fiscal committee to act as a negative upon the execution of the laws by the executive violated the constitutional principle of separation of powers. N.H. CONST. pt. 1, art. 37. I adhere to that opinion today. KING, J., dissenting: The critical issue in this case concerns the extent to which the legislative branch of government may limit the powers of the executive branch to accept and utilize federal grants. Part 2, article 41 of the New Hampshire Constitution provides that "[t]he executive power of the state is vested in the governor. The governor shall be responsible for the faithful execution of the laws." This includes the duty to enforce legislative mandates, powers and rights. The legislature, on the other hand, has the "supreme legislative power." N.H. CONST. pt. 2, art. 2. "It has the power to make laws; to name all civil officers [with certain exceptions] and to define their duties and powers . . . ." Opinion of the Justices, 118 N.H. 7, 14, 381 A.2d 1204, 1208 (1978); citing O'Neil v. Thomson, 114 N.H. 155, 160, 316 A.2d 168, 171 (1974); Brouillard v. Governor and Council, 114 N.H. 541, 547, 323 A.2d 901, 905 (1974). The three branches of government cannot be completely separate, however, and there must be some overlapping as a matter of practical and essential expediency. Opinion of the 341 Justices, 118 N.H. 582, 585, 392 A.2d 125, 129 (1978); Opinion of the Justices, 110 N.H. 359, 363, 266 A.2d 823, 825-26 (1970). The "policy-making legislature [for example] possesses some administrative power and ... the administrative Governor may possess some subordinate legislative power, all within circumscribed limits." Opinion of the Justices, 118 N.H. at 585, 392 A.2d at 128. A "twilight zone" of uncertain power distribution exists in which both the governor and the legislature can concurrently operate. Id. at 588, 392 A.2d at 130. There is "a region of authority, therefore, alternative and concurrent, the boundaries of which are fixed by no final rule." Opinion of the Justices, 87 N.H. 492, 493, 179 A. 344, 345 (1935). It is not surprising that with such an unclear and undefined jurisdictional overlap, the doctrine of separation of powers has at times received conflicting interpretations by the United States Supreme Court, even from the same judges. See EDWARD E. CORWIN, THE CONSTITUTION AND WHAT IT MEANS TODAY, Revised by Harold W. Chase and Craig R. Ducat, p. 2 (1978). While there are certain areas of legislative power that can be exercised only by the legislative branch of State government, there is also an area of executive power that can be exercised only by the executive branch of State government. A legislative act, for example, will be struck down if it encroaches upon the constitutional prerogatives of another branch of government under part 1, article 37 of the New Hampshire Constitution, which requires the three governmental branches to be as independent of each other as "the nature of a free government will admit." Opinion of the Justices, 118 N.H. 7, 14, 381 A.2d 1204, 1208 (1978), quoting Merrill v. Sherburne, 1 N.H. 199 (1818); see Opinion of the Justices, 117 N.H. 398, 374 A.2d 638 (1977) (legislative proposal to alter method of judicial appointment found to be unconstitutional infringement on executive power). As applied to the executive, the primary purpose of part 1, article 37 of the New Hampshire Constitution is to protect it from legislative encroachment. Opinion of the Justices, 118 N.H. at 585, 392 A.2d at 129. While no precise analytical lines demarcate these powers, and while both the legislative and executive branches may enter the domain of the other to some extent, the constitution does establish certain irreducible residua of power that may not be invaded. See generally MORISON & H. COMMAGER, THE GROWTH OF THE AMERICAN PUBLIC (1942). Such is the constitutional question at issue. 342 The United States Supreme Court has held that the power of appointment is so distinctly an executive power that it cannot be delegated by a general assembly to a board made up of its own members. Springer v. Government of the Philippine Islands, 277 U.S. 189 (1928). Mr. Justice Sutherland, speaking for the Court in Springer, noted: It may be stated then, as a general rule inherent in the American Constitutional system, that, unless otherwise expressly provided or incidental to the powers conferred, the legislature cannot exercise either executive or judicial power; the executive cannot exercise either legislative or judicial power.... The existence in the various constitutions of occasional provisions expressly giving to one of the departments powers which by their nature otherwise would fall within the general scope of the authority of another department emphasizes, rather than casts doubt upon, the generally inviolate character of this basic rule. Legislative power, as distinguished from executive power, is the authority to make laws, but not to enforce them or appoint the agents charged with the duty of such enforcement. The latter are executive functions.... Not having the power of appointment, unless expressly granted or incidental to its powers, the legislature cannot engraft executive duties upon a legislative office, since that would be to usurp the power of appointment by indirection.... Id. at 201-02; see People v. Tremaine, 252 N.Y. 27, 168 N.E. 817 (1929). Requiring legislative fiscal committee approval before the governor may establish new federally funded positions within his office in effect transfers executive decision-making and appointment power to the legislature. If the particular legislators desire to approve the program, accept the money, and approve the personnel, it is a fait accompli. If they reject it, the federal grant is disapproved. The legislature, through its appropriations power, may place restrictions on the time and manner that state funds may be expended. This may, necessarily and constitutionally in some cases, limit the governor's appointment power. In the instant 343 case, however, the legislature cannot restrict the governor's power to accept federal funds. In Opinion of the Justices, 118 N.H. 7, 15, 381 A.2d 1204, 1209 (1978), this court expressed fear that the legislature would have little or no role to play in overseeing federal funds and that the executive would be seeking and administering federal aid programs free of any checks and balances and free of any political accountability should the governor be allowed to control the distribution of federal grants. This view does not consider, however, that such federal programs are relatively short in duration and less short in total funding. Moreover, the legislature may eliminate or modify such programs as it deems prudent when state or matching funds are required. It is also significant that while the executive is effectively precluded from applying for and administering new federal funds, the University of New Hampshire or the legislature itself may exercise their power to apply for and administer similar federal funds. The majority in the instant case places weight on the plaintiffs' argument that the grant may extend beyond the governor's term of office. This grant, however, may be terminated at the expiration of the executive's term or, in any event, by a new executive who could refuse to continue its existence. Once State money is needed to continue the grant, a legislative appropriation would be required. The legislature, thus, would have the opportunity to deny the continuation of the grant through its appropriation power. I dissent from the majority position, and, accordingly, I would hold that the provisions of the Laws of 1979, 434:22 are an unconstitutional encroachment on the powers granted to the governor under part 2, article 41 of the New Hampshire Constitution, and constitute a violation of the principle of the separation of powers.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532592/	120 N.H. 308 (1980) JEANNETTE BERTOLAMI v. MERCHANTS MUTUAL INSURANCE COMPANY. No. 79-270. Supreme Court of New Hampshire. May 5, 1980. 309 Upton, Sanders & Smith, of Concord, by brief for the plaintiff. Hall, Morse, Gallagher & Anderson, of Concord (Robert E. K. Morrill orally), for the defendant. DOUGLAS, J. The plaintiff in this case questions the legitimacy of an automobile liability policy clause that allows the insurer to deduct medical payments from amounts paid under the policy's uninsured motorist endorsement. We hold that the clause is void. On December 22, 1970, an uninsured motorist struck and injured Janet Bertolami, minor daughter of Jeannette Bertolami, as she was crossing a street. At the time of the accident, the plaintiff had in force a Merchants Mutual Insurance Company automobile liability policy. The policy carried an uninsured motorist endorsement, which provided coverage of $15,000 for each person and $30,000 for each accident, and a medical payments endorsement with a limit of $500 for each person. The plaintiff paid a separate premium for each type of coverage. Following the accident, the plaintiff sued both the uninsured motorist and her own insurer, Merchants Mutual. The plaintiff settled her uninsured motorist claim with Merchants Mutual for 310 $7,000, and she and her daughter released the company from future claims that might arise from the accident. The release, however, excepted "any claim and suit ... which ... Janet Bertolami may have under [the policy's] medical payments provision ...." The plaintiff later sued Merchants Mutual in Concord District Court for $500 in medical payments. The District Court (Waters, S.J.) found for the plaintiff on the merits, and the defendant appealed pursuant to Supreme Court Rule 7. In its argument that it does not owe the plaintiff $500, the defendant relies on the following policy clause: The company shall not be obligated to pay under this [uninsured motorist] Coverage that part of the damages which the insured may be entitled to recover from the owner or operator of an uninsured automobile which represents expenses for medical services paid or payable under Part II [expenses for medical services]. (Emphasis added.) Clearly this language means that any medical payments made under PART II may be deducted from payments made under the uninsured motorist endorsement. We think it equally clear that if the insurer makes medical payments under the uninsured motorist endorsement it will rely on the above clause in refusing to pay claims for the same medical payments made under PART II. Thus, if this medical payments deduction clause is valid, the plaintiff cannot recover. We hold, however, that it violates statutory law and is therefore void. [1, 2] Before addressing the statutory issue, we discuss the insurer's argument that if the plaintiff now recovers under her medical payments endorsement she will be paid twice for the same medical expenses. This, Merchants Mutual implies, would be unjust. We disagree. Charges for medical services rendered as a result of injuries inflicted by uninsured motorists are compensable under the plaintiff's uninsured motorist endorsement. RSA 268:15-a (Supp. 1970). Certainly they are insured against under the medical payments provision. The plaintiff paid a separate premium for each type of coverage. Under these circumstances, we see nothing unjust in allowing plaintiff to recover under each endorsement. Her decision to purchase personal protection beyond that afforded by her policy's uninsured motorist endorsement should not now be used as an argument to limit the company's statutory obligations under either the uninsured motorist or the 311 medical payments endorsement. Bacchus v. Farmers Ins. Group Exchange, 106 Ariz. 280, 475 P.2d 264 (1970); cf. Shea v. United Services Automobile Assoc., 120 N.H. 106, 411 A.2d 1118 (1980) (plaintiff allowed to stack coverage under three separate policies for which he paid separate premiums). Since 1971, RSA 268:15-b has required a minimum amount of separate medical payments coverage. At the time the plaintiff bought her policy, the following sections of RSA ch. 268 were in effect: 268:1 Definitions. ... VII. "Motor Vehicle Liability Policy," a policy of liability insurance which provides ... indemnity for or protection to the insured [and others]... against loss by reason of the liability to pay damages to others for damage to property ... or bodily injuries ... accidentally sustained ... to the amount or limit of at least fifteen thousand dollars on account of injury to or death of any one person ... of at least thirty thousand dollars on account of any one accident resulting in injury to or death of more than one person .... 268:15-a [New] Uninsured or Hit-and-Run Motor Vehicle Coverage. I. No [motor vehicle liability] policy shall be issued or delivered in this state ... unless coverage is provided therein or supplemental thereto at least in amounts or limits prescribed for bodily injury or death for a liability policy under this chapter, for the protection of persons insured thereunder who are legally entitled to recover damages from owners or operators of uninsured motor vehicles ... because of bodily injury, sickness or disease, including death resulting therefrom.... RSA 268:1 VII (Supp. 1970) (emphasis added), :15-a I (Supp. 1970). These statutes, read together, clearly required that the defendant offer the plaintiff minimum uninsured motorist coverage of $15,000 per person and $30,000 per accident. Nowhere in RSA ch. 268 was it permitted, or even suggested, that these minimums could be lowered at the option of the insurer. The clear thrust of the law was to guarantee that certain minimums for uninsured motorist coverage would be available to the consumer. Yet the defendant included in the plaintiff's policy a clause by which the plaintiff, if she had a $15,000 uninsured motorist claim and a 312 medical payments claim of $500, could recover only $14,500 under her uninsured motorist endorsement. In our opinion this is precisely the result that the legislature intended to prevent when it set precise minimums. [3] There is a separate, but related, statutory reason why the medical payments deduction clause must be voided. We have stated that RSA 268:15-a evinces a legislative intent to allow a person to protect himself against injury from uninsured motorists to the extent that he protects himself against ordinary personal liability. See, e.g., Courtemanche v. Lumbermen Mut. Cas. Co., 118 N.H. 168, 385 A.2d 105 (1978); Vigneault v. Travelers Ins. Co., 118 N.H. 75, 382 A.2d 910 (1978). The plaintiff's policy, therefore, cannot be read to place her daughter in a position inferior to that which she would have occupied had she been injured by the plaintiff. The medical payments deduction clause, however, does just that. The exclusion relates only to uninsured motorist coverage and not liability coverage. Thus, if the plaintiff and her daughter had been riding in the plaintiff's insured automobile, and Janet had been injured through the plaintiff's negligence, Janet could have settled with the defendant for $7,000 and still recovered $500 in medical payments. If the medical payments deduction clause is given effect, however, Janet gets her $7,000 settlement and no more. We distinguish Hackman v. American Mut. Liab. Ins. Co., 110 N.H. 87, 261 A.2d 433 (1970). In that case we held that an insurer who issues to an employer both workmen's compensation and automobile liability insurance may include in the liability policy's uninsured motorist endorsement a clause permitting the deduction of amounts paid on workmen's compensation claims. The holding rested on RSA 281:14, which provides that when a workmen's compensation carrier pays benefits to an employee injured by a third party tortfeasor, it obtains a lien, for the amount paid in benefits, against any damages that the injured employee recovers from that third party. In Hackman, therefore, the workmen's compensation deduction clause enabled the insurer to do no more than it had a right to do under RSA 281:14. The challenged policy paid the injured employee the same amount he would have received had he been injured by an insured third party tortfeasor. [4] Because we view the deduction clause in the present case as contrary to both the letter and spirit of our statutory law, we hold *313 that it is void. The illegality of the clause, however, does not invalidate the other provisions of the contract. The policy is simply now read as if the offending language were not there. Peerless Ins. Co. v. Vigue, 115 N.H. 492, 345 A.2d 399 (1975). The other provisions now entitle the plaintiff to a recovery under the medical payments endorsement. [5] The remaining issue in this case is whether the plaintiff can recover costs and attorneys' fees under RSA 491:22-b (Supp. 1979). The statute reads: 491:22-b. [New] Insurance Actions: Costs and Attorneys' Fees. In any action to determine coverage of an insurance policy pursuant to RSA 491:22, if the insured prevails in such action, he shall receive court costs and reasonable attorneys' fees from the insurer. (Emphasis added.) This case did not arise under RSA 491:22; therefore, section 22-b does not apply. Absent bad faith on the part of the insurer, the plaintiff has no right to costs and fees. Harkeem v. Adams, 117 N.H. 687, 377 A.2d 617 (1977); see Lawton v. Great Southwest Fire Ins. Co., 118 N.H. 607, 392 A.2d 576 (1978). Affirmed. All concurred.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532598/	272 Pa. Super. 32 (1979) 414 A.2d 654 Walter SCHACHTEL, Robert B. Einhorn and Kiefer N. Gerstley, Individually and t/a Schachtel, Einhorn and Gerstley, Appellants, v. R. Jere BLOCHE. Superior Court of Pennsylvania. Argued March 22, 1979. Filed November 16, 1979. Reargument Denied February 21, 1980. 33 Michael J. Clement, Norristown, for appellants. Charles K. Plotnick, King of Prussia, submitted a brief on behalf of appellee. Before CERCONE, President Judge, and WATKINS and HOFFMAN, JJ. CERCONE, President Judge: The Judicial Code, 42 Pa.C.A. § 742 (effective June 27, 1978) provides, as did its predecessor,[1] in relevant part, "[t]he Superior Court shall have exclusive appellate jurisdiction of all appeals from final orders of the courts of common pleas . . . ." The question presented is whether a lower court order pursuant to Rule 1006(d) of the Pennsylvania Rules of Civil Procedure,[2] transferring an equity action from one county courthouse in the Commonwealth to another 34 county court of equal competence, is a "final order" within the meaning of Section 742, and thus immediately appealable. For the reasons which follow, we hold that where as in the present case both the transferor court and the transferee court, are of equal competence[3] to entertain an equity action, the order effecting this statutory transfer of venue is discretionary in character and not final for purposes of appellate review; accordingly, we quash the appeal.[4] In September of 1974, appellants formed a partnership in the practice of law with appellee, R. Jere Bloche. During the existence of this understanding, appellee allegedly provided legal services to the Estate of James Corse and its executors, James L. Corse, Jr. and Edward M. Corse. Subsequently, on March 31, 1976, appellee orally agreed to withdraw from the partnership and on April 6, 1976, a writing was executed which set forth a partial settlement of the affairs of the now non-existent partnership. Apparently, this initial settlement failed to satisfactorily resolve the representation by the partnership of both the Corse Estate and the individual executors. On November 1, 35 1976, in Montgomery County, appellants commenced this equity action. It sought to resolve the respective rights of the former partners to a legal fee which has accrued, or will accrue, from services provided to the above clients. Specifically, appellants prayed that Attorney Bloche be ordered to: produce for inspection and copying the entire file on the Corse Estate, make available any records of billing costs or costs advanced to the above clients, and; account for and transfer to appellants three-fourths of any fees earned during the existence of the partnership which had been paid or are to be paid by the above clients. The troubles of the partners were increased when in October of 1977, in Delaware County, the executors of the Corse Estate, in their own right, filed a lawsuit against appellants. This action, which sounds in Assumpsit and Trespass, generally alleged that appellants engaged in certain unethical practices and maliciously interfered with the relationship between the executors and Attorney Bloche. Attorney Bloche was neither originally named a party defendant to this proceeding, nor did he actively participate in it on behalf of the executors. In the original action commenced by appellants in Montgomery County, which is the subject matter of the present appeal, appellee filed preliminary objections raising numerous legal issues. In this posture, however, the lower court en banc found it necessary to rule on only one issue: Whether in accordance with Rule 1006(d) appellee was entitled to a statutory transfer of venue from Montgomery to Delaware County. The court concluded transfer was proper and this appeal, questioning only the soundness of the lower court's exercise of its discretion to transfer, ensued. a. At the threshold of this appeal we are confronted with the question whether a lower court's discretionary order granting a statutory transfer of venue is appealable. Appellants, relying exclusively upon their novel interpretation of Norman v. Norfolk & Western Ry. Co., 228 Pa.Super. 319, 323 A.2d 850 (1974), maintain such an order is immediately 36 appealable. Appellee, however, reasons that the rule of Norman is not applicable. In support of its contention, appellee argues the order appealed from in Norman concerned a lower court application of the common law doctrine of forum non conveniens, and not a discretionary application of the statutory transfer rule embodied in Rule 1006(d). b. We approach the merits of these competing contentions with two basic rules in mind: (1) The appellate jurisdiction of this court, where other grounds of statutory jurisdiction are absent, is limited to appeals from final orders of lower tribunals[5] and; (2) in the absence of certification[6] or other statutory authority providing for an immediate appeal, "[o]rders made on preliminary objections are interlocutory, and ordinarily not appealable." Ro-Med Constr. Co. v. Clyde M. Bailey Bldg. Co., 239 Pa.Super. 311, 313, 361 A.2d 808, 809 (1976). E.g., Wilcox v. Evans, 190 Pa.Super. 166, 168, 153 A.2d 817, 818 (1959); see generally, Montgomery, Interlocutory Appeals in Pennsylvania, 41 Pa. B.A.Q. 398 (1970). Pennsylvania law, therefore, evidences a firm policy against piecemeal review because of its crippling effect upon the effective and fair administration of justice. In Norman v. Norfolk & Western Ry. Co., 228 Pa.Super. 319, 323 A.2d 850 (1974), the defendant-appellant appealed from the lower court's refusal to grant preliminary objections raising a question of venue. The appellant, relying upon the common law doctrine of forum non conveniens, had requested that the proceedings in Pennsylvania be dismissed in order that suit could be brought either in West Virginia or Kentucky. Our court initially determined Rule 1006(d) was not applicable as the Rule does not give Pennsylvania courts the power to transfer cases to other states. Id., 228 37 Pa.Super. at 321 n. 2, 323 A.2d at 851 n. 2. Before we reached the merits of appellant's arguments, in Norman, supra, however, we noted that jurisdiction was present because: "[O]rders involving the application of the doctrine of forum non conveniens are considered final in nature. Caplan v. Keystone Weaving Mills, Inc., 431 Pa. 407, 410, 246 A.2d 384, 386 (1968). This being so, the present appeal to our court is authorized by the Act of July 31, 1970. P.L. 673, No. 223 Article III, § 302, 17 P.S. § 211.302. Further, we have jurisdiction over matters of venue since they are treated as jurisdictional in nature: Gaetano v. Sharon Harold Co., 426 Pa. 179, 231 A.2d 753 (1967); and by virtue of the Act of March 5, 1925, P.L. 23, § 1, 12 P.S. § 672. In addition, the lower court certified this matter to us in accordance with provisions of the Appellate Court Jurisdiction Act of 1970, July 31, 1970. P.L. 673, No. 223, Article V, § 501, 17 P.S. § 211.501. Id., 228 Pa.Super. at 322 n. 3, 323 A.2d at 851 n. 3. As appellant presently challenges only the lower court's decision to transfer this equity action to a court of equal competence in Delaware County, the jurisdictional issue presented narrows to this does a discretionary order granting a statutory change of venue, and not mandating dismissal, fall within any of the jurisdictional bases present in Norman. The initial rule relied upon in Norman, i.e., that orders dismissing a litigant's preliminary objections predicated upon common law forum non conveniens are final and appealable, is not applicable to the present appeal.[7] For purposes of determining "finality," there is a clear distinction between Rule 1006(d) transfer and the common law doctrine of forum non conveniens. Thus, while 1006(d) basically derives from the common law doctrine, it provides for transfer of a cause from one appropriate county to another, where as application of the common law doctrine 38 dictates that only one result is permissible dismissal. Viewed in this light, the practical effect of a transfer order, as in this case, is not to put appellants out of court, but rather to continue to guarantee that their cause will still be tried in a courtroom in Pennsylvania; therefore, for purposes of ascertaining finality, the rationale for holding orders involving common law forum non conveniens final and appealable does not support a judgment that a statutory transfer order should be immediately appealable. Cf. Caplan, 431 Pa. at 410, 246 A.2d at 386. The second rule relied upon in Norman, supra, is also not applicable. That rule originated in Gaetano v. Sharon Herald, 426 Pa. 179, 231 A.2d 753 (1967). Sharon involved an appeal of a lower court order denying defendant's preliminary objections as to the propriety of venue. Specifically, it was contended that venue was not proper in the county where the suit was filed, and thus, the suit was being maintained in a court not statutorily empowered to entertain it. Our Supreme Court held that jurisdiction over the appeal was present in that preliminary objections raising questions of improper venue are "[f]or procedural purposes. . . treated as raising a question of jurisdiction."[8]Id., 426 Pa. at 181 n. 1, 231 A.2d at 755 n. 1. E.g., Estate of Smith, 442 Pa. 249, 253-4, 275 A.2d 323, 325 (1971) (venue determination is appealable if propriety of venue is challenged, but mere refusal to transfer venue is not jurisdictional 39 and, therefore, not appealable); Ro-Med Constr. Co. v. Clyde M. Bailey Bldg. Co., 239 Pa.Super. 311, 313, 361 A.2d 808, 809 (1976); Bloom v. Bloom, 238 Pa.Super. 246, 250 n. 3, 362 A.2d 1024, 1026 n. 3 (1976) (lower court denials of preliminary objections challenging improper venue or jurisdictional matters are appealable). In the instant appeal, appellants did not, nor could they successfully, assert that venue was improper where the suit was originally filed, nor do they seriously argue that Delaware County is not a county "where the action could originally have been brought." See Pa.R.Civ.P. 1006(d).[9] Accordingly, since nothing in Norman, supra, mandates the immediate appealability of an order of transfer where the only ground upon which it is attacked is that the lower court abused its discretion, and no other statutory grounds which support jurisdiction are advanced by appellants, we hold that this order transferring venue pursuant to Rule 1006(d) is interlocutory, and not final for purposes of 42 Pa.C.S. § 742 (effective June 27, 1978). Cf. Caplan, 431 Pa. at 410, 246 A.2d at 386; Anderson v. Uva, 230 Pa.Super. 533, 536, 326 A.2d 430, 431-32 (1974) (grant or denial of petitions to transfer are interlocutory and not appealable as jurisdictional questions under 12 P.S. § 672 (1925)); see, Ventura v. Skylark Motel, Inc., 431 Pa. 459, 463, 246 A.2d 353, 355 (1968); McConnell v. Schmidt, 234 Pa.Super. 400, 403, 339 A.2d 578, 581 (1975). See also, 1 Goodrich Amram 2d., Standard Pennsylvania Practice, § 1006(d), 458-59 (2d ed. 1976); see generally, ABA Standards on Appellant Courts, § 3.12, Comment (1977).[10] To conclude, it would indeed be 40 anomalous to hold otherwise. A contrary result would cripple the procedural innovations intended by Rule 1006(d) by subjecting the litigants to two suits. The first suit would concern itself only with where the actions should be instituted, while the second would finally focus on the merits of the litigation. See, All States Freight, Inc. v. Modarelli, 196 F.2d 1010, 1011-12 (3d Cir. 1952). Appeal quashed. NOTES [1] Section 742 is essentially a recodification of the Appellate Court Jurisdiction Act, 17 P.S. § 211.302 which provided: The Superior Court shall have exclusive appellate jurisdiction of all appeals from final orders of the courts of common pleas, regardless of the nature of the controversy or the amount involved, except such classes of appeals as are by any section of this act within the exclusive jurisdiction of the Supreme Court or the Commonwealth Court. [2] Rule 1006(d) provides in pertinent part: "For the convenience of parties and witnesses the court upon petition of any party may transfer an action to the appropriate court of any other county where the action could originally have been brought." [3] The appellant in its brief suggest that venue may not lie in the transferee county; however, on the present state of the record, this Court can do no more than speculate on the merits of appellant's "arguable" contentions. Accordingly, we can perceive no jurisprudential justification for accepting appellant's invitation to decide an issue which is neither properly presented i.e., this contention is appended to appellant's argument that the court abused its discretion not its power, nor ripe for review at the present time. Thus, we need not and do not express any opinion on whether our conclusion on appealability of a transfer order would be different where the record on appeal conclusively establishes that the transferror court transferred an action to a court where the action might not have been originally brought. Cf. Pa.R.Civ.P. 1006(d) and Pa.R.App.P. 311(c), comment (amended November 30, 1978). See generally, Kaufman, Further Observations on Transfers Under Section 1404(a), 56 Colum. L.Rev. 1, 182 n. 4, 5 (1956) (federal practice); Kitch, Section 1404(a) of the Judicial Code: In the Interests of Justice or Injustice, 40 Ind. L. J. 99, 110-131 (1965) (federal practice). [4] In view of this disposition we do not reach the merits of appellant's second contention that the lower court abused its discretion in ordering a transfer. See Plum v. Tampax, Inc., 402 Pa. 616, 618, 168 A.2d 315, 316 (1961). [5] Judicial Code, 42 Pa.C.S. § 742 (effective June 27, 1978); McConnell v. Schmidt, 234 Pa.Super. 400, 402-03, 339 A.2d 578, 581 (1975) (per curiam); Lewandowski v. General Telephone Co., 223 Pa.Super. 476, 302 A.2d 478 (1973). [6] See Judicial Code, 42 Pa.C.S. § 702(b) (effective June 27, 1978); see generally, Tarasi v. Settino, 223 Pa.Super. 158, 160, 298 A.2d 903, 904 (1972) (per curiam). [7] Compare Daugherty v. Inland Togs, 240 Pa.Super. 527, 529, 359 A.2d 465, 466 (1976). [8] The court later explained the rationale of its holding by observing: There is a distinct and important difference between `jurisdiction' and `venue.' County Construction Company v. Livengood Construction Corp., 393 Pa. 39, 142 A.2d 9 (1958). For procedural purposes, however, objections to venue have been treated by this Court as raising a question of jurisdiction, and we have reviewed under the Act of March 5, 1925, supra, an order of a lower court ruling on the propriety of venue. County Construction Company v. Livengood Construction Corp., supra; Gaetano v. Sharon Herald Co., 426 Pa. 179, 231 A.2d 753 (1967). But these cases all involved an order ruling upon the propriety of the venue chosen by the plaintiff. In other words, in such instances we recognize no difference procedurally between a claim that the action was instituted before the wrong tribunal and a claim that the action was brought before a court lacking competence to entertain it. Caplan, 431 Pa. at 409-10, 246 A.2d at 386. [9] Also, the third rule relied upon in Norman, supra, is clearly not applicable. In the present appeal, the lower court did not certify its order of transfer to this Court as involving a controlling question of law under the Judicial Code, 42 Pa.C.S. § 702 and 1722 (effective June 27, 1978). Compare, Tarasi v. Settino, 223 Pa.Super. 158, 160, 298 A.2d 903, 904 (1972) (per curiam). [10] The above conclusion has uniformly been reached by all federal courts which have passed upon the question whether a transfer order under 28 U.S.C. § 1404(a) (1966) is a final order for purposes of applying 28 U.S.C. § 1291 (1966) (granting jurisdiction to circuit courts in "all final decisions" of district courts). Codex Corp. v. Milgo Elec. Corp., 553 F.2d 735, 737 (1st Cir. 1977); Young Properties Corp. v. U.S. Equity Corp., 534 F.2d 847, 852 (9th Cir. 1976); Ellicott Mach. Corp. v. Modern Welding Co., 502 F.2d 178, 180 n. 4 (4th Cir. 1974); Wilkins v. Erickson, 484 F.2d 969, 971 (8th Cir. 1973); Stelly v. Employers Nat'l Ins. Co., 431 F.2d 1251, 1253 (5th Cir. 1970); Ackert v. Pelt Bryan, 299 F.2d 65, 67 (2nd Cir. 1962); Chicago, R.I. & Pac. R.R. v. Igoe, 212 F.2d 378, 381 (7th Cir. 1954); Paramount Pictures Inc. v. Rodney, 186 F.2d 111, 116 (3rd Cir. 1951), cert. den., 340 U.S. 953, 71 S. Ct. 572, 95 L. Ed. 687 (1951); Nicol v. Koscinski, 188 F.2d 537 (6th Cir. 1951).	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532593/	383 B.R. 604 (2008) In the matter of John LIVERMAN and Lynda K. Liverman, Debtors. No. 07-20590/JHW. United States Bankruptcy Court, D. New Jersey. March 5, 2008. 605 606 S. Daniel Hutchison, Esq., Woodbury, NJ, for the Debtors. Donna L. Wenzel, Esq., Office of the Chapter 13 Standing Trustee, Cherry Hill, NJ, for the Chapter 13 Trustee. Robert H. Johnson, Esq., Yablonsky & Associates, LLC, Wayne, NJ, for eCAST Settlement Corporation. OPINION ON OBJECTION TO CONFIRMATION JUDITH H. WIZMUR, Chief Judge. The Chapter 13 trustee and an unsecured creditor, eCAST Settlement Corporation, object to confirmation of the debtors' proposed Chapter 13 plan. They challenge as insufficient the plan payments proposed by the debtors. As well, they challenge the validity of the debtors' Form 22C disposable income calculation. Because the debtors have overcome the challenges to the Form 22C calculations and have devoted their projected disposable income to their Chapter 13 plan, the objections are overruled and the plan may be confirmed. FACTS John and Lynda K. Liverman filed a voluntary petition under Chapter 13 of the Bankruptcy Code on July 27, 2007. The debtors' Schedule I reflects that both debtors are currently employed. Lynda Liverman earns a gross monthly salary of $5,470.68. John Liverman was unemployed for the six-month period leading up to the filing, but obtained employment a week before the filing, and is now earning a gross monthly salary of $1,248. After payroll deductions, the debtors' net monthly income is $4,950.22. Debtors' Schedule J indicates total average monthly expenses of $4,600, for a monthly net income of 5350.22. Debtors' Chapter 13 plan proposes to pay $350 per month for 36 months. On their Second Amended "Chapter 13 Statement of Current Monthly Income and Calculation of Commitment Period and Disposable Income", also known as Form 22C[1], the debtors listed current monthly income of $5,705.18, representing Lynda Liverman's average monthly income during the six-months prior to filing. The debtors' calculated their Form 22C expenses at $6,511.84, resulting in a monthly deficit of $806.66.[2] 607 eCAST Settlement Corporation, the assignee of Bank of America/FIA Card Services, formerly MB NA, Citibank USA NA, and GE Money Bank/Sam's Club, an unsecured creditor of the debtors, objects to the confirmation of the debtors' plan, asserting that the debtors' proposed plan fails to apply all of the debtors' projected disposable income to pay unsecured creditors. eCAST seeks to reduce the debtors' claimed Form 22C deductions by $803, the amount of the transportation ownership/lease expense deduction claimed by the debtors for their two wholly owned vehicles. As well, eCAST contends that in light of John Liverman's recent employment and the debtors' resulting additional income, which is not reflected on Form 22C, the proper calculation of the debtors' "projected disposable income" would be to start with the debtors' Schedule I gross income of $6,718.68 and to reduce it by the approved deductions calculated on Form 22C. Applied to the debtors' Second Amended Form 22C calculation, this approach would impose upon the debtors a projected disposable income of $1,009.84 (gross Schedule I income of $6,718.68 minus "means test" expenses of $5,708.84).[3] eCAST contends that the debtors must pay this amount per month for 60 months. The Chapter 13 Standing Trustee supports eCAST's objection to confirmation. The trustee also questions the increase of approximately $600 in expenses claimed by the debtors from their original Form 22C to the current second amended form. DISCUSSION I. 11 U.S.C. § 1325(b)(1). Under the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 ("BAPCPA"), if the trustee or an allowed unsecured creditor objects to confirmation of the debtors' plan, the plan cannot be confirmed unless that claim is to be paid in full, or the plan "provides that all of the debtor's projected disposable income to be received in the applicable commitment period beginning on the date that the first payment is due under the plan will be applied to make payments to unsecured creditors under the plan."[4] 11 U.S.C. § 1325(b)(1)(B). Our focus here is on the meaning of the debtors'"projected disposable income" to be received within "the applicable commitment period." A. Projected Disposable Income. The phrase "projected disposable income" is not defined under the Bankruptcy Code.[5]In re Brady, 361 B.R. 765, 608 771 (Bankr.D.N.J.2007). Prior to the enactment of BAPCPA, the "projected disposable income" of the debtor for purposes of section 1325(b)(1) was calculated by "utiliz[ing] the debtors' income and reasonable expenses as listed on Schedules I and J to determine the debtors' disposable income. That amount would be projected forward by multiplying it times the number of months in the debtors' plan, with flexibility to accommodate for `virtually certain' changes, and would be dedicated to the debtors' plan." Id. at 769.[6] While the BAPCPA amendments to the Bankruptcy Code did not change the phrase "projected disposable income" in section 1325(b)(1), the legislation amended the definition of the term "disposable income" for purposes of the subsection. Income is now calculated as a historical average, and expenses are determined by a standardized formula. "Disposable income" is now defined to mean the "current monthly income received by the debtor . . . less amounts reasonably necessary to be expended for the maintenance or support of the debtor or a dependent of the debtor . . . and for charitable contributions." 11 U.S.C. § 1325(b)(2).[7] "Current monthly income" ("CMI"), defined in 11 U.S.C. § 101(10A), requires a determination of the debtors' income from all sources, with limited exceptions, averaged over the 6 month period immediately prior to the debtors' filing.[8] If the debtors' CMI is 609 greater than the median family income of the applicable state, than the "amounts reasonably necessary to be expended [by the debtors] . . . shall be determined in accordance with such paragraphs (A) and (B) of section 707(b)(2),"[9] the so-called "means test" expenses. 11 U.S.C. § 1325(b)(3). The deductible expenses under subparagraph (A) and (B) of section 707(b)(2) are based upon the national and local standards for certain expenses as regulated by the Internal Revenue Service, plus the debtor's actual expenses for specific categories of expenses. In re Brady, 361 B.R. at 772. Here, because the debtors' CMI is greater than the median family income of like size in New Jersey, the debtors' disposable income is determined by subtracting means test expenses from their CMI. As scheduled, the debtors' CMI is $5,705.18. Subtracting means test expenses of $6,511.84 produces a negative disposable income of $806.66. Utilizing the debtors' calculations, unsecured creditors would not be entitled to receive a dividend. See In re Brady, 361 B.R. at 772-73. With the adjustments to the means test expenses, discussed infra, including the disallowance of the debtors' transportation ownership expense, the debtors will have "disposable income", as that term is defined in section 1325(b)(2), of $122.96. As noted above, where the trustee or an unsecured creditor objects to the confirmation of the debtors' plan, the debtors must direct their "projected disposable income" to unsecured creditors. "[T]he addition of the term `projected' to `disposable income' in § 1325(b)(1)(B) differentiates it from `disposable income' as defined in § 1325(b)(2)." In re Pak, 378 B.R. 257, 264 (9th Cir. BAP 2007). If the debtors had no significant changes in their income or expenses at the time of the confirmation of the Chapter 13 plan, the formulaic calculation required under § 1325(b)(2) to determine "disposable income" would represent the debtors'"projected disposable income". In re Brady, 361 B.R. at 772 (Where there are no changed circumstances, "projected" means that the debtors' disposable income, as calculated under the statute, which is projected to be received over the course of the applicable commitment period, must be dedicated to the payment of the unsecured creditors.). See also, In re Lanning, 380 B.R. 17, 23 610 (10th Cir.BAP2007) (citing to In re Kibbe, 361 B.R. 302, 312 (1st Cir.BAP2007)). (Where the debtors' CMI in Form 22C "is substantially the same as the actual current income at the time of confirmation of the plan, less the Income Exclusions, the inquiry begins and ends with Form B22C."[10]) In contrast, where a substantial change in the debtors' actual ability to fund a plan is shown, the formulaic calculation of disposable income may be modified to "project" the reality of the debtors' income and expenses going forward. See In re Lanning, 380 B.R. 17, 24-25 (10th Cir. BAP 2007); In re Pak, 378 B.R. 257, 268 (9th Cir. BAP 2007). "[W]here the debtor's income at confirmation or as reasonably anticipated for the plan commitment period is materially different from the debtor's `disposable income' as defined by § 1325(b)(2), the court must depart from the Form B22C calculation." In re Kibbe, 361 B.R. at 314-15. Because the debtor's disposable income is calculated historically, while the term "projected" is essentially forward-looking, In re Pak, 378 B.R. at 264-65, a change in the debtor's income going forward injects the term "projected" with an opportunity to incorporate the change in determining the confirmability of the debtor's plan. Consistent with this interpretation of the term "projected" is the § 1325(b)(1) requirement that "projected disposable income" be applied "as of the effective date of the plan," generally understood to mean the date of plan confirmation. Id. at 265. In light of the historical basis of the "disposable income" calculation, the phrase "as of the effective date of the plan" only makes sense if the debtors' actual current income as of plan confirmation is considered in the application of the phrase "projected disposable income", where a significant change from the historical CMI calculation is demonstrated. Id. "If the determination of the debtor's `projected disposable income to be received in the applicable commitment period' is to be made at the time of chapter 13 plan confirmation, which often occurs months after the petition date, it makes little sense to tie that determination exclusively to income information for the period of six months prior to the debtor's bankruptcy filing." Id. Put another way, the "disposable income" formula serves as a presumption that the prescribed calculation represents the amount that is projected to be paid through the Chapter 13 plan. In re Slusher, 359 B.R. 290, 297 (Bankr.D.Nev.2007) ("[I]f . . . Form B22C accurately represents the anticipated future income of the debtor, the court will likely use it as `projected disposable income', in large part because, by hypothesis, there are no facts which could rebut the presumption."). Here, the debtors' income as of the effective date of the plan has increased significantly from their CMI, which represents the debtors' average monthly income during the six months prior to filing. The debtors and the objectors agree that because the debtors' income has increased, a calculation of the debtors'"projected disposable income" may differ from the calculation of the debtors' "disposable income" derived from the section 1325(b)(2) formula. However, the debtors and the objectors do not agree on the manner in which "projected disposable income" should be calculated. The debtors reference Schedules I and J to reflect a net monthly 611 income of $350, which they propose to commit to the plan. The objectors seek to deduct the debtors' means test expenses from the debtors' Schedule I gross income. This calculation would require the debtors to make a monthly plan payment of $1,009.84 ($6,718.68 minus $5,708.84).[11] That payment does not appear to be feasible. The debtors' actual income and expenses reflected in Schedules I and J have not been challenged by the objectors as inaccurate, unnecessary or unreasonable. The objectors' proposal to calculate projected disposable income by utilizing the debtors' actual Schedule I income and deducting the means test expenses from that income cannot be sustained, because the statute itself does not support the proposal, and because the proposal produces an anomalous result. Section 1325(b)(2) defines "disposable income" as the debtors' CMI minus amounts reasonably necessary to be expended for the support of the debtors and their dependents. For abovemedian income debtors, section 1325(b)(3) requires that "amounts reasonably necessary to be expended" be determined in accordance with the means test expenses under § 707(b). The requirement in § 1325(b)(3) to use means test expenses is specifically limited by the phrase "under paragraph (2)", referring to § 1325(b)(2), which defines "disposable income".[12] The mandate to use standardized means test expenses extends only to define "disposable income", and does not extend to give meaning to the term "projected disposable income" in § 1325(b)(1)(B). See In re Slusher, 359 B.R. at 299 ("Section 1325(b)(3) applies only to a determination of reasonably necessary future expenses within the definition of `disposable income'"). It follows that the most plausible reconciliation of the paragraphs of § 1325(b) is that disposable income is calculated according to the prescribed § 1325(b)(2) formula, and is then "projected" with reference to actual income and expenses as necessary to reflect a debtor's changed circumstances as of the effective date of the plan. Some bankruptcy courts have agreed with the objectors that where a debtor's financial circumstances has changed, "projected disposable income" must be determined by the debtor's gross Schedule I income minus the debtor's means test expenses. Some of these cases read "projected disposable income" as follows: The word "projected" in the phrase "projected disposable income" modifies each of the component parts of "disposable income," that is, it modifies "current monthly income" and it modifies "amounts reasonably necessary to be expended for support." "Projected disposable income," then, means the "projected current monthly income" less `projected amounts reasonably necessary to be expended for support" where "reasonably necessary to be expended for support" is to be determined in accordance with Subparagraphs 707(b)(2)(A) & (B). In re McPherson, 350 B.R. 38, 43-44 (Bankr.W.D.Va.2006). See also In re Petro, 381 B.R. 233, 235-36 (Bankr. M.D.Tenn.2008) ("[T]he BAPCPA amendments to the Bankruptcy Code require the application of a strictly mathematical formula in determining `projected disposable income'"); In re Hughey, 380 B.R. 102, 106 (Bankr.S.D.Fla.2007) ("In determining the Debtor's projected disposable income, 612 § 1325(b)(3) mandates use of applicable expense standards as set forth in § 707(b)(2)."); In re Meek, 370 B.R. 294, 307 (Bankr.D.Idaho 2007); In re Edmunds, 350 B.R. 636, 643 (Bankr.D.S.C. 2006). This statutory construct does not recognize the limitation contained in § 1325(b)(3) described above, and produces an anomalous result which is at odds with the avowed legislative purpose of the means test amendments. The legislative history of BAPCPA reflects upon congressional intent as follows: The heart of [BAPCPA's] consumer bankruptcy reforms consists of the implementation of an income/expense screening mechanism ("needs-based bankruptcy relief" or "means-testing"), which is intended to ensure that debtors repay creditors the maximum they can afford. Kibbe, supra, 361 B.R. at 314 (citing to H.R.Rep. No. 109-31, pt. 1, at 2 (2005), U.S.Code Cong. & Admin.News 2005, p. 88) (emphasis in original). Similarly, the Presidential Signing Statement accompanying the BAPCPA amendments "make[s] clear that Congress intended to require debtors to `make a good-faith effort to repay as much as they can afford.'" In re Pak, 378 B.R. at 265 (citing to Presidential Signing Statement at http://www. whitehouse.gov/news/release/2005/04/ XXXXXXXX-X.html.). If we were to accept the objectors' position here, the debtors would not be able to utilize the Chapter 13 process to make a good faith effort to repay as much as they can afford. The statute would be read to require them to make a monthly payment that is three times what they can actually afford. That reading cannot be sustained. Rather, to reconcile the term "disposable income", which demands a look back, and the term "projected", which requires a look forward, where circumstances have changed, "courts should assume that Congress intended that they rely on what a debtor can realistically pay to creditors through his or her plan and not on any artificial measure." Kibbe, supra, 361 B.R. at 312. The debtors' ability to pay creditors as of the effective date of the plan is most accurately depicted in the debtors' Schedules I and J.[13] Three Bankruptcy Appellate Courts that have faced this issue agree with this approach. See In re Lanning, supra; In re Pak, supra, In re Kibbe, supra. In each case, the debtor demonstrated a significant change in income at the time of confirmation from the historical CMI calculation. In each case, the court calculated the debtor's disposable income, and then resorted to Schedules I and J to "project" the debtor's actual ability to make plan payments going forward.[14] I readily recognize that resort to Schedules I and J, as a departure from the "disposable income" formula of section 1325(b)(2) where there are changed circumstances, is not authorized in or directed by the statute. Courts have criticized this result, opining that 613 [I]f Congress had intended that the definition of "disposable income" be merely a starting point or a presumptive figure for determining "projected disposable income", allowing courts the flexibility to make that determination, it could have so stated within the confines of § 1325(b). Instead, Congress chose to impose a rigid definition with little room for flexibility by the court. In re Petro, 381 B.R. at 240-41 (quoting In re Musselman, 379 B.R. 583, 588 (Bankr. E.D.N.C.2007)). We are reminded by these courts that although the application of the mechanical test formulated by Congress to determine plan requirements may lead to impractical results, "Tilt is beyond our province to rescue Congress from its drafting errors, and to provide for what we might think . . . is the preferred result.'" Id. at 241-42 (quoting In re Nance, 371 B.R. 358, 367 (Bankr.S.D.Ill.2007)). The resort here to Schedule I and J does not represent an activist judicial attempt to improve upon the statute, or to correct perceived Congressional drafting errors. Rather, the interpretation is intended to reconcile the otherwise inconsistent notions reflected by the terms "projected" and "disposable income", where the debtors' present circumstances, as of the confirmation date, have changed from the historic calculations of the debtors' income and expenses. In re Lanning, 380 B.R. at 23 (citing to Kibbe, 361 B.R. at 312) ("Insofar as the term `disposable income' demands a look back and the term `projected' requires a look forward, the language is irreconcilable. One must give way to the other, or the courts must fashion an interpretation that gives the greatest meaning to both."). By this interpretation, adherence to the amended statutory text is reconciled with the pre-amendment practice of resort to Schedules I and J, particularly in light of the fact that the phrase "projected disposable income" was not changed by BAPCPA.[15] The reconciliation also furthers the expressed intent of Congress to ensure that debtors repay creditors the maximum that they can afford, as well as the need to safeguard the availability of the Chapter 13 process to good faith debtors who propose payments representing their ability to pay creditors through their Chapter 13 plan. In commenting on this interpretive dilemma, Judge Markell articulated most effectively the difficulties of this exercise, as follows: The Court acknowledges that its result is not what every person reading Section 1325(b) might reach, particularly considering the general view that BAPCPA sought to limit bankruptcy judges' discretion in various areas. Regardless of what this court may write, there remains a common sense argument to the effect that if Congress had meant "disposable income" to be a presumptive guide for "projected disposable income" it could have said so in explicit terms. But it didn't, and also didn't amend Section 1325(b) so that there is but one, unambiguous, canonical reading. In this vacuum, courts must puzzle over the intended differences, if any, between "projected" disposable income and "disposable income" without a modifier. This court's result, then, can perhaps best be characterized as the least flawed 614 of all possible interpretations, each of which is in some way unsatisfactory in its own right. 359 B.R. at 299 n. 15.[16] I concur that the "least flawed of possible interpretations" here is to resort to Schedules I and J to determine "projected disposable income" in this circumstance. In this case, the debtors have had a substantial increase in income from their income during the six months preceding the filing. Their projected disposable income as of the confirmation hearing, with reference to Schedules I and J, is greater than the formulaic disposable income "calculated under section 1325(b)(2) and (3). The debtors propose to commit that income to their Chapter 13 plan for the benefit of their unsecured creditors and to satisfy their other plan obligations. The objectors' challenge to the debtors' proposal in this regard is overruled. B. Applicable Commitment Period. Under section 1325(b)(1), where the trustee or an unsecured creditor objects to confirmation, the plan must provide that all of the debtor's projected disposable income to be received "in the applicable commitment period" be applied to pay unsecured creditors under the plan. Under section 1325(a)(4), the "applicable commitment period" governing these abovemedian income debtors is "not less than five years."[17] Therefore, the projected disposable income of the debtors to be received during the 60 months of the plan must be paid to unsecured creditors under the plan. Here, the debtors have $350 of projected disposable income per month, minus any funds necessary to satisfy other plan requirements. Therefore, the debtors must apply that projected disposable income for the commitment period applicable to them, i.e., 60 months.[18] 615 At oral argument, debtors' counsel acknowledged that the applicable commitment period here is 60 months, notwithstanding the fact that the plan was proposed as a 36 month plan. Counsel reflected that the debtors will willingly commit to make plan payments for 60 months, in conformance with the applicable commitment period. II. Means Test Expense Deductions. The objectors also contest the expense deductions taken by the debtors on their Form 22C, claiming that if certain deductions were denied, the debtors' disposable income would be substantially higher than noted, requiring a higher payment to unsecured creditors. They focus on the debtors' vehicle ownership expense deductions for two unencumbered vehicles, i.e., vehicles not subject to any leasing or financing payments. As well, the trustee questions the $600 increase in expense deductions claimed by the debtors from the original Form 22C to the Second Amended Form 22C. On the question of whether a debtor can claim the vehicle ownership/lease expense deduction under section 707(b)(2), for a vehicle that is unencumbered, the courts are split. Compare In re Ransom, 380 B.R. 799 (9th Cir. BAP 2007) (holding that a debtor may not claim an ownership expense deduction on a vehicle that is not subject to financing or lease payments) with In re Thomas, No. 06-21108, 2007 WL 2903201, 3 (Bankr.D.Kan. Oct.2, 2007) (holding that a debtor may claim an ownership expense deduction on a vehicle that is owned outright). We need not resolve the issue here, because the deduction of the vehicle ownership expense will not change the ultimate calculation of the debtors' projected disposable income. For purpose of this analysis, I will assume that the vehicle ownership allowance would be disallowed, without prejudice to a full examination of the issue in the appropriate case. Aside from the vehicle ownership issue, the trustee questions the increase in expense deductions taken by the debtors from the original Form 22C to the Second Amended form, claiming that the debtors have failed to document the increases. An examination of the documents of record in this case leads me to conclude that the disallowance of the transportation ownership deduction coupled with the additional expenses claimed by the debtors results in a positive disposable income of approximately $123.00. The trustee is certainly justified to demand documentation of all challenged expenses. However, the bases for at least some of the expense increases are readily ascertainable by reference to the debtors' Schedules I and J. For instance, the debtors' home mortgage deduction for the mortgage payable to PNC Bank, listed in Line 47 of Form 22C, increased from $1,052[19] to $1,496.28, a difference of $444.28. The debtors apparently amended the payment to reflect the real estate taxes and homeowner's insurance associated with the property. The debtors' Schedule J lists these expenses as $435.00 ($375 for real estate taxes and $60 for homeowner's insurance). Another apparently supportable increase in Form 22C expenses is noted on line 31, describing the debtors' mandatory payroll deductions, which includes union dues. Line 31 was amended from $31 to $71.32, for a difference of $40.32. Debtors' Schedule J lists Lynda's *616 union dues as $68.38 per month. A third readily ascertainable expense is the addition of Chapter 13 administrative expenses of $20.30 on line 50. These three expense increases total $504.90. Adjusting the expenses noted in the original Form 22C produces an expense total of $5,582.22.[20] Subtracting the expenses from the debtors' CMI of $5,705.18, we would arrive at a monthly disposable income of $122.96, which is notably less than the $350 per month proposed to be paid into the plan by the debtors. Parenthetically, I note that these calculations do not take into account other potential deductions that the debtors have not claimed on their Second Amended Form 22C. For example, eCAST has opined that the debtors are potentially eligible to claim a $200 deduction for each vehicle based on the age and excess mileage of the vehicles. See, e.g., In re Slusher, 359 B.R. at 310; Internal Revenue Manual, Pt. 5, Ch. 15 § 5.8.5.5.2. The debtors have not sought these deductions. These deductions would reduce the debtors' monthly disposable income to a negative number, even without considering the debtors' increased deductions for life insurance, health care and additional food expenses. The challenges to the debtors' Second Amended Form 22C are overruled. CONCLUSION I conclude that the objections of the creditor eCAST and the Chapter 13 trustee to the debtors' proposed Chapter 13 plan, as modified, must be overruled. With the adjustment of the plan to pay $350 for 60 months, the debtors have proposed to pay their projected disposable income to unsecured creditors for the applicable commitment period. The plan is confirmed. The debtors' counsel is directed to submit a form of order in conformance with this opinion. NOTES [1] Form 22C, or the "means test" form, collects the information needed to determine "disposable income" under § 1325(b)(2). [2] The original and First Amended Forms 22C filed by the debtors each reflected the same current monthly income of $5,705.18, but adjusted the total expenses from $5,913.32 to $6,112.56. The deficit in monthly disposable income calculated on the original Form 22C was $208.14, and grew to $407.38 in the First Amended Form 22C. [3] eCAST calculates the debtors' Form 22C expenses ($5,708.84) by disallowing the transportation ownership allowance for the debtors' vehicles ($803) and deducting that amount from the debtors' Second Amended Form 22C expenses ($6,511.84). eCAST does not take into account other expense adjustments, discussed infra. [4] Section 1325(b)(1) provides: (b)(1) If the trustee or the holder of an allowed unsecured claim objects to the confirmation of the plan, then the court may not approve the plan unless, as of the effective date of the plan (A) the value of the property to be distributed under the plan on account of such claim is not less than the amount of such claim; or (B) the plan provides that all of the debtor's projected disposable income to be received in the applicable commitment period beginning on the date that the first payment is due under the plan will be applied to make payments to unsecured creditors under the plan. 11 U.S.C. § 1325(b)(1). [5] The phrase "projected disposable income" appears without definition in five other subsections of the Code including, 11 U.S.C. §§ 1129(a)(15)(B), 1222(a)(4), 1225(b)(1)(B), 1225(b)(1)(C) and 1322(a)(4). See In re Pak, 378 B.R. 257, 264 n. 7 (9th Cir. BAP 2007); In re Slusher, 359 B.R. 290, 297 (Bankr. D.Nev.2007). Only section 1129(a)(15)(B) refers back to the definition of "disposable income" in section 1325(b)(2). Id. [6] Pre-BAPCPA, where an objection was filed, the plan could not be confirmed unless the debtor paid all claims in full, or the plan provided that "all of the debtor's projected disposable income to be received in the three-year period beginning on the date that the first payment is due under the plan will be applied to make payments under the plan." 11 U.S.C. § 1325(b)(1)(B) (2005). "Disposable income" was defined as that "income which is received by the debtor and which is not reasonably necessary to be expended for the maintenance or support of the debtor or a dependent of the debtor." 11 U.S.C. § 1325(b)(2) (2005). [7] Section 1325(b)(2) provides: (2) For purposes of this subsection, the term "disposable income" means current monthly income received by the debtor (other than child support payments, foster care payments, or disability payments for a dependent child made in accordance with applicable nonbankruptcy law to the extent reasonably necessary to be expended for such child) less amounts reasonably necessary to be expended (A)(i) for the maintenance or support of the debtor or a dependent of the debtor, or for a domestic support obligation, that first becomes payable after the date the petition is filed; and (ii) for charitable contributions (that meet the definition of `charitable contribution' under section 548(d)(3) to a qualified religious or charitable entity or organization (as defined in section 548(d)(4))) in an amount not to exceed 15 percent of gross income of the debtor for the year in which the contributions are made; and (B) if the debtor is engaged in business, for the payment of expenditures necessary for the continuation, preservation, and operation of such business. 11 U.S.C. § 1325(b)(2). [8] Under section 101(10A), "current monthly income": (A) means the average monthly income from all sources that the debtor receives (or in a joint case the debtor and the debtor's spouse receive) without regard to whether such income is taxable income, derived during the 6-month period ending on (i) the last day of the calendar month immediately preceding the date of the commencement of the case if the debtor files the schedule of current income required by section 521(a)(1)(B)(ii); or (ii) the date on which current income is determined by the court for purposes of this title if the debtor does not file the schedule of current income required by section 521(a)(1)(B)(ii); and (B) includes any amount paid by any entity other than the debtor (or in a joint case the debtor and the debtor's spouse), on a regular basis for the household expenses of the debtor or the debtor's dependents (and in a joint case the debtor's spouse if not otherwise a dependent), but excludes benefits received under the Social Security Act, payments to victims of war crimes or crimes against humanity on account of their status as victims "of such crimes, and payments to victims of international terrorism (as defined in section 2331 of title 18) or domestic terrorism (as defined in section 2331 of title 18) on account of their status as victims of such terrorism. 11 U.S.C. § 101(10A). [9] Section 1325(b)(3) provides that: Amounts reasonably necessary to be expended under paragraph (2), other than subparagraph (A)(ii) of paragraph (2), shall be determined in accordance with subparagraphs (A) and (B) of section 707(b)(2), if the debtor has current monthly income, when multiplied by 12, greater than (A) in the case of a debtor in a household of 1 person, the median family income of the applicable State for 1 earner; (B) in the case of a debtor in a household of 2, 3, or 4 individuals, the highest median family income of the applicable State for a family of the same number or fewer individuals; or (C) in the case of a debtor in a household exceeding 4 individuals, the highest median family income of the applicable State for a family of 4 or fewer individuals, plus $575 per month for each individual in excess of 4. 11 U.S.C. § 1325(b)(3). [10] The form previously labeled as Form B22C was an interim form, which became Form 22C when the official form was adopted. Many opinions refer to the form as "B22C". References in cited cases to either designation are interchangeable. In re Lanning, 380 B.R. 17, 19 n. 1 (10th Cir. BAP 2007) [11] See n. 3, supra. [12] Compare paragraphs (2) and (4) of § 1325(b), each of which contains the language "for purposes of this subsection". The referenced "subsection" is the entirety of § 1325(b), which includes § 1325(b)(1)(B). [13] Schedules I and. J reflect the debtors' actual net monthly income, which will be applied to satisfy administrative, priority and/or secured claims provided for under the plan. The remaining "projected disposable income" will be paid to unsecured creditors. [14] Cf. In re Frederickson, 375 B.R. 829, 835 (8th Cir. BAP 2007) ("`Projected disposable income' is the disposable income calculated on Form 22C extrapolated over the applicable commitment period."). In Frederickson, the debtors' financial circumstances had not changed from the six-month period prior to the filing through the effective date of the plan. [15] In re Slasher, 359 B.R. at 296 (citing to Cohen v. de la Cruz, 523 U.S. 213, 221, 118 S. Ct. 1212, 140 L. Ed. 2d 341 (1998) ("We . . . `will not read the Bankruptcy Code to erode past bankruptcy practice absent a clear indication that Congress intended such a departure' ") (quoting Pa. Dep't of Pub. Welfare v. Davenport, 495 U.S. 552, 563, 110 S. Ct. 2126, 109 L. Ed. 2d 588 (1990))). [16] In Slusher, on Schedules I and J, the debtor evidenced substantial ability to pay creditors ($2,364 net monthly income). On Form B22C, the debtors showed significantly less disposable income. The debtor proposed to pay the lesser amount in the plan. The court determined that the plan could not be confirmed. [17] Section 1325(b)(4) provides: For purposes of this subsection, the "applicable commitment period" (A) subject to subparagraph (B), shall be (i) 3 years; or (ii) not less than 5 years, if the current monthly income of the debtor and the debtor's spouse combined, when multiplied by 12, is not less than (I) in the case of a debtor in a household of 1 person, the median family income of the applicable State for 1 earner; (II) in the case of a debtor in a household of 2, 3, or 4 individuals, the highest median family income of the applicable State for a family of the same number or fewer individuals; or (III) in the case of a debtor in a household exceeding 4 individuals, the highest median family income of the applicable State for a family of 4 or fewer individuals, plus $575 per month for each individual in excess of 4; and (B) may be less than 3 or 5 years, whichever is applicable under subparagraph (A), but only if the plan provides for payment in full of all allowed unsecured claims over a shorter period. 11 U.S.C. § 1325(b)(4). [18] Distinction is drawn here between the facts in this case and the facts in Brady, supra. In Brady, because the debtors' financial circumstances had not changed, there was no basis to resort to Schedules I and J, and the debtors' negative "disposable income" was the same as their "projected disposable income". With no projected disposable income, the debtors were not required to make payments during the applicable commitment period. Here, while the debtors' "disposable income" may be negative, see discussion infra, the debtors'"projected disposable income", with reference to Schedules I and J, is positive. Payments during the applicable commitment period are required. [19] The proof of claim filed by PNC Bank reflects that the debtors' regular monthly mortgage payment is $1,051.69. [20] Total of all deductions listed on original Form 22C $5,913.22 Minus vehicle ownership deduction for two unencumbered vehicles - $ 803.00 Minus unsubstantiated "Additional Food and Clothing Expense" on Line 44 - $ 33.00 Plus ascertainable expense increases listed in Second Amended Form 22C $ 504.90 __________ $5,582.22	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532605/	368 S.W.2d 533 (1963) Roger ANTHONY, Respondent, v. Kenneth JENNINGS, Appellant. No. 23750. Kansas City Court of Appeals, Missouri. June 3, 1963. 535 Allebach & Ross, J. F. Allebach, Robert L. Ross, Albany, for appellant. Fred Kling, Albany, for respondent. MAUGHMER, Commissioner. T-intersection collision. Verdict for defendant. The trial court found error in the contributory negligence instruction and awarded a new trial. Defendant has appealed. Route O is a graveled state highway in Gentry County, Missouri, running east and west. Its traveled part is approximately 20 feet in width. It is intersected from the north at the top of a hill by another gravel road designated as Route F. This is a T-intersection as Route F does not extend beyond its junction with Route O. There was testimony that the hilltop at the intersection was flat and fell off sharply to both east and west. There was no definite testimony as to (a) how far a driver of an automobile in Route O at the intersection could see to the east and (b) how far the driver of the vehicle proceeding west on Route O could see an automobile in the intersection. All of the evidence was that it would have been impossible to see the roadway over the brow of the intersection hill until the top of the hill was reached. At about 5:00 p. m. on April 20, 1961, plaintiff, Roger Anthony, alone in his 1958 Ford sedan, was driving east on Route O and planned to turn north and left onto Route F. At the same time defendant Kenneth Jennings was driving a 1952 Ford coach in a westerly direction on Route O and approaching the intersection. It had rained and the roadway was wet. Plaintiff said that as he approached the intersection he turned on his left signal lights, "pulled up to the intersection and came to just about a complete halt and as I got past the center line of F and turned north, I was headed north when I saw the Jennings's car out of the corner of my eye". He then speeded up, but the front of defendant's automobile struck the right rear half of plaintiff's automobile. The defendant said he approached the intersection at a speed of "between 45 and 55 miles per hour"; that he did not see plaintiff's vehicle until "briefly before the collision"; that the front end of plaintiff's car was in the north lane and the back end in the south lane of Route O and headed north. Defendant, after the accident, conducted an experiment and said that in making a left turn north on Route O "I reached a place where I could not have seen a car coming up that hill". Both parties were familiar with the highway and the intersection. Sheriff Bowman of Gentry County investigated the accident. He found that plaintiff's automobile came to rest headed northwest and defendant's "almost in the center of what would be Route F, heading north, with the rear part partially in Route O." He found debris on the north portion of Route O. There were no skid marks indicating application of brakes by either vehicle. Sheriff Bowman said defendant had estimated his speed at 55 miles per hour. The front end of defendant's car struck plaintiff's at the front door post on its right side. Plaintiff submitted (Instruction No. 1) on defendant's failure to keep his automobile under proper control and failure to keep a careful and vigilant lookout. Defendant offered and the court gave his contributory negligence Instruction No. A, which we set out in full: "The Court instructs the jury that it is the law of Missouri that the driver of an automobile within an intersection intending to turn to the left shall yield the right of way to any vehicle approaching from the opposite direction, which is within the intersection or so close thereto as to constitute an immediate hazard. 536 "The Court therefore instructs the jury that if you find and believe from the evidence that at the time of the collision mentioned in evidence plaintiff, Robert Anthony, was operating his vehicle in an easterly direction on Route O and defendant, Kenneth Jennings, was operating his vehicle in a westerly direction on said Route O, and if you further find and believe plaintiff, Roger Anthony, commenced a left turn into Route F by crossing the center of said Route O when defendant, Kenneth Jennings, was so close to said intersection as to constitute an immediate hazard and plaintiff thereby failed to yield the right of way to defendant, Kenneth Jennings, if you so find, then the Court instructs the jury that plaintiff, Roger Anthony, was negligent in the operation of his automobile, and if you further find that the negligence, if any, of plaintiff, Roger Anthony, directly caused or contributed to cause any injuries to his person or damage to his automobile, then the Court instructs you that plaintiff, Roger Anthony, cannot recover from defendant and your verdict will be for the defendant, Kenneth Jennings". The jury returned a verdict for defendant. Thereafter the court sustained plaintiff's motion for new trial "on the grounds that defendant's Instruction `A' is erroneous and prejudicial error". On his appeal, defendant asserts, first, it was not prejudicially erroneous to give Instruction A, and second, defendant's motion for directed verdict at the close of all the evidence should have been sustained as the evidence establishes plaintiff's contributory negligence as a matter of law. Section 304.021(3), V.A.M.S. provides: "The driver of a vehicle within an intersection intending to turn to the left shall yield the right of way to any vehicle approaching from the opposite direction which is within the intersection or so close thereto as to constitute an immediate hazard." It was by reason of this statute that defendant offered and the court gave Instruction A. In Carpenter v. Kessner, Mo.App., 330 S.W.2d 270, 273-274, this court considered the circumstances under which a leftturning motorist should be ruled guilty of contributory negligence as a matter of law so as to authorize a directed verdict against him. In that case the collision occurred at the intersection of 47th Street and J. C. Nichols Parkway in Kansas City. Plaintiff was proceeding east on 47th Street and turned left and north. It was a foggy day and the pavement was wet. Plaintiff said that as he commenced his turn he saw defendant about 100 feet away. He thought he had sufficient time to make the turn. When defendant was about 20 feet away plaintiff realized a collision was imminent and speeded up but the front end of defendant's car struck the right rear fender of plaintiff's vehicle. Section 304.021(3) supra, as to left turns was invoked. The court directed a verdict for defendant. This court reversed and held the contributory negligence question was for the jury, saying, in part: "The evidence is that appellant was within the intersection and had proceeded to the center of it while respondent was still a considerable distance east of the intersection. This leaves the question, `was respondent so close thereto as to constitute an immediate hazard?' If so, appellant had the statutory duty to yield the right of way to respondent, and, ordinarily, a a failure to do so would be a failure to exercise the highest degree of care as required by law of the driver of a motor vehicle and would make appellant guilty of contributory negligence. If reasonable minds could not differ on this question then it becomes a matter of law for the court to decide but if reasonable minds could differ 537 on it then it becomes a matter for the jury to decide under proper instructions by the court. * * * * * "A fair reading of all appellant's testimony and its favorable inferences concerning respondent's speed would not preclude the conclusion that he did not then know the exact speed at which respondent was approaching but thought it was such that he had enough time to safely make his left turn. * * * * * * "Additionally, appellant's evidence does not compel a finding that he knew or should have known respondent didn't see him until approximately the time of impact, and would not permit him to complete a turn he began while respondent was still some 80 feet east of the intersection. One about to make a turn usually has the right to act upon appearances and unless there is a reasonable indication to the contrary, to assume that the driver of the other approaching vehicle will not act negligently and will operate his vehicle in a prudent and lawful manner. (citing cases)". We rule that the court did not err in denying defendant's motion for a directed verdict. The issue of contributory negligence in this case is one for the jury under proper instructions. Was Instruction A such a proper instruction? As stated in Lincoln v. Railway Express Agency, Inc. et al., Mo., 359 S.W.2d 759, 765: "It has been frequently stated that traffic regulations are not unyielding and inflexible and are not to be applied rigidly, absolutely and peremptorily without regard to circumstances or conditions, Wines v. Goodyear Tire & Rubber Co., Mo.App., 246 S.W.2d 525, MacArthur v. Gendron, Mo.App., 312 S.W.2d 146, and that the duties thereby imposed may be qualified by circumstances, Nelms v. Bright, Mo.Sup., 299 S.W.2d 483, such as considerations of safety, Lix v. Gastian, Mo.App., 287 S.W.2d 354, emergency conditions, Lewis v. Zagata, 350 Mo. 446, 166 S.W.2d 541, Filkins v. Snavely, 359 Mo. 356, 221 S.W.2d 736, or impossibility. Politte v. Miller, supra [Mo.App., 301 S.W.2d 839]. In such unusual circumstances deviation from the statutory standard will not be considered as negligence per se." In the Lincoln case the violation charged was that defendant negligently failed, when approaching the intersection to make a left turn, to drive in the lane nearest to the center as required by statute. In Terrell v. McKnight, 360 Mo. 19, 226 S.W.2d 714, the trial court refused plaintiff's instruction that defendant's failure to signal his turning into plaintiff's lane, stopping on the highway without warning and failure to drive as far to the right as possible, amounted to negligence per se. The court, however, gave an instruction that if defendant did those things and the jury found they were reasonably likely to cause a collision, were not in the exercise of the highest degree of care and were negligent, then a verdict for plaintiff was authorized. The Supreme Court approved such rulings. In Herr v. Ruprecht, Mo., 331 S.W.2d 642, 647, the court said: "The defendant properly asserts that the proof of negligence cannot rest upon guesswork, speculation, or conjecture and that the mere fact of collision is not sufficient to establish defendant's negligence. Miller v. Wilson, Mo.App., 288 S.W. 997, 999; Bates v. Brown Shoe Co., 342 Mo. 411, 116 S.W.2d 31, 33; Fritz & Groh v. St. Louis, I. M. & S. R. Co., 243 Mo. 62, 148 S.W. 74, 79. However, the fact that a collision occurred and the manner of its happening are evidentiary facts which must be taken into consideration in determining the sufficiency of the evidence, especially 538 in this type of case where the essential question is whether the plaintiff's vehicle was `approaching so closely on the through highway as to constitute an immediate hazard' and whether the defendant knew or should have known of such danger." And 331 S.W.2d on page 652, Judge Storckman in his concurring opinion points out that: "Mere abstract statements of legal propositions do not make proper instructions, and an instruction authorizing the jury to return a verdict for a party must require the finding of all essential fact issues necessary to establish the legal proposition on which the right to the verdict is based. * * * * * "Under the statute it is only where the hazard is created by the closeness or proximity of the approaching automobile on the through highway that the defendant is required to yield the right of way." See also Edwards v. St. Louis Public Service Co. et al., Mo., 365 S.W.2d 483, 486. In our case the undisputed evidence is that plaintiff entered the intersection, came almost to a stop and proceeded to make his left turn at slow speed. Based upon his testimony, situs of the debris, location of the cars at rest and the parts of each vehicle which came in contact, plaintiff's car was partly or nearly out of the intersection when hit. Defendant, by his own admission to Sheriff Bowman, was at all times traveling at approximately 55 miles per hour and therefore many times faster than was plaintiff. Neither driver saw the other car until just before the collision. The record contains no evidence as to how far to the east plaintiff, commencing his turn, could have seen defendant's car approaching from the east. The physical facts and the admitted speeds of each vehicle indicate that defendant must have been some distance to the east when plaintiff commenced his left turn. Under the evidence we can only guess, and the jury could only guess, as to the location of defendant's vehicle when plaintiff turned north. We can only guess, and the jury could only guess, as to what plaintiff might have seen if he had been able to see 500 feet to the east, and if he had looked. It is possible defendant was far enough away for plaintiff, in the exercise of due care, to commence his turn. If he had seen defendant some distance away, he might, in the exercise of the highest degree of care, have reasonably assumed defendant saw him and would reduce his speed. It seems apparent by hindsight that if defendant had reduced his speed even slightly, instead of continuing on at 55 miles per hour, plaintiff would have passed safely out of Route O. Again by hindsight, it is now a demonstrated fact that there was danger of collision if plaintiff, under the circumstances then existing, turned left. The fact that a collision did occur is proof of the existing danger. But it is not proof that plaintiff knew, or in the exercise of the highest degree of care should have known, that defendant was "so close as to constitute an immediate hazard". Failure to yield as directed by Section 304.021(3), supra, does not in every instance amount per se to negligence or failure to exercise the highest degree of care, so as to tax such an operator with responsibility for every resultant accident. Each case depends upon its own facts. The evidence may in some cases require a directed verdict. In others, it is a question for the jury. It is best if an instruction hypothesizes the pertinent facts where such facts are in evidence. At the least it must permit and require the jury to decide if the actions complained of amounted to negligence and failure to exercise the highest degree of care. To instruct a jury that if the motorist turns left and is struck by an oncoming car, then he is negligent and liable is, in effect, directing a verdict. We believe that in this case the evidence and the instruction permit the jury to guess and speculate. 539 Defendant urges that Garrison v. Ryno et al., Mo., 328 S.W.2d 557, and MacArthur v. Gendron, Mo.App., 312 S.W.2d 146, approve Instruction A as given here. In the Garrison case defendant allegedly entered an arterial highway without stopping and failed to look ahead and laterally before entering, and failed to yield the right of way. The instruction told the jury that if it found defendant ran the stop sign, failed to look ahead and laterally and failed to yield the right of way and if the jury found that such amounted to negligence, as defined in other instructions, their verdict should be for plaintiff and against defendant. It will be noted this instruction posed some of the facts to the jury, and required the jury to decide if such conduct and such violations of the rules of the road enactments, amounted to negligence. It did not bluntly tell the jury that such conduct was negligence and require a verdict against defendant. The MacArthur case more strongly supports appellant's position. In fact his instruction A is a copy of the one given in that case. The MacArthur appeal came up on an abbreviated transcript and under an agreement "that evidence was introduced at the trial tending to prove the allegations of petition and answer, the instructions, and the objection to Instruction 3". We believe the case may be distinguished from ours and quote from the opinion: "If plaintiff's criticism is valid No. 3 cannot stand because traffic regulations imposed by statute are not unyielding and inflexible. 60 C.J.S. Motor Vehicles § 271. They are not to be applied rigidly, absolutely and peremptorily without regard to the circumstances or conditions. Wines v. Goodyear Tire & Rubber Co., supra, and cases cited. The duties imposed by the statutory rules of the road may be qualified by the circumstances. Nelms v. Bright, Mo. Sup., 299 S.W.2d 483. Under the circumstances of a particular case there may be a valid excuse for failing to comply with a statutory rule of the road, as where nonobservance of the statute is induced by considerations of safety, Lix v. Gastian, Mo.App., 261 S.W.2d 497, or emergency conditions, Lewis v. Zagata, 350 Mo. 446, 116 S.W.2d 541; Filkins v. Snavely, 359 Mo. 356, 221 S.W.2d 736, or where compliance is impossible, as in the case where knowledge, actual or constructive, of the immediate approach of an emergency vehicle comes too late to yield the right of way under an emergency statute". (Italics ours). We cannot agree with defendant's assertion that the instruction in Lay v. McGrane, Mo., 331 S.W.2d 592, 599 "is in practically the same language as Instruction A in this case". In that case there was evidence that both arrived at the intersection at about the same time. The instruction reads: " * * if you find * * * that the automobile of defendant Hays entered said intersection first or that both of said automobiles arrived at said intersection at approximately the same time, then it was the duty of defendant McGrane to yield the right of way to the automobile of defendant Hays, and if you find that defendant McGrane failed so to do, you may find him negligent. * * ". (Italics ours). By this instruction the jury was permitted to find negligence but the court did not declare defendant was negligent. The Springfield Court of Appeals (Lillard v. Bradford, 241 Mo.App. 538, 243 S.W.2d 359, 366) summarized the issue this way: "Thus the law is that there must be circumstances which would bring to the mind of the driver of the car approaching from the right that there was danger ahead before there would be a duty to stop or to slacken his speed. "We hold plaintiff's instruction numbered I was erroneous in that it authorized a verdict against defendant for failure to stop before entering the intersection, regardless of where plaintiff's truck was at the time or any other 540 conditions which would lead defendant to believe that a collision would occur if he did not stop." We are not persuaded by the MacArthur and other cases urged upon us by appellant to approve Instruction A under this evidence or as a correct application of the law. It is possible that at a retrial some additional evidence will be adduced, particularly as to how far east plaintiff could have seen and how far defendant's car must have traveled going 55 miles per hour while plaintiff was moving from "almost stopped" to the point of impact. We rule that the trial court did not err in overruling defendant's motion for directed verdict or in granting a new trial. The order granting a new trial is affirmed. SPERRY, C., concurs. PER CURIAM. The foregoing opinion of MAUGHMER, C., is adopted as the opinion of the Court. All concur.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532620/	368 S.W.2d 240 (1963) CITY OF DALLAS et al., Petitioners, v. Daniel C. BROWN et al. and James P. Donovan, Atty., Respondents. No. 16193. Court of Civil Appeals of Texas, Dallas. May 22, 1963. H. P. Kucera, City Atty., and N. Alex Bickley, Asst. City Atty., Dallas, for petitioners. James P. Donovan, Dallas, for respondents. PER CURIAM. Original contempt proceedings. The City of Dallas, acting through its City Attorney, by motion duly verified, moves this Court to declare respondents to be in contempt of this Court for violation of a Writ of Prohibition and Ancillary Orders issued by this Court on April 16, 1963. For a proper understanding of the issues here presented it is both desirable and essential to relate the following relevant antecedent facts. 1. On April 4th, 1961 George S. Atkinson, and others, owners of property near Love Field, a municipal airport located in the City of Dallas, filed a class suit in the District Court of Dallas County seeking to restrain the City of Dallas from the construction of a runway at said airport. Said suit being No. 59027-H, styled George S. Atkinson, et al. v. City of Dallas, also attacked the validity of certain revenue bonds which the City of Dallas was about to issue to finance construction of the airport runway. 2. On July 17, 1961 the District Court granted a summary judgment in favor of the City denying permanent injunction sought by plaintiffs. 3. On December 15, 1961 this Court, on the appeal of the above case, affirmed the 241 judgment of the trial court. Motion for rehearing was overruled on January 19, 1962. A detailed statement of the facts and issues involved will be found in this Court's opinion, styled Atkinson, et al. v. City of Dallas, and reported in 353 S.W.2d 275. 4. Appellants made application to the Supreme Court of Texas for a writ of error and, on March 14, 1962, the application was denied by the Supreme Court with the notation "No Reversible Error". 5. On June 25, 1962 the Supreme Court of the United States denied a writ of certiorari in the case, and on October 8, 1962 overruled a motion for rehearing. See Atkinson v. City of Dallas, 370 U.S. 939, 82 S. Ct. 1587, 8 L. Ed. 2d 808, rehearing denied 371 U.S. 854, 83 S. Ct. 18, 9 L. Ed. 2d 92. By the action of the Supreme Court of the United States the judgment of this Court of December 15, 1961 became final. 6. On September 24, 1962 Respondents herein filed Civil Action No. 9276, styled Brown, et al. v. City of Dallas, et al. in the United States District Court for the Northern District of Texas, Dallas Division. By this suit they sought a permanent injunction against the City of Dallas to restrain said City from building the runway and from issuing certain revenue bonds. No temporary injunction was sought and none was granted. Forty of the plaintiffs in the case of Brown, et al. v. City of Dallas, et al. in the United States District Court were the same persons who were plaintiffs in the original suit filed April 3, 1961 in the District Court of Dallas County, Texas and other plaintiffs, all alleged to be property owners, were added in the Federal Court case. 7. On October 2, 1962, the City of Dallas and others filed an application for Writ of Prohibition and other Ancillary Mandatory Orders in this Court asking us to enforce our judgment in Atkinson v. City of Dallas by prohibiting the plaintiffs in the case of Brown v. City of Dallas, et al. in the United States District Court from attempting to relitigate the same issues and from interfering with the issuance and sale of the Love Field Revenue Bonds which this Court had declared to be valid in the Atkinson decision. This Court was also requested to direct that the plaintiffs in the Brown suit be required to dismiss said cause and refrain from filing any other litigation in reference to said runway and Love Field Revenue Bonds. 8. On October 6, 1962, the plaintiffs in the Brown suit filed an application in the United States District Court seeking to enjoin this Court from considering or acting upon the City's application for writ of prohibition. 9. On October 10, 1962, at the hearing, the United States Court dismissed the application for injunction to restrain this Court from further considering the City's application for a writ of prohibition. 10. On October 24, 1962, by a divided court, with Chief Justice Dixon and Associate Justice Williams filing a majority opinion, we denied the City of Dallas the relief sought in its application for writ of prohibition. Associate Justice Young filed a written dissenting opinion. The motion for rehearing filed by the City of Dallas was overruled on November 23, 1962. City of Dallas, et al. v. Brown, et al., Tex.Civ. App., 362 S.W.2d 372. 11. On December 8th, 1962, the City of Dallas, as petitioner, filed its original application for a mandamus in the Supreme Court of the State of Texas in which it was asked that the Supreme Court order and direct this Court of Civil Appeals to grant the relief prayed for and which relief this Court had denied in cause No. 16,193, styled City of Dallas, et al. v. Brown, et al, 362 S.W.2d 372. 12. The Supreme Court of the State of Texas in cause No. A-9340, styled City of Dallas, et al., Relators v. Dixon, Chief Justice, et al., Respondents, did by written opinion dated March 15 1963, issue its order, styled "An Original Mandamus" directing this Court to issue a writ of prohibition 242 and other ancillary orders granting to the City of Dallas the relief sought against further prosecution of the case involving the same issues as had been previously foreclosed in the Atkinson case. City of Dallas, et al. v. Dixon, Chief Justice, et al., Tex., 365 S.W.2d 919. The Supreme Court overruled motion for rehearing and notice was given to this Court to comply with the order of the Supreme Court. 13. Thereafter no action was taken by respondents to cause such decision of the Supreme Court of Texas to be reviewed by the Supreme Court of the United States. 14. The Supreme Court of Texas in its opinion, held that the parties in the case of Brown v. City of Dallas in the Federal Court were bound by the decision in Atkinson v. City of Dallas. In this regard the court said: "It is immaterial that Brown is not a class action. The controlling fact is that Atkinson was a class action as authorized by Rule 42, Texas Rules of Civil Procedure; and being a class action of the hybrid type, the judgment in Atkinson binds all members of the class insofar as validity of the bonds and the right of the City to construct the runways are concerned if the class was adequately represented by those who sued on behalf of the class. McDonald, Texas Civil Practice, Vol. 1, § 3.37, pp. 283-284; Hovey v. Shepherd, 105 Tex. 237, 147 S.W. 224. The description of the plaintiffs in Brown, quoted above, shows clearly that they are members of the class represented by the plaintiffs in Atkinson, and it is not suggested that they were not adequately represented in that suit. Their right to relitigate the same issues is foreclosed by our decision in Hovey v. Shepherd, supra. This must be so. If it were not so, different groups of Dallas citizens could halt all efforts of the City to improve its airport facilities indefinitely by filing new suits. Such an absurdity cannot be tolerated." 15. The Supreme Court, by its opinion, also held that the issues sought to be litigated in the Federal Court are essentially the same as the issues litigated in Atkinson to final judgment. Thus the court said: "An analysis of the petition in Brown discloses that the issues sought to be litigated are essentially the same as the issues litigated in Atkinson, and the prayer is for the same ultimate relief. Such additional collateral issues as are injected in Brown could, by diligence, have been litigated in Atkinson. They are, therefore, also foreclosed by the judgment in Atkinson." 16. Pursuant to direct order of the Supreme Court of Texas, this court did, on April 16, 1963, grant its Writ of Prohibition and Ancillary Orders, directed to the Respondents providing that said parties and all of them; "together with all persons similarly situated, are hereby prohibited from prosecuting, urging or in any manner seeking to litigate, as attorney and/or plaintiffs, case No. 9276 styled Brown et al. v. City of Dallas, et al. now pending in the United States District Court for the Northern District of Texas, Dallas Division, and they and each of them, individually, and as a class, are further prohibited and enjoined from filing or instituting any litigation, lawsuits and other actions, seeking to contest the right of the City of Dallas to proceed with the construction of the parallel runway as presently proposed at Love Field situated within the City of Dallas, Texas, or from instituting and prosecuting any further litigation, lawsuits or actions in any court, the purpose of which is to contest the validity of the airport revenue bonds heretofore issued under authority of Art. 1269-J, V.A.C.S. or that might be issued under said Article for the construction of the Love Field runway and the ancillary improvement in connection therewith, or from, in any manner 243 interfering with or casting any cloud upon, or slandering the title of, or interfering with the delivery of, the proposed bonds by the City of Dallas, any of its agents or representatives or others seeking to assist them in the sale and delivery of the same." 17. The City of Dallas filed a motion to dismiss the Brown suit in the Federal Court and at a preliminary hearing in the Federal Court James P. Donovan, as attorney for the plaintiffs therein, filed a motion to dismiss certain persons as plaintiffs, but to add new party-plaintiffs. The Federal Judge granted the motion to dismiss certain plaintiffs from the suit but before permitting the new parties to intervene in that suit required assurance that the parties seeking to intervene had been warned that to actively prosecute said suit might be a contempt of this court and the orders theretofore issued by it. Attorney James P. Donovan stated to the Federal Judge that the matter had been brought to the attention of the new parties and they had been fully warned of the possible consequences of their action. 18. In spite of the Writ of Prohibition issued by this Court, attorney James P. Donovan, representing the parties in the Brown case in the Federal Court, filed an answer to the City's motion to dismiss the Brown case and actively and vigorously opposed the motion to dismiss. The basis of the attorney's opposition to such motion was that his clients had not had their day in court and that the order of this court and the order of the Supreme Court of Texas were invalid. On May 2, 1963 the Judge of the United States District Court ordered the Brown case dismissed and Respondent Donovan noted exception to such action. 19. Following the issuance of the Writ of Prohibition by this Court, attorney James P. Donovan, on behalf of himself and a number of the Respondents herein, filed Cause No. CA-3-63-120 Civil in United States District Court styled James P. Donovan, et al., v. The Supreme Court of Texas, et al., in which suit it was prayed that the Federal Court grant an injunction against the Court of Civil Appeals and the Supreme Court of Texas restraining the enforcement of the writs theretofore issued by this court. On May 9, 1963 the Judge of the United States District Court granted motion to dismiss this cause, to which action an exception was duly noted by Donovan. 20. The present motion for contempt filed by the City of Dallas in this Court alleges that respondents, and each of them, have been guilty of contempt of this Court by violating the Writ of Prohibition and injunction heretofore issued by us in the following respects: (a) In failing to request the Federal Court to dismiss the case of Daniel C. Brown, et al., v. City of Dallas, et al., No. 9276 pending in the United States District Court; (b) By filing motion contesting the dismissal of said Brown suit in the Federal Court; (c) That the respondents who made themselves new parties in the Federal Court case, following the issuance of our Writ of Prohibition and injunction, were guilty of contempt in knowingly aiding and abetting the further prosecution of said suit in the Federal Court; (d) In appearing and vigorously and actively opposing and contesting the motion to dismiss the Brown suit in the Federal Court; (e) By taking exceptions to the order of the Federal Court in dismissing the Brown suit; (f) By filing cause No. CA-3-63-120 Civil styled James P. Donovan, et al., v. Supreme Court of Texas, et al., in the United States District Court which said suit seeks to interfere with the enforcement of the Writ of Prohibition issued by this Court. The hearing on the motion for contempt came on to be heard by this Court on May 244 13, 1963. Motion for continuance filed by James P. Donovan, for himself and respondents, was sustained and the matter reset for May 20, 1963. On said date, May 20, 1963 the matter came on for hearing and James P. Donovan and all of the respondents who had been served with notice to appear, did appear, and announced ready for the hearing on the motion for contempt. Respondents' motion to quash the affidavit for contempt was overruled and the Court proceeded to hear testimony from both petitioners and respondents. The evidence of petitioners consisted of documentary proof relating to the matter heretofore recited and testimony of an Assistant City Attorney. The only witness who testified for respondents was attorney James P. Donovan who candidly stated that the actions and conduct on the part of all the respondents were taken upon his advice that the orders of the Supreme Court of Texas and of this Court were invalid. The testimony presented upon this hearing abundantly demonstrates that all of the respondents are guilty of contempt of this Court. Respondents have been shown to have knowingly violated the orders of this Court which were issued in pursuance to a mandate of the Supreme Court of Texas. Such willfull disobedience of a valid order of a court constitutes contempt which cannot be tolerated. Respondents' contention that they have not been afforded their day in court is entirely without merit. As demonstrated by the foregoing facts, respondents have had their full day in court. The issues have been presented to twenty-three judges comprising every court from the trial court to the United States Supreme Court and these judges have, without a single dissent, decided the issues against respondents. Over a period of two years respondents have had the benefit of every judicial hearing available in both State and Federal Courts. The issues having been adjudicated against them, they must necessarily recognize the end of litigation. There must be an end to litigation else there would be no purpose of beginning litigation. If orders of this or any other court are to be ignored and disobeyed merely because some attorney says that they are invalid then our system of jurisprudence will fall and anarchy and chaos will result. We will have fallen upon evil days, indeed, when an attorney arrogates unto himself the function to declare invalid mandates of a court of law. Our Government of law, and not of men, does not tolerate such usurpation of power by any person and especially by an officer of the court sworn to protect and defend the constitution and laws of the nation and of this State. During the hearing of this matter the respondent, attorney James P. Donovan, made many irresponsible statements concerning our courts which clearly demonstrate his attitude. For example he assailed the judgment of the Supreme Court of Texas contending that "it isn't worth, in our opinion, the paper it was written on." At another point he said, in effect, that he and his clients were not in contempt of this Court; that they were probably in contempt of the Supreme Court of Texas but they were not being tried for that.[1] He admitted that, in response to an inquiry from the United States District Judge, that he had advised his clients that they were subjecting themselves to a contempt action by proceeding in the Federal Court case. The whole record illustrates one fact clearly, that is, that the respondents, with full knowledge of the facts, followed attorney Donovan's advice and counsel to the effect that orders of the court were invalid and should be disobeyed or ignored. Art. 1826, Vernon's Ann.Civ.St. specifically empowers this Court to punish any *245 person for a contempt of this Court, not to exceed $1,000 fine or imprisonment not to exceed twenty days. As to the individual respondents we have considered the mitigating facts and circumstances, and especially that they were advised by attorney Donovan to perform the acts complained of, and have therefore set their punishment at $200 fine. However, as to the respondent Donovan, it is our judgment that he should be assessed the maximum jail sentence of twenty days in the County Jail. Subsequent to the entry of our original judgment several of the respondents appeared and presented additional mitigating or extenuating circumstances, and as a result thereof we have amended our order, as shown by the record herein, completely exonerating twenty-six of the respondents and altering and modifying the sentence of others. All respondents, with exceptions heretofore noted, are found guilty of contempt and assessed punishment as shown by the judgment of this Court. NOTES [1] It is of interest to note other irresponsible and unlawyerlike statements made by Respondent Donovan which illustrate his general attitude towards courts. For example, he charged the Assistant City Attorney with "tampering with the Court" (referring to the Federal Court), and that he did not "believe in backdoor jurisprudence" (still referring to the United States District Court).	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532616/	489 Pa. 568 (1980) 414 A.2d 1037 AMERICAN TOTALISATOR COMPANY, INC., Appellant, v. Charles S. SELIGMAN et al., and Control Data Corporation. Supreme Court of Pennsylvania. Argued January 22, 1980. Decided May 30, 1980. 569 570 Patrick W. Kittredge, David Gutin, Philadelphia, for appellant in No. 162 and for appellee in No. 170. Donald J. Murphy, Deputy Atty. Gen., for appellees in Nos. 162 and 170. Frank A. Sinon, R. Stephen Shibla, Harrisburg, for appellee in No. 162 and for appellant in No. 170. Before EAGEN, C.J, and O'BRIEN, ROBERTS, NIX, LARSEN and FLAHERTY, JJ. OPINION OF THE COURT O'BRIEN, Justice. The instant controversy concerns the competitive bidding process and award of a contract for the supply of equipment 571 and technology to be used for the Daily Numbers Game operated by the Bureau of State Lotteries. On February 19, 1976, the Bureau of State Lotteries issued a request for proposal, inviting companies to submit bids for a computerized daily numbers game. Appellant, American Totalisator Company, Inc., and intervenor-appellee, Control Data Corporation, were the only companies to submit bids. The request for proposal stated that the contract would be awarded in "conformity with the concept of the lowest responsible bidder," and further provided: "Innovative Suggestions and Recommendations: The Bureau welcomes and invites innovative suggestions and recommendations from bidders who feel the operation of the proposed daily lottery can be improved. Such suggestion and recommendations may not be substituted for, but should be in addition to bid provisions required in this RFP. No bid will be disqualified or rejected for failure to submit such suggestions and recommendations. In the event that the evaluation committee determines that any such suggestion or recommendation is worth further exploration, all bidders will have an opportunity to conform their proposals in accordance with the revised provisions." (Emphasis added.) On March 26, 1976, both American Totalisator and Control Data submitted technical proposals, which were reviewed by an evaluation committee.[1] To review said technical proposals, the committee divided its inquiry into eight areas: internal control systems, management reports capabilities, security, training, terminal, central computer facility, maintenance capabilities and general ability of company to perform. The committee found no significant disparity between the two proposals in six of the eight areas; however, in the areas of terminal and training, Control Data received significantly higher grades because, pursuant to the request for proposals' invitation for innovative suggestions, Control 572 Data had included the use of a cathode ray tube[2] at the agents' terminals. (American Totalisator, however, was never given a chance to amend its proposal to include cathode ray tubes at the agents' terminals. On June 2, 1976, the cost proposals of American Totalisator and Control Data were opened at a public meeting. It immediately became apparent that the cost proposals were calculated on different bases; American Totalisator had used an effective rate basis while Control Data's bid was based on an accumulative rate. Acting Secretary of Revenue Charles Seligman sent letters to both bidders seeking clarification of their cost proposals and asking whether the bids were based on effective rate or accumulative rate. American Totalisator responded that its bid was indeed calculated on an effective rate basis. Control Data confirmed that it had used an accumulative rate basis; subsequently a bid based on the effective rate was submitted. In effect, Control Data was allowed to amend its cost proposal after seeing the supposedly secret bid of American Totalisator, which was not given a chance to amend its bid. On the basis of Control Data's amended cost proposal, which was lower than the bid of American Totalisator,[3] Control Data was awarded the contract on June 23, 1976. On July 2, 1976, American Totalisator filed a petition for review in the Commonwealth Court, seeking to enjoin the Commonwealth from entering into a contract with Control Data. The petition named as respondents the Department of Revenue, the Bureau of State Lotteries, Secretary of Revenue Milton Lupes, Deputy Secretary (and at times 573 Acting Secretary) Seligman and Bureau of State Lotteries Executive Director Lynn R. Nelson. Appellee Control Data was permitted to intervene. On August 6, 1976, following a hearing, the Commonwealth Court denied American Totalisator's request for a preliminary injunction. Control Data and the Commonwealth executed a contract, effective October 1, 1976. The Daily Numbers Game has been in operation since March 1, 1977. American Totalisator filed an amended petition for review, requesting the Commonwealth Court to stay the Bureau's decision to award the contract to Control Data. Both the Commonwealth and Control Data filed preliminary objections, alleging that American Totalisator lacked standing to sue and that its petition failed to state a cause of action. The Commonwealth Court overruled the preliminary objections. American Totalisator Co., Inc. v. Seligman, et al., 27 Pa.Cmwlth. 639, 367 A.2d 756 (1976). Control Data and the Commonwealth then filed, in March of 1977, answers and new matter to American Totalisator's amended petition for review. American Totalisator responded to the answers containing new matter and requested the case be listed for trial. In its response, American Totalisator requested the Commonwealth Court to order, inter alia, (1) the Commonwealth to award it the contract in question and (2) Control Data to disgorge any profits received under the allegedly illegal contract. A trial was held by the chancellor from June 15, 1977 to June 21, 1977. The chancellor issued his decree nisi on October 18, 1977, decreeing (1) the contract with Control Data void as of March 2, 1978, and (2) the Commonwealth to solicit new bids. The chancellor, however, refused to award the contract to American Totalisator or to order disgorgement of Control Data's profits. Both companies filed exceptions.[4]American Totalisator Co., Inc. v. Seligman, 34 Pa. Cmwlth. 391, 384 A.2d 242 (1977). On November 17, 1977, the Commonwealth issued a new request for proposal. When both companies sought to enjoin 574 the issuance of the request, the chancellor ordered it withdrawn. On December 2, 1977, the chancellor postponed the cancellation of the existing contract, extending the date from March 2, 1978 to July 2, 1978; he further allowed the issuance of a third request for proposal. Both companies submitted bids which were opened on December 28, 1977. Control Data was once again the low bidder and was awarded the contract, which was to run from July 2, 1978 until July 1, 1980. On March 15, 1978, the Commonwealth Court, sitting en banc, dismissed all of the exceptions filed by American Totalisator and Control Data and directed the prothonotary to enter the chancellor's decree nisi as a final decree. American Totalisator Co., Inc. v. Seligman, et al., 34 Pa.Cmwlth. 436, 384 A.2d 266 (1978). Both companies filed appeals and the matter is now before us for final disposition. Control Data, in its cross-appeal, would have us reverse the Commonwealth Court and reinstate the original contract. Control Data first argues that American Totalisator, as a disappointed bidder, had no standing to bring this action. This argument is meritless, as we have held that a taxpayer has standing to enjoin the improper award of a public contract and such standing is not defeated by the fact that the complaining taxpayer is also a disappointed bidder. Lutz Appellate Printers Inc. v. Commonwealth, 472 Pa. 28, 370 A.2d 1210 (1977). As there is no dispute concerning American Totalisator's status as a taxpayer, it clearly has standing to maintain the instant action. Control Data further argues that the chancellor erred in failing to conclude that the procurement procedure in the instant case was exempt from the requirements of competitive bidding. Control Data argues that the request for proposal sought a contract for highly technical professional services, thus exempt from competitive bidding. We need not decide, however, whether the instant contract is exempt. The request for proposal stated: 575 "The bidders should understand that the criteria used in the selection process are both objective and subjective and that cost is not the only determining factor. Financial resources and the capability of the bidder, among other things, are taken into consideration in order for the contract to be awarded in conformity with the concept of the lowest responsible bidder." As the Commonwealth elected to use the competitive bidding process, Control Data has no ground for complaint.[5] Finally, Control Data argues that the chancellor erred in intervening in the procurement process, citing Blumenschein v. Pittsburgh Housing Authority, 379 Pa. 566, 109 A.2d 331 (1954), as authority for his proposition. Therein we stated: "By a host of authorities in our own and other jurisdictions it has been established as an elementary principle of law that courts will not review the actions of governmental bodies or administrative tribunals involving acts of discretion, in the absence of bad faith, fraud, capricious action or abuse of power: they will not inquire into the wisdom of such actions or into the details of the manner adopted to carry them into execution. It is true that the mere possession of discretionary power by an administrative body does not make it wholly immune from judicial review, but the scope of that review is limited to the determination of whether there has been a manifest and flagrant abuse of discretion or a purely arbitrary execution of the agency's duties or functions. That a court might have a different opinion or judgment in regard to the action of the agency is not a sufficient ground for interference; judicial discretion may not be substituted for administrative discretion." Id., 379 Pa. at 572-73, 109 A.2d at 334-35. (Emphasis added.) As the chancellor made no findings concerning bad faith, fraud or capricious action, Control Data believes that the 576 instant judicial intervention was improper. We do not agree. As Blumenschein points out, principles of municipal law forbid the substitution of judicial discretion for administrative discretion. We believe, however, that the governmental agencies in this case simply had no discretion to award the contract to Control Data on the original bids submitted. Our belief is based on two reasons. As previously mentioned, the original request for proposal invited the use of innovative suggestions. The request, by its own terms, stated: "In the event that the evaluation committee determines that any such suggestion or recommendation is worth further exploration, all bidders will have an opportunity to confirm their proposals in accordance with the revised provisions." Instantly, the chancellor found that Control Data's use of the cathode ray tube at the agents' terminals was such an innovative suggestion. In fact, the use of the tube was the crucial factor in the evaluation committee's recommendation of Control Data's proposal over the proposal of American Totalisator as the latter was never given an opportunity to include the use of cathode ray tube at the agents' terminals in its proposal. As the Commonwealth failed to abide by the terms of its own request for proposal, it lacked, in our view, any discretion to award the instant contract to Control Data, thus warranting judicial intervention. We acknowledge that the chancellor made no findings of bad faith, fraud or capricious action. Nevertheless, the chancellor did find that elementary principles of competitive bidding had been violated when Control Data was allowed to "clarify" its bid after American Totalisator's bid had been opened. Before the clarification, Control Data's bid was higher than the bid of American Totalisator; yet, after the clarification the opposite was true. The evil of the instant procedure is readily apparent. When competitive bidding is used and the procedures followed emasculate the benefits of such bidding, we believe judicial intervention is proper. Control Data's argument that the original contract should be 577 reinstated must be rejected, as we believe the chancellor acted correctly in ordering new bids submitted. See also, Lutz Appellate Printers v. Commonwealth, 485 Pa. 559, 403 A.2d 530 (1979). American Totalisator argues that it was the only responsive and lowest responsible bidder and as such, the chancellor erred in not awarding it the instant contract. We do not agree, because, the chancellor, in the instant case, decided that the best solution was to order rebidding. As we can find no abuse of discretion, we believe the chancellor did not err in refusing American Totalisator's requested relief. Finally, American Totalisator argues that the chancellor erred in refusing to require Control Data to disgorge its profits from the original contract. As the entire Commonwealth Court stated, in confirming the chancellor's decree nisi: ". . . The facts that the contract awarded was one within the general powers of the Bureau of Lotteries to make, that the evidence did not justify a finding of bad faith, as distinguished from mere fecklessness, on the part of the respondents of CDC, that the Acting Secretary had sought the advice of his lawyers, and that the Commonwealth had the benefit of CDC's services at a price no higher than AmTote originally bid, tend to support the Chancellor's decision not to afford this type of relief. Furthermore, again, the provision of such drastic relief might have harmed, interfered with or embarrassed the continued highly successful operation of the daily numbers game. We discern no abuse of the Commonwealth's discretion with respect to the relief afforded by the decree nisi." American Totalisator Co., Inc. v. Seligman, supra, 34 Pa.Cmwlth. at 440-41, 384 A.2d at 269. We likewise agree the chancellor did not abuse his discretion. Decree affirmed. Each party to pay own costs. LARSEN, J., files a dissenting opinion. 578 LARSEN, Justice, dissenting. I dissent. Even the majority recognizes that judicial intervention was proper because "the elementary principles of competitive bidding had been violated when Control Data was allowed to `clarify' its bid after American Totalisator's bid had been opened." However, I disagree with the majority's conclusion that the chancellor acted properly in ordering the submission of new bids since American Totalisator had in fact been the lowest responsible bidder; and, as such, I would now award the contract to American Totalisator. Additionally, I would compel Control Data to disgorge its profits to the Commonwealth. NOTES [1] The request for proposal provided that the technical proposal, i.e., the proposal for the supply of equipment and management services, would be reviewed before the cost proposals were opened and considered. [2] The committee was impressed by the cathode ray tube for two reasons. First, the tube facilitated the training of agents. Second, by using the tube, the winning number could be displayed on each terminal. [3] The chancellor, in his findings of fact (Finding No. 50) stated: "The calculations prepared by Bureau employees (Finding 26) before either bidder responded to Seligman's letters indicated that (1) if AmTote bid on an effective rate basis and CDC bid on a cumulative basis, and (2) both bids as submitted on March 26, 1976 were complete and responsive to the [request for proposal], AmTote's bid was lower than CDC's [bid]." (Emphasis added.) [4] The Commonwealth did not file any exceptions. [5] Control Data also argues that both the nature of the procurement and the conduct of the parties shows that they did not regard the contract as one requiring competitive bidding. Suffice it to say that the Commonwealth has always acted as if such bidding was required.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532614/	368 S.W.2d 469 (1963) Meyer ACKERMAN et al., Respondents, v. GLOBE-DEMOCRAT PUBLISHING COMPANY, a Corporation, Appellant. No. 49308. Supreme Court of Missouri, Division No. 1. April 8, 1963. Motion for Rehearing or to Transfer Denied June 4, 1963. 471 Hocker, Goodwin & MacGreevy, Lon Hocker, St. Louis, for appellant. Bartley & Bartley, Malcolm L. Bartley, Donald S. Siegel, St. Louis, for respondents. Motion for Rehearing or to Transfer to Court En Banc Denied June 4, 1963. HOUSER, Commissioner. This is an action by 154 members of St. Louis Typographical Union No. 8 against Globe-Democrat Publishing Company, a corporation, which is engaged in the business of publishing a daily newspaper in St. Louis known as the "St. Louis Globe-Democrat," for severance pay under a collective bargaining contract. A jury in the Circuit Court of the City of St. Louis returned a verdict for plaintiffs for $234,707.80 plus interest. Judgment was rendered accordingly. Defendant appealed. The union, an unincorporated labor organization, was the designated and recognized sole bargaining agent of all Globe-Democrat employees engaged in composing room work. The union and the corporate publisher will be referred to as "Union" and "Globe-Democrat." On June 17, 1958 Union and St. Louis Newspaper Publishers' Association (consisting of the two corporations which publish the St. Louis Post-Dispatch and the St. Louis Globe-Democrat) entered into a written collective bargaining agreement for the period January 1, 1958 to December 31, 1959, providing the hours, wages and other terms and conditions of employment of plaintiffs by Globe-Democrat. We have italicized the portion of the article of the agreement which forms the contractual basis of this action: "ARTICLE XI Severance Pay "1. Situation holders laid off to reduce the force shall receive severance pay of one week's pay for each year of continuous priority. "2. In the event of merger, consolidation or permanent suspension of publication by any newspaper covered by this contract, all employes who lose employment thereby shall receive severance pay as follows: "Employes having six months priority standing, six (6) weeks' pay. "Employes having one year or more priority standing, twelve (12) weeks' pay. "3. Such severance pay shall be at the employe's regular straight time rate of pay. Priority standing shall be as recorded on the books of chapel officers at the time of such lay off, suspension, merger or consolidation." On February 21, 1959 the St. Louis Newspaper Guild, a union not affiliated with the typographical union, struck against Globe-Democrat and established a picket line. Plaintiffs, typographical union members, who had been working at Globe-Democrat on various shifts, and all other mechanical craft employees, refused to cross the Guild picket line. By a provision of the contract each of these plaintiffs had a right to refuse to cross the picket line without being disciplined therefor, but without payment for time lost. The publisher of the Globe-Democrat that day sent a letter to all employees saying "I regret very much that the Globe-Democrat will not be able to publish its Sunday edition because of a strike by the St. Louis Newspaper Guild. It does not appear probable that publication will be resumed in the immediate future." 472 About 3 o'clock a. m. on February 22 the Globe-Democrat delivered a letter to the Union president saying: "Any employee member of your union who presented himself for duty at his accustomed place of work in the Globe-Democrat building composing room today or does so Sunday, February 22, 1959, will be put to work and paid his regular day's pay at the straight time rate. This condition also applies to regular situation holders who are members of your union, who continue to report for duty at the Globe-Democrat building at their accustomed place of work on their regular work days and hours until the work stoppage caused by the St. Louis Newspaper Guild is ended or until further notice." On February 27, 1959 Globe-Democrat sold its building, printing plant, machinery, equipment and other personal property to Pulitzer Publishing Company, publishers of the St. Louis Post-Dispatch, under an agreement by which Pulitzer agreed to print the Globe-Democrat for ten years from February 27, 1959, beginning the date the Globe-Democrat was prepared to resume publication following settlement of the then-existing strike of its Guild employees. This agreement provided, among other things, that "both parties are desirous of retaining their separate identities and their separate news, advertising, circulation and editorial policies" so as to present to the public more than one coverage and opinion of public affairs by two independent newspapers. Pulitzer agreed to pay all printing expenses from the point where the copy was received to delivery of the printed newspapers at the truck side of the loading dock, where Globe-Democrat would accept and be responsible for their delivery. Globe-Democrat was to maintain in its own separate quarters its own business, advertising, circulation, news and editorial departments and pay all expenses up to delivery of the material for printing and all expenses of delivery of newspapers from the loading dock. Globe-Democrat was to be responsible for all wages or other obligations incurred prior to date Pulitzer began printing the Globe-Democrat and Pulitzer was to be liable only for wages, etc. incurred in the printing of the Globe-Democrat after said date. Pulitzer agreed to employ any additional persons it might need to print the Globe-Democrat "from the present employees of Globe-Democrat Publishing Company if available, but shall not be obligated to employ any of the [said employees] whose services are not actually needed by it." On the same day the publisher of Globe-Democrat sent a letter to all its employees, saying in part: "To effect greater economy and efficiency in mechanical operation, The Globe-Democrat today entered into an agreement with the St. Louis Post-Dispatch under which the Globe-Democrat will be printed by the Post-Dispatch, when and if the Guild strike is settled. "The sale is of the physical property only. The editorial, advertising, circulation and business departments of the two newspapers will be entirely separate. The Globe-Democrat will continue as a completely independent newspaper in every sense of the word. "The consolidation of mechanical operations between competing newspapers finds great precedent in many cities throughout America, a list which we suspect may grow larger in the future as the mechanical costs of publishing a daily newspaper continue to rise. The editorial, advertising, circulation and business independence of these newspapers has not in any way been affected. I assure you that it will not be affected in St. Louis. * * * * * * "Members of the mechanical unions will be employed on a priority basis in the consolidated mechanical operation. If they all cannot be employed, the dismissal provisions of the current mechanical contracts will apply." None of plaintiffs performed any work for, received any compensation from, or were called back to work by Globe-Democrat after February 27, 1959. All plaintiffs 473 were on the last priority (seniority) list made up in February, 1959, which showed when each member of Union became an employee of Globe-Democrat. Union had another group of members (called a "chapel") in the composing room of the Post-Dispatch. None of plaintiffs' names appeared on the priority list at the Post-Dispatch chapel as of February 27, 1959. A member of Local 8 in the employment of the Globe-Democrat could not have priority with more than one newspaper at the same time, and if an employee lost priority standing at Globe-Democrat and took a job at some other newspaper his priority would begin as of the date of his employment by the second employer and his priority prior to February 27, 1959 was lost. Those plaintiffs hired by Post-Dispatch after February 27, 1959 were given situations in their priority at the bottom of the Post-Dispatch priority list. The president of Union testified that at a meeting on February 27, 1959 called by the publisher of Globe-Democrat, attended by representatives of the mechanical craft unions, the publisher announced the sale of Globe-Democrat's printing equipment to Pulitzer and that Globe-Democrat would no longer need the services of the members of the various mechanical unions, and that Post-Dispatch would hire what they needed of the former Globe-Democrat employees "and those who were not employed by the Post-Dispatch would receive severance pay." Certain alleged admissions by Globe-Democrat, by way of pleading in the several lawsuits involving the various mechanical crafts unions, were read in evidence. By these pleadings Globe-Democrat admitted that it gave notice that there had been a merger of mechanical operations of the two newspapers; that it gave notice that the mechanical operations of the two companies were consolidated and merged and operated solely and exclusively by and under control of Pulitzer; that there had been a discontinuance of mechanical operations by Globe-Democrat. In its answer in Irwin v. Globe-Democrat Publishing Company, Mo., 368 S.W.2d 452 before this Court, Globe-Democrat construed the arrangement between Globe-Democrat and Pulitzer as a merger or a consolidation of the mechanical functions of the two publishers. Globe-Democrat also admitted in a pleading that the Globe-Democrat gave notice to plaintiffs and their union representatives of the discharge of plaintiffs and the suspension of the printing of the newspaper by Globe-Democrat. Since February 27, 1959 Globe-Democrat has not owned the building where, or the equipment on which, plaintiffs performed their accustomed work, and has had no contractual right to use presses, printing equipment and auxiliary facilities with which Globe-Democrat newspapers could have been printed. As a consequence of the strike Post-Dispatch had need for additional help in its mechanical department. Some of the plaintiffs were sent by Union to Post-Dispatch to do this additional work. Some were sent to other places of employment. At Post-Dispatch these former employees of Globe-Democrat did not immediately get "situations" under union law that if an employee occupies a position for five successive nights and days in an employment he is entitled to a situation, because Union "froze" the priority board at Post-Dispatch until after the end of the Guild strike at Globe-Democrat (May 27, 1959). The freeze officially went off at approximately the time the Post-Dispatch started printing the Globe-Democrat, June 1, 1959. On June 2, 1959 Post-Dispatch made a statement of policy with reference to new employees formerly employed by Globe-Democrat, to the effect that they would be "new" employees of Pulitzer; that Pulitzer was under no obligation to employ any particular person or any number of persons formerly employed by Globe-Democrat, but had agreed to select such new employees as it might need from qualified former employees of Globe-Democrat, if available, stressing that Pulitzer had no connection with Globe-Democrat except its agreement to print Globe-Democrat on a contract basis in Pulitzer's plant. The notice also stated that in the event a former 474 employee of Globe-Democrat should become eligible to dismissal or severance pay after employment as a new employee of Post-Dispatch only actual service in employ of Post-Dispatch should be taken into consideration in computing the amount of such severance pay. Globe-Democrat continued to pay the employer's contribution for plaintiffs' Blue Cross-Blue Shield coverages after February 27, 1959, and as long as June 1, 1959. The court refused an offer by Globe-Democrat to prove that among the persons engaged in the printing trade and printing business in the St. Louis area the word "printing" means the mechanical reproducing of type on paper, and the word "publication" means the making public of printed matters. Plaintiffs introduced no evidence that in the trade "publication" is understood as the equivalent of "printing," or that Globe-Democrat Publishing Company as a corporation had been involved in any merger or consolidation. It was established that there was no change in the corporate status of the Globe-Democrat Publishing Company, a corporation, since its incorporation in 1873, and that neither Globe-Democrat nor Pulitzer acquired any interest in the other's corporation. Post-Dispatch has been printing the Globe-Democrat under its agreement, since June 1, 1959, with the exception of 14 days in June, 1959 when publication was interrupted by a strike at Post-Dispatch. Plaintiffs' petition sought severance pay under Article XI, paragraph 2 of the collective bargaining agreement, supra, on the basis of allegations that the mechanical operations of the two papers were consolidated and operated exclusively by Post-Dispatch, and that there was a merger, consolidation or permanent suspension of the printing of the Globe-Democrat by defendant, but plaintiffs' main instruction directed a verdict on the basis of a finding that there was a "merger, consolidation or permanent suspension of publication by defendant as set out in Article II, paragraph 2 of the aforesaid collective bargaining agreement," and that "plaintiffs, or any of them, lost employment thereby with defendant, * * ." The court defined the term "lose employment thereby" occurring in Article XI, paragraph 2, as "loss of employment with any newspaper in the event of a merger, consolidation or permanent suspension of publication" and instructed the jury to disregard whether plaintiffs worked for other employers after loss of employment with Globe-Democrat. The court refused defendant's motion for a directed verdict; and refused Instructions B and C, withdrawing consideration of whether there was a permanent suspension of publication and whether there was a merger or consolidation, and Instruction D defining "merger," "consolidation" and "publication," all offered by defendant. On this appeal defendant makes 10 points, six of which relate to the phrase "merger, consolidation or permanent suspension of publication"; four of which involve the phrase "who lose employment thereby." The first point is that the court erred in refusing defendant's motion for a directed verdict because there was no evidence to support the necessary finding of either a "merger, consolidation or permanent suspension of publication" within the meaning of paragraph 2, Article XI, supra. Globe-Democrat's position is that "merger" and "consolidation" are words of art having a specific meaning in the law of corporate reorganization, and that they were so used here; that the words "merger, consolidation * ," modified by the adverbial phrase "by any newspaper," refer to merger or consolidation of the corporate entity Globe-Democrat Publishing Company, and to the assimilation of two or more corporate entities into one; that under the collective bargaining agreement employees are entitled to severance pay if they lose employment by reason of a corporate merger or consolidation, but these terms were not intended to cover loss of employment due to merger or consolidation 475 of a department or a composing room, or suspension of the printing function upon sale of its physical plant and printing equipment, by a corporation which continues in business. Globe-Democrat cites § 351.450, V.A.M.S., under which the several corporations involved in a statutory merger or consolidation become a single corporation known as "the surviving corporation" in cases of merger, and "the new corporation" in cases of consolidation; the separate existence of all corporations in a plan of merger or consolidation ceases, except for the surviving or new corporation, which thereafter possesses all of the rights, etc. of the merging or consolidating corporations, and all property, debts, etc. of them are taken to be transferred to the single corporation, along with the liabilities and obligations of the corporations so merged or consolidated. Appellant says Globe-Democrat Publishing Company and Pulitzer Publishing Company, each of which survived and preserved its own separate corporate existence and identity, did not merge or consolidate into a "surviving or new corporation." Globe-Democrat contends that the words "merger" and "consolidation" express ideas which, although nearly the same, are distinct enough to require that both words be used when both types of corporate reorganization are intended to be encompassed; that if merely unification of function had been intended, either word would have expressed the whole of the idea and there would have no need of both; that the use and juxtaposition of these two words, in the contract, echoing their use and juxtaposition in the statutes,[1] indicates that the parties had in mind the type of merger or consolidation to which the statutes refer. Globe-Democrat further contends that even if the words are to be construed with an imprecise and general meaning, it is nevertheless plain that the parties did not intend that the clause operate in the event of any type of partial or functional unification. It points to the modifying phrase "by any newspaper covered by this contract," contending this refers to Globe-Democrat Publishing Company, a corporation, and that it is the publishers and the conduct of the business of the corporate publishers, not the publications, that are "covered by this contract." Globe-Democrat also relies upon the dictionary definition of "consolidation" ("to bring together and unite firmly into one mass or body") and "merger" ("to sink or disappear into something else; be swallowed up; lose identity or individuality: with in.") Globe-Democrat says the only fact or evidence pleaded, proved or submitted to the jury upon which to predicate the conclusion of merger or consolidation was the sale of the plant and equipment and the execution of the printing contract, neither of which indicates that Globe-Democrat was united with or swallowed up by Pulitzer, and that this is true whether the word "newspaper" be construed to mean the publisher or the publication. It maintains that the contract between the publishers carefully preserves the separate identity and mutual independence of the two corporations, and is a simple printing contract; that there is no evidence of any uniting or swallowing up by either of them or that the absolute separation preserved by the contract has not been scrupulously observed in fact; that no merger or consolidation was shown by the evidence. Union's position is that "merger" and "consolidation" was intended to include any sort of uniting or combining of the printing function as a result of which employees lose their employment. They refer to paragraph I of the Preamble to the collective bargaining agreement, which provides: "All wages, vacation credits, retirement pay credits and severance pay credits shall be considered as an earned equity and shall 476 have prior claim in the event of merger, permanent suspension or liquidation. The cash equivalent of any such earned equity shall be paid immediately upon any employe's severance of employment as a result of such merger, permanent suspension or liquidation," and to Section 13, Article III, General Laws of the Union, which provides: "Subordinate unions shall incorporate in proposed contracts a clause providing for * * severance pay of not less than two weeks pay for each year of priority in the office for all journeymen affected by suspension or mergers * * ." The failure in these quotations to use the words "merger" and "consolidation" in juxtaposition; the use only of the word "merger" and the use of the words "permanent suspension" instead of "permanent suspension of publication" indicate that the parties intended the words "merger" and "consolidation" to mean any combining or uniting of the printing function which results in a loss of employment, so says the Union. Union proposes that the following language appearing in Section 23, Article I, General Laws of the Union, reveals that Article XI of the collective bargaining agreement is speaking of mergers or consolidations of printing offices: "In filling of apprenticeship vacancies preference shall be given to apprentice members discharged from the military services * * whose terms of apprenticeship have been interrupted because of suspensions, mergers or consolidation of printing offices, * * ." Union argues that the words in question are common, ordinary words in every day use, and do not have the definite legal meaning for which appellant contends; that while they might at first have such a connotation to one trained in the law, they do not convey such a meaning to the ordinary composing room employee or a member of a union negotiating committee, to whom these words mean a unification or combining of the function of printing. Union maintains that the parties did not mean "merger" or "consolidation" in the sense of a corporate merger or corporate consolidation; that there is no evidence to support such a construction but there is evidence that the publisher of Globe-Democrat considered that what happened constituted a merger, consolidation or permanent suspension of publication within the meaning of the contract, as shown by his oral statement and letter of February 27, 1959 indicating that those mechanical employees who did not obtain employment with Pulitzer would receive severance pay, and his references to "consolidation of mechanical operations." Reference is made to allegations in various pleadings filed by Globe-Democrat in the five lawsuits filed in connection with the claims of the several unions, in which Globe-Democrat admitted that "the mechanical operations" of the two newspapers "were consolidated and merged" under the operation and control of Post-Dispatch, and that Globe-Democrat "and the merger, consolidation or permanent suspension of the printing" of the Globe-Democrat; admitted that Globe-Democrat gave notice to plaintiffs of a sale to Pulitzer of the building, printing presses, equipment, and physical properties of Globe-Democrat "so that the mechanical operations of the [Globe-Democrat] and [Pulitzer] could and would be consolidated and operated solely and exclusively by and under the control of [Pulitzer]"; admitted that Globe-Democrat discontinued mechanical operations; and alleged that "the arrangement between defendant and [Pulitzer] was within the meaning of Article XII, Section 1 (the same as instant Article XI, Paragraph 2) a merger or consolidation of the mechanical functions of the two publishers, * ." Union also urges that the court should have ruled as a matter of law that there was a merger, consolidation or permanent suspension of employment, and a loss of employment thereby. It says this was an agreement to provide severance payments to employees of Globe-Democrat "in the event that such employees lost their employment through no fault or misconduct on their part"; that it covered the performance of composing room work; that if composing 477 room operations were terminated employment would be terminated and it was for such a loss of employment that Article XI was intended to provide severance pay; that it would be of no concern whether appellant was able to put out a newspaper by some other means or in some plant other than its own; that it is "inconceivable" that the parties would make payment of severance benefits depend upon Globe-Democrat's ability to continue publishing by whatever means it could, regardless of whether plaintiffs were still employed to perform composing room work. In determining whether plaintiffs adduced evidence of merger, consolidation or permanent suspension of publication within the meaning of the agreement, and in construing the agreement to determine what the parties intended by the provision in question, we look at the relationship of the parties, the subject matter of the contract as a whole, the surrounding facts and circumstances to the extent that they are shown and bear upon the matter, and any practical construction the parties themselves may have placed upon the agreement by their acts and conduct. Leggett v. Missouri State Life Ins. Co., Mo.Sup., 342 S.W.2d 833, 852. Thus considered, we conclude that the loss of employment referred to in paragraph 2, Article XI was loss of employment resulting from Globe-Democrat Publishing Company, a corporation, GOING OUT OF BUSINESS AS THE PUBLISHER OF A NEWSPAPER, either by corporate merger or consolidation, or by permanently suspending publication for any reason. This seems evident not only from the specific language used in said paragraph 2, but also by considering the wording "merger, permanent suspension or liquidation" (our emphasis of language indicative of the winding up of a corporation (occurring in paragraph (I) of the Preamble. By differentiating between the two concepts "merger" and "consolidation" the parties evidently meant to ascribe to the two words different meanings. In Dodier Realty & Investment Co. v. St. Louis National Baseball Club, 361 Mo. 981, 238 S.W.2d 321, 324, this Court, sitting en banc, pointed out that the two words are not the same; that a consolidation exists where a new corporation comes into existence to assume the liabilities of the former corporations and the former corporations are dissolved and cease to exist, while a merger, which means something more than a mere consolidation, exists where one corporation is continued and the others are merged in it without the formation of a new corporation. And see § 351.450, V.A.M.S. The words were used in connection with "any newspaper covered by this contract," which means in this instance Globe-Democrat Publishing Company, a corporation. When words with a well-defined meaning are used in a contract referring to a corporation it is reasonable to assume that they are used by the contracting parties in the sense ordinarily ascribed to them in the field of corporate law. Stated in the language of corporate reorganization, there has been no merger or consolidation resulting in the formation of a surviving or new corporation and no dissolution of Globe-Democrat Publishing Company, a corporation. The stockholders of Globe-Democrat did not become stockholders of Pulitzer, or vice versa. The corporations have not been extinguished and have not been consolidated. The contract was for an absolute sale and transfer of the properties to Pulitzer, and for printing. Globe-Democrat did not become extinct, either as a corporation or as a publication. It retained its franchise and continued to function as a corporation. Its corporate identity has continued without interruption since 1873. The mere purchase by one corporation of a part of the assets of another for a sufficient consideration (and there is no suggestion that the consideration was inadequate or that the sale was not in good 478 faith) is not a merger or a consolidation. Mercantile Home Bank & Trust Co. v. United States, 8 Cir., 96 F.2d 655; Pinellas Ice & Cold Storage Co. v. Commissioner of Internal Revenue, 287 U.S. 462, 53 S. Ct. 257, 77 L. Ed. 428; Drovers' & Mechanics' Nat. Bank of Baltimore, Md. v. First Nat. Bank, 4 Cir., 260 F. 9; Pankey v. Hot Springs Nat. Bank, 46 N.M. 10, 119 P.2d 636, 640. Whether we define these terms by resort to legal sources, everyday dictionaries or common understanding, the words "merger" or "consolidation" by Globe-Democrat describe situations not presented by the facts in this case. There simply has been no combining, uniting, swallowing up, absorption, springing into existence of a new corporation or dissolution of an existing corporation, involving Globe-Democrat Publishing Company, by which its identity as a newspaper and as a corporation has been extinguished. Union's proposition that the language employed was intended to encompass "any sort of uniting or combining of the printing function" finds no support in the wording of paragraph 2, in any other provision of the agreement, or in the evidence. The agreement makes no reference whatever to the uniting or combining of the printing function, the composing room, the chapel, the Machine Department, the Machine Tenders' Department, the Proofroom Department, the Adroom Department, the Makeup Department, or any other unit or fragmentation of "the newspaper covered by this contract." Instead the contract refers to "merger" or "consolidation" by any newspaper covered by this contract, which in this case means "by Globe-Democrat Publishing Company, a corporation." Plaintiffs also failed to prove that there was a "permanent suspension of publication." This phrase cannot be twisted and strained to mean permanent suspension of "printing," under any fair interpretation of the word "publication," whether we use technical legal definitions or everyday acceptance of the words. "Publication" is not synonymous with "printing" in this situation. In the context in which it is employed, "publication" means the business of causing a newspaper to be composed, edited, printed and disseminated or distributed to the public, and the fact that the Globe-Democrat terminated the practice of causing its newspaper to be printed by its own employees in its own building or plant did not result in a "permanent suspension of publication." Allen v. Globe-Democrat Publishing Company, Mo.Sup., 368 S.W.2d 460. The facts show a temporary suspension of publication, caused by the strike, but no permanent suspension of publication. The Globe-Democrat resumed publication June 1, 1959. We find no practical construction, either in the pleadings filed or in its letter or oral announcement on February 27, that constitutes a binding admission against interest by Globe-Democrat that there was a merger, consolidation or permanent suspension of publication by Globe-Democrat. The most that can be said is that Globe-Democrat construed the contract of sale and for printing as a merger or consolidation of the mechanical operations of the two newspapers. A consolidation of one particular function such as mechanical operations, out of the manifold operations involved in the conduct of a newspaper business, is not a consolidation of the business, or of the corporation. An admission that the mechanical operations of two newspapers have been consolidated by a sale and printing contract is not an admission that there has been a consolidation of the two corporate entities. Union's references to various provisions of the General Laws of the International Typographical Union in support of their construction have little if any bearing upon the question, because the General Laws were not incorporated in or made a part of the terms of the collective bargaining agreement, except as provided in Articles II, 5 479 and VI, 1, both of which are immaterial here. Inconsistently, counsel for Union took the position below that the General Laws were not a part of the contract and were not binding upon Globe-Democrat. We realize that this collective bargaining agreement was a comprehensive labor contract the object and purpose of which, from the standpoint of the bargaining representatives of Union, was to protect the interests of the members of Local 8 in every conceivable aspect of their employment, including severance pay, as fully as possible. Doubtless their objective was to provide for all contemplated circumstances in which the question of the right to severance pay might arise. The language finally agreed upon to accomplish this objective, however, was not sufficiently comprehensive to cover all situations and circumstances in which the employer-employee relationship between the members of Local 8 and Globe-Democrat might be terminated. Instead of providing for severance pay upon termination of the relationship for any reason not connected with willful breach of duty or willful misconduct (as was done in the Guild contract in Globe-Democrat Publishing Co. v. Industrial Commission, Mo.App., 301 S.W.2d 846, 848), the agreement before us provides severance benefits in three particular eventualities only, thereby excluding all others. The parties simply failed to provide for, and the agreement does not contemplate, the situation that actually came to pass, i. e., loss of employment with Globe-Democrat resulting from the sale of the physical plant and equipment by which Globe-Democrat had been printing its newspaper, and the negotiation of a contract with an outside firm for the physical printing of the newspaper. Plaintiffs' rights under this agreement depend entirely upon contractual provisions. We are not at liberty to write into the contract a provision covering loss of employment by consolidation of mechanical operations or permanent suspension of printing. We cannot decide the case on the basis of what the parties may have intended to say. Our function is to determine what the parties intended by what they did say. Chater v. Carter, 238 U.S. 572, 584, 35 S. Ct. 859, 863, 59 L. Ed. 1462. There is no evidence in this record that there was any merger, consolidation or permanent suspension of publication, within the meaning of paragraph 2, Article XI, and appellant's motion for a directed verdict at the close of the evidence, based upon failure of proof, should have been sustained. The judgment is reversed. COIL and HOLMAN, CC., concur. PER CURIAM. The foregoing opinion by HOUSER, C., is adopted as the opinion of the court. All of the Judges concur. On Motion for Rehearing or to Transfer to Court En Banc. PER CURIAM. Respondents have filed a motion for rehearing or to transfer to the court en banc. Transfer is requested on the contention that this case involves a federal question requiring the transfer of the case to the court en banc under Constitution of Missouri, 1945, Art. 5, § 9, V.A.M.S., namely, individual employees' rights arising under a collective bargaining agreement with an employer engaged in activities affecting interstate commerce within the meaning of and subject to the Labor Management Relations Act 1947, as amended, and that the case arises under and is governed by Section 301(a), L.M.R.A., 29 U.S.C. § 185(a). No question involving the construction of the constitution of this state or of the United States, or the validity of a treaty or federal statute, or any authority 480 exercised under federal laws,[1] was raised or involved in the original submission of this case, either in the trial court or in this court, until after the opinion of this court was handed down. The attempt to inject a federal question for the first time in the motion for rehearing came too late to secure a transfer to the court en banc, under our practice and procedure. Respondents further contend that in construing this collective bargaining agreement local state law instead of applicable federal substantive law was improperly applied; that the principles and precepts of federal labor law and policy must be observed; that the context in which this agreement was negotiated and the purpose it was intended to serve should have been considered; that collective bargaining agreements are federal contracts which are conceptually different from other contracts and subject to different approaches in their construction and enforcement. It is urged that the interests and positions of respondents were not considered; that the obvious intendment and purpose of Article XI was overlooked; that federal labor law and policy require a construction favorable to the demands of respondents; that the courts should interpolate terms which might have been but were not included in the agreement, so as to effectuate the policies of federal labor law and accomplish the "evident aims and purpose" of the agreement, where necessary; that respondents' interpretation of the agreement is "in accord with substantive federal law," and that we should rule in respondents' favor because our construction of the agreement can only breed discontent and inharmonious relations between employers and employees, constitute a source of unnecessary and disrupting litigation, and have an unsettling effect upon the negotiation and administration of collective bargaining agreements throughout the country. The suggestion that federal labor policy and federal substantive law governs the construction of this agreement is a new theory, introduced into this litigation for the first time on the motion for rehearing. As indicated, the case was not submitted on any such theory, either in the trial court or in this court. No reference was made in respondents' brief on appeal to federal law, in urging us to adopt their interpretation of Article XI. Both sides treated all questions for decision as questions arising under local law and determinable by local law. New propositions and complaints, not made in the original briefs, Ford v. Wabash Ry. Co., 318 Mo. 723, 300 S.W. 769, 778, and raised for the first time after the opinion is handed down by the Supreme Court, Phippin v. Missouri Pac. R. Co., 196 Mo. 321, 93 S.W. 410, 418, or which are clearly afterthoughts, State ex rel. Cole v. Matthews, en banc, Mo.Sup., 274 S.W.2d 286, 292, ordinarily will not be considered on motion for rehearing. We will consider the matter, however, sufficiently to point out the following: Although on original submission respondents cited no federal cases, but only Missouri cases and cases from other states, and on this motion for rehearing have not cited any federal cases construing a provision similar to Article XI, our original research, and our research on this motion for rehearing, was conducted in the case law of both hierarchies, state and federal. We have found no federal cases construing such a provision or a similar provision and we are of the opinion that there are no ruling cases in the federal courts applying any different rule or reaching any different result on comparable facts. Respondents have not shown that our decision is contrary to any federal decisions 481 on this subject. We consider our decision not inconsistent with the existing body of federal law. The parties were accorded a review of the provisions of the contract under applicable law on the merits in accordance with accepted principles of construction and on the basis of what the parties said in their agreement. Neither respondents, nor appellant, were entitled to prevail on the basis of what they intended to say or might have said, or on the basis of the effect a certain construction may have upon industrial peace, nor on any basis except the merits of their contentions. Nothing said in Smith v. Evening News Association, 371 U.S. 195, 83 S. Ct. 267, 9 L. Ed. 2d 246, or in any of the other United States Supreme Court decisions cited in respondents' suggestions, militates against the conclusions we have reached. In none of these cases was there a question of construction analogous or similar to that presented in this case. Assuming that we are obliged to follow and apply federal substantive labor law and policy, the United States Supreme Court has not issued any universal ukase that in all cases of disagreement between the parties to collective bargaining agreements federal labor law and policy dictates that the position of the labor union shall be sustained arbitrarily or that the preservation of harmonious labor relations requires the capitulation of employers in all cases where questions of interpretation arise, regardless of the merits of the case, but this is what respondents seem to imply. Having decided this case on its merits we do not conceive it to be our function to sustain respondents' position in this case willy-nilly, "lest it be summarily returned to this Court by the Supreme Court of the United States," as respondents' counsel warn on page 12 of their suggestions. Respondents' contentions that we misinterpreted the law in holding that the General Laws were not incorporated into the agreement; in applying improper principles of review; in holding that the motion for a directed verdict should have been sustained; in ruling that permanent suspension of publication cannot be interpreted to mean permanent suspension of printing; in holding that Article XI means corporate merger or consolidation by appellant; in holding that permanent suspension of publication meant to go out of business as a publisher of a newspaper; in invading the province of the jury by construing the language of Article XI; and in failing to consider controlling decisions of local law with which this opinion is said to conflict, constitute mere reargument of issues determined by the opinion. Under Sup.Ct.Rule 83.16, V.A.M.R. reargument of such issues will be disregarded. We have carefully examined these contentions seriatim and have satisfied ourselves that no matters of law or fact have been overlooked or misinterpreted. The motion for a rehearing or to transfer is overruled. NOTES [1] In addition to § 351.450 we are referred to §§ 355.195, 352.140, 394.210 and 394.220, and § 363.770 et seq. [1] These are the standards by which we determine whether there is a "federal question" requiring transfer. McAllister v. St. Louis Merchants' Bridge Terminal Ry. Co., 324 Mo. 1005, 25 S.W.2d 791; Huckleberry v. Missouri Pac. R. Co., 324 Mo. 1025, 26 S.W.2d 980, 988; Pashea v. Terminal R. Ass'n of St. Louis, 350 Mo. 132, 165 S.W.2d 691, 696; State ex rel. Perrine v. Keirnan, 361 Mo. 871, 237 S.W.2d 156.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532617/	368 S.W.2d 390 (1963) Gabriel URNSTEIN and Goldye Urnstein, d/b/a Sherwood Day School Plaintiffs-Respondents, v. VILLAGE OF TOWN AND COUNTRY, a Municipal Corporation, James A. McCollum, Joseph Leopold, Russell J. Gittens, Grindon E. Leslie, S.D. Fisher, Arthur E. Jones, Defendants-Appellants. No. 49727. Supreme Court of Missouri, Division No. 2. May 13, 1963. Motion for Rehearing or for Transfer Denied June 4, 1963. 391 Carroll J. Donohue, Shulamith Simon, Husch, Eppenberger, Donohue, Elson & Jones, St. Louis, for defendants-appellants. Erwin Tzinberg, Albert A. Michenfelder, Jr., Ziercher, Tzinberg, Human & Michenfelder, Clayton, for plaintiffs-respondents. Motion for Rehearing or for Transfer to Court En Banc Denied June 4, 1963. BARRETT, Commissioner. The Village of Town and Country, its board of trustees and its building commissioner appeal from a declaratory judgment decree which adjudges unconstitutional, as applied to the plaintiffs and their private school, a part of the village's comprehensive zoning ordinance. The village contends, of course, that it was authorized to adopt the ordinance, that it had authority to zone and restrict private schools, that its ordinance was reasonable and that the court erroneously declared it unconstitutional. On the other hand, the respondent owners contend that private and public schools may not be distinguished, that an ordinance prohibiting or restricting private schools bears no relation to public safety or general welfare and is therefore arbitrary, unreasonable and unconstitutional. The most important factor upon this particular appeal is the fact that the cause was tried and submitted upon a very brief agreed statement of facts and "stipulation of issues" to be decided. In summary these are the stipulated facts: Gabriel and Goldye Urnstein own a tract of land, 14.845 acres, in Village of Town and Country, and "in buildings situated on the property" are "copartners doing business as Sherwood Day School, a private school with academic classes at the present time from first grade through twelfth grade." The private school is "conducted by plaintiffs for profit purposes" and they have operated it "on a portion of the above premises since 1945." The Village of Town and Country was incorporated in January 1950, and in February 1951 adopted its comprehensive zoning ordinance number 50 and the plaintiffs' property is in a "Zone `A' Residential District." On July 15, 1954, the then village building commissioner issued the plaintiffs 392 a permit for "a two-room addition to a building" on the property. June 1, 1961, plaintiffs filed an application for a permit "to erect an additional school building" and that application was denied on the ground that the "use contemplated by the application for a building permit was in violation of the terms" of the zoning ordinance. There was no appeal to the village board of adjustment and upon denial of the building permit plaintiffs filed this action. Furthermore, as stated, in addition to their stipulation of facts, the parties agreed and stipulated, so far as relevant here, "that the following are the issues in this cause: 1. The constitutionality of subparagraph 3 of Section 2, Article III of Ordinance No. 50, permitting only public schools, elementary and high, within Zone `A' Residential District, and the determination as to whether said permitted use legally prohibits the location of a private school, operated for profit, within said Zone `A' Residential District." This is not to criticize or discourage the trial of cases on agreed facts or stipulated issues, but in this instance the fact has had the necessary effect of strictly limiting the issues and the scope of this court's review and decision. There is some risk of encumbering this opinion with a long list of cases, but upon this particular record the discrimination in cases serves not only to distinguish them either on principle or on their facts but also points up the limited question involved and at the same time indicates in part the reasons for the court's conclusion and final disposition of the appeal. While this action originated in an application to the building commissioner for a permit "to build a four-room addition to said building," the application and its purposes have now been ignored or forgotten. The immediate consequence of leaving out of consideration the application is that the court is not now concerned with and is not reviewing the propriety of the building commissioner's denial of the building permit. State ex rel. Kaegel v. Holekamp, (Mo.App.) 151 S.W.2d 685; Fleming v. Moore Bros. Realty Co., 363 Mo. 305, 251 S.W.2d 8; Lumpkin v. Township Committee of Bernards, 134 N.J.L. 428, 48 A.2d 798. Furthermore, the extension or changing of a nonconforming use is not a problem. Women's Christian Association of Kansas City v. Brown, 354 Mo. 700, 190 S.W.2d 900; Annotation 9 A.L.R. 2d 1039; 42 A.L.R. 2d 1146. Nor, in this connection, is the appeal concerned with a building ordinance regulating the subsequent alteration, enlargement or extension of an existing building. Annotation 64 A.L.R. 920. Ordinarily, when the constitutionality of a zoning ordinance has been involved, there has been an elaborate record and every fact relevant to zoning in general and to the particular land and its use has been in evidence and subject to review as "each case must be ruled on its particular facts." Glencoe Lime & Cement Co. v. St. Louis, 341 Mo. 689, 694, 108 S.W.2d 143, 145. See for example Flora Realty & Investment Co. v. City of Ladue, 362 Mo. 1025, 246 S.W.2d 771. Then there are the purposeful differences in the statutes and ordinances involved in the various cases, a distinction the parties have not carefully observed. It is not necessary to review the statutes authorizing cities to zone (V.A.M.S. Secs. 89.020-89.140) and indicate their purpose or to consider the fundamentals of zoning. It is sufficient to say that zoning is a legislative function and that towns are authorized subject to certain limitations to regulate the use of property and may exclude all business operations from residentially zoned areas. Ryan v. City of Warrensburg, 342 Mo. 761, 117 S.W.2d 303; Downing v. City of Joplin, (Mo.) 312 S.W.2d 81. In any event, ordinance number 50 is a comprehensive zoning ordinance and in so far as applicable here by Article III establishes "Zone `A' ResidentialSingle FamilyDwelling District Regulations." Specifically, section 2 provides that in this zone: "A building or premises shall be used only for the following purposes: "1. Single family dwellings. 393 "2. Churches. "3. Public schools, elementary and high. * * * * * "5. Accessory buildings and uses customarily incident to the above uses, * * ." Regardless of the fact that the ordinance permits churches, it has been settled in this jurisdiction that churches, as with public schools, may not be excluded from a residential area on that basis alone. Congregation Temple Israel v. City of Creve Coeur, (Mo.) 320 S.W.2d 451. Since both parties rely on this case it must be pointed out that the opinion was confined to churches, the court explicitly pointed out that "private schools" along with other institutions were "reserved for decision when and if presented in future cases." At this point it should be interpolated, perhaps, that in connection with the location of public schools the statutes have endowed school districts with the power of eminent domain, (V.A.M.S. Secs. 165.100, 165.370) if not incidentally with some of the attributes of sovereignty, and that power and authority have not been subordinated or made subservient to the cities' right to zone. State ex rel. St. Louis Union Trust Co. v. Ferris (Mo.) 304 S.W.2d 896. While, as indicated, churches may not be excluded, this case is not concerned with an attempt to establish a parochial school as an adjunct to a church. Tustin Heights Association v. Board of Supervisors, 170 Cal. App. 2d 619, 339 P.2d 914. Despite the fact that certain authoritative texts and some cases refuse to recognize the fact, there are several important distinctions in public schools and parochial schools (sometimes the latter are treated as "private schools"). See for example State ex rel. Wisconsin Lutheran High School Conference v. Sinar, 267 Wis. 91, 65 N.W.2d 43; Great Neck Community School v. Dick, Sup., 140 N.Y.S.2d 221; and the dissenting opinion in Roman Catholic Welfare Corp. v. City of Piedmont, 45 Cal. 2d 325, 289 P.2d 438. Compare on this particular point 1 Rathkopf, Zoning, Ch. 18; 11 Miami L.Q. 68; Annotation 36 A.L.R. 2d 653, 660; Catholic Bishop of Chicago v. Kingery, 371 Ill. 257, 20 N.E.2d 583; Diocese of Rochester v. Planning Board of Town of Brighton, 1 N.Y.2d 508, 154 N.Y.S.2d 849, 136 N.E.2d 827. In State ex rel. St. Louis Union Trust Co. v. Ferris, (Mo.) 304 S.W.2d 896, (condemnation for a public school was involved) the ordinance "by means of restrictive provisions" excluded "the erection of any schoolhouse." There, in considering Chapter 89 R.S.Mo. 1959 (zoning) and Chapter 165 R.S.Mo.1959 (authorizing school districts to locate schools), the court pointed out that public school districts are invested with some of the attributes of sovereignty. The court said, "The selection, location, procurement of a site through condemnation and operation of a public school is a governmental and not a proprietary function." Because of the differences and distinctions in public and parochial schools the parochial school cases are not considered in this opinion. Having made these distinctions perhaps it is well to continue and note these further differentiating factors. This appeal is not concerned with the problem of whether the plaintiffs' institution is a "school" as that term is employed in either a statute or an ordinance. In Langbein v. Board of Zoning Appeals of Town of Milford, 135 Conn. 575, 67 A.2d 5, the question was whether a "summer day school" was a school within the meaning of an ordinance permitting "schools" in a class "A" residential area. See also City of Miami Beach v. State ex rel. Lear, 128 Fla. 750, 175 So. 537, "a school for minors," Livingston v. Davis, 243 Iowa 21, 50 N.W.2d 592, 27 A.L.R. 2d 1237, whether a "private preschool or nursery" was permitted as a "private elementary school to age 14," and, finally, Wiltwyck School for Boys, Inc. v. Hill, 14 A.D.2d 198, 219 N.Y.S.2d 161, in which it was held that plaintiff's primary purpose was the "rehabilitation 394 of delinquent or maladjusted boys" and therefore did not qualify as a "school." The fact that one text devotes an entire chapter to forty-six separate subjects, from amusement parks to undertakers, of zoning classification is some indication of the increasing complexity of the problem. 2 Yokley, Zoning Law & Practice, Ch. XVIII, and see the annotation, 36 A.L.R. 2d 653, "zoning regulations as applied to schools, colleges, universities, and the like." These are some of the distinguishing factors and having thus attempted to negatively delimit the issues it is necessary to consider the positive factors and the very limited facts of this record. As the court said of a claim that certain "restrictions" in a zoning ordinance were invalid, "The issue is not brought `to exact focus.' * * * Appellant cannot challenge the validity of Section 8 of the ordinance on hypothetical grounds." Flora Realty & Investment Co. v. City of Ladue, 362 Mo. l. c. 1042, 246 S.W.2d l. c. 780. In the first place, while the general object of zoning is the promotion of the general welfare (Downing v. City of Joplin, supra), as to class "A" residential districts "Its ultimate purpose is to confine certain classes of buildings and uses to certain localities." Langbein v. Board of Zoning Appeals of Town of Milford, 135 Conn. l. c. 580, 67 A.2d l. c. 7. And despite the indicated tendency to generalize as far as schools are concerned, "The validity of a regulation which had the effect of excluding a particular type of school from a residential district has been sustained." 36 A.L.R. 2d l. c. 655. All this is to point out, as the court did in the Congregation Temple Israel case, that the opinion in this case is to be strictly confined to this record and the stipulated issue, as to all other institutions including all other types of schools,"these questions are reserved for decision when and if presented in future cases.". (320 S.W.2d l. c. 457). The plaintiffs' private school was not established after the enactment of the comprehensive zoning ordinance (City of Florence v. Turbeville, 239 S.C. 126, 121 S.E.2d 437, 85 A.L.R. 2d 1143), and an existing ordinance was not amended to exclude or restrict an existing school. Phillips v. City of Homewood, 255 Ala. 180, 50 So. 2d 267. Here the plaintiffs' private school for profit "with academic classes * * * from first grade through twelfth" has been in existence and operated on "a portion" of the 14.845 acres since 1945. The Village of Town and Country was not incorporated until five years later and its zoning ordinance was not adopted until February 1951. And, although not mentioned by the parties and while not an issue, Section 1, Article V of the ordinance provides that "The lawful use of a building existing at the time of the effective date of this ordinance may be continued, although such use does not conform to the provisions hereof." From this record all that is known of this school is that it is a private school for profit, grades one to twelve, and is conducted in buildings on this property. The plaintiffs own the property and operate the school as "copartners" for profit. There is no information in this record as to the Village of Town and Country other than the fact that it was incorporated in 1950 and passed this ordinance in 1951. There is no information as to the exact location, nature or extent of the buildings in which the school is conducted, all that is known in this regard is that in 1954 a permit was issued for a "two-room addition to a building." Other than grades one to twelve there is no information as to the school's standards, its curriculum, its faculty, its supervision and whether it meets the requirements of the public school laws of Missouri. Yanow v. Seven Oaks Park, Inc., 11 N.J. 341, 94 A.2d 482, 36 A.L.R. 2d 639, 1 Rathkopf, Law of Zoning, Sec. 3. The school and the land are owned by husband and wife as a partnership and there is no evidence as to the school's future in the event of a dissolution from any cause of the partnership. In short, there are no surrounding circumstances to accompany the stipulated facts *395 The fact that Sherwood Day School is operated "for profit purposes" is not a determinative factor and yet its profit motive and its finances should be relevant circumstances. Livingston v. Davis, supra; Incorporated Village of Brookville v. Paulgene Realty Co., 24 Misc. 2d 790, 200 N.Y.S.2d 126. As indicated, there are numerous distinctions in public and private schools, including the fact that they often serve different interests and purposes (State ex rel. Wisconsin Lutheran High School Conference v. Sinar, supra) and perhaps, undeniably, a private school for profit infringes upon the general scheme of residential zoning. City of Florence v. Turbeville, supra. According to the stipulation of the parties the only issue here is whether "said permitted use" (public schools elementary and high) "legally prohibits the location of a private school, operated for profit" in a Zone A residential district. In the limited circumstances of this record, particularly in view of the facts set forth in the second paragraph above, there is an insufficient relation in the stipulated facts and the general welfare and as applied to these plaintiffs and this school the ordinance is arbitrary and unreasonable and, as the trial court held, therefore unconstitutional. As indicated, particular types of schools may be excluded from a residentially zoned area, "However, in most of the cases where the ordinance had the effect of excluding all types of schools, or a particular type of school, from a district, it has been held invalid on the ground that it was arbitrary and discriminatory, having no reasonable relation to the public health, morals, safety, or welfare, or specifically that it violated the due process clause." 36 A.L.R. 2d l. c. 655-656. Despite the differences in the statutes, the ordinances and even the facts, this view of the ordinance as applied to this school and the stipulated facts is supported by the fundamental principle found in the following authorities: State v. Northwestern Preparatory School, 228 Minn. 363, 37 N.W.2d 370; Longbein v. Board of Zoning Appeals, supra; City of Miami Beach v. State ex rel. Lear, supra; Livingston v. Davis, supra; 1 Rathkopf, Law of Zoning & Planning, Ch. 18, Sec. 3, 18-27. Accordingly the judgment is affirmed. BOHLING and STOCKARD, CC., concur. PER CURIAM. The foregoing opinion by BARRETT, C., is adopted as the opinion of the Court. All of the Judges concur.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532613/	383 B.R. 419 (2007) In re Eugene McCALL and Judy Anne McCall (Deceased), Debtors. No. 05-75245. United States Bankruptcy Court, N.D. Ohio. October 19, 2007. 420 Douglas A. Daley, Balyeat, Leahy, Daley & Miller, LLC, Randy Lee Reeves, Lima, OH, for Debtors. DECISION AND ORDER RICHARD L. SPEER, Bankruptcy Judge. This cause is before the Court after a Hearing on the Trustee's Motion for Turnover and Objection to the Debtors' claim of exemption. In response, the Debtor, Eugene McCall, filed a brief and memorandum objecting to the Motion for Turnover. The Trustee then filed a brief in support of his Motion for Turnover, with the Debtor thereafter filing a reply to the Trustee's brief. After considering the arguments raised by the Parties, the Court finds, for the reasons that are explained herein, that the Trustee's Motion for Turnover should be Denied and that the Trustee's Objection to Exemption should be Overruled. FACTS On October 14, 2005, the Debtors, Eugene and Judy Anne McCall, filed a bankruptcy petition in this Court for relief under Chapter 7 of the United States Bankruptcy Code. (Doc. No. 1). On December 27, 2005, during the administration of the case, the Debtor, Judy Anne McCall, passed away. (Doc. No. 16). At the time of her death, the deceased maintained a group life insurance policy through her employer, Lima City Schools, whose beneficiary was her husband, the Debtor, Eugene McCall. On March 17, 2006, a check was issued from said insurance company to the Debtor in the amount of $160,000.00. On October 9, 2006, the Trustee filed a Motion for Turnover of the policy and these funds. (Doc. No, 21). The Debtor objected, amending his bankruptcy schedules to claim the policy and funds as exempt based" O.R.C. § 2329.66(A)(6)(c) and O.R.C. § 3917.05. (Doc. No. 44). The 421 Trustee objected to this claim of exemption. (Doc. No. 45). DISCUSSION The issue before the Court is whether Mrs. McCall's group life insurance policy and the proceeds paid to Mr. McCall, as the beneficiary thereunder, are exempt from administration by the Trustee. Determinations as to exemptions from property of the bankruptcy estate are core proceedings over which this Court has been conferred with the jurisdictional authority to enter final orders. 28 U.S.C. §§ 157(b)(2)(B) & 1334. For purposes of bankruptcy law, the permissibility of exemptions for debtors domiciled in Ohio, such as these Debtors, is governed by Ohio law, Ohio having opted out of the federal bankruptcy exemptions. O.R.C. § 2329.662. In this matter, the Debtors cite to O.R.C. § 2329.66(A)(6)(c) and O.R.C § 3917.05, at authority for their right to exempt the insurance policy and its proceeds. The party objecting to the exemption, the Trustee in this, case, has the burden of proving that a debtor's exemption is not properly claimed. FED. R.BANKR.P. 4003(c). For this burden, a central focus of the argument presented by the Trustee centered on this contention: "There is no mention of O.R.C. § 3917.05 in Ohio's general exemption statute, O.R.C. § 2829.66." (Doc. 50). In taking this position, the Trustee relies on O.R.C. § 2329.66(A)(6)(13),[1] correctly identifying that this particular provision does not reference O.R.C. § 3917.05, the statute relied upon by the Debtors for their claim of exemption. Rather, as the Trustee' points out, O.R.C. § 2329.66(A)(6)(b) references O.R.C. § 3111.10 which arguably would not apply to Mr. McCall in this matter. Under § 3111.10, it is the insured, not the beneficiary, who is entitled to the exemption.[2] However, in claiming an exemption in the insurance proceeds, the Debtors, rely on O.R.C. § 2329,66(A)(6)(c ), not subparagraph (A)(6)(b). (Doc. No. 44). Ohio Revised Code § 2329.66(A)(6)(c) states: (A) Every person who is domiciled in this state may hold property exempt from execution, garnishment, attachment, or sale to satisfy a judgment or order, as follows: (6)(c) The person's interest in a policy of group insurance or the proceeds of a policy of group insurance, as exempted by section 3917.05 of the Revised Code, In turn, this provision, as the Debtors point out, references O.R.C. § 3917.05, not § 3111.10. The gravamen of the Trustee's 422 position, that § 2329.66 does not mention § 3917.05, is therefore without merit. Notwithstanding, the Trustee maintains that, like with O.R.C. § 3111.10, the insurance policy proceeds in this case are not exempt under O.R.C. § 3917.05 "because the Debtor claiming the exemption is the beneficiary and not the owner of the policy." (Doc. No. 45). Section 3917.05 of the Revised Code provides: No policy of group insurance, nor the proceeds thereof, when paid to any employee thereunder, is liable to attachment, garnishment, or other process, or to be seized, taken, appropriated, or applied by any legal or equitable process or operation of law, to pay any liability of such employee, his beneficiary, or any other person who may have a right thereunder, either before or after payment. An examination of this statute, however, shows the Trustee's position to be again incorrect. Unlike § 3111.10, which limits it class of protected persons to just the debtor-insured (that is, the owner of the insurance policy), the class of protected persons under O.R.C. § 3917.05 is broader. First, as with § 3111.10, the owner of the policy, the insured-employee, is entitled to an exemption under § 3917.05. But in addition, § 3917.05 also provides that the proceeds of group insurance are not available "to pay any liability of such employee, his beneficiary, or any other person who may have a right thereunder, either before or after payment." (emphasis added). In this matter, the Parties do not disagree, and the evidence shows, that Mr. McCall was designated as the beneficiary of his wife's group life insurance policy. (Doc., 23). Still, it is recognized that a plausible reading of O.R.C. § 3917.05 could operate to exclude a beneficiary from the protection of the statute when the proceeds of the policy are paid to the beneficiary and not directly to the insured-employee. In its opening, § 3917.05 sets forth that its exemption only applies when the proceeds of the policy are "paid to any employee thereunder. . . ." But requiring, as this language would seem to suggest, that the proceeds of an insurance policy must be paid to the insured-employee in other words, the proceeds must pass through their hands in order to obtain exempt status under § 3917.05, does not find support with other courts which have addressed the issue. In In re Heins, 83 B.R. 504, 505 (Bankr. S.D.Ohio 1988), the court declined to read into § 3917.05 such a prerequisite, holding instead that the "correct focus of the inquiry is whether [the Debtor] is of the class intended to be protected by the insurance exemption provisions." This reasoning was later followed in In re Lewis, 327 B.R, 645 (Bankr.S.D.Ohio 2005), a case decided under facts almost identical to those of this case. See also In re Fahey, 352 B.R. 288, 290-91 (Bankr.D.Colo.2006) (construing a similar exemption statute). Although not an issue put directly in controversy by the Parties, as a matter of first impression for the Court, this would appear to be the better view. First, it is an absurdity to assume that § 3917.05 would require, as a condition precedent to its applicability, that the death benefit from an employee's life insurance policy must be paid directly to the employee for the obvious reason that person is now deceased. Additionally, reading into § 3917.05 a requirement that the death benefit be paid directly the employee-decedent's estate, as would be the only commonsensical approach, places a requirement on the statute which is not directly expressed. Similarly, to give § 3917.05 a strict reading, by requiring that as a prerequisite to its applicability, 423 the proceeds from the policy be paid to the employee-decedent's estate, as opposed to the beneficiary, would render the statute ineffective in many instances. When, a death benefit is paid from a life insurance policy, it is commonly paid to the policy's beneficiary, not the policy holder's estate. Given these considerations, a cogent reading of § 3917.05 holds that, so long as a debtor otherwise falls into a protected class, the proceeds of a group life insurance policy do not need to be paid directly to the insured-employee to be claimed as exempt under § 3917.05. In this way, Ohio courts follow the interpretive principle that exemption statutes are to be construed liberally in favor of the debtor and any doubt in interpretation should" be in favor of granting the exemption. Baumgart v. Alain (In re Alam), 359 B.R. 142, 147-48 (6th Cir. BAP 2006), citing Daugherty v. Cent. Trust Co. of Northeastern Ohio, N.A., 28 Ohio St. 3d 441, 504 N.E.2d 1100, 1104 (1986). Basic interpretive principles also hold that the terms of a. statute should not be read so as to render them superfluous. Statutes are instead to be interpreted as a whole so as to give effect to every provision. The Trustee offered no basis which would warrant affording § 3917.05 a different reading. In any event, the actual issue, of whether the employee-deceased must be directly paid the proceeds from a group life insurance policy, need not, be decided. It is the Trustee's burden to establish that the Debtors' exemptions were not properly claimed. And contrary to this burden, an interpretation of the applicable law, together with the facts before the Court, tend to show that Mr. McCall is entitled to claim as exempt, under O.R.C. § 2329.66(A)(6)(c) and O.R.C. § 3917.05, the proceeds he received from the group life insurance policy provided by his wife, Judy Anne McCall. In reaching the conclusions found herein, the Court has considered all of the evidence, exhibits and arguments of counsel, whether or not they are specifically referred to in this Decision. Accordingly, it is ORDERED that the Motion of the Trustee for Turnover, be, and is hereby, DENIED' and that the Trustee's Objection to the Debtor's claim of exemption is hereby OVERRULED. NOTES [1] This section provides: (A) Every person who is domiciled in this state may hold property exempt from execution, garnishment, attachment, or sale to satisfy a judgment or order, as follows: (6)(b) The person's interest in contracts of life or endowment insurance or annuities, as exempted by section 3911.10 of the. Revised Code; [2] This section provides, in relevant, part: All contracts of life or endowment insurance or annuities upon the life of any person, or any interest therein, which may hereafter mature and which have been taken out for the benefit of, or made payable by change of beneficiary, transfer, or assignment to, the spouse or children, or any persons dependent upon such person, or an institution or entity described in division (B)(1) of section 3911.09 of the Revised Code, or any creditor, or to a trustee for the benefit of such spouse, children, dependent persons, institution or entity, or creditor, shall be held, together with the proceeds or avails of such contracts, subject to a change of beneficiary if desired, free from all claims of the creditors of such insured person or annuitant.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532622/	173 N.J. Super. 492 (1980) 414 A.2d 607 HENRY KALNAS, PLAINTIFF-APPELLANT, v. LAYNE OF NEW YORK COMPANY, INC., DEFENDANT AND THIRD-PARTY PLAINTIFF-RESPONDENT, v. EMCEE CONSTRUCTION COMPANY, INC., THIRD-PARTY DEFENDANT-RESPONDENT. Superior Court of New Jersey, Appellate Division. Submitted April 29, 1980. Decided May 8, 1980. 494 Before Judges LORA, ANTELL and PRESSLER. Robert J. Forgash, attorney for appellant. William M. Lake, attorney for defendant and third-party plaintiff-respondent. Parker, McCay & Criscuolo, attorneys for the third-party defendant-respondent (Jeanne A. Taylor on the brief). The opinion of the court was delivered by PRESSLER, J.A.D. Plaintiff Henry Kalnas appeals from the involuntary dismissal of his third-party negligence action against defendant Layne of New York Company, Inc. (Layne) on Layne's motion made at the conclusion of plaintiff's case. The basis of the trial court's action was its conclusion that Layne was immune from a third-party action under the Workers' Compensation Act, N.J.S.A. 34:15-8. We affirm the dismissal, not for the reason relied on 495 by the trial judge but because we are persuaded that plaintiff failed to prove a prima facie case of liability against Layne. We are, of course, obliged to view the facts adduced on plaintiff's case most favorably to him and to give him the benefit of all favorable inferences supported thereby. R. 4:37-2(b); Dolson v. Anastasia, 55 N.J. 2, 5-6 (1969). So viewed, the proofs showed that plaintiff was a laborer employed by a construction firm, Emcee Construction Company, Inc. (Emcee), which was interested in bidding on a water treatment plant project of the City of Bordentown (city). Apparently the city's plan was to take bids for three separate contracts for the total job, one for structural and mechanical work, one for plumbing, heating, ventilation and air conditioning, and one for electrical work. The last two of these contracts were entered into by the city with bidders not here involved. As to the first of these contracts, Emcee entered into a joint venture with defendant Layne for the purpose of submitting a bid, their agreement being that Emcee would do the structural work and Layne the mechanical work. Their bid was accepted and they entered into a written joint venture agreement essentially providing which contract item would be done by which company and allocating to each a share of the total contract price based on the actual work to be undertaken by each. The agreement further required each joint venturer to be "responsible for all of the general conditions as they appear to apply to each partner." There is nothing in the record to suggest that the joint venturers would combine their payrolls or would in any other way supervise, control or bear financial responsibility for the employees of the other. Emcee, of all the contractors, was apparently first on the job, Layne's work at the site not having commenced until some eight months after Emcee's. Emcee's work apparently included site clearance, and early in the project, when it alone was on the site, it became necessary to remove a very large tree therefrom. A crew of Emcee's, including plaintiff, began to perform this task during the course of which plaintiff was seriously injured. It 496 appears that the factors contributing to the accident were improper safety equipment issued to plaintiff by his foreman, inadequate instruction as to the technique of performing the work, and plaintiff's inexperience in tree removal. Plaintiff sought and received workers' compensation benefits from his employer, Emcee, and brought this third-party action against Layne who, in turn, impleaded Emcee, claiming a right to indemnification from it. Plaintiff's primary theory of Layne's liability, particularly as it became focused during the trial, was that Layne had an independent obligation to him to assure him a safe place to work and to ensure compliance by all personnel on the site with the relevant provisions of the Construction Safety Code, N.J.A.C. 12:180-1.1 et seq. The trial judge on the motion for involuntary dismissal did not deal directly with the question of Layne's breach of duty in respect of plaintiff because he concluded that the fact of the joint venture relationship between Layne and plaintiff's employer, Emcee, cloaked Layne with the same mantle of immunity under the Workers' Compensation Act as Emcee itself was entitled to. This conclusion was based on his perception that the essential attributes of a joint venture are the same as those of a partnership. He noted that an employee of a partnership is barred by the exclusivity of the workers' compensation remedy from bringing a third-party action against either the partnership or any of its partners individually. See, e.g., Mazzuchelli v. Silberberg, 29 N.J. 15, 21-24 (1959); Seltzer v. Isaacson, 147 N.J. Super. 308 (App.Div. 1977). He therefore reasoned that because of the partnership nature of the joint venture, an employee of one of the joint venturers is also barred by the exclusivity of the workers' compensation remedy from bringing a third-party action against all joint venturers whether or not his direct employer. There is apparently no authority in this State addressing the issue of the availability of a third-party action against a 497 joint venturer and we have substantial doubt that the partnership analogy is dispositive. In the typical partnership situation the partnership is, indeed, both formalistically and functionally, the employer. See, e.g., N.J.S.A. 34:15-36, expressly recognizing that "employer" within the intendment of the Workers' Compensation Act may include a natural person, a partnership or a corporation. But these are all entities subsumed by the basic concept of the employer as the master and, as that section of the act further provides, "`employer' is ... synonymous with master." In our view, therefore, whenever there is a dispute as to whether there is in fact an employment relationship encompassed by the act, and particularly where the circumstances of the relationship depart from traditional modes, the resolution of the question requires a factual analysis of all of the indicia of the relationship in order to determine if it is truly that of master-servant. And in order to constitute such a relationship, it must be characterized by such elements as the employer's supervisory power, his right to control the activities of the employee, his right to terminate the relationship, his payment to the employee of regular wages for services, and his provision of tools and equipment and facilities. See, generally, Marcus v. Eastern Agricultural Ass'n, Inc., 32 N.J. 460 (1960), rev'g on the dissent in 58 N.J. Super. 584, 596 (App.Div. 1959). Thus, it is clear that while the joint venturers themselves are, inter se, essentially partners, that partnership characterization does not necessarily and for all purposes determine either the relationship of each of the joint venturers to the employees of the others nor of the joint venture as an entity to the joint venturers' employees. Whether each joint venturer can be deemed the employer of all the employees engaged in the work of the joint enterprise must clearly depend on the particular facts and circumstances surrounding the joint venture. This is especially so where, as here, each joint venturer comes to the joint venture with his own work force. Among the critical 498 questions under these circumstances are whether or not there was an intention to share or combine the separate work forces, whether the separate work forces have been in fact functionally shared or combined, whose instructions vis-a-vis the joint venturers bind each of the work forces, who pays them and who ultimately controls them. Clearly, depending on how the joint venturers have agreed to perform the joint enterprise and have actually performed it, their respective employees may remain their own or may for purposes of the joint enterprise become each others as well and therefore also become the employees of the joint venture as a separate entity. The indicia here adduced are suggestive of the conclusion that the work force of each joint venturer remained its own. Despite the absence of a finding, we assume arguendo that Layne was not plaintiff's employer. Under this assumption, the question is whether there was such a prima facie showing on plaintiff's case of Layne's negligence as would make Layne chargeable for his injury. It is our negative answer to this question which impels our affirmance of the dismissal here and moots resolution of the employment relationship question. Plaintiff argues that his injury resulted from violations of the Construction Safety Code, supra, in respect of his safety equipment. We are willing to assume that is so. The only basis which plaintiff assigns as implicating Layne in that violation is N.J.A.C. 12:180-3.15, which provides in full as follows: 3.15.1 Where one contractor is selected to execute the work of the project, he shall assure compliance with the requirements of this Chapter from his employees as well as all subcontractors. 3.15.2 Where the owner selects more than one contractor to perform the work of the project, he shall be responsible or he shall designate one particular contractor to be responsible for providing the general safeguarding as well as gaining compliance with the requirements of this Chapter from all other contractors and parties engaged in the operation of the project. 499 See, also, Bortz v. Rammel, 151 N.J. Super. 312 (App.Div. 1977), certif. den. 75 N.J. 539 (1977). The problem, however, is that neither of these provisions applies to Layne. The first subsection does not since there were at least three contractors for the project, that is, the electrical contractor and the plumbing contractor as well as the Layne-Emcee joint venture. The second does not apply to Layne since there was no suggestion that the owner of the project, the city, had designated any one contractor to be in charge of the overall safety responsibility. Plaintiff further suggests an independent responsibility in Layne for his safety by pointing to the above-quoted provision of the joint venture agreement imposing on each joint venturer the responsibility for all of the general conditions applicable to either. We regard the term "general conditions" as meaning the conditions stated in the contract documents and not, as plaintiff assumes, the physical conditions of the work itself. We regard our interpretation of the phrase as clearly mandated in the context of the joint venture agreement, and there is nothing in the record to suggest that there was any contract condition violated by Layne which contributed to the accident. In view of the fact that Layne had not even yet commenced work at the job site when plaintiff was injured and does not appear to bear any direct independent responsibility for plaintiff or for his injury, all that remains by way of a liability theory is plaintiff's contention that Layne, as Emcee's "partner," is vicariously liable for Emcee's negligence and hence vicariously liable for Emcee's failure to have provided him with a safe place in which to work, proper equipment and proper instructions. We are satisfied, however, that under these circumstances vicarious liability for the employer's negligence alone does not afford an adequate basis for third-party liability. The Workers' Compensation Act provides the exclusive remedy for an employer's act of negligence and we find it consistent with the policy of the act that its remedy be exclusive in respect of *500 that same act of negligence even if one not technically an employer is vicariously liable for it as well. In our view, if a unitary and single act of negligence is in actuality committed only by the employer, a nonemployer who is vicariously liable only and only because he is the employer's partner, ought for purposes of the Workers' Compensation Act, be regarded "in substance, whether or not technically" as part of "a unitary employer-entity." See Freppon v. Hittner, 91 N.J. Super. 9, 12 (App.Div. 1966). We hold, therefore, that in the absence of an independent contributing act of negligence by the nonemployer joint venturer, the third-party action against him is not maintainable. Affirmed.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532633/	489 Pa. 243 (1980) 414 A.2d 48 Steven H. BRUSH, on behalf of himself and as representative of a class, Michael J. Mullen, on behalf of himself and as representative of a class, Kimberly Getz, on behalf of herself and as representative of a class v. The PENNSYLVANIA STATE UNIVERSITY, Board of Trustees of the Pennsylvania State University, John W. Oswald, Individually and as President of the Pennsylvania State University, M. Lee Upcraft, Individually and as Director of Residence Hall Programs of the Pennsylvania State University. Appeal of Steven H. BRUSH, on behalf of himself and as representative of a class, and Kimberly Getz, on behalf of herself and as representative of a class. Supreme Court of Pennsylvania. April 24, 1980. 244 245 246 Virginia B. Eisenstein, State College, for appellants. Delbert J. McQuaide, Grant H. Fleming, State College, for appellees. Before EAGEN, C.J., and O'BRIEN, ROBERTS, NIX, MANDERINO, LARSEN and FLAHERTY, JJ. OPINION OF THE COURT ROBERTS, Justice. Appellants, the class of canvassers and the class of residents, challenge Pennsylvania State University's regulation of residence hall canvassing. Appellants claim the regulations impermissibly restrict freedoms of speech and assembly guaranteed by the first and fourteenth amendments to the Constitution of the United States and Article I, Section VII of the Pennsylvania Constitution. Thus, they ask this Court to reverse the order of the equally divided Superior Court affirming a decree of the Court of Common Pleas of Centre County, entered after a full hearing, denying them injunctive relief against the challenged regulations. We conclude that the Superior Court and the court of common pleas correctly determined on this record that the Penn State regulations are constitutionally permissible limitations on the time, place and manner of the exercise of these rights. Accordingly, we affirm. Penn State operates 66 residence halls providing housing and meal service for approximately 11,600 students. Access to a residence hall is gained by way of a separate entrance in the main lobby and main floor common areas. Living areas of the halls, including individual rooms, are located apart from those common areas. In the larger multi-story residence halls, living areas are located on the upper floors of 247 the hall and are reached by elevators.[1] All residence halls exhibit "No Trespassing" signs at the entrances and exits.[2] In the living areas of the residence halls, rooms are used for sleeping, studying and entertaining within the restrictions of the Penn State visitation policy and general rules of conduct. These individual rooms, however, do not contain bathrooms, laundry facilities or telephones. Those facilities, used in common by all residents of the floor, are located at the center of each floor and may be reached only by traversing the common hallways. Thus, the resident must pass through the common hallway when using the shower, lavatory or any other common facility located on that individual's floor. Common study areas, located on each floor for the students' use, are also reached by passing through the common hallway. In addition, telephone calls may be placed and received only at the telephones located in the hallway. Visitors seeking to contact a resident may enter the main lobby of the residence hall and telephone the individual. In accordance with Penn State visitation policy, guests may then visit the resident in that student's room. If a guest is of the opposite sex, visitation rules require the resident to escort that person through the common hallway. Resident Assistants live on the floors to ensure that no unauthorized persons gain entrance to the living areas. Before February 15, 1975, Penn State prohibited all canvassing in its residence halls. On that date the University adopted the regulations appellants challenge.[3] These regulations 248 permit canvassing by registered individuals in the living areas of individual residence halls if, at the beginning of the school term, a majority of residents vote in favor of "open" canvassing. A vote to ban canvassing precludes canvassers from reaching the living areas of the halls without previously obtaining an invitation from a resident. Canvassers may obtain lists of hall residents and reach each resident by telephone. If invited to an individual's room, the canvasser may enter the living area of the hall as would any other invited guest. Under the regulatory provisions a registered canvasser still may contact hall residents in the dining hall buildings and the main lobbies of each residence hall. Canvassers also may use conference rooms located in the main common area where a large group of residents may be assembled for lectures, discussions or other activities. Finally, canvassers may post notices on residence hall bulletin boards or place pamphlets in residents' mailboxes, provided each pamphlet is individually addressed.[4] 249 A majority of students residing in 66% of the residence halls voted to permit "open" canvassing during the term immediately following implementation of the February 15 regulations. After the next election, Fall Term 1975, only 32% of the residence halls voted to have "open" canvassing. In the spring of 1975, appellant Steven Brush sought to canvass the living areas of "closed" residence halls. When notified of Penn State's intention to enforce the canvassing regulations, Brush along with appellant Michael Mullen, a resident of a "closed" hall who sought to receive the information canvassers might disseminate, filed a class action seeking an injunction against Penn State's enforcement of the canvassing regulations.[5] The Court of Common Pleas of Centre County rejected appellants' initial request for a preliminary injunction. After a hearing, at which all parties introduced extensive testimony, the court dismissed appellants' complaint and refused to grant permanent injunctive relief. In holding that the Penn State canvassing regulations are a reasonable restriction on the place and manner of expression, the trial court found the living areas of the halls essentially equivalent to the interior of a private home. In addition, the court concluded that "there are reasonable alternatives available to preserve freedom of speech, expression and association," due to "the number of practical alternatives available to a person who desires to communicate.. . ." As previously indicated, on appeal an equally divided Superior Court affirmed. We granted allowance of appeal. Appellees suggest that residence hall operations are not in any manner financed by state or federal funds. They claim the revenues received from the residents provide the sole 250 funds for residence hall maintenance. Thus, appellees argue, the self-governance of the halls by residents does not bear the imprimatur of "state action." We disagree. When presented this question on previous occasions, federal courts have decided that the nexus between Penn State and the Commonwealth justifies a finding of state action for purposes of the Fourteenth Amendment. Benner v. Oswald, 592 F.2d 174 (3d Cir. 1979) (whether students may participate in the section of trustees). Klain v. Pennsylvania State University, 434 F. Supp. 571 (M.D.Pa. 1977), aff'd 577 F.2d 726 (3d Cir. 1977) (challenge to Penn State's mandatory retirement policy). See also Isaacs v. Board of Trustees of Temple University, 385 F. Supp. 473 (E.D.Pa. 1974). See generally, Jackson v. Metropolitan Edison Co., 419 U.S. 345, 95 S. Ct. 449, 42 L. Ed. 2d 477 (1974) and Burton v. Wilmington Parking Authority, 365 U.S. 715, 81 S. Ct. 856, 6 L. Ed. 2d 45 (1961). Indeed this record reflects that Penn State built, manages and maintains the residence halls. Penn State employs a Director of Residence Hall Programs whose responsibilities include supervision of residence hall operations. This director develops and implements the Penn State residence hall policies and regulations. On the facts of this case, we agree with those courts and hold that Penn State's connection with residence hall operations supports a finding of state action. We will not disturb the determination of the trial court with respect to the "physical aspects of the dormitory structures." That court found that it was "unrealistic" to find the "upper floor hallway and bedroom door of a dormitory resident to be the same as a public street and the front door of a private dwelling." The court concluded "that the upper floor areas of the residence halls are private living quarters . . . ." Because the record reflects that Penn State's extensive residence hall regulations are designed to maintain residents' privacy, security and quiet, we conclude that the trial court's findings are adequately supported and may not be disturbed on appeal. Commonwealth Trust Co. 251 v. Szabo, 391 Pa. 272, 277, 138 A.2d 85, 87 (1957); Bohachevsky v. Sembrot, 368 Pa. 228, 81 A.2d 554 (1951); Custis v. Serrill, 321 Pa. 154, 183 A. 774 (1936).[6] Given these specific findings by the trial court, based upon the extensive testimony in the record, we must conclude that the challenged regulations do not abridge freedom of expression.[7] In Martin v. City of Struthers, 319 U.S. 141, 63 S. Ct. 862, 87 L. Ed. 1313 (1943), the Court held invalid a municipality's ordinance which precluded canvassers from ringing the doorbells of private homes. The Court stated that "[o]rdinances of the sort now before us may be aimed at the protection of householders from annoyance, including intrusion upon the hours of rest, and at the prevention of crime." However, the "dangers of distribution [of pamphlets] can so easily be controlled by traditional legal methods, leaving to each householder the full right to decide whether he will receive strangers as visitors." Id. at 144, 147, 63 S.Ct. at 864, 865. Thus, the Court concluded that individual householders could protect themselves from undesirable intrusions by displaying signs indicating the owner's desire to exclude canvassers. Martin, however, "never intimated that the visitor could insert a foot in the door and insist on hearing." Kovacs v. Cooper, 336 U.S. 77, 69 S. Ct. 448, 93 L. Ed. 513 (1949). In fact, it has always been recognized that dwellers have a right to exclude trespassers from the interior of the dwelling. Rowan v. Post Office Department, 397 U.S. 728, 737, 90 S. Ct. 1484, 1490, 25 L. Ed. 2d 736 (1970). In 252 light of the trial court's specific finding that the hallways in the residence hall living areas are not "the same as a public street," nor "open to public use," we hold that the Penn State regulations permissibly bar canvassers from those areas. It must be remembered that a regulation based on content, of course, is invalid. Erznoznik v. City of Jacksonville, 422 U.S. 205, 95 S. Ct. 2268, 45 L. Ed. 2d 125 (1975); Lehman v. City of Shaker Heights, 418 U.S. 298, 94 S. Ct. 2714, 41 L. Ed. 2d 770 (1974). Here, however, we are presented with a time, place or manner regulation. Such a regulation is constitutionally permissible if reasonable and in furtherance of a substantial governmental interest. Commonwealth v. Sterlace, 481 Pa. 6, 391 A.2d 1066 (1978); Grayned v. City of Rockford, 408 U.S. 104, 92 S. Ct. 2294, 33 L. Ed. 2d 222 (1972).[8] As the trial court found here, Penn State seeks to permit the residents of "closed" halls to protect their interest in privacy when performing personal household activities, such as laundering clothing, bathing or using the telephone. Penn State also seeks to prevent breaches of security by regulating those halls where a majority of residents decline the "open" canvassing option. Finally Penn State maintains an understandable interest in promoting quiet study conditions for residents. The canvassing regulations challenged here promote these legitimate goals of Penn State by providing its students with living quarters suitable to the university environment. Importantly, these regulations in no respect prohibit the canvasser from utilizing alternative means of communication. 253 As the Court in Linmark Associates, Inc. v. Township of Willingboro, 431 U.S. 85, 97 S. Ct. 1614, 50 L. Ed. 2d 155 (1977), recognized, "First Amendment concerns are less directly implicated" when the regulation "restricts only one method of communication, . . . since laws regulating the time, place, or manner of speech stand on a different footing from laws prohibiting speech altogether." Id. at 93, 97 S.Ct. at 1618. Penn State, in this case, has not totally prohibited the canvasser's speech. The regulations here permit canvassing in the main lobby and fully afford canvassers the opportunity to telephone residents, mail information and hold meetings in Penn State facilities. These alternatives are reasonably effective means by which canvassers may reach hall residents. Appellants argue that on the rationale of Linmark, they are entitled to canvass the residence hall living areas because the direct confrontation of residents at their individual room doors is the more effective means of communication. We reject this claim. As the Third Circuit Court of Appeals recently stated, "Linmark does not stand for the proposition that the First Amendment requires that a [speaker] in all instances be able to use the techniques he considers most effective. Rather, Linmark teaches that a realistic appraisal must be made of the alternative methods of communication.. . ." American Future Systems, Inc. v. Pennsylvania State University, 618 F.2d 252, 259 n.18 (3d Cir. 1980).[9] See also Virginia State Board of Pharmacy v. Virginia Citizens Consumer Council, 425 U.S. 748, 96 S. Ct. 1817, 48 L. Ed. 2d 346 (1976). We believe the trial court makes a "realistic appraisal" of the canvassing alternatives and properly concluded that regulations "le[ft] open ample alternative channels of communication." Linmark, supra at 93, 97 S.Ct. at 1618; Virginia State Board of Pharmacy, supra at 771, 96 S.Ct. at 1830. *254 We conclude that Penn State has not impermissibly regulated canvassers based upon the content of the message they seek to convey. See Erznoznik, supra; Lehman, supra. Rather, the regulation furthers a legitimate governmental interest by reasonably restricting the place and manner of expression. Sterlace, supra; Grayned, supra. Because the challenged regulations recognize the private nature of living areas in student residence halls and provide reasonable alternatives for the communication of appellants' message, we affirm the denial of injunctive relief. Order of the Superior Court affirming the Decree of the Court of Common Pleas of Centre County dismissing the request for injunctive relief is affirmed. Each party pay own costs. MANDERINO, J., did not participate in the decision of this case. NOTES [1] In the smaller single-story residence halls these living areas are located on the ground level, but nonetheless are separate from the lobby. Entrance to those areas is similarly restricted. [2] TRESPASSING PRIVATE RESIDENCE This building is restricted to persons assigned as residents, their invited guests and authorized University personnel." The record indicates that members of the public are not permitted in the residence halls absent an invitation from a resident. In fact, other University students similarly are not permitted to enter a residence hall, other than their own, without an invitation. [3] The Penn State canvassing regulations are as follows: "a. Canvassing shall be defined as any effort to influence student opinion, gain support, or promote a particular cause or interest, specifically excluding any solicitation or fund raising as defined by current University policy. b. Students, student organizations, residence hall house governments and area governments, and outside interests are eligible to canvass in the residence halls. c. Canvassing may occur in individual residence hall buildings unless restricted by a majority vote of the residents of that building at the beginning of each academic year. Canvassing is permitted in all main lobbies of residence halls. d. Canvassing may occur in dining hall buildings. Canvassing in dining rooms is prohibited. e. Canvassing shall be restricted to the hours of 11:00 a.m. to 11:00 p.m. f. Any canvasser must register with the area coordinator no less than 24 hours prior to the canvass and must clearly understand all provisions of canvassing regulations before canvassing may begin. g. When contacting students in their rooms, canvassers must knock before entering, identify themselves, announce their specific purpose, enter an individual room only by the express consent of the resident, and leave immediately if the resident so requests. h. Canvassers must abide by all University rules and regulations. Violators will be subject to referral to the Office of Conduct Standards and/or civil or criminal prosecution." [4] In addition to the canvassing regulations challenged on this appeal, there are Penn State regulations applicable to other aspects of residence hall life, including guest visitation, quiet hours, and solicitation of funds or sales. Many of these regulations are subject to the vote of hall residents. The vote determines which regulations are to be adopted for use in that residence hall during the ensuing term. See Penn State 1975-76 Student Handbook. [5] Appellant Kimberly Getz intervened on behalf of "closed" hall residents seeking to receive information when appellant Mullen moved out of the residence hall during the pendency of this action. [6] That members of the public may make an occasional dormitory visit does not contravene the trial court's finding that the living areas of a residence hall are private in nature. A place does not necessarily become a "public forum" for purposes of the first amendment even where members of the public are freely permitted to visit. Greer v. Spock, 424 U.S. 828, 96 S. Ct. 1211, 47 L. Ed. 2d 505 (1976). Of necessity, the limited visitation of the Penn State residence halls by others does not require the opening of those living areas to canvassing. [7] Because the parties have not squarely presented the issue of whether these regulations are an improper delegation of decision-making authority, we need not reach that issue today. See City of Eastlake v. Forest City Enterprises, Inc., 426 U.S. 668, 677, 96 S. Ct. 2358, 2364, 49 L. Ed. 2d 132 (1976) and cases cited therein. [8] It is also important to consider "whether the manner of expression is basically incompatible with the normal activity of a particular place at a particular time." Grayned v. City of Rockford, 408 U.S. 104, 116, 92 S. Ct. 2294, 2303, 33 L. Ed. 2d 222 (1972). See also Lloyd Corporation v. Tanner, 407 U.S. 551, 92 S. Ct. 2219, 33 L. Ed. 2d 131 (1972). Moreover, "[t]he state, no less than a private owner of property, has the power to preserve the property under its control for the use to which it is lawfully dedicated. Adderly v. Florida, 385 U.S. 39, 87 S. Ct. 242, 17 L. Ed. 2d 149 (1966). [9] In American Future Systems, the Third Circuit upheld the Penn State regulation forbidding sales demonstrations and solicitations in residence halls against a constitutional challenge on first amendment grounds.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532654/	32 B.R. 27 (1983) In re Robert L. CARSON, Debtor. Bankruptcy No. 82-01791-BKC-SMW. United States Bankruptcy Court, S.D. Florida. July 21, 1983. Linda A. Conahan, Reggie D. Sanger, Fort Lauderdale, Fla., for creditor. Richard W. Smith, Fort Lauderdale, Fla., for debtor. Herbert Freehling, trustee. FINDINGS OF FACT AND CONCLUSIONS OF LAW SIDNEY M. WEAVER, Bankruptcy Judge. THIS CAUSE having come on to be heard upon LANDMARK FIRST NATIONAL BANK OF FORT LAUDERDALE's (hereinafter LANDMARK) Motion to Dismiss or Convert the Chapter 13 filed by the Debtor, ROBERT L. CARSON, and the Court having heard the testimony and examined the evidence presented, having observed the candor and demeanor of the witnesses, having considered arguments of counsel and being otherwise fully advised in the premises, does hereby make the following findings of fact and conclusions of law: This Court has jurisdiction of the parties and the subject matter hereto. The Debtor originally filed a Petition under Chapter 7 of the Bankruptcy Code on September 14, 1982. On or about April 25, 1983, the Debtor filed a Notice of Conversion to a Chapter 13 bankruptcy under the Code. LANDMARK filed a Motion to Dismiss or Convert the case back to Chapter 7 on the basis that the Debtor did not meet the qualifications required under the Code for filing a Petition under Chapter 13 in that (a) he was not a wage earner with regular income and (b) he has unsecured debts in excess of $100,000.00. LANDMARK additionally alleged that the Debtor filed a conversion to a Chapter 13 in bad faith, the sole purpose of his conversion being to avoid this Court's Final Judgment denying his discharge entered April 14, 1983, in Adversary No. 83-0059-BKC-SMW-A LANDMARK filed a proof of unsecured claim in the amount of $221,135.95. The Debtor disputed the amount of this claim *28 alleging that he only owes LANDMARK approximately $40,000.00 in unsecured debt. At a preliminary hearing on May 25, 1983, the Court ruled that in order to determine LANDMARK's Motion to Dismiss or Convert an evidentiary hearing must be held wherein the Court would determine the amount of unsecured indebtedness owed to LANDMARK by the Debtor. That hearing is the subject of these findings of fact and conclusions of law. Based upon the testimony of the Debtor, the Court finds that Debtor is employed and is a wage earner with regular income and was so at the time of filing the Chapter 13 conversion. The bank produced and admitted into evidence documentation representing seven (7) loan transactions with LANDMARK. In all but one instance, the documentation showed ROBERT CARSON signing as maker, co-maker or guarantor. The uncontradicted testimony presented by the bank's handwriting expert showed that ROBERT CARSON did in fact sign three (3) names which were not his own on bank documents, specifically, Hymen Schwartz, Richard Albertson and James Sheil. The handwriting expert further testified that the guaranties of the Schwartz and Albertson loans appearing to be signed by BOB CARSON were also the signature of the Debtor. The uncontradicted testimony and evidence presented by the bank further shows that each of the loans was funded to or for the benefit of the Debtor. Even though the Debtor failed to either directly admit or deny his signatures, his testimony during 205 examination admitted that he received the proceeds of all loans except those signed in fictitious names. The uncontradicted testimony produced by the bank showed that the proceeds of the fictitious loans were also received by or for the benefit of the Debtor. The loan proceed checks themselves and other checks payable to or for the benefit of the Debtor, together with testimony, showed that some of the proceed checks were deposited into the Great American Bank of Davie, and an officer of that bank indicates that the accounts to which they were deposited were controlled by the Debtor and used by the Debtor or for the benefit of the Debtor. The evidence and testimony further showed that other loan proceed checks and checks from the cashier's check float were deposited into various accounts of the Debtor or accounts for entities controlled by the Debtor or were endorsed by the Debtor and cashed out. There was no contradictory evidence of any kind presented by the Debtor. The bank officer testified that each of the loans presented is in default, that any collateral available to the bank has been disposed of and credited against the Debtor's accounts and that interest has properly been figured through September 14, 1982, which was the date of the filing of the Petition in bankruptcy. Based upon the evidence presented, the Court finds that ROBERT CARSON is the maker, co-maker or guarantor as represented in the documentation taken into evidence on each of the notes presented by LANDMARK in this hearing. The Court further finds that each of the notes is in default and that the amounts testified to by the bank as due and owing with interest through the date of the filing of the Petition are the amounts validly owed to the bank by the Debtor. The Court finds that ROBERT L. CARSON owes LANDMARK in unsecured debt a total of $221,135.95. Based upon the foregoing facts, the Court finds that the Debtor is not qualified pursuant to § 109(e) of the Bankruptcy Code to file a Chapter 13 Petition in that his unsecured debt exceeds $100,000.00. Having made this finding, the Court need not rule upon the bank's allegation that the conversion was filed in bad faith. The Debtor's Chapter 13 Petition is hereby converted back to a Chapter 7 Petition under the Bankruptcy Code. A separate order will be entered in accordance with these findings of fact and conclusions of law.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532651/	32 B.R. 871 (1983) In re NAUDAIN, INC., formerly known as Brooks Shoe Manufacturing Company, Inc., et al., Debtors. BROOKS SHOE MANUFACTURING COMPANY, INC., Plaintiff, v. METROPOLITAN EDISON CO., Defendant. Bankruptcy No. 81-04333G, Adv. No. 82-1539G. United States Bankruptcy Court, E.D. Pennsylvania. September 9, 1983. 872 Kathryn Heidt, Duane, Morris & Heckscher, Philadelphia, Pa., for plaintiff, Brooks Shoe Manufacturing Co., Inc. Frederick L. Reigle, Ryan, Russell & McConaghy, Reading, Pa., for defendant, Metropolitan Edison Co. Adelman Lavine Krasny Gold & Levin, Philadelphia, Pa., for the Creditors' Committee. OPINION EMIL F. GOLDHABER, Bankruptcy Judge: The issue at bench is whether two checks paid by the debtor to the defendant are avoidable pursuant to section 547(b) of the Bankruptcy Code ("the Code"). Since all the elements necessary to constitute a preference under section 547(b) have been met and since the exceptions to the avoidance of preferential transfers contained in sections 547(c)(1) and 547(c)(2) are inapplicable in the instant case, we conclude that the two check transfers at issue can be avoided by the debtor pursuant to section 547(b) of the Code. The facts of the instant case have been stipulated by the parties and are as follows:[1] On October 23, 1981, Brooks Shoe Manufacturing Company, Inc. ("the debtor") filed a petition for reorganization under chapter 11 of the Code. Immediately prior thereto, Metropolitan Edison Company ("Met-Ed"), a public utility company, provided electric service to the debtor pursuant to five separate general service accounts. All of the debtor's electric service accounts were billed monthly and all bills were to be paid within fifteen (15) days after the respective billing dates in order to avoid late payment charges. The transfers which are the subject of dispute in the instant proceeding represent payments made by the debtor to Met-Ed in the form of two checks, the first of which was drafted by the debtor on September 4, 1981, and honored by the debtor's bank on September 10, 1981. The second check in question was drafted by the debtor on September 16, 1981, and was subsequently honored by the debtor's bank on September 23, 1981. It is undisputed that the subject payments were made for the benefit of Met-Ed, while the debtor was insolvent and within ninety (90) days prior to the filing of the petition for reorganization by the debtor. It is also without question that the said payments enables Met-Ed to receive more than it would have received if the debtor had filed a petition under chapter 7 of the Code. On June 21, 1982, the debtor[2] filed the instant complaint against Met-Ed to avoid the aforesaid two payments made by it to Met-Ed. Section 547(b) of the Code provides: (b) Except as provided in subsection (c) of this section, 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 873 (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). Met-Ed contends initially that the subject payments cannot be avoided in accordance with section 547(b) of the Code because said payments constituted contemporaneous exchanges and not payments made on account of antecedent debts. In order to ascertain whether those payments were made on account of an antecedent debt, it must first be determined when the debt was incurred. In this regard, we note that Collier on Bankruptcy provides: The determination of when a debt is actually `incurred' is critical. One view is that the debt is not incurred until an invoice is sent or demand for payment is made. The probably better view is that the debt is incurred whenever the debtor obtains a property interest in the consideration exchanged giving rise to the debt. Thus if goods are identified for shipment, unless the special agreement otherwise provides, the debtor has a special property interest and the debt is `incurred'. Certainly when a debtor uses a utility the debt is incurred at the time the resource is consumed rather than when the invoice is sent (emphasis added). 4 Collier on Bankruptcy ¶ 547.39 at 547-121 (15th ed. 1983). In addition, the court in In re Valley Mechanical Industries, Inc., 20 B.R. 350 (Bkrtcy.N.D.Ga.1982) stated: `Incurred does not necessarily imply `due'. One noted commentary on the bankruptcy laws [Collier] is of the opinion that a debt is incurred at the time that services are rendered or goods delivered and not at the time a bill is sent . . . (quotation omitted). This Court believes that the opinion expressed by Collier is the proper view as to when a debt is incurred. For example, the mere fact that a bill is never sent does not mean that an obligation has not been created, but it means only that payment is not yet due. 20 B.R. at 352-53. See also In re Brown, 20 B.R. 554 (Bkrtcy.S.D.N.Y.1982); In re Ray W. Dickey & Sons, Inc., 11 B.R. 146 (Bkrtcy. N.D.Tex.1980). Therefore, since the debts in the instant case were incurred each time the debtor consumed the electricity provided by Met-Ed, these debts were necessarily incurred prior to the time the debtor paid for such service. See In re Hersman 20 B.R. 569 (Bkrtcy.N.D.Ohio 1982). As Met-Ed has not disputed the existence of any other element necessary to constitute a preference pursuant to section 547(b), the subject payments were preferential in accordance with that section. Whether these preferences may ultimately be avoided depends, in turn, on the applicability of the exceptions to avoidance asserted by Met-Ed. Section 547(c)(1) provides: (c) The trustee may not avoid under this section a transfer (1) to the extent that such transfer was (A) intended by the debtor and the creditor to or for whose benefit such transfer was made to be a contemporaneous exchange for new value given to the debtor; and (B) in fact a substantially contemporaneous exchange; 11 U.S.C. § 547(c)(1)(A), (B). Although Met-Ed contends that the sale of electricity and the payment therefor was intended to be, and in fact was, a contemporaneous exchange, the facts, and Met-Ed's own pleadings, clearly establish that the transactions in question were purely credit transactions. As stipulated to by the parties, the course of dealing between the debtor and Met-Ed reveals that the debtor consumed electricity, was billed at the end of a monthly period for such services, was given at least an additional fifteen (15) days before payment for the services was due and, in fact, never paid for said services 874 until after the due date. Since the dispositive inquiry in construing section 547(c)(1) is "[w]hether the parties at the outset intended the exchange to be contemporaneous," we conclude that Met-Ed's defense asserted under section 547(c)(1) must fail. 4 Collier on Bankruptcy ¶ 547.37 at 547-118 (15th ed. 1983).[3] Met-Ed also contends that the payments made to it by the debtor fall within the second exception to the trustee's avoiding powers contained in section 547(c)(2) of the Code, which provides: (c) The trustee may not avoid under this section a transfer * * * * * (2) to the extent that such transfer was (A) in payment of a debt incurred in the ordinary course of business or financial affairs of the debtor and the transferee; (B) made not later than 45 days after such debt was incurred; (C) made in the ordinary course of business or financial affairs of the debtor and the transferee; and (D) made according to ordinary business terms; 11 U.S.C. § 547(c)(2). Met-Ed suggests at the outset that compliance with all four subsections of section 547(c)(2) is not necessary in order to fall within the exception embodied in that section. Met-Ed states that it is "aware of no authority" which stands for the proposition that the four elements of section 547(c)(2) must be read in the conjunctive. Simply put, the relevant case law does not support that interpretation. In Matter of Donny, 11 B.R. 451 (Bkrtcy.W.D.Wis.1981), the court held that "the exception found in § 547(c)(2) requires all four elements, (A) through (D), to be satisfied in order to prevent avoidance of a preferential transfer of § 547(b)." Id. at 452. See also In re Gulf States Marine, Inc., 6 B.C.D. 79 (Bankr.W.D.La.1980); In re McCormick, 5 B.R. 726 (Bkrtcy.N.D.Ohio 1980). As we have previously held in In re Ardmore Sales Co., Inc., 22 B.R. 911 (Bkrtcy.E.D.Pa.1982), "[i]t is generally held that payment of a debt by check constitutes a transfer under the Code as of the date of payment rather than as of the date of deliver." citing 3 Collier on Bankruptcy ¶ 60.14 at 820 (14th ed. 1977); Matter of Duffy, 3 B.R. 263 (Bkrtcy.S.D.N.Y.1980). See also In re Fabrics of Jericho, 22 B.R. 1010 (Bkrtcy. S.D.N.Y.1982); In re Sportsco, Inc., 12 B.R. 34 (Brktcy.D.Ariz.1981). The same holds true under section 547(c)(2) of the Code. See Naudain, Inc. v. Schaad Detective Agency, 32 B.R. 875 (Bkrtcy.E.D.Pa.1983) citing Matter of Advance Glove Mfg. Co., 25 B.R. 521 (Bkrtcy.E.D.Mich., S.D. 1982). Moreover, a review of the commentaries and decisional interpretations on section 547(c)(2) leads us to conclude that a debt is "incurred" for purposes of 547(c)(2) "on the date the debtor becomes liable for itwhen a resource is consumed or a service performed, not the date that the creditor chooses to bill the debtor." Matter of Emerald Oil Co., 695 F.2d 833 (5th Cir. 1983). See citations and accompanying text appearing on page 873 of this opinion. Therefore, we hold that both of the transfers at issue occurred on the dates the debtor's bank honored the two checks in question. Consequently, since the first check in question was honored by the debtor's bank on September 10, 1981, we conclude that that transfer occurred on said date; and, since the other check at issue was honored by the debtor's bank on September 23, 1981, we likewise hold that the second transfer occurred on that date. With respect to the first check, only $23.14 of that amount represented payment for services rendered within 45 days of the date the check was honored by the debtor's bank. *875 The remainder of said check was applied by Met-Ed for bills conveying services rendered on dates prior to the 45 days before the check was honored. Consequently, $4,257.93 of the first check can be avoided and recovered by the debtor. In regards to the second check, the entire proceeds were applied by Met-Ed to bills for services rendered on dates prior to 45 days before the check was honored.[4] Finally, citing cases decided under the Bankruptcy Act,[5] Met-Ed argues that the subject payments can not be avoided because there was no depletion to the debtor's estate caused by the payment to Met-Ed since Met-Ed provided something in return to the estate.[6] However appropriate and persuasive these decisions may have been under the former Act, the fact remains that Congress has enacted the present Bankruptcy Code and there is no requirement in the Code that an estate be depleted or diminished in order for a preference to be avoided. Consequently, because all the elements of section 547(b) are present in the instant case and because the transfers in question do not fall within the exception to the avoidance powers enumerated in sections 547(c)(1) and 547(c)(2) we will grant the debtor's complaint to avoid the subject transfers. NOTES [1] This opinion constitutes the findings of fact and conclusions of law as required by Rule 7052 of the Rules of Bankruptcy Procedure (effective August 1, 1983). [2] Section 1107(a) of the Code grants the debtor in possession all the rights and powers of a trustee appointed in a case under chapter 11 of the Code. 11 U.S.C. § 1107(a). [3] In its brief, Met-Ed states that "[b]usiness custom and the law regulating public utility companies mandate that a substantial amount of time elapses between the time utility services is [sic] provided and when that service is paid for (emphasis added)." See memorandum of defendant at 3. This averment clearly violates the requirement of § 547(c)(1)(B) that the payments in question be, in fact, substantially contemporaneous. [4] The two checks total $8,415.79. The debtor does not seek the return of the payments of $15.93 and $7.21 applied from the first check. Because Met-Ed continued to provide electrical service to the debtor subsequent to the time the checks were paid, for which the debtor billed a total of $3,296.28, the debtor has agreed that Met-Ed is entitled to retain that amount as it is subject to the exception contained in Section 547(c)(4) and is therefore not an avoidable preference. Therefore, the amount in controversy is $5,096.37. [5] The Bankruptcy Act has been superceded by the Bankruptcy Code as of October 1, 1979. The Bankruptcy Reform Act of 1978, Pub.L. No. 95-598, § 403, 92 Stat. 2683 (1978). [6] See, e.g., National Home Products, Inc., 4 B.C.D. 1295 (Bankr.E.D.La.1978).	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532657/	32 B.R. 308 (1983) In the Matter of GWF INVESTMENTS, LTD, Debtor. Harry J.W. FRAVERT, Trustee in Bankruptcy, Plaintiff, v. IMPERIAL MANAGEMENT, INC. United States of America, Defendants. Bankruptcy No. 3-81-00699, Adv. No. 3-83-0344. United States Bankruptcy Court, S.D. Ohio, W.D. August 12, 1983. 309 Gary W. Crim, Dayton, Ohio, for plaintiff/trustee. Harry J.W. Fravert, trustee/plaintiff. Horace W. Baggott, Dayton, Ohio, for debtor/defendant. Vanessa D. Walton, Asst. U.S. Atty., Dayton, Ohio. ORDER CHARLES A. ANDERSON, Bankruptcy Judge. This matter is before the Court upon Complaint filed 16 May 1983. The Complaint alleges that the subject property, an apartment complex (consisting of 10 buildings and 120 apartments units, a swimming pool and clubhouse), is presently being improperly managed and maintained, and requests an order authorizing replacement of Defendant Imperial Management, Inc. as manager. On 2 June 1983, Defendant Imperial Management, Inc. filed an Answer essentially denying that the above-captioned Debtor has any interest in the subject property. On 8 June 1983, Defendant United States of America on behalf of the Secretary of Housing and Urban Development (hereinafter HUD) also filed an Answer denying that the subject property is property of Debtor's estate. The United States further responds that the subject property is presently the subject of a pending foreclosure action commenced 1 July 1981 in the "adjunct" United States District Court, styled United States v. Frederic E. Gagel, Canterbury Runn Apartments, et al., Civ. No. C-3-81-357. The United States further requests "any relief necessary for HUD to continue its foreclosure suit and place a Receiver or HUD in possession as Mortgagee-in-Possession of Canterbury Runn Apartments." The Court considered the matter at a pretrial conference held 14 June 1983 and a status conference held 17 June 1983. The matter was then continued because the parties had, apparently provisionally, settled the matter. This settlement was never journalized by the anticipated agreed order. The Court then reset the request for relief from stay in the Answer of the United States seeking "relief necessary to HUD to continue its foreclosure suit," and heard the matter on 8 August 1983 conformably to 11 U.S.C. § 362(e). No evidence was adduced as to current valuation of the property, although the Plaintiff has posed the question of "adequate protection." Upon review of the record, it is the determination of the Court that conditional relief from stay should be granted. In this regard, the Court specifically finds that "cause" has been established pursuant to 11 U.S.C. § 362(d). This finding is based upon the considerable delay since commencement of the foreclosure action over two years 310 ago; that no payments have been made on the mortgage during the pendency of the Chapter 11 case filed by GWF Investments, Ltd. on 4 March 1981 scheduling ownership of Canterbury Runn Apartments; and also the facts of record, as alleged by the Complainant and only party objecting to relief, that the property is presently improperly managed and maintained, thus obviating the necessity of additional testimony regarding valuation. As of December 31, 1982, the delinquencies in payment of principal, interest, service charges and reserves as required by the mortgage to HUD total $2,139,610.48, and the interest accrual factor is $367.60710 to $379.86067 per day. The Court also notes that any interest the estate may possess in the subject property is presently, at best, speculative. Furthermore, after the sale is complete, it is possible that any interest the estate may arguably possess might be mooted by distribution of all proceeds to secured parties. In addition, any jeopardy to the property created by the present management may be immediately and most efficiently resolved by district court receivership. The court further notes that the ownership of Canterbury Runn Apartments as an asset in the estate of GWF Investments, Ltd. was not questioned during the administration of the Chapter 11 Case since 4 March 1981, even though a Trustee was appointed on 17 March 1982 and the Plaintiff herein, Harry J.W. Fravert, was duly appointed as Successor Trustee on 24 September 1982. Although Defendant, Imperial Management, Inc. by motion filed 2 June 1983 alleges "the Debtor, GWF Investments, Ltd., has no interest in the property known as Canterbury Runn," . . . the President of this Defendant, by its President Frederic E. Gagel, has regularly filed with the Trustee monthly cash reconciliations, and detailed statements of rental income and cash disbursements showing management fees in excess of the management agreement and continuous net operating losses. This same Frederic E. Gagel is the same person who as managing general partner of GWF Investments, Ltd. instituted the Chapter 11 case, scheduling Canterbury Runn, Ltd. as partnership property of GWF Investments, Ltd., with a valuation of $2,300,000.00. The first mortgage principal indebtedness to HUD on 1 July 1970 was in the amount of $1,635,000.00 and the Answer filed in behalf of Imperial Management, Inc. on 2 June 1983 admits the validity and priority thereof, although denying that Plaintiff "has, as Trustee, any interest over the property known as Canterbury Runn," and alleging "that the deed to Canterbury Runn is in the name of Frederic E. Gagel." Many of the multifarious and inconsistent statement of record by Frederic E. Gagel in his numerous postures and capacities are sworn statements under oath. The Court is constrained to conclude that counsel for the Trustee places undue emphasis upon whether there might be some "equity" in the real estate collateral. On the facts, such a proposition appears to be somewhat fantastic; but, this is not the crucial factor instanter. "Adequate Protection" by any definition encompasses more than conjectural "appraised" values. Other causes exist now such as the depreciation in values and monetary losses experienced over a period of nearly three years of unprofitable management both before and since the filing of the GWF case. Further, the completion of the foreclosure litigation in the District Court, wherein no title or ownership questions have been raised, is the proper forum to provide adequate protection to all parties in an early realization of economic values. To intensify this obvious conclusion, attention is also directed to the Congressional intent giving rise to 11 U.S.C. § 362(b)(7), which enacts an exception to the prohibition of the commencement of mortgage foreclosure suits by HUD for all property consisting of five or more living units. Obviously, the "commencement" of an action is not now involved; but, the Congressional intent of encouraging private investors to use their own capital to finance projects for development of housing in this country must not be ignored in light of extreme *311 delays, as sub judice. Hence, although continuation of a pending HUD foreclosure is stayed, an inordinate abuse of the stay, as herein, should not be condoned by the court. Certainly, adequate protection to the mortgage must be more sound than fanciful conjecture. IT IS HEREBY ORDERED that the Defendant United States of America is GRANTED RELIEF FROM STAY TO PROCEED IN the aforementioned FORECLOSURE action. IT IS FURTHER ORDERED that this relief is CONDITIONED upon this Court's RESERVING JURISDICTION as to the ownership interest of GWF in the property subject to the first and best mortgage lien of HUD and the delinquent taxes and the concomitant question of the proper distribution of any excess value after a foreclosure sale, AND ALSO the Trustee's RESERVING THE RIGHT TO SELL THE SUBJECT PROPERTY upon payment in full of the balance owing to Defendant United States of America UNTIL the property is sold by the Department of Housing and Urban Development to a third party bona fide purchaser. IT IS FURTHER ORDERED that Plaintiff Trustee SHALL BE HELD HARMLESS in his proper exercise of fiduciary responsibilities over the property, as scheduled in the GWF Investments, Ltd. Chapter 11 Case and also as to administrative expenses and costs incurred thereby. IT IS FURTHER ORDERED that the Trustee is authorized to continue to sign management checks and to oversee the property until order is issued by the District Court placing the mortgagee in possession, or the appointing of a receiver.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532638/	368 S.W.2d 122 (1963) Wesley Howard WILLIAMS, Appellant, v. EMPLOYERS MUTUAL CASUALTY COMPANY, Appellee. No. 14095. Court of Civil Appeals of Texas, San Antonio. May 8, 1963. Rehearing Denied June 5, 1963. 123 Wade & Howard, Corpus Christi, for appellant. Keys, Russell, Keys & Watson, Corpus Christi, for appellee. BARROW, Justice. This is an appeal by Wesley Howard Williams from a take-nothing summary judgment granted Employers Mutual Casualty Company in a suit filed by Williams on two drafts issued by appellee. Payment was refused when the drafts were presented. The facts are not in dispute and both parties filed motion for summary judgment. The question presented is whether there was consideration for the issuance of the drafts. The trial court found there was none and granted appellee's motion. The motions for summary judgment were based on the depositions of appellant, his employer, and his employer's bookkeeper. For several years prior to September 29, 1960, appellant was employed as a salesman for Dixie Enginaids Company. His territory was a large part of South Texas and the Rio Grande Valley, with his headquarters in Corpus Christi. On that date Williams was involved in an automobile collision with a third party and sustained personal injuries whereby he incurred medical expenses in the amount of $509.25. At the time of the accident he was admittedly in the course and scope of his employment for Dixie Enginaids Company. Appellee had issued a liability policy to that company on the automobile operated by appellant, which provided $2,000.00 medical payment benefits for bodily injury sustained as the result of an automobile accident while in the insured vehicle. This coverage contains an exclusion that it does not apply to bodily injury "of any employee of insured arising out of and in the course of (1) domestic employment by the named insured, if benefits therefor are in whole or in part either payable or required to be provided under any workmen's compensation law, or (2) other employment by the named insured." Dixie Enginaids carried a policy of workmen's compensation insurance on its employees, but appellant elected to settle with the insurance carrier for the third party. He knew that this election precluded him from asserting a claim for compensation benefits. Hart v. Traders & General Insurance Co., 144 Tex. 146, 189 S.W.2d 493. Dixie Enginaids also carried a group hospitalization policy for its employees and appellant made application for payment under that policy. It was declined after appellant advised that company that he was within the scope of his employment at the time of the accident and eligible for benefits under workmen's compensation law. A representative of the third party insurance carrier advised appellant that he could recover medical benefits under his own automobile liability policy. He did not have a personal policy on the car, but contacted appellee. On June 8, 1961, Mr. Rojo, an adjuster for appellee, contacted appellant and, after some discussion as to whether the policy contained an endorsement providing medical payments coverage, issued the two drafts sued on herein. The drafts were for the exact amount of the medical expenses paid or incurred by appellant as a result of injuries sustained in the collision. At the time of the delivery of the drafts, appellant was required to execute a receipt and release whereby he released and discharged appellee from any and all liability whatsoever under the medical payments coverage of the automobile liability policy issued to Dixie Enginaids. The next day, after issuing the drafts, Rojo telephoned appellant and advised him of the exclusion in the policy and that payment on the drafts would be stopped. This type of coverage is a comparatively new form of insurance. The liability 124 of the insurer under such a provision is based upon contract and not upon negligence of the insured. 42 A.L.R. 2d 983. Appellant's medical expenses were excluded under the express terms of the policy provisions. He admittedly was in the scope of his employment and furthermore his employer had a policy of workmen's compensation insurance whereby medical benefits were either payable, or required to be provided, for the injuries sustained by appellant. Art. 8306, § 7, Vernon's Ann.Civ. Stats. Appellant relies primarily upon the recent New Jersey case of Hunt v. Hospital Service Plan of New Jersey, 33 N.J. 98, 162 A.2d 561. There Hunt sought to recover under a hospitalization policy issued by defendant for medical bills incurred by his wife. The policy excluded payment for medical expenses "which were in whole or in part compensable under any state workmen's compensation law." The defendant contended that since Mrs. Hunt was injured while in the scope of her employment, this exclusion applied. The Supreme Court of New Jersey held that, since the Compensation Board had ruled that the medical charges were not "compensable" as they were not authorized by her employer as required under New Jersey law, the exclusion was not applicable and permitted recovery by Hunt. This rule would not apply here, in that the policy issued by appellee excluded benefits which were not only payable, but which were required to be provided, under the workmen's compensation law. The benefits were not paid to appellant because of his own election to recover from the third party. Appellant asserts that there was consideration for the drafts in that they were issued in compromise of a disputed claim. It is settled that a compromise agreement made in settlement of a doubtful claim is supported by sufficient consideration. Aydelotte v. Anderson, Tex.Civ.App., 284 S.W.2d 804; Cleburne State Bank v. Ezell, Tex.Civ.App., 78 S.W.2d 297; Walker-Smith Co. v. Pouns, Tex.Civ.App., 256 S.W. 613. These cases are distinguishable in that here the drafts were issued not in compromise but for the exact amount of a liquidated claim. The drafts were issued through a mistake as to the coverage provided under the policy. This is not consideration. Columbian Nat. Fire Ins. Co. v. Dixie Co-op Mail Order House, Com.App., 276 S.W. 219; Burkett v. Cluck Grain Co., Tex.Civ.App., 266 S.W.2d 425; Prigmore v. Hardware Mut. Ins. Co. of Minnesota, Tex.Civ.App., 225 S.W.2d 897; 9 Tex.Jur. 2d, Bills and Notes, § 40. Appellant further asserts that there was consideration in that he was required to execute a release of his claim for any other medical expenses he might incur as a result of the accident. A recent case has held that where the beneficiary is paid the exact amount admittedly due him, there is no consideration for a full release executed by him of any other sums which might be owed under the medical payments coverage. Southwestern Fire & Casualty Co. v. Atkins, Tex. Civ.App., 346 S.W.2d 892. There the insured was permitted to recover an additional $500.00 the Court found was owed under the medical payments coverage of a liability policy, even though the insured had signed a full release upon receipt of $500.00 which the company admitted it owed. The Court there quoted with approval from Woodmen of the World Life Ins. Soc. v. Armstrong, Tex.Civ.App., 170 S.W.2d 526, as follows: "`The real question involved was whether or not there was a consideration for the execution of the receipt by appellee; appellant having paid the amount admitted to be due, we do not think there was any consideration for the remission by appellee of the remainder of her claim under the certificate. * * * So, we conclude that appellant's contention that there was an accord and satisfaction is without merit, and is overruled.' *125 See also Woodmen of World Life Ins. Soc. v. Smauley, Tex.Civ.App., 153 S.W.2d 608." The release executed by appellant was in exchange for drafts in the exact amount of his medical expense, and there is no consideration for release of any additional medical expense which might be incurred under the coverage provided for in the policy. The judgment of the trial court is affirmed.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532655/	368 S.W.2d 385 (1963) Joseph H. LANGWORTHY, Appellant, v. The PULITZER PUBLISHING COMPANY, a corporation, Respondent. No. 49669. Supreme Court of Missouri. Division No. 2. May 13, 1963. Motion for Rehearing or for Transfer Denied June 4, 1963. 387 Joseph Langworthy, Pacific, pro se. Robert D. Evans, Robert B. Hoemeke, Green, Hennings, Henry, Evans & Arnold, St. Louis, for respondent. Motion for Rehearing or for Transfer to Court En Banc Denied June 4, 1963. STOCKARD, Commissioner. Plaintiff has appealed from a judgment dismissing his petition for libel on the ground that it failed to state a claim upon which relief may be granted. On May 11, 1956, defendant published the following article in its newspaper of general circulation: "`TOWHEAD PETE'S' GANG OF 5 BOYS, 4 GIRLS SEIZED. "`Towhead Pete' and his gang were rounded up today by county detectives at the personal direction of Superintendent of Police Albert E. DuBois, who found himself on a `hot spot.' "Joseph H. Langworthy, an attorney of 512 Ivy Avenue, Times Beach, reported someone had pushed open a window at his home and had taken three pieces of Swiss cheese, a piece of cake, some jello and $20. He wanted something done about it and told police so in emphatic terms. "The gang of `Towhead Pete' was rounded up. It consists of five boys12, 10, 6, 5 and 2 years oldand four girls, 13, 8, 6 and 4 years. They admitted getting into the house, but insisted they found only 28 cents and not $20. "After a lecture at police head quarters, they were turned over to juvenile authorities for another lecture, that is, all except the 2-year-old, who was in diapers and police said they `couldn't pin anything on him, anyway.'" Plaintiff alleged in his petition that "said matter" was "false, malicious, and defamatory" to him and that it was published concerning him "with actual malice" and was an invasion of his right of privacy in that it was unwarranted by the incidents which actually occurred, that the public had no legitimate concern in the matter as published, and that the article was published without his consent or prior knowledge. He then alleged that "said matter" was false in that (a) there was no person involved either named or known as "Towhead Pete," "Pete" or "Peter;" (b) no child involved was as young as the age of four years or who was in diapers; and (c) there was no child involved about whom the police made the statements attributed to them. He then alleged that the "matter published" was a "false and unfair abridgement of what actually occurred" in that (a) the incidents which actually occurred and were reported by him to the police "included a long series of crimes" or "repeated acts of larceny, stealing, burglary, and vandalism," a number of the children involved were "delinquent children who needed help," and while repeated efforts to secure help had been made by him, the juvenile authorities took the position that the detection of one further crime would have to be made before they would proceed against the delinquent children; (b) the published article reported as a single incident a garbled version of two or more incidents but omitted some of the articles which were stolen, and also omitted the fact that the children which were involved broke into and entered the dwelling house of plaintiff by forcibly breaking an outer window with intent to commit a felony therein; and (c) the published article omitted the fact that most of the money stolen was that of plaintiff's 7-year-old daughter which she was proudly saving to buy a bicycle and that the loss was a strong emotional shock to her. Plaintiff then purported to plead innuendoes as follows: "Said matter" meant, was intended to mean, and was understood by those to whom published that (a) plaintiff had 388 falsely reported that more money was stolen than was actually taken and therefore was untruthful and for that reason not well-suited for his professional duties as an attorney; (b) plaintiff was "an inordinately selfish and egocentric person who greatly magnified and enlarged the importance of a trivial wrong committed against him by small children and demanded police action against the perpetrators of such wrong to an extent that he was ridiculous;" (c) plaintiff was "lacking in the good judgment, balance, and regard for others requisite to the proper performance of his professional duties as an attorney;" and (d) plaintiff "used undue and unwarranted pressure on public officials in a manner not befitting an attorney in the sense that he demanded police action beyond the point of good judgment and to the extent that he was ridiculous." In conclusion plaintiff alleged that the publication caused him "great humiliation, mortification, shame, embarrassment, and mental suffering," and that "said matter" was a "malicious defamation" of him in that it tended to provoke him to wrath and expose him to public hatred, contempt and ridicule and deprive him of the benefits of public confidence and social intercourse and intended to injure and did injure him as a member of his profession. He prayed for $10,000 actual and $10,000 punitive damages. In view of plaintiff's attempt to plead several innuendoes we should set forth certain basic rules pertaining to the law of libel and thereby define and delineate the precise issues for determination. Words which are defamatory per se, that is, defamatory on their face without the aid of extrinsic proof, are actionable and the allegation in the petition of extrinsic facts in the form of what is referred to as the inducement and innuendo is not required in order to state a cause of action. 53 C.J. S. Libel and Slander §§ 8 and 162; Chambers v. National Battery Co., 34 F. Supp. 834. In such event the law presumes damages which may be alleged generally, 53 C.J.S. Libel and Slander §§ 170b and 262; Eby v. Wilson, 315 Mo. 1214, 289 S.W. 639, 50 A.L.R. 268, and special damages need not be alleged although proof of actual damage may be made to support the presumption of injury and to show its extent. 53 C.J.S. Libel and Slander §§ 264 and 265. A petition based on published words not defamatory per se may state a cause of action for what is referred to as libel per quod. See Nordlund v. Consolidated Electric Co-operative, Mo., 289 S.W.2d 93, 57 A.L.R. 2d 832; 53 C.J.S. Libel and Slander § 8, pp. 43-44. However, the petition must allege extrinsic facts which show that although the words published were not libel per se they were in fact defamatory, and it is the uniform rule in Missouri and elsewhere that in such situation special damages must be pleaded in order for the petition to state a cause of action. Nordlund v. Consolidated Electric Cooperative, supra; Eby v. Wilson, supra; Furlong v. German-American Press Ass'n, Mo., 189 S.W. 385; Mitchell v. Bradstreet Co., 116 Mo. 226, 22 S.W. 358, 724, 20 L.R.A. 138; Curry v. Collins, 37 Mo. 324; National Refining Co. v. Benzo Gas Motor Fuel Co., 8 Cir., 20 F.2d 763; McBride v. Crowell-Collier Pub. Co., 5 Cir., 196 F.2d 187; Chambers v. National Battery Co., 8 Cir., 34 F. Supp. 834; Cal-Therm Industries, Inc. v. Dun & Bradstreet, Inc., D.C., 75 F. Supp. 541; Landstrom v. Thorpe, 189 F.2d 46, 26 A.L.R. 2d 1170, certiorari denied, 342 U.S. 819, 72 S. Ct. 37, 96 L. Ed. 620; Muchnick v. Post Publishing Co., 332 Mass. 304, 125 N.E.2d 137, 51 A.L.R. 2d 547; 33 Am.Jur., Libel and Slander § 243; 53 C.J.S. Libel and Slander § 170a. Plaintiff has pleaded no special damages in this case. Therefore, for the petition to state a cause of action the published words must constitute libel per se. "In determining whether language is libelous per se, it must be viewed stripped of any pleaded innuendo. The meaning of the phrase `per se' is `taken alone, in itself, by itself.' Words which are libelous per se do not need an innuendo, and, conversely, 389 words which need an innuendo are not libelous per se." Shaw Cleaners & Dyers, Inc. v. Des Moines Dress Club, 215 Iowa 1130, 245 N.W. 231, 86 A.L.R. 839. The motion to dismiss the petition for failure to state a claim upon which relief may be granted does not admit the construction of the words pleaded in an innuendo, Fritschle v. Kettle River Co., 346 Mo. 196, 139 S.W.2d 948; Hylsky v. Globe Democrat Pub. Co., 348 Mo. 83, 152 S.W.2d 119, and whether the alleged libelous words, when given their natural meaning, Bernhardt v. Armbruster, Mo.App., 217 S.W.2d 759; Lightfoot v. Jennings, 363 Mo. 878, 254 S.W.2d 596, are "capable of the defamatory meaning ascribed to them" is a question of law for the court to decide on a motion to dismiss. Cook v. Pulitzer Pub. Co., 241 Mo. 326, 145 S.W. 480, 485. Section 559.410, RSMo 1959, V.A. M.S., defines libel as follows: "A libel is the malicious defamation of a person made public by any printing, writing, sign, picture, representation or effigy tending to provoke him to wrath or expose him to public hatred, contempt or ridicule, or to deprive him of the benefits of public confidence and social intercourse, * ." The Missouri courts, as is set out in Coots v. Payton, 365 Mo. 180, 280 S.W.2d 47, have uniformily held that the published writing must itself amount to a "defamation," and that if in addition (and only if) it also exposes one to hatred or contempt, etc., it is libelous. It was held in Diener v. Star-Chronicle Pub. Co., 232 Mo. 416, 135 S.W. 6, 11, that "There must be defamation in a libelous sense before there can be a libel. * * To make a libel there must be defamation in the sense of the law, before the public scorn and contempt feature is operative. Defamation includes the idea of calumny, aspersion by lying; the injury of another's reputation in that way. To defame is to speak evil of one maliciously, to dishonor, to render infamous." What is there defamatory about plaintiff in the published article? We can find nothing. The most that can be said is that in some small way it may have subjected plaintiff to ridicule. However, "a communication is not defamatory solely because it may expose one to ridicule in the sense, at least, that it exposes him to tests or injured personal feelings. And, however difficult it may be to formulate a definition of `defamatory' which may be applied in determining whether particular words constitute a `defamation' we need go no further * * * than to reach the conclusion that words do not constitute a `defamation' solely because they subject one to ridicule." Coots v. Payton, supra, 280 S.W.2d at p. 54. No reasonable construction of the published words in this case could result in them being defamatory of plaintiff. For that reason the publication of them did not and could not be found to constitute libel per se, and the petition does not state a cause of action for libel. Plaintiff next asserts that his petition, although in one count only, also states a claim for invasion of privacy. He cites several cases including Barber v. Time, Inc., 348 Mo. 1199, 159 S.W.2d 291. In that case this court recognized that such a cause of action exists in this state and it stated that "establishing conditions of liability for invasion of the right of privacy is a matter of harmonizing individual rights with community and social interests." It was then held: "The determination of what is a matter of public concern is similar in principle to qualified privilege in libel. It is for the court to say first whether the occasion or incident is one of proper public interest. * * * If the court decides that the matter is outside the scope of proper public interest and that there is substantial evidence tending to show a serious, unreasonable, unwarranted and offensive interference with another's private affairs, then the case is one to be submitted to the jury." Plaintiff alleged that he did report to the police that a number of children had broken into his house and committed a theft. That report and the resulting action of the police was properly a matter of public interest *390 and defendant could comment thereon in its newspaper. The fact that plaintiff may think the comment was not as complete or accurate as he would have preferred it to be does not result in the publication constituting an invasion of his privacy when it did not constitute "a serious, unreasonable, unwarranted and offensive interference" with his private affairs. No action for damages lies against a newspaper for merely inaccurate reporting when the publication does not constitute libel. See 66 C.J.S. Newspapers § 21. In addition, the right of privacy is not an absolute right, and it protects only the ordinary sensibilities of an individual and not supersensitiveness. 77 C.J.S. Right of Privacy § 2. Admittedly it is difficult to define precisely the limits of what is and is not an actionable invasion of privacy, but some factual situations so clearly and unquestionably do not result in an invasion of privacy that the courts should so declare as a matter of law. We have no hesitancy whatever in ruling that the subject of the publication in this case was a matter of public concern, and even if the published report was incomplete and in the asserted respects inaccurate it did not constitute an actionable invasion of the privacy of plaintiff. Plaintiff also asserts that his petition should be construed to state a cause of action for emotional suffering. "The rule is well established that, in the absence of evidence of an unlawful invasion of one's rights under circumstances of malice, wilfulness, wantonness, or inhumanity, there is no recovery for fright, terror, anxiety, mental distress, or nervousness, unless these are accompanied by some physical injury." Gambill v. White, Mo., 303 S.W.2d 41, and see the numerous cases there cited. This rule applies equally as well to a claim for damages for emotional suffering when there is no actionable invasion of plaintiff's rights. We need not indicate whether emotional suffering would be an element of damages in an action for libel or invasion of privacy. It is sufficient to rule, which we do, that it alone does not give rise to a separate cause of action. The petition was properly dismissed, and the judgment is affirmed. BOHLING and BARRETT, CC., concur. PER CURIAM. The foregoing opinion by STOCKARD, C., is adopted as the opinion of the Court. All of the Judges concur.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532691/	368 S.W.2d 159 (1963) Miriam F. SPRAY, Appellant, v. George Clifford SPRAY, Appellee. No. 11091. Court of Civil Appeals of Texas, Austin. May 15, 1963. Rehearing Denied May 29, 1963. Sharpe & Hardy, Brownsville, J. I. Simon, Pittsburgh, Pa., for appellant. Mathews & Walsh, Brownsville, for appellee. HUGHES, Justice. This is a divorce suit in which George Clifford Spray, appellee, was granted a divorce from appellant, Miriam F. Spray. 160 Appellant has four points which present but two questions, (1) that the Trial Court erred in finding that appellee at the time of exhibiting his petition was an actual bona fide inhabitant of this State for a period of twelve months next preceding its filing as required by Art. 4631, Vernon's Ann.Civ.St. and (2) that divorce should have been denied because appellee was, at the time of trial, living bigamously with a common law wife. This suit was filed November 8, 1961. Appellee testified that he moved from Pennsylvania and came to Texas on November 1, 1960, and that he had lived in Brownsville, Cameron County since November 13, 1960. The move from Pennsylvania was on the advice of appellee's physician. He chose Brownsville because of its sub-tropical climate. He obtained a driver's license in Texas in March, 1961. Appellee repeatedly testified that he intended to make Texas his home from the date he entered Texas. The fact that appellee, age 62, did not purchase a home in Texas, but lived in a motel, and that he received mail in places other than in Texas, are of an inconclusive nature, being evidentiary only. The Trial Court was fully warranted in finding that appellee was a bona fide inhabitant of Texas for the required period, and appellant's point to the contrary is overruled. We also overrule the contention that appellee's immoral conduct precludes his right to a divorce upon the ground it was granted. The Court found that the parties were married on December 31, 1923, and have lived separate and apart without cohabitation since March 30, 1952. Art. 4629, V.A.C.S., provides, in part, "A divorce may be decreed in the following cases: * * (4) Where a husband and wife have lived apart without cohabitation for as long as seven (7) years; * *." Appellant does not attack the above finding of the Trial Court, and we, therefore, do not review the evidence to sustain it. Appellant merely asks us, in effect, to amend the divorce statutes to include the proviso that divorce on the ground of separation shall not be granted if the spouse seeking divorce has committed bigamy. We have no such authority. The custodian of this authority is our Legislature. Pappas v. Pappas, 146 S.W.2d 1115, Galveston Civ.App., Divorce and Separation, Vol. 20 Tex.Jur.2d, Sec. 3. Other Courts have considered the complaint which appellant makes and, invariably, it has been denied. We merely cite them because it is inappropriate that we utilize space in discussing a point settled beyond our power to unsettle. Robertson v. Robertson, 217 S.W.2d 132, Fort Worth Civ.App., Christopher v. Sims, 234 S.W.2d 901, Dallas Civ.App., writ ref., n. r. e., Helfer v. Helfer, 342 S.W.2d 8, Fort Worth Civ.App. The judgment of the Trial Court is affirmed. Affirmed.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532701/	368 S.W.2d 185 (1963) Ex parte J. C. WAGNER and Wife, Mardess Wagner. No. A-9516. Supreme Court of Texas. May 22, 1963. Rehearing Denied June 19, 1963. Kuykendall & Kuykendall, Austin, LeVoy Musick, Houston, for relators. Adams & Granberry, Crockett, for respondent. STEAKLEY, Justice. This is an original habeas corpus proceeding. Relators, J. C. Wagner and wife, Mardess Wagner, were committed to jail on December 27, 1962, pursuant to an order of commitment of the county judge of Houston County. They were released on March 22, 1963, pursuant to our order granting a writ of habeas corpus. On March 30, 1962, one P. S. Berry filed a forcible detainer action against relator J. C. Wagner in the justice court of Houston County. Berry was given judgment and Wagner appealed to the county court. In the appeal cause No. 3063 the county court by judgment dated August 7, 1962, decreed that Berry have restitution of the property in question, and a writ of restitution was served on J. C. Wagner on August 11. Under date of October 25, 1962, Berry filed suit for injunction against relators in the county court of Houston County. The suit was assigned cause No. 3079. Berry alleged that he was the owner of the tract of land in question; that he had recovered judgment against J. C. Wagner in cause No. 3063 for restitution and possession of 186 the premises; and that a writ of restitution in enforcement of the judgment had been issued and served. He further alleged that relators "will immediately or shortly after such restitution re-enter upon such premises and again take possession," and that he "has no means by which he can hold and retain possession of said premises except by writ of injunction." His prayer was that relators "be temporarily enjoined from taking possession of, holding possession of, or interfering with plaintiff's possession of, said house and premises," and for permanent injunction. On October 26 the judge of the county court granted a temporary restraining order enjoining relators from "taking or holding possession * * and from interfering in any way with the plaintiff, P. S. Berry, exercising possession of, and having possession of, said house and premises." A temporary injunction to the same effect as the restraining order was granted on November 5; the order of the court recited that the plaintiff was entitled to the temporary injunction "for the reason that the property and premises described in plaintiff's petition are owned and belong to plaintiff." Subsequently, the attorney for Berry filed a complaint supported by affidavit charging that relators on or about November 6 entered upon and took possession of the premises wilfully and without justification and in defiance of the order of the court granting the temporary injunction. Acting thereon, the court ordered that attachment issue for relators to personally answer the complaint on December 27. Upon hearing, the court found that relators were in contempt of the temporary injunction order by entering upon and taking possession, and holding possession, of the premises. The court decreed that relators pay "a fine of $No as a punishment of the contempt aforesaid and that they forthwith turn over and deliver to P. S. Berry the house and premises above described and that they both and each be imprisoned in the common jail of Houston County, Texas, until each of them shall pay the said fine of $No as herein described and until they and each of them shall turn over and deliver to the said P. S. Berry the house and premises in Houston County, Texas, belonging to the said P. S. Berry * * ; or until they and each of them shall be discharged by the further order of this court * ." Relators attack the order of commitment on the sole ground that it was void because based on an attempted adjudication of title beyond the jurisdiction of the county court. There is no attack upon the factual basis supporting the temporary injunction and contempt orders. See Ex parte Arapis, 157 Tex. 627, 306 S.W.2d 884. In the forcible detainer suit instituted by P. S. Berry neither the justice court nor the county court undertook to adjudicate title and the final judgment therein was for possession only. The injunction suit instituted by Berry was ancillary to, and brought for the enforcement of, the prior judgment of the same court ordering the relator J. C. Wagner to restore possession of the premises to Berry. The fact that it was assigned a different cause number is not controlling. The recitation in the order granting the temporary injunction that the plaintiff was entitled thereto for the "reason" that the plaintiff was the owner of the property does not render the order void as an assertion of jurisdiction to adjudicate title to the property. We will presume that the court did not undertake to exercise a jurisdiction which was not invoked and which was beyond its powers. Although not raised by relators, we note that the performance required of relators to purge themselves under the terms of the contempt order is to "turn over and deliver to the said P. S. Berry the house and premises." Imprisonment for an indefinite period in a civil contempt is a recognized remedial measure to coerce a contemner to do an act within his power to perform. but he must have the means by which he may purge himself. Under 187 the terms of the contempt order here the possibility is apparent that the relators cannot discharge themselvesdo not carry the keys to their jail in their pocket, see Ex parte De Wees, 146 Tex. 564, 210 S. W.2d 145because the incarceration itself may have accomplished that which relators were required to do. The imprisonment of relators removed them from possession of the house and premises and may have made it possible for Berry to regain possession, hence there was no additional performance by which relators could obtain their liberty. However, the record does not include a statement of facts and we must presume there was evidence to support the contempt judgment of the court. See City of Galveston v. Hill, 151 Tex. 139, 246 S.W.2d 860. For example, relators may have been continuing to hold possession of the property by means of an agent whom they could direct to relinquish possession. Relators are remanded to the sheriff of Houston County.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532695/	368 S.W.2d 883 (1963) James H. COKER et al., Appellants, v. WESCO MATERIALS CORPORATION, Appellee. No. 3811. Court of Civil Appeals of Texas, Eastland. May 10, 1963. James C. Tubb, Dallas, for appellants. Strasburger, Price, Kelton, Miller & Martin, Dallas, for appellee. COLLINGS, Justice. James H. Coker and James B. Tuggle brought separate suits against Wesco Materials Corporation for the alleged breach of employment contracts. The cases were consolidated and the motion of the defendant for a summary judgment was granted. Coker and Tuggle have appealed. Appellants present one point of error in which it is contended that the court erred in sustaining the motion for summary judgment of Wesco Materials Corporation, hereinafter referred to as Wesco. Appellants urge that the pleadings, depositions and affidavits before the court presented questions of fact concerning the existence of appellants' alleged cause of action. In the pleadings of appellants it is contended that each of them was employed by Wesco for a period of one year at specified salaries to perform certain duties. The contracts of employment were in letter form, signed or countersigned by Thomas L. Amis, Vice-President of Wesco. Wesco's pleading contained a general denial and further allegations that appellants had breached their contracts of employment in that they failed to render satisfactory performance and that willful conduct by appellants detrimental to the welfare of Wesco necessitated termination of their employment. Wesco filed a motion for summary judgment alleging that there was a provision in the employment contracts to the effect that appellants' employment was contingent upon satisfactory performance on their part; that the performance of Tuggle 884 and Coker was not satisfactory to Wesco and that no bona fide issue of fact existed upon which appellants could show a right to recover; that the record was undisputed that the performance of appellants was not satisfactory to Wesco. In support of Wesco's motion for summary judgment it filed and submitted certain depositions and affidavits. Appellants duly replied to the motion. The contracts of employment relied upon by appellants are included in the record and by their express terms are contingent upon satisfactory performance by appellants Coker and Tuggle. The depositions and affidavits presented by Wesco show that Wesco contends it was not satisfied with the performance of Coker and Tuggle. Appellants contend that any dissatisfaction on the part of Wesco and its directors was feigned and without basis or justification. They contend and the record shows that everything they did as employees was known of and approved by Mr. Tom Amis, Vice-President and General Manager of Wesco, under whom they worked and who was instrumental in their employment. The general rule in such cases is that the employee may question the honesty and good faith of his employer's dissatisfaction, and that a feigned dissatisfaction is not sufficient justification to avoid the continuation of a contract of employment. The question of good faith thus may become a question of fact, the burden of proof being upon the employee to show that the claimed dissatisfaction is not in good faith. Golden Rod Mills v. Green, Tex. Civ.App., 230 S.W. 1089; Dallas Hotel Co. v. Lackey, Tex.Civ.App., 203 S.W.2d 557; 56 C.J.S. § 32, p. 418; 35 Am.Jur. 464; Atlas Torpedo Co. v. United States Torpedo Company, Tex.Civ.App., 15 S.W.2d 150. The record presents most unusual and peculiar circumstances concerning appellants' employment and connection with appellee Wesco Corporation. It is undisputed that appellants were employed by the corporation in November 1960, as Assistant Directors of Industrial Engineering for a period of one year at an annual salary of $10,000.00. The record further shows that in April of 1961, Mr. Pickens, the President of Wesco, and its Board of Directors discovered that a secret group had developed among some of its officers and employees. The group was confined principally to the marketing department. It is undisputed that this group of employees had come under the influence of and gave its allegiance to a man by the name of Higginbotham, who was neither officer, director, stockholder nor employee of the corporation and of whose existence the President and Board of Directors had no knowledge whatever. Higginbotham purported to be a psychologist and business consultant and apparently was able to exert considerable control over those who came under his influence. Through Mr. Amis who was an officer in the company, Higginbotham was able to bring about the employment of men of his choice, in all a total of about 15 employees, including Mr. Robinson who was made an official in charge of the marketing division. In this manner Higginbotham acquired considerable control over the activities of the company. The members of this group referred to themselves as the marketing team. Each of them paid Higginbotham $50.00 per week out of their salaries for his instructive sessions. During a portion of the time they paid him an additional $25.00 per week for the purpose of hiring a private detective to shadow the President of the company. These employees of Wesco furnished Higginbotham with full confidential information of Wesco's sales, costs, production, financial condition and other private facts concerning the corporation. All of this was done without the knowledge of or authority from the Chairman of the Board of Directors, the President, or the controlling stockholders of the corporation. It was, however, done with the knowledge and approval of Amis, who was Vice-President and General Manager of the corporation. The business decisions of this group were dictated by Higginbotham. It is undisputed 885 that Higginbotham instructed such employees, including Coker and Tuggle to reimburse themselves for the $25.00 payments to be used for shadowing the President by padding their expense accounts. Appellants Coker and Tuggle denied that they padded their expense accounts in this connection but admitted that they made such payments to Higginbotham and that other employees of appellee did so reimburse themselves. Higginbotham admitted the receipt of these $25.00 payments and, when he was confronted with Wesco's knowledge of the fact, returned them to Wesco by a Cashier's check in the amount of $2,775.00. It is undisputed that appellants and the other employees who were under the control of Higginbotham were instructed by him to conceal from Wesco's President, Chairman of the Board, Board of Directors and controlling stockholders all facts concerning him. They were instructed to refer to Higginbotham only through the use of a code name "Roy Edwards." The record shows that when this situation was discovered by Wesco and confirmed by investigation such officers and employees, including Coker and Tuggle, were discharged. The discharging of the employees was done by the President of the corporation under the express authority and direction of a resolution of the Board of Directors. There are many elements which properly bear upon satisfactory performance by an employee. In some types of work the personal taste, feeling, sensibility and individual judgment of the employer is highly material. In other types of employment mechanical ability and utility in relation to which recognized standards are available is the principal consideration. In Isbell v. Anderson Carriage Company, 170 Mich. 304, 136 N.W. 457, it was stated concerning the first mentioned type of employment that since the matter was personal to the employer it was therefore "his right to say whether he was satisfied or not" and that it should not be left to another to say that he ought to be satisfied. In Hardison v. A. H. Belo Corp., Tex. Civ.App., 247 S.W.2d 167, (No writ history), it was stated as follows: "Actually claimed, in short, is that the parties have entered into one of those familiar `satisfaction' contracts; i. e., an agreement under which the employee undertakes to render services satisfactory to the employer and to which a different principle of law is clearly applicable. 6 A.L.R., Annotations, p. 1502. Under a contract to render satisfactory services it is not required that a reasonable ground for discharge should exist on part of the employer. It is merely necessary that he be honestly dissatisfied with the employee's work; in other words, that such dissatisfaction is real and not pretended." In the instant case Wesco's dissatisfaction with appellants involves a fact situation and elements of satisfactory performance which are entirely different from those involved in the above cited cases. Wesco's dissatisfaction concerns the matter of appellants loyalty as employees of the corporation. Any employer has the right to expect loyalty from its employees. The evidence is undisputed that Coker and Tuggle knew that their actions as heretofore set out were not in accordance with the wishes of the President and Board of Directors of Wesco, but on the contrary their efforts were to please Higginbotham, and they kept many things secret from such top management. Without doubt Wesco is justified in its contention that appellants were disloyal. It is no defense for appellants to show that Amis and Robinson, who held official positions in the corporation were likewise disloyal to the management and encouraged appellants in such disloyalty. The evidence is undisputed that appellants were not loyal. The top management of Wesco says that it is dissatisfied with the performance of its employees Coker and Tuggle. There is no evidence or circumstances in the record which shows or tends to show that Wesco's dissatisfaction with *886 such disloyalty is feigned and that Wesco is in fact satisfied with the performance of appellants. In our opinion there is no disputed fact issue in the case to be determined by a fact finding body and the trial court properly entered a summary judgment for Wesco Materials Corporation. The judgment is affirmed.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532713/	368 S.W.2d 216 (1963) John Henry SCOTT, Appellant, Clyde Howard, Appellant, v. The STATE of Texas, Appellee. Nos. 35828, 35829. Court of Criminal Appeals of Texas. May 29, 1963. Jack Pevehouse, Dallas, for appellant. Henry Wade, Dist. Atty., James H. Miller, Stephen Guittard and Emmett Colvin, 217 Jr., Asst. Dist. Attys., Dallas, and Leon B. Douglas, State's Atty., Austin, for the State. BELCHER, Commissioner. The appellants, although separately indicted, were by agreement jointly tried and were convicted of murder. They were each assessed a penalty of twenty years. The appellants, Scott and Howard, and Howard's wife, Mary, and Willie Shaw, about 2:30 P.M., July 4, arrived at Johnny's Lounge which was operated by the deceased. Later Mary and another woman had an argument and also Howard and another. Next Howard, Mary, Scott and Shaw left the lounge. About an hour later Howard, Shaw, a man named Sidney and Scott who was carrying a shotgun entered the lounge from the rear. The deceased told them to leave, and when they declined he took Shaw by the arm and put him out the front. Scott was at the front when the deceased came back into the lounge. Deceased was attacked by Sidney but broke away and was backing from the front door while Scott was pointing the shotgun at him from a distance of six or seven feet. At this time Howard went to Scott, reached for the shotgun with both hands and referring to the deceased said twice: "Shoot that nigger," and Scott shot the deceased with the shotgun. Officer Smithson testified that he arrested Howard shortly after the shooting and that Howard delivered to him a shotgun which he said was his and was used in the shooting. The evidence shows that a gunshot wound in the center of the upper portion of the chest caused the death of the deceased. The appellants, testifying in their own behalf, stated that Willie Shaw, one of the persons in their company, had the shotgun and that he, and not either of the appellants, shot the deceased. The testimony reveals that Howard and Scott had planned to go hunting. When Howard arrived at Scott's place about 1 P.M., Shaw was there. The hunt was cancelled and Howard, in the presence of Scott and Shaw, put the shotgun in the trunk of the car and in a short time they went to Johnny's Lounge. Howard and Scott soon left going to a hospital, and on their return about 6 P.M., left the keys in the car. Then the deceased began talking about putting Shaw out of the lounge, and Shaw soon appeared in the lounge with the shotgun, and in his removal Shaw while standing near the front door shot the deceased who was standing inside the lounge with a pistol in his hand. It is contended that there is a fatal variance between the allegations of the indictments that appellants killed Clifford David Taplett, Jr., and the evidence that the person killed was Clifford Taplett. It is uncontradicted by the evidence that the killing occurred July 4, at Johnny's Lounge which was operated by the deceased at a certain location. An employee of the Lounge testified that she was present July 4, when Clifford Taplett, Jr., who operated Johnny's Lounge was killed. A Pathologist testified that he performed an autopsy on the body of Clifford Taplett, Jr., on July 5, whose death was caused by a shotgun wound in the chest. In response to a report Officer Smithson testified that on July 4, he saw the body of Clifford Taplett on the floor in Johnny's Lounge. There appears no material variance between the allegations and proof as to the name of the deceased and no error is presented. 30 Tex.Jur.2d 652, Sec. 65; Delphino v. State, 11 White & W. 30; Jiminez v. State, Tex.Cr.App., 364 S.W.2d 397. Appellants contend that the state erred in cross-examination of appellant Howard's wife, called by the appellants as a witness, about who was in the car with her when she drove it to Johnny's Lounge, whether she drove it around the block, and how many trips she made to the Lounge, on the ground it brought out new and incriminating evidence against them in violation of Art. 714, Vernon's Ann.C.C.P. 218 On direct examination the wife of the appellant-Howard testified that on the evening of the shooting she was with Howard in and around Johnny's Lounge; and that she drove the car from around five blocks to within twelve feet of the Lounge. It is apparent that the cross-examination of Howard's wife was germane and pertinent to her testimony on direct examination and was not in violation of said statute. The court charged the jury on the law applicable to principals. The evidence is sufficient to support the convictions and no error appearing the judgments are affirmed. Opinion approved by the Court.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532703/	368 S.W.2d 134 (1963) MARYLAND CASUALTY COMPANY, Appellant, v. R & L CONSTRUCTION COMPANY et al., Appellees. No. 3800. Court of Civil Appeals of Texas, Eastland. May 17, 1963. Rehearing Denied June 7, 1963. Thompson, Coe, Cousins & Irons, Dallas, for appellant. Henry Klepak, Dallas, for appellee. WALTER, Justice. Maryland Casualty Company filed suit again R & L Construction Company upon an indemnity agreement. Based on a verdict, judgment was rendered that Maryland take nothing and it has appealed. R & L Construction Company contracted with Ross and Levy, Inc. to erect a building. Maryland Casualty Company issued its bond guaranteeing performance. R & L executed an indemnity agreement to Maryland in connection with its application for a performance bond. Service Bureau Corporation, the tenant, was assigned the performance bond in consideration of its acceptance of the premises as lessee of 135 Ross and Levy, Inc. Service Bureau made a claim against Maryland under the bond contending that R & L had failed to complete the building according to plans and specifications. Maryland paid Service Bureau $4,000.00 on this claim. Maryland sought to recover the $4,000.00 from R & L under the following indemnity agreement: "The undersigned will at all times indemnify and keep indemnified the Company, and hold and save it harmless from and against any and all liability for damages, loss, costs, charges and expenses of whatever kind or nature (including counsel and attorney's fees) which the Company shall or may, at any time, sustain or incur by reason or in consequence of having executed the bond(s) herein applied for, or any and all other bonds executed for us or at our instance and request; and will pay over, reimburse and make good to the Company, its successors and assigns, all money which the Company or its representatives shall pay, or cause to be paid, or become liable to pay, by reason of the execution of any such instruments, or in connection with any litigation, investigation or other matters connected therewith, such payment to be made to the Company as soon as it shall have become liable therefor, whether the Company shall have paid out such sum, or any part thereof, or not. In any accounting which may be had between the undersigned and the Company, the Company shall be entitled to credit for any and all disbursements, in and about the matters herein contemplated, made by it in good faith under the belief that it is or was liable for the sums and amounts so disbursed, or that it was necessary or expedient to make such disbursements, whether such liability, necessity or expediency existed or not, and vouchers or other evidence of such disbursements shall be taken as conclusive evidence against the undersigned of the fact and extent of the undersigned's liability to the Company." Concerning the rule of construction to be applied in construing an indemnity contract, our Supreme Court in the case of Mitchell's Inc., v. Friedman, 157 Tex. 424, 303 S.W.2d 775 at page 777, said: "It is somewhat misleading to say that an indemnity agreement must be strictly construed in favor of the indemnitor and against the indemnitee. Although the distinction has not been frequently noted, the doctrine of strictissimi juris is not a rule of construction but is a principle of substantive law which is applicable after the intention of the parties has been ascertained by ordinary rules of construction." Maryland called upon R & L to make payment to Service Bureau. R & L refused and denied liability. Maryland made a settlement with Service Bureau for $4,000.00. If it acted in good faith, Maryland had the right to make a reasonable settlement. Having made the settlement, Maryland assumed the responsibility of showing that the settlement was made in good faith and that it was a reasonable and prudent settlement. Gulf, Colorado & Santa Fe Railway Company v. McBride, 159 Tex. 442, 322 S.W.2d 492 (Sup.Ct.). Good faith is an ordinary term and its meaning is presumed to be understood by men of ordinary intelligence. Dunning v. Badger, Tex.Civ.App., 74 S.W.2d 151 (Dismissed). We recite the pertinent testimony of the witnesses. Mr. W. P. Bostick testified he worked for Service Bureau, which is a wholly owned subsidiary of International Business Machine Corporation, located on North Central Expressway in Dallas. Other than as a local representative of the company, he had nothing to do with the negotiations of the lease executed by his company and Ross and Levy, Inc. Service Bureau made a claim against Maryland, under the bond, asserting that R & L had failed to brick the south wall, failed to 136 install proper conduit for electrical wiring and failed to waterproof certain portions of the buillding. On cross-examination, he testified that he did not have any instrument of any kind or character to show the jury that the plans and specifications called for a brick wall on the south side. He had nothing to do with signing the lease. Hon. Paul Carrington testified that he was a member of the law firm of Carrington, Johnson and Stephens and had practiced in Dallas since 1919 and that he represented Service Bureau in presenting their claim to Maryland under its performance bond. Vernon Koger, an adjuster with Maryland Casualty Company, testified that he worked on Maryland's claim against R & L. On cross-examination he testified that during his investigation he did not see an agreement in writing specifying that the south wall was to be a brick wall. He never did see any plans or specifications that called for a brick wall on the south side. The principal object of his investigation was to find out for his company whether it should recognize the claim of Service Bureau, and determine whether it would be advisable for his company to settle. He was asked the following question: "Now, in order to give your company some advice as a result of your investigation, you would want to see whether or not there was a contract that obligated the putting up of a brick wall or waterproofing a wall or imbedding this electrical wiring in the concrete, wouldn't you?" And he answered, "Yes, sir." "You didn't do that, though, did you?" and he answered, "I do not recall if I did, or not." J. E. Hall, Jr., claims division manager for Maryland in the Dallas area, testified that it was doubtful whether he could collect the $4,000.00 paid Service Bureau Corporation from Mr. Ross and Mr. Levy, because they told him they were broke. He testified: "I don't see why I have to consider getting into a lawsuit which is going to cost several thousand dollars more to defend when I was having no cooperation from them is something." Mr. Cerf Ross, one of the appellees, testified that he was a licensed architect; that plaintiff's Exhibit No. 9 was a blueprint, only a check set of prints and not signed. He then introduced defendants' Exhibits 2 and 3, which were two pages of blueprints he described as a contract set of blueprints which showed the floor plans, the basement plan and the first and second floor plan, as well as the mechanical, the wall sections and the stairway sections. These two sheets of blueprints constituted the contract set that were initialed by J. S. Karlton, the representative of Service Bureau. Maryland objected to these prints as follows: "If Your Honor please, we are going to object to the introduction of Defendants' Exhibits 2 and 3 for the reason that the issue is not what the actual plans show; the issue is the good faith of Maryland Casualty in making payment; until such time it is shown that these were in fact called to the attention of Maryland Casualty Company, at the time the negotiations were going on, it would be hearsay, they would be completely irrelevant and immaterial to any issue before this Court." Service Bureau occupied about 60 percent of the building and he occupied about 28 or 30 percent and another firm occupied about 10 percent of the building. He was handed plaintiff's Exhibit No. 4 which was a letter from Mr. Bostick to Cerf Ross Associates dated December 18th, 1957, in which letter Mr. Bostick in behalf of Service Bureau Corporation accepted the premises subject to 8 exceptions. He complied with all of the 8 requirements described in the letter. There is nothing in the letter requiring a brick wall on the south. He explained to Mr. Hall, claims manager for Maryland, that he had complied with all of Service Bureau's requirements. He had several conversations with Mr. Hall and on one occasion Hall informed him there was great pressure on him to settle this claim and that Maryland had been threatened with *137 a law suit and "The fact they were doing business with IBM and SBC, and that they just had to make a settlement of this thing, and I took the position that I didn't feel that there was anything to settle; they were tenants, we did everything they asked us to do, and I felt no further obligation to them." That Mr. Karlton told him in his letter of January 21, 1958, being defendants' Exhibit No. 1, that it would not be necessary to install the brick wall; that as a result of this building deal he was forced into bankruptcy but did not list this claim in the bankruptcy proceedings. Service Bureau moved into the building in December '57. The prints introduced by R & L and initialed by Ross and Mr. Karlton do not indicate that there was to be a brick wall. On this job he was the architect, contractor and owner of the building. He actually completed and did all the things that were demanded of him in Mr. Bostick's letter of December 18, 1957, and a lot more. Mr. Ross further testified that the parties did not enter into a formal written contract for the construction of this building. No formal specifications were drawn. The lease was executed on June 28, 1957, which was approximately two months before any plans were submitted for approval. In view of the jury's finding that Maryland did not act in good faith, the burden is upon Maryland to show that the record conclusively demonstrates that it acted in good faith. We have concluded that the testimony set forth above, constitutes some evidence of probative force to support the jury's finding that Maryland did not act in good faith. In answer to a special issue the jury found that Service Bureau intended to waive any right it asserted to have the south wall bricked. Maryland contends there was no evidence or insufficient evidence to sustain such a finding and as a matter of law such finding was not binding on it. We have concluded that the only issue in this case is whether Maryland compromised the claim in good faith. We have also concluded that the appellant has not shown that the submission of the issue on waiver was reasonably calculated to cause, and probably did cause, the rendition of an improper judgment. Rule 434 T.R.C.P. We have examined and considered all the evidence and conclude that the findings of the jury are not against the great weight and preponderance of the evidence. In re King's Estate, 150 Tex. 662, 244 S.W.2d 660. We have considered all of appellant's points and find no merit in them. They are overruled. The judgment is affirmed.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532719/	414 A.2d 896 (1980) Nancy REMICK v. ERIN, INC., d/b/a Holiday Inn and Peerless Insurance Company. Supreme Judicial Court of Maine. Argued May 5, 1980. Decided May 21, 1980. *897 Jerome B. Goldsmith, Bangor, for plaintiff. Rudman, Winchell, Carter & Buckley, Clark P. Thompson (orally), Michael P. Friedman, Bangor, for defendants. Before McKUSICK, C. J., and WERNICK, GODFREY, NICHOLS, GLASSMAN and ROBERTS, JJ. PER CURIAM. On January 31, 1980, the Superior Court (Penobscot County) entered a pro forma decree based upon a decision of the Workers' Compensation Commission denying compensation to petitioner Remick. Petitioner filed her appeal to the Law Court on February 13, 1980, after the expiration of the 10-day appeal period prescribed by 39 M.R.S.A. § 103 (1978).[1] Respondents, on February 22, moved to dismiss the appeal for untimeliness. We grant respondents' motion and dismiss the appeal. Time requirements for the taking of an appeal are mandatory and jurisdictional. See Town of South Berwick Planning Board v. Maineland, Inc., Me., 409 A.2d 688, 689 (1980), and cases cited therein. Petitioner's failure to appeal within the prescribed period prevents the Law Court from acquiring jurisdiction over the attempted appeal. See Town of South Berwick, supra; Reynolds v. Hooper, Me., 407 A.2d 312, 314 (1979); Harris Baking Co. v. Mazzeo, Me., 294 A.2d 445, 451-52 (1972). We do not reach the question whether the 30-day extension upon a showing of excusable neglect permitted by M.R.Civ.P. 73(a) applies to the statutory appeal period at issue here.[2] Petitioner requested no extension of time from the Superior Court within 30 days from the expiration of the original statutory appeal period or at any later time, and thus failed to invoke Rule 73(a). She did file in this court on March 28, 1980, a motion for an extension of time to appeal, but we had no jurisdiction to entertain the motion, particularly at that late date. The entry is: Appeal dismissed. No fee is allowed to employee's counsel. All concurring. NOTES [1] Section 103 provides in pertinent part: There shall be no appeal from a decree based upon any order or decision of the commission or of any commissioner unless said order or decision has been certified and presented to the court within 20 days after notice of the filing thereof by the commission or by any commissioner; and unless appeal has been taken from [the] pro forma decree within 10 days after such certified order or decision has been so presented. (Emphasis added) Matthews v. R. T. Allen & Sons, Inc., Me., 266 A.2d 240, 243 (1970), held that section 103 permits the taking of an appeal within 10 days of the rendering (i. e., entry) of the pro forma decree in the Superior Court. [2] Our Rule 73(a) was derived directly from former F.R.Civ.P. 73(a), see Reporter's Notes to Rules 73(a), (b), and (c), 2 Field, McKusick & Wroth, Maine Civil Practice 151-52 (2d ed. 1970). Federal rulemakers have considered the time extension provisions of Rule 73(a) to be applicable to statutory appeal periods of less than 30 days. See Committee Note of 1946 to amended F.R.Civ.P. 73(a), 9 Moore's Federal Practice ¶ 203.25[1], at 3-103 (2d ed. 1980).	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532715/	368 S.W.2d 635 (1963) W. B. RUST, Appellant, v. Iris ENGLEDOW, Appellee. No. 4083. Court of Civil Appeals of Texas, Waco. May 16, 1963. Rehearing Denied June 6, 1963. 636 John A. James, Jr., Cleburne, for appellant. Anderson & Anderson, Cleburne, for appellee. McDONALD, Chief Justice. This case was filed by Rust against Engledow, seeking a mandatory injunction requiring defendant to remove a fence erected on the line between plaintiff's and defendant's property, and in the center of an existing driveway. Plaintiff contends that the driveway between plaintiff's and defendant's houses, and partly on plaintiff's property and partly on defendant's property, is a joint driveway, and that plaintiff has acquired a private easement by prescription, over that portion of the driveway on defendant's property, by virtue of adverse use by plaintiff's predecessors in title, for some 30 years. The following schematic diagram illustrates the factual situation. Trial was before the court without a jury, which after hearing, entered judgment that plaintiff take nothing; quieted defendant's title to that portion of the 637 driveway located on her property; and enjoined plaintiff from driving across that portion of the driveway on defendant's property. The Trial Court filed Findings of Fact and Conclusions of Law, pertinent portions of which are summarized as follows: FINDINGS OF FACT 1) Plaintiff owns lot 9. 2) Defendant owns lot 10. 3) The land owned by plaintiff joins and is immediately south of the land owned by defendant. 4) There is a way of ingress and egress from North Walnut Street to plaintiff's garage. 5) Defendant's driveway extends from North Walnut Street and across defendant's property to defendant's garage, which driveway is parallel to and just north of the south line of defendant's property. 6) Plaintiff's predecessors in title have used the driveway on plaintiff's property since the establishment of said driveway, and defendant and defendant's predecessors in title have used the driveway located on defendant's property since the establishment of said driveway. 7) Any use of defendant's driveway or a portion thereof located on defendant's property, by plaintiff and plaintiff's predecessors in title, was not under any claim or right, nor was such use by plaintiff and plaintiff's predecessors in title continuous, notorious, open, visible, hostile or adverse toward or against defendant or her predecessors in title. 8) The use by plaintiff and plaintiff's predecessors in title of any portion of defendant's driveway has been in common with defendant and defendant's predecessors in title and has been consistent with the use of said driveway by defendant and defendant's predecessors in title. 9) The fence erected by defendant is wholly on defendant's property. 10) Jim Smith, who owned the property now owned by plaintiff from 1923 to 1939, never asserted any right to drive over any property north of plaintiff's line; nor did H. W. English, who owned plaintiff's property from 1939 to 1950, assert any claim of right to any of the property now owned by defendant; nor did H. D. Germany, who owned plaintiff's property from 1950 to 1951, claim to have a right to use defendant's property; nor did Joseph Smith, who owned plaintiff's property from 1951 to 1959, ever assert any right to use any of the property now owned by defendant. 11) Neither defendant nor defendant's predecessors in title had any notice of any adverse claim by plaintiff or plaintiff's predecessors in title. 12) Plaintiff's tenants, since 1962, have been driving and parking their car on defendant's driveway and property in such a manner as to interfere with and obstruct the use of defendant's driveway. 13) Permission was never requested by plaintiff or plaintiff's predecessors in title, to use that portion of the driveway on defendant's property. Defendant and her predecessors in title did grant permission for the use of the driveway. CONCLUSIONS OF LAW I conclude the plaintiff Rust does not have an easement by prescription or a prescriptive right of the driveway in question, upon, over and across the property of the defendant Engledow. Plaintiff appeals, contending: 1) The Trial Court erred in finding that there were 2 driveways, one on the Rust property, and the other on the Engledow property. 2) The Trial Court erred in finding that permission was granted by defendant and *638 her predecessors in title to plaintiff and his predecessors in title to use the driveway in question. 3) The Trial Court erred in denying plaintiff an easement by prescriptive right over that portion of the driveway located on defendant's property. The dominant issue in this case is whether plaintiff and his predecessors in title acquired an easement by prescription over the driveway located on defendant's property by adverse use. (Whether there are two driveways or one is actually immaterial. However, the record reflects that there is sufficient room for plaintiff to get his car in his garage, staying on his own property). The record reflects that the driveway (or driveways) came into being sometime after 1923, and that the predecessors in title of lots 9 and 10 used such driveways; and that plaintiff's predecessors in title drove on the driveway located on defendant's land from time to time. There is no evidence that any of the plaintiff's predecessors in title claimed to use the driveway (or that portion of the driveway) on defendant's land as a matter of right, or adversely to defendant's predecessors in title, prior to 1959. Moreover, defendant's predecessors in title, were also using their driveway all during such period. To establish an easement by prescription over the land of another, it must be shown that the use was open, notorious, hostile, adverse, uninterrupted, exclusive and continuous for a period of more than 10 years. A failure to prove any one of the essential elements is fatal. Mere user alone will not create an easement. Moreover, the use of the way is permissive and not adverse, as a matter of law, if the way is also used by the owner of the land, along with the adverse user. O'Connor v. Gragg, 161 Tex. 273, 339 S.W.2d 878; Othen v. Rosier, 148 Tex. 485, 226 S.W.2d 622; Gill v. Pringle, CCA, Er. Ref., 224 S.W.2d 525; Sassman v. Collins, Er.Ref., 53 Tex. Civ. App. 71, 115 S.W. 337; Hollingsworth v. Williamson, CCA (n. r. e.) 300 S.W.2d 194; Weldon v. Quaite, CCA, (n. w. h.), 175 S.W.2d 969; Brown v. Woods, CCA (n. w. h.) 300 S.W.2d 364. The Trial Court's findings are amply supported by the evidence. Plaintiffs and their predecessors in title did not use defendant's driveway for 10 years, in a hostile and adverse manner. Further, under the authorities cited,[1] since defendant and her predecessors in title were also using the driveway, such use as plaintiff and his predecessors in title, made of the way, is permissive and not adverse, as a matter of law. The judgment of the Trial Court is affirmed. NOTES [1] Foster v. Patton, CCA, (Er.Dis.C.J.), 104 S.W.2d 944; Fowler v. Matthews, CCA (n. w. h), 204 S.W.2d 80; and Schultz v. Shatto, 150 Tex. 130, 237 S.W.2d 609; appear contrary to the authorities cited, and hold that where the way is also used by the owner, such does not prevent the adverse users' use from being adverse and ripening into an easement by prescription, as a matter of law. All 3 cases are "public easement" cases, and the Foster and Fowler cases restrict their application to "public easement" situations. Schultz v. Shatto, 1951, (Supreme Court), is in direct conflict with Othen v. Rosier 1950, 148 Tex. 485, 226 S.W.2d 622, on the point. Since, however, the Supreme Court in 1960, in O'Connor v. Gragg, 161 Tex. 273, 339 S.W.2d 878, cites, quotes from, and reaffirms Othen v. Rosier, and nowhere mentions the Shatto case, it would appear that in both public and private easement cases, contemporaneous use of the way by the owner, renders use by others as permissive and not adverse, as a matter of law.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532690/	368 S.W.2d 413 (1963) STATE of Missouri, Respondent, v. James Audie RAMSEY, Appellant. No. 49826. Supreme Court of Missouri. Division No. 2. June 4, 1963. 415 Warren H. Kawin, St. Louis, for appellant. Thomas F. Eagleton, Atty. Gen., Jefferson City, James P. Jouras, Sp. Asst. Atty. Gen., Kansas City, for respondent. EAGER, Presiding Judge. Defendant was charged in the City of St. Louis with attempted burglary, second degree. The case was tried to the court, upon the waiver of a jury entered in open court, and assented to by the trial judge pursuant to Art. 1, § 22(a), Mo. Constitution 1945, V.A.M.S. Such a waiver in a felony case was first permitted by the provisions of that Constitution. The trial court found defendant guilty and assessed his punishment at two years' confinement. Defendant was represented at the trial and is represented here by appointed counsel. Motion for new trial was filed and overruled and this appeal taken, after leave granted to appeal as a poor person. Since the only substantive question to be considered is that of the sufficiency of the evidence, we relate that in some detail. There is little or no controversy concerning the facts developed. The St. Louis police received a call at about 2:00 a. m. on July 3, 1962, that there was a prowler at a store at the corner of Glasgow and Hebert. Three different cars answered the call but Sergeant Robert Scheetz arrived first. He had driven south on Glasgow and as he approached the designated corner he saw a car (a light colored Lincoln) parked at the east curb of Glasgow, just north of Hebert and alongside a confectionery store on the northeast corner. A man was just in the process of entering the driver's seat, and another man was standing nearby on the corner. The sergeant headed his patrol car into the curb, blocking the exit of the parked car, and got out. He then saw another man, who proved to be this defendant, sitting on the passenger's side of the front seat. Defendant was identified at the trial as that man and no question is raised here concerning the identification. The man on the corner ran east, but was later apprehended by other officers. The sergeant ordered the two men out of the car, placed them under arrest, questioned them briefly, and searched the car. He found on the floor back of the front seat a padlock, a tire tool and a pinch bar. If it be of any significance, the padlock was found on the floor behind the passenger's side of the front seat. The tire tool appeared to have some green paint on it at its pointed end. All three men were taken to the police station later. A few minutes before the police received this call, an officer passing by had seen two men standing on that corner in front of the confectionery. While still at the scene the police got in touch with the operator of the confectionery store, one Howard Schenk; they had him come there and bring the key to the padlock which he had left on the store's front door. Schenk testified that when he left the store 416 at about 10:00 p. m. on July 2, he had locked the door securely, with the ordinary lock made in the door (such as a "Yale" lock) and also with a padlock inserted into a hasp secured to the doorframe. When examined by the police and Schenk, the molding and framework of the door were "pulled away," the molding was "chewed up," and there were "jimmy marks"; the hasp was open and bent and the padlock was gone. The door was still closed and the other lock was in place. Mr. Schenk gave his padlock key to the sergeant who tried it in the padlock found on the floor of the car and discovered that it readily opened that lock. Both key and lock were retained as possible exhibits and both were offered in evidence, along with the tools. Mr. Schenk also identified the padlock. Sergeant Scheetz took paint and wood samples from the door and frame where the damage had been done; he delivered those, along with the tools and the shirt and trousers which defendant had been wearing, to the police laboratory. The chemist from the laboratory testified that near the end of the tire tool there were two layers of paint, dark green over gray, which were similar in color to the two top layers of paint on the samples furnished from the door. He found nothing of significance on the trousers or shirt of defendant. The car was registered in the name of a woman who was not further identified. The defendant produced no evidence. The only question briefed on appeal is the alleged insufficiency of the evidence to support a finding of guilty. This is stated in seven different points but, in full substance, the points are as follows: that upon this evidence the finding necessarily rested upon mere surmise, suspicion, and inference upon inference; that the evidence did not meet the degree of proof required of circumstantial evidence (which will be mentioned later); that no intent was shown, no act of participation by defendant was shown, and that there was no evidence of aiding or encouraging. As a follow-up on these points, counsel also suggest that, the evidence having been fully developed, the defendant should be discharged without remand of the case. We do not quarrel with the rules of law urged; the only real point here is the sufficiency of the evidence under those rules. Counsel argue that: defendant was not shown to be the driver or a "lookout"; that he did not flee the scene; that no paint was found on his clothes; that he was not shown to have been previously associated with the other two men; that his mere presence was not enough to convict him; and that no intent was shown. We do not deem any showing of intent, as such, to be necessary here. There is no question whatever that the crime of attempted burglary had been committed by some one or more persons, with all the necessary elements present. An act of that nature proves, in itself, the intent of those involved. The only question remaining, so far as defendant is concerned, is whether the evidence permits a fair inference of his participation or of his aiding, abetting or encouraging the crime, for any of which he would properly be found guilty. State v. Corbin, Mo., 186 S.W.2d 469; State v. Kowertz, 317 Mo. 426, 297 S.W. 358; State v. Butler, Mo., 310 S.W.2d 952; State v. Whitaker, Mo., 275 S.W.2d 316; State v. Massey, 358 Mo. 1108, 219 S.W.2d 326; Mays v. United States (C.A. 8), 261 F.2d 662; State v. Bresse, 326 Mo. 885, 33 S.W.2d 919; State v. Stidham, Mo., 305 S.W.2d 7, 15. Defendant relies rather strongly on the accepted rule regarding circumstantial evidence, namely, that where this is relied upon the facts and circumstances must be consistent with each other and with the hypothesis of defendant's guilt, and they must be inconsistent with his innocence and exclude every reasonable hypothesis of his innocence. State v. Odum, Mo., 351 S.W.2d 10, 14; State v. Murphy, Banc, 356 Mo. 110, 201 S.W.2d 280. It may be conceded that evidence raising a mere suspicion of 417 guilt, or showing an opportunity to commit a crime, is insufficient. State v. Murphy, supra; State v. Ashe, Mo., 350 S.W.2d 768. In various cases evidence of mere "presence" has been held insufficient to support a conviction. State v. Odbur, 317 Mo. 372, 295 S.W. 734; State v. Bresse, 326 Mo. 885, 33 S.W.2d 919. And, of course, evidence which merely raises a suspicion or gives rise to conjecture, has often been held insufficient. Murphy, supra; Odum, supra. "`"The presence of one at the commission of a felony by another is evidence to be considered in determining whether or not he was guilty of aiding and abetting. * "'" State v. Corbin, Mo., 186 S.W.2d 469, 471. And one's "presence" may have substantially different meanings and raise wholly different inferences under differing circumstances. Evidence fairly showing any form of affirmative participation in a crime is sufficient to support a conviction. State v. Butler, Mo., 310 S.W.2d 952, 957. Also, evidence sufficient to justify the jury in finding that defendant did in any way aid, abet or encourage another in the commission of a crime is sufficient to support a conviction. State v. Present, Mo., 344 S.W.2d 9, 10; State v. Corbin, supra; State v. Butler, Mo., 310 S.W.2d 952, 957; State v. Stidham, Mo., 305 S.W.2d 7, 15; State v. Bresse, 326 Mo. 885, 33 S.W.2d 919, 921; State v. Muchnick, Mo.App., 334 S.W.2d 386, 388. In many instances no physical act of participation is necessary. State v. Stidham, supra; State v. Whitaker, Mo., 275 S.W.2d 316; State v. Bresse, supra; State v. Butler, supra. The term "aid and abet" is well defined in Mays v. United States (C.A. 8), 261 F.2d 662, at loc. cit. 664, where the court said: " * * In order to aid and abet another to commit a crime it is necessary that a defendant "in some sort associate himself with the venture, that he participate in it as in something that he wishes to bring about, that he seek by his action to make it succeed." L. Hand, J., in United States v. Peoni, 2 Cir., 100 F.2d 401, 402.' And, at page 620 of 336 U.S., at page 770 of 69 S.Ct., the Supreme Court states: `* * Aiding and abetting has a broader application. It makes a defendant a principal when he consciously shares in any criminal act whether or not there is a conspiracy. * * '" In none of the cases cited by defendant are the facts substantially like ours. In State v. Murphy, 356 Mo. 110, 201 S.W.2d 280, it was merely shown that defendant and another man had stopped defendant's truck on a country road in the vicinity of the yard from which a gas engine was later found stolen, that there were tracks around the truck, that a path was found in the grass leading up to the yard, and also tracks around the place where the engine had been located. There was no real examination of any of the tracks, nor was defendant shown to have been present at the time of the actual theft. In State v. Odbur, 317 Mo. 372, 295 S.W. 734, the defendant Shade was shown to have been present at three successive fights between the other defendant and the deceased; however, the evidence was fully developed and it tended to negative any participation, aiding or abetting by Shade in any of the fights. The court was there concerned more with the construction of direct evidence than with circumstantial evidence. In State v. Bresse, 326 Mo. 885, 33 S.W.2d 919, also cited by defendant, the evidence was held sufficient for submission; the charge was stealing a car. The evidence showed that the car had been stolen by a stranger who came to the scene with defendant, that defendant then followed the stranger away in his own car, and that they were later seen together. Of this evidence the court said, loc. cit. 921: "Suffice it to say that it is sufficient to support the inference that the stranger and defendant conspired together to steal an automobile, and the stranger stole one, and that defendant was present as an accessory aiding and abetting him." In State v. Present, Mo., 344 S.W.2d 9, 10, the State's evidence showed the presence of defendant when his associate and helper 418 stole some brass journal bearings from a railroad station and put them in defendant's truck. There the defendant testified, disclaimed all connection with the theft, and contended that he attempted to discourage his associate from his actions. However, the truck belonged to defendant and he started back to St. Louis in it with his helper. The discussion in the opinion concerned the instructions, but all concerned seem to have assumed that the evidence was sufficient to make a submissible case. See also State v. Mitts, Mo., 347 S.W.2d 677, where two men entered a double-parked car with stolen luggage and defendant drove the car away. This was held to constitute sufficient evidence for a conviction of defendant on a charge of stealing the luggage, with no further showing of knowledge, intent or action. In State v. Stidham, Mo., 305 S.W.2d 7, loc. cit. 15, the court said: "* * * `no particular acts are necessary; nor is it necessary that any physical part in the commission of the crime be taken; mere encouragement is enough.' * * * McMannus v. Lee, 43 Mo. 206, 208, states: `The law is well laid down that any person who is present at the commission of a trespass, encouraging or exciting the same by words, gestures, looks, or signs, or who in any way or by any means countenances or approves the same, is in law deemed to be an aider and abettor, and liable as a principal * * .'" Every case must naturally stand upon its own facts. Here defendant was found sitting in a car, at 2:00 o'clock in the morning, beside a confectionery store where a burglary had just been attempted, the attempt having been interrupted or having otherwise failed. The store had been closed and locked since 10:00 p. m. The padlock from the door (positively identified) was found immediately behind defendant on the floor of the car, and tools appropriate to such a crime were close by in the car, one showing evidence of recent use. Another man was just entering the car, a third man ran from the corner. It is perhaps significant that the police sergeant did not testify that he saw the entering man place the padlock and tools in the car. Here there were physical facts showing the commission of a crime, and we conclude that, under all the circumstances, a finding of defendant's guilt did not rest upon mere suspicion, conjecture, surmise or inference upon inference. So far as concerns the rules governing circumstantial evidence, we hold that this evidence and these circumstances were consistent with defendant's guilt, that they were inconsistent with his innocence, and that they excluded every reasonable hypothesis of his innocence. These circumstances raised a fair and reasonable inference of concerted action which involved defendant either as an actual participant or as an aider and abettor in the crime; and this inference, in our opinion, was sufficient " * * to permit reasonable minds to believe the defendant guilty beyond a reasonable doubt,' * * " and thus to make a submissible fact issue. State v. Spraggins, Mo., 368 S.W.2d 407. The weight of the evidence is to be determined by the jury or by the trial court sitting as a jury. We merely find on appeal, as we have found, that there was substantial evidence to support the finding and conviction. At the conclusion of the evidence and after announcing its finding informally, the trial court entered an order in which it stated: the charge against defendant; the presumption of innocence and the burden of the State to prove the defendant's guilt beyond a reasonable doubt; that "the evidence and circumstances herein are sufficient to show the attempted breaking into the building"; and its finding that the defendant was guilty of attempted burglary in the second degree. Therein the court also assessed the punishment. Our Criminal Rule 26.01(c) V.A.M.R. requires that in a felony case tried without a jury "the court shall be required to prepare an opinion or give declarations of law to the extent necessary to indicate the court's theory of the law applicable thereto." This provision of the rule is consonant with the 419 suggestions made in State v. Hardy, 359 Mo. 1169, 225 S.W.2d 693, loc. cit. 698. The statement of the court in its present order was hardly sufficient to indicate its theory of the applicable law. There was no real dispute that there had been an "attempted breaking into the building" and the question was whether or not defendant was criminally connected with it. The rule contemplates that, under such circumstances, some declaration should be made stating the applicable rule or rules of law, as here for instance, declaring the applicable rules of guilt for participation in the offense or for aiding, abetting or encouraging it. However, the point has not been raised in the rather full and competent brief filed here by counsel, and we deem it waived under Rule 28.02. The general finding of the court constitutes its verdict; these matters are not integral parts of the verdict itself. We find no error in those parts of the record which we examine under Rule 28.02. Finding no reversible error, the judgment is affirmed. All of the Judges concur.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532730/	51 Pa. Commw. 117 (1980) Commonwealth of Pennsylvania, Department of Transportation, Bureau of Traffic Safety, Appellant v. Donald Sherwood, Appellee. No. 688 C.D. 1978. Commonwealth Court of Pennsylvania. Argued April 10, 1980. May 1, 1980. Argued April 10, 1980, before President Judge CRUMLISH and Judges ROGERS and WILLIAMS, JR., sitting as a panel of three. 118 Harold H. Cramer, Assistant Attorney General, with him Robert W. Cunliffe, Deputy Attorney General and Edward G. Biester, Jr., Attorney General for appellant. Donald R. Sherwood, appellee, for himself. OPINION BY PRESIDENT JUDGE CRUMLISH, May 1, 1980: The Commonwealth of Pennsylvania's Department of Transportation appeals a Delaware County Common Pleas Court order sustaining an appeal from the suspension of motor vehicle operating privileges. We reverse. This is a point system case dependent upon the following chronology: Donald R. Sherwood was cited on June 29, 1976 for a traffic signal violation, convicted on July 7, 1976, and assessed three (3) points against his driving record. He was cited for a speeding violation on March 7, 1977, convicted and then certified on April 20, 1977 and assessed three (3) points against his driving record. Sherwood was again cited on May 3, 1977 for a speeding violation, convicted on May 14, 1977 and assessed an additional two (2) points to his total. After this accumulation of eight (8) points, he 119 was notified on August 26, 1977, of the statutory requirement to either attend an approved driver improvement school or undergo a special examination.[1] Sherwood was cited again on August 29, 1977 for speeding, plead guilty on September 9, 1977 and was assessed another four (4) points against his record, bringing his total number of points to twelve (12). On October 25, 1977, he passed the required special operator's examination, conducted by the Pennsylvania State Police, and recorded at the Bureau of Traffic Safety on November 9, 1977. Two days later, on November 11, 1977, the Department acted upon Sherwood's twelve (12) point accumulation and mailed a notice of license suspension.[2] On appeal, the Delaware County Common Pleas Court entered a March 20, 1978 opinion and order reinstating operating privileges based upon Sherwood's successful completion of the special examination before the actual suspension. The lower court held suspension improper on the ground that the October 25, 1977 special examination acted to reduce the point accumulation by two (2) for a total of ten (10) points, one less than necessary for the Section 1539 license suspension. The Department appeals. 120 The narrow issue for our review is whether the successful completion of a special driver's examination after the accumulation of points necessary for suspension, but before the actual suspension has any effect upon that suspension. We think not. According to the "old" Vehicle Code of 1959, Section 619.1 provided for the computation and assessment of points according to the conviction date of the particular offenses.[3] However, the "new" Vehicle Code of 1976 at 75 Pa. C.S. § 1535(a) resolved the inherent problems of the former statute by clearly assessing points "as of the date of violation" for the particular offense. Our recent decision in Department of Transportation, Bureau of Traffic Safety v. Sheets, Pa. Commonwealth Ct., 410 A.2d 1295 (1980), per Judge ROGERS, is controlling in its interpretation and application of Section 1535(a). Although the decision turns on whether an appeal from the conviction of summary offenses under the Vehicle Code purges that conviction from the record pending an appeal's disposition, we held that points are indeed assessed as of the date of violation. For all practical purposes, Sherwood's motor vehicle operating privileges were suspended on August 29, 1977 when his point total exceeded the statutory amount. The successful completion of a special operator's examination could only have credited the allowable two points if taken chronologically before the final violation. Turning briefly to the question of "due diligence" by the Department, we recognize that operating privileges must be suspended within six months of the conviction resulting in suspension.[4] 121 Since only two months passed between the time of conviction and suspension, we are further convinced that the lower court erred in reinstating this driver's motor vehicle operating privileges. Accordingly, we ORDER AND NOW, this 1st day of May, 1980, the order of the Court of Common Pleas of Delaware County, dated September 26, 1978, is hereby reversed; and the order of the Commonwealth of Pennsylvania, Department of Transportation, dated November 11, 1977, suspending motor vehicle operating privileges, is reinstated. NOTES [1] In accordance with the new Vehicle Code of 1976, 75 Pa. C.S. § 1538(a): (a) Initial accumulation of six points. When any person's record for the first time shows as many as six points, the department shall require the person to attend an approved driver improvement school or undergo a special examination and shall so notify the person in writing. Upon satisfactory attendance and completion of the course or upon passing the special examination, two points shall be removed from the person's record. (Emphasis added.) [2] According to 75 Pa. C.S. § 1539(a): (a) General rule. When any person's record shows an accumulation of 11 points or more, the department shall suspend the operating privilege of the person. . . . [3] See The Vehicle Code, Act of April 29, 1959, P.L. 58, as amended, 75 P.S. § 619.1, repealed by the Act of June 17, 1976, P.L. 162, § 7. [4] Unlike Section 1535(a)'s assessment of points "as of the date of violation," Vehicle Code Section 1551, 75 Pa. C.S. § 1551, provides a different time guideline for license suspensions: Notice of suspension of licenses or permits. The department shall promptly notify each person whose license or permit is suspended . . . within six months following the conviction of a violation of this title that resulted in the addition of sufficient points to cause the suspension. (Emphasis added.)	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/8304204/	Mr. Justice CresoN delivered the opinion of the Court. This suit was begun by the filing of a summons and petition on August 25, 1964. The appellee, petitioner-contestant below, sought to contest appellant’s election to the Office of Tax Assessor of Fentress County. This suit was filed in the County Court for Fentress County, Tennessee. On December 1, 1964, the County Judge, H. B. Duncan, declared himself incompetent to hear the case and transferred the case tb the Circuit Court of Fentress County. This was done in accord with T.C.A. sec. 17-220. On January 12, 1965, the appellant filed, in the Circuit Court of Fentress County, Tennessee, a motion to remand the case to the County Court of Fentress County, Tennessee. On April 16, 1965, the appellant filed a demurrer in the Circuit Court of Fentress County, Tennessee. On April 22, 1965, the case was heard before the Honorable Boland Prince, Judge of Law and Equity Court of Anderson County, Tennessee, sitting by designation of the Chief Justice of the Supreme Court of Tennessee, upon the petition of the appellee and the demurrer of the appellant. At this hearing, the demurrer of the appellant 398was overruled and, upon appellant’s motion, lie was granted a discretionary appeal to the Supreme Court of Tennessee. This case is before us as a result of the granting of this discretionary appeal. It seems improper to consider the correctness of the Trial Judge’s action in overruling appellant’s demurrer, as this case is not properly before this tribunal. T.C.A. sec. 17-220, which allows a County Judge who is incompetent to try any cause in his Court to have any one of the Circuit Judges or Chancellors from that County to sit in his place, provides that the same shall be done “according to law”. Cases transferred from the County Court to the Circuit Court are to be tried by the Circuit Judge, as any other case at law. An election contest is a lawsuit, and is to be tried according to the forms of law. See Throgmorton v. Copeland (1949), 188 Tenn. 248, 218 S.W.2d 994. T.C.A. sec. 27-305, which allows discretionary appeals prior to final decrees, applies only to equity causes and this clearly is not such. in Hart v. Pitts (1964), 213 Tenn. 412, 374 S.W.2d 379, this Court construed the discretionary appeal statute in unambiguous terms: “(1) The statement by Mr. Justice Gailor in Matthews v. Archie, 196 Tenn. 417, 268 S.W.2d 334, that Chapter 154, Public Acts of 1953, extended the right of a circuit judge to grant an appeal from decrees overruling demurrers, was an inadvertance. An examination of that statute shows that it did not in any way relate to discretionary appeals from orders on demurrers. Insofar as the holding the Court in Matthews v. Archie, supra, construes the statute, now T.C.A. sec. 27-305, as authorizing a discretionary ap399peal from an order overruling a demurrer in a law case, that case is expressly overruled. It is only in equity causes that such a .discretionary appeal is allowed. ’ ’ It necessarily follows that this appeal was improvidently granted and confers no jurisdiction on this Court to hear the case beyond this determination. This appeal will be dismissed at cost of appellant and the cause remanded to the Circuit Court of Fentress County. BurNett, Chief Justice, and White, Dyer and Chat-tiN, Justices, concur.	01-03-2023	10-17-2022
https://www.courtlistener.com/api/rest/v3/opinions/1532839/	227 S.W.2d 559 (1950) WATSON v. STATE. No. 24629. Court of Criminal Appeals of Texas. February 15, 1950. Rehearing Denied March 22, 1950. 560 Jack W. Knight, Houston, James H. Letts, Houston, for appellant. A. C. Winborn, Cr. Dist. Atty., Houston, E. T. Branch, Asst. Cr. Dist. Atty., Houston, George P. Blackburn, State's Atty., of Austin, for the State. WOODLEY, Judge. Appellant was convicted of the offense of robbery of Mamie Cleveland by assault, and his punishment was assessed by the jury at give years confinement in the penitentiary. On the morning of April 10, 1949, Mamie Cleveland was found in her home dead, her body lying in bed covered with a blanket, her footlocker containing $127 missing. In his oral and written confessions, introduced in evidence without objection, appellant gave a detailed account of his association with Mamie Cleveland on Saturday afternoon, April 9, 1949. He said that he had seen her get money out of the footlocker to make change for Connie D. Adams. Regarding his last trip to Mamie's apartment that night, he said in his confessions: "When we got back to Mamie's house, I couldn't wake her up, so I went around on the side of the house, and pulled the window up, and reached in and shook Mamie while she was asleep on her bed. I asked her how about going to Galveston and she asked me how about coming in. She got up and opened the door and let me in. She laid back down on the bed. I was sitting on the side of the bed and I reached over and pressed my thumbs against the veins in her neck. She seemed to pass out and got limber. I pulled the cover up over her head." He further confessed that he had then taken the footlocker and contents and had removed the money after breaking the lock by dropping the footlocker, and had given Connie a part of it. Appellant did not testify on the trial. The contention is made that the evidence is insufficient to corroborate the confession, that is, to establish the corpus delicti of the offense of robbery. For this reason, it is necessary that the evidence be detailed at some length. Aside from the oral and written confessions of appellant, the evidence shows the following: Appellant, a man of family, had been keeping company with Mamie Cleveland for about two years. He frequented her apartment which was occupied by her and her two children, a daughter Dorothy Nell, 19, a son, 17, and a grandchild. The apartment consisted of two rooms, Mamie Cleveland sleeping in one and her two children and her grandchild occupying the other. In Mamie's room was a small footlocker trunk. In the trunk was a green leather sewing kit or folder containing $127, which 561 she was saving to pay on a lot she had bought. About 4 P.M. on Saturday, April 9, 1949, appellant was present and saw Mamie get money from the trunk and change a ten dollar bill for his friend Connie D. Adams. On that afternoon appellant asked Mamie to lend him $15, but she told him that she had no money except the money she had saved to pay on a lot she bought. About two weeks previously, appellant had given Mamie a pistol to sell or pawn for him, but she returned the pistol after an unsuccessful attempt to comply with his request. Appellant left the apartment about 6:30 P.M. Mamie left some time thereafter and returned home shortly after midnight. Upon her return she opened a can of beets, and after eating the beets, retired. At all times Saturday she appeared to be in a good condition of health. About 4 o'clock the following morning (Sunday, April 10, 1949), appellant knocked on Mamie's door, and getting no answer raised the window. Mamie then got up, turned on the light, and let appellant in. There was some conversation thereafter between appellant and Mamie. He stated that a fellow named "D" was with him. He asked Mamie to go to Galveston with him. No other conversation or noise was heard by the daughter, Dorothy Nell, who slept in the adjoining room, only a few feet away. She got up about 5 or 5:30 A.M., closed the door, and went back to bed and to sleep. Upon arising about 9:30 A.M. Dorothy Nell went into her mother's room. She noticed that the footlocker was gone; that the blanket was lying over her mother's head. She removed the blanket and found that her mother was dead. She testified: "My mother was lying on the bed in a crooked position like this." "One of her legs was up like this * * * and one of her arms was up and one arm was down by her side. Her left leg and arm was up. I did not see any wounds or bruises on my mother's body. I looked my mother over and did not see anything that looked like wounds or bruises on her." The officers were notified and given a description of the footlocker that was missing. Connie D. Adams, who got the change from Mamie during the afternoon, testified for appellant. According to his version, he drove appellant to Mamie's apartment, and remained in appellant's car with another boy, O. C. White; he was asleep and did not know the time except that appellant returned to the car shortly before dawn, and it was after midnight when they arrived. He disclaimed any knowledge of the footlocker having been placed in the car. Appellant made no statement to him as to what had occurred in the apartment. Connie also testified: "The next morning, which was Sunday, the defendant told me that while I was asleep in the car that night he got some money and I didn't know it, and he gave me $21 of it. "When I saw the defendant that Sunday after I got back from singing I told him the law was looking for him. I found that out when I heard a boy talking about it; he said the defendant had killed a woman. It was about five o'clock Sunday afternoon when I heard the boy say that." Connie testified that he thereafter drove appellant and appellant's wife to the police station about 9 P.M. Sunday and drove them back home. The record does not disclose what, if any, explanation was made by appellant on this occasion. Appellant's wife testified also regarding the trip to the police station, and explained that appellant was taken into a room apart from Connie and herself, and that they did not hear what was said. Appellant, however, was permitted to return home with his wife. On the following morning (Monday, April 11th), Houston police officers C. F. Langston and C. B. Sheppard went to appellant's home and took appellant and Connie D. Adams out to their car. After some conversation, the officers stated that they wanted to talk to them further and drove away with them in the car. 562 After driving a few blocks, appellant told the officers to take him back home and he would get them the footlocker. Appellant then made his confession to Officer Langston which was later reduced to writing and signed by him. The officers accompanied appellant to his car and appellant unlocked the trunk of the car and took out a footlocker. Among the contents was a green folder. The footlocker and folder were afterwards identified as being the property of Mamie Cleveland, which was missing from her room. Appellant also delivered to the officers $34 in money which he said was all of the money he had left of that taken out of the footlocker. Appellant says that there is no proof that the property was taken in robbery; that the hypothesis that it was taken by theft from a dead person is not excluded, except by resort to the confession. It is his contention that in view of the fact that no marks of violence were found on the body of the deceased, no physical evidence of a struggle sufficient to awaken the parties in the adjoining room, and that no witness saw or heard appellant threaten or assault Mamie Cleveland, and the further fact that appellant and Mamie were friendly even to the last conversation heard between them, that the evidence is insufficient to show that the property was taken by means of an assault. Therefore appellant contends that the evidence is insufficient to corroborate the confession. In determining this question the following propositions of law, well established by the decisions of this court, must be kept in mind. The confession of the guilty party alone is not sufficient to support a conviction for the offense, the confession must be corroborated. "Corroboration of the confession" in effect means proof of the corpus delicti. "Corpus delicti" as used in this connection means proof of the fact that the crime charged has been committed by someone. See 18 Tex.Jur. 451, Sec. 327. There must be proof of the corpus delicti, outside of the confession. The confession of the accused alone is not sufficient. See Davis v. State, 101 Tex.Cr. R. 243, 275 S.W. 1060. In establishing the corpus delicti, the confession may be used in connection with the other facts and circumstances, that is, the confession may be used to aid the proof of the corpus delicti. See Anderson v. State, 34 Tex. Crim. 546, 31 S.W. 673, 53 Am. St. Rep. 722; Kugadt v. State, 38 Tex. Cr.R. 681, 694, 44 S.W. 989; and Sowles v. State, 52 Tex. Crim. 17, 105 S.W. 178. The corpus delicti may be proved by circumstances as well as by direct evidence. See Kugadt v. State, supra; Brown v. State, 61 Tex. Crim. 334, 136 S.W. 265; and Tabor v. State, 52 Tex. Crim. 387, 107 S.W. 1116. And the confession may render sufficient circumstantial evidence that would be insufficient without it. See Davis v. State, supra. This being a robbery case, the corpus delicti consists of proof that property has been fraudulently taken by an assault, or by putting in fear of life or bodily injury. It does not include proof of violence or of death by violence. The statute as to corpus delicti, Art. 1204, P.C., applies to homicide cases and has no application to robbery. Applying these principles of law, does the evidence corroborate the confession, that is, does the evidence outside of the confession, considered alone or in connection with the confession, show that the crime of robbery was committed by someone? That property was fraudulently taken from the possession of Mamie Cleveland on the occasion is abundantly shown. It is immaterial as to whether she was conscious, or whether she died before or after the taking of her property. If the taking was made possible by an antecedent assault, the offense is robbery. See Alaniz v. State, 147 Tex. Crim. 1, 177 S.W.2d 965. 563 The assaulted party being dead, and there being no third person available as a witness, the state was required to resort to circumstances to prove that the property was taken in robbery. There is no medical testimony to the effect that appellant's pressing of his thumbs against the veins of her neck until she "was limp" or until she "passed out" would necessarily leave marks of violence on her body. Appellant was present with Mamie Cleveland at 4 A.M. They were alone in the room, though Connie D. Adams and O. C. White were waiting nearly in appellant's car. Mamie Cleveland was alive and apparently in good health, and was in bed when appellant arrived at 4 A.M. When discovered by her daughter later in the morning she was still in her bed, her body covered with a blanket. Appellant was gone and was later found in possession of her property which had been stolen from her apartment. Appellant suggests the hypothesis that Mamie Cleveland died a natural death at a time when appellant was not present, probably caused by her having eaten a can of beets, and that appellant returned to her apartment, found her dead, covered her body with a blanket and then formed the intent to take the property and did so. Therefore he says that the offense proven is theft from a dead person and not robbery. Aside from appellant's confession, the facts and circumstances are ample to relegate such an hypothesis to that of pure speculation. That appellant did fraudulently take the money is shown beyond question. Mamie had refused his request for a loan. He knew where the money was kept. He took container and contents as well. These circumstances show that she did not consent unless by reason of an assult. Appellant made no explanation, so far as shown by the record, other than the version of robbery given in his confession. He talked to someone at the police station. He talked to Connie D. Adams, who waited for him in the car. He gave Connie a part of the money. He did not claim at any time that he obtained the money from Mamie Cleveland in any manner other than by robbery, nor did he claim that Mamie came to her death from any cause other than by his violence. We overrule appellant's contention that the evidence is insufficient to establish the corpus delicti, to corroborate the confession, and to sustain the verdict. Appellant sought a continuance based upon the absence of an unnamed witness "Toxicologist (name unknown) who made examination of gastric contents from Mamie Cleveland and bring with you such gastric contents, all reports thereon (case #L-17418/0-344), Bureau of Identification and Records, Camp Mabry, Austin, Texas." It was represented that said witness, if present, would testify that Mamie Cleveland died a natural death, and that she was dead prior to the taking of her money by appellant, and prior to the time when appellant was in the presence of Mamie Cleveland. The application for continuance is not in compliance with the statute which requires that it state that the application is not made for delay. The allegation that it is not made for "delay merely" or "merely for the purpose of delaying" is not sufficient. See Turpin v. State, 149 Tex. Crim. 179, 192 S.W.2d 277; and Art. 543, Sec. 5, C.C.P. Moreover, the witness is not shown to be competent to testify that Mamie Cleveland was dead before appellant came to her house; and as stated, we think the question of the time of her death is immaterial if the taking was made possible by an antecedent assault made by appellant. Other bills of exception have been examined and no error is found. The judgment of the trial court is therefore affirmed. Opinion approved by the Court.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532881/	227 S.W.2d 774 (1950) SKELTON v. BARNETT. Supreme Court of Tennessee. March 17, 1950. C.L. Boyd, Waynesboro, for complainant. Ross & Ross, Savannah, for defendant. NEIL, Chief Justice. This suit had its origin in the county court of Wayne County in which A.H. Skelton filed his original petition against Albert Barnett purporting therein to contest the election of the defendant to the office of Justice of the Peace. The petition consisted of 21 typewritten pages and charged that the election for the office of Justice of the Peace of the First Civil District was fraudulent and void and should be so declared. Both complainant and the defendant were candidates, the latter receiving 775 a substantial majority in the election. It would unduly prolong this opinion for us to give a detailed statement of all the frauds alleged to have been committed in said election. Following a recitation of illegal actions and practices by many persons not named, and the election officials, it charges that these violators of the law are immune from criminal prosecution "because of their prominence and because of the general apathy on the part of Courts and juries to prosecute, indict, try, and convict", and that such practices exist in other counties of the State to the shame of the general public. The petition concludes with the following averment: "Petitioner now states that this suit is not brought by him in his private right as a candidate, and to recover the office in question, because he was elected to such office, but it is brought by him as a citizen to redress a public wrong." The petition prays that the court declare the entire election for Justice of the Peace "illegal and void" and for a decree "adjudging that there is a vacancy in the office" and that this fact be certified to the Commissioners of Elections to the end that a new election be held "without delay". The county judge was disqualified from hearing the case and transferred it to the chancery court of Wayne County. The defendant filed a demurrer to the petition upon numerous grounds. The first ground of the demurrer goes to the very heart of the question before us and reads as follows: "Because the petition, in its statements and allegations, is wholly insufficient for petitioner to be granted any relief of any character". The third ground challenges the sufficiency of the petition as follows: "The petition shows on its face, that the petitioner does not insist or contend that he was elected at said election, but that defendant cannot claim title to the office, although duly and regularly elected by a majority of the votes cast * * that the election was void." The Chancellor sustained the demurrer upon the foregoing grounds and other grounds and dismissed the bill. While the petitioner asks that the suit be treated as an "election contest" it cannot be so treated for the reason that he is not before the Court claiming any relief as a contestant for the office. Conceding as we must that all the allegations in the petition are true it does not follow that the suit can be prosecuted merely for the vindication "of a public wrong". Jared v. Fitzgerald, 183 Tenn. 682, 195 S.W.2d 1. While this case was brought for a declaratory judgment it was held on the authority of Patton v. City of Chattanooga, 108 Tenn. 197, 65 S.W. 414, and other cases, that the complainants were not entitled to relief because they had suffered no injury that was not common to all citizens. If, as a result of the gross frauds alleged to have been committed in the instant case, the public at large in Wayne County and especially in the town of Waynesboro suffered an injury, it is one that is common to every citizen and it cannot be corrected or repaired in an action brought by any private citizen. Neither the county judge nor the chancery court has jurisdiction of such proceedings. The case at bar is not analogous to State ex rel. Davis v. Kivett, 180 Tenn. 598, 177 S.W.2d 551. In that case the State of Tennessee on relation of John P. Davis, who was a candidate for county judge in the general election, filed a bill in the chancery court against J. Kyle Kivett, the successful candidate, and also against the County Election Commission, to have the election annulled and declared void for fraud. The relator did not seek to have himself installed as county judge, "but for the general welfare". The present action is in the nature of a quo warranto proceeding just as State ex rel. Weaver v. Maxwell, Tenn.Sup., 224 S.W.2d 832. It is not maintainable at the instance of a private citizen, but must be brought on relation of the State of Tennessee There is no case in the books so far as we have been able to find wherein an individual citizen is permitted to file a bill seeking to have an election declared void upon any ground. Since the complainant in the instant case seeks no relief whatever for himself he is not permitted *776 to challenge the result of the election solely upon the ground that he seeks to "redress a public wrong". We find no error in the decree of the Chancellor, and it is accordingly affirmed. All concur.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532879/	227 S.W.2d 655 (1950) STATE ex rel. TAYLOR, Attorney General, v. NANGLE, Judge. No. 41564. Supreme Court of Missouri, en Banc. February 13, 1950. Rehearing Denied March 13, 1950. J. E. Taylor, Attorney General, Arthur M. O'Keefe, C. B. Burns, Jr., Robert R. Welborn, Assistant Attorneys General, for relator. Morris A. Shenker, St. Louis, for respondent. CLARK, Judge. Original prohibition to prevent the respondent circuit judge from proceeding further in a cause pending before him in the Circuit Court of the City of St. Louis, 656 and to abate the orders heretofore made in such cause. The cause as to which prohibition is sought was filed on March 18, 1949, by Pioneer News Service, Inc., against the Southwestern Bell Telephone Company, praying for a mandatory injunction to compel the defendant to restore telephone service to the plaintiff and for a judgment for damages in the sum of $100,000.00. On February 5, 1947, Phil M. Donnelly, then governor, and J. E. Taylor, attorney general, of Missouri, joined in a telegram to Southwestern Bell stating that telephone service supplied by it was being used by Pioneer News to register and record bets on horse races in violation of Section 4674 of our statutes. All mention of statutes will refer to sections of Revised Statutes Missouri, 1939, and Mo.R.S.A. The telegram referred to a provision in the telephone company's tariff on file with the Public Service Commission, effective September 2, 1943, authorizing the discontinuance of telephone service upon notice from any law enforcement official that such service was being used as an aid in the violation of law, and requested the telephone company to discontinue service to Pioneer News. On February 6, 1947, the telephone company disconnected all telephones, except one, in the possession of Pioneer News. On March 18, 1949, more than two years later, Pioneer News brought the suit above mentioned against the telephone company. Respondent judge entered an order for the telephone company to show cause why a mandatory injunction should not be issued compelling it to restore telephone service to the plaintiff. On motion the attorney general was permitted to intervene and he and the telephone company filed separate motions to dismiss on the ground that the Public Service Commission had exclusive primary jurisdiction of the subject of the action. The telephone company also filed its return to the order to show cause. On April 12, 1949, respondent entered his "finding of facts, conclusions of law, judgment and decree." He stated that "original jurisdiction of this action lies exclusively in the Public Service Commission," and that jurisdiction of the court is foreclosed except to the limited extent of prescibing the behavior of the parties while they await action by the Commission. He stated that the court had such limited jurisdiction because the Commission has no power to enforce temporary or interlocutory relief pending a hearing. He referred to an order of the Commission made in 1945 requiring the telephone company to continue service to Pioneer News and stated: "The court is aware that the Commission may find circumstances different from those in the case of 1945; but until the Commission does so, and such finding would seem to be within the exclusive jurisdiction of the Commission, the court is of the opinion that plaintiff's telephone service should be restored, and should be continued pending a determination by the Commission." The decree enjoined the telephone company from discontinuing service to Pioneer News until authorized to do so by order of the Commission or until further order of the court. On April 15, 1949, the Public Service Commission entered an order reciting that the attorney general had called to its attention the order issued by respondent on April 12, 1949; that the action of the telephone company in discontinuing service had not been brought before it by Pioneer News; and authorizing the telephone company to discontinue such service under its tariff heretofore mentioned. On April 18, 1949, on motion of Pioneer News, respondent entered a further order, calling attention to the order of the Commission on October 4, 1945, by which the telephone company was ordered to continue to furnish service to Pioneer News until discontinued by mutual consent or further order of the Commission. Respondent stated that there had been no application for a rehearing of such order, and that the later order of the Commission, made on April 16, 1949, is void because made ex parte without notice. Respondent ordered that the injunction be kept in force until the further order of the court or until the 657 order of the Commission dated October 4, 1945, be revoked or modified by the Commission in accordance with the statutes. After unavailing motions, the attorney general filed in the Supreme Court the pending application for prohibition and the same is now at issue. A great many decisions have been cited. We have examined them, but it will be necessary to discuss only a few of them. The legal correctness of no case cited is questioned by either party, but the parties seriously disagree as to the relevancy of some of the cases to the facts of the instant case. We agree with the cases cited by respondent as to the general nature of the writ of prohibition. Those cases and many others hold that the writ is not a writ of right, but its issuance in a given case is addressed to the sound discretion of the court. However, the chief purpose of the issuance of the writ by this court is to confine a lower court within its proper jurisdiction; that is, to prevent it from acting without or in excess of its rightful jurisdiction. We do not agree with respondent's contentions that the writ is improper here either because relator has another adequate remedy or because the act sought to be prohibited has already been performed. Remedy by appeal is unavailable because no final judgment or appealable interlocutory judgment has been rendered. Civil Code, Section 126, Mo.R.S.A. § 847.126. For the same reason certiorari would not avail. State ex rel. Walbridge v. Valliant, 123 Mo. 524, 27 S.W. 379, 28 S.W. 586. Ordinarily prohibition is preventive, rather than corrective, and issues to restrain the commission of a future act and not to undo on act already performed. Yet there is abundant authority that the remedy is available where a judicial body is proceeding without jurisdiction and some part of its action remains to be performed. If respondent was without jurisdiction to grant the injunction, its enforcement may be prohibited. 50 C.J., p. 662, sec. 18; same, p. 711, sec. 139; St. Louis, K. & S. Ry. v. Wear, 135 Mo. 230, 36 S.W. 357, 658, 33 L.R.A. 341; State ex rel. Rogers v. Rombauer, 105 Mo. 103, 16 S.W. 695; State ex rel. Ellis v. Elkin, 130 Mo. 90, 30 S.W. 333, 31 S.W. 1037; State ex rel. Schoenfelder v. Owen, 347 Mo. 1131, 152 S.W.2d 60. In State ex rel. St. Louis S. F. Railway Co. v. Russell, 358 Mo. 1136, 219 S.W.2d 340, this court modified an injunction granted by a circuit court. Cases cited by respondent are those in which the act sought to be prohibited had already been fully performed. Our statutes, Sections 5663-5690, inclusive, vest in the Public Service Commission extensive control over public utilities including telephone companies. Specifically, the Commission, either upon its own motion or upon complaint of an interested party, may determine the reasonableness of rates to be charged and the adequacy of service to be performed by such utilities, and to require such service to be furnished to any person lawfully entitled thereto. The power to determine such matters, in the first instance, is vested exclusively in the Commission and not in the courts. State ex inf. Barker v. K. C. Gas Co., 254 Mo. 515, 163 S.W. 854; State ex rel. Cirese v. Ridge, 345 Mo. 1096, 138 S.W.2d 1012; State ex rel. Kansas City Power & Light Co. v. Buzard, 350 Mo. 763, 168 S.W.2d 1044. Respondent expressly concedes that exclusive primary jurisdiction is vested in the Commission to determine whether the telephone company is justified in discontinuing service to Pioneer News. But respondent contends that his court has jurisdiction of the subject matter and the parties in the cause pending before it and, as a court of equity, has power by mandatory injunction to place the parties in status quo until the matter can be heard and determined by the Commission. He further contends that the Commission cannot grant such relief pending its final determination. The Commission is not a court and has no power to render a judicial decision, but it can sue or be sued. It can resort to the courts to enforce its orders and such orders can be reviewed by a circuit court 658 of proper venue, to wit, in a county where it holds a hearing or in Cole County where its principal office is located. Section 5690. The injunction granted by respondent does not place the parties in status quo as to the conditions which existed at the time the suit was filed. It reaches back more than two years before that time and orders restoration of telephone service which has not been furnished since February, 1947. To do that the order of respondent refers to an order of the Commission made in 1945. By that order the Commission refused to authorize the telephone company to discontinue service to Pioneer News, but neither the Commission nor Pioneer News has ever made any effort to enforce that order although it has not been complied with since February, 1947. Even in its petition in the instant suit, Pioneer News does not mention or reply upon the 1945 order or any other order of the Commission. As stated, respondent expressly concedes that jurisdiction to finally decide the controversy is vested in the Commission; also that, notwithstanding the 1945 order, changed conditions may or may not justify the telephone company in discontinuing service and that only the Commission, in the first instance, may determine that question. But, until the Commission takes further action, respondent contends that his court has the limited jurisdiction specified in its decree. Cases cited by respondent in support of that contention are not in point. State ex rel. Public Service Comm. v. Blair, 347 Mo. 220, 146 S.W.2d 865, was an original proceeding in this court to prohibit a circuit judge from determining and deciding a suit pending in his court. That suit was brought by a number of drayers and haulers against the Public Service Commission and certain law enforcement officers. Its purpose was to obtain a judgment declaring that the Bus and Truck Act, Mo.R.S.A. §§ 5720-5738, did not apply to their operations and to restrain defendants from attempting to enforce it against them. We sustained plaintiffs' contention that the Act did not apply to them; that the Commission was entirely without jurisdiction to enforce it against them and, of course, could not prohibit the circuit court from acting. Southern Railway Co. v. Atlanta Stove Works, 128 Ga. 207, 57 S.E. 429, cited by respondent, was a suit for mandamus by a shipper to compel the railroad to accept a shipment at the rates which had been fixed by the State Railway Commission. The plaintiff prevailed against the defenses that he had another adequate remedy and that the rate was unreasonable. There was no question of venue or jurisdiction in the case and the opinion has no relevancy to the instant case. State ex rel. St. Louis S. F. Railway Co. v. Russell, 358 Mo. 1136, 219 S.W.2d 340, has some similarity to the instant case, but does not sustain respondent's contention. That was an original proceeding in this court to prohibit a circuit court from exercising jurisdiction in a suit by certain employees of the railway to enjoin it from carrying out certain employment practices. We held that original jurisdiction to decide the controversy was vested in the Federal Mediation Board, but that the circuit court had jurisdiction to enjoin the discharge of the plaintiff employees until the Mediation Board could pass upon the matter or for a reasonable time to permit the jurisdiction of the Board to be invoked. There the effect of the temporary injunction was actually to preserve the status quo, that is, to prevent the employees from being discharged until the matter could be considered by the tribunal having jurisdiction. Here the injunction does not preserve the condition existing between the parties at the time of the institution of the suit, but usurps the original jurisdiction of the Commission to determine whether Pioneer News is entitled to a service which it has not had for more than two years before the suit was filed. Besides, in the instant suit we have a question of venue, as distinguished from jurisdiction, which was not present in the case of State ex rel. v. Russell. Respondent concedes that, notwithstanding the Commission's 1945 order, changed conditions may have justified discontinuance of 659 telephone service in 1947. Whether changed conditions did justify that action, only the Commission has primary jurisdiction to decide. In fact, the Commission attempted to decide that question in its finding and order of April, 1949, wherein it granted to the telephone company permission to discontinue service. But, respondent says the later order of the Commission was made without notice or hearing and is void. We need not decide that question. Pioneer News appearing specially, unsuccessfully, asked the Commission to revoke that order. Under the statutes it could have obtained a speedy review by the circuit court of Cole County. Even if no order had been made by the Commission, its doors were and are open for an application by Pioneer News for restoration of service and it alone has primary jurisdiction of such an application with the right of review by the circuit court of the proper venue, to writ, Cole County or, if the hearing is held elsewhere, the county where the matter is heard; and such court of proper venue has power to make such orders as equity may authorize. Respondent says that the telegram from the governor and attorney general did not warrant the telephone company in discontinuing telephone service to Pioneer News, citing Andrews v. Telephone Co., D.C., 83 F. Supp. 966, 968. In that case the telephone company notified one of its customers that it had been informed by the United States District Attorney that she was using telephone service in aid of gambling operations and that such service would be discontinued on a certain date. The tariff of the telephone company purported to authorize such action upon notice and request of any law enforcement officer. The customer brought suit in the district court of the District of Columbia praying for a mandatory injunction. In effect, the opinion says that mere notice from a law enforcement officer does not justify a public utility in refusing to furnish service; "to confer what would amount to judicial power on a law enforcement officer and to exercise such power ex parte would be violative of due process of law * * *." We agree with much that is said in that opinion, but we do not regard it as complete authority for respondent's position in the instant case. No temporary injunction was issued in that case and the question of the primary jurisdiction of the Public Utilities Commission of the District of Columbia was not discussed. The opinion does say, however, "A public utility may refuse, and in fact, must refuse, service if to its knowledge the service is being used for illegal purposes. This fact must, however, be established." "The telephone company, for example, may have a right, if it sees fit to do so, to request the United States Attorney to disclose whatever evidence he has in support of the information contained in the notice. The telephone company must make its own decision whether the evidence is sufficient to justify discontinuance of the service." In the instant case the notice from the governor and attorney general did not amount to a judicial finding of the facts stated therein and did not constitute full and complete authority for the telephone company to discontinue service. But, coming from the chief law enforcement officers of the State, it was not to be ignored or lightly considered. No doubt the telephone company could have applied to the Commission for permission to discontinue service. Apparently it was satisfied that the statements contained in the telegram were true and assumed the responsibility of discontinuing service. The initial jurisdiction to determine whether the action of the telephone company is legally justified is vested in the Public Service Commission and not in the courts. Upon the record before us we hold that respondent is without jurisdiction to grant or enforce an injunction and our provisional rule in prohibition must be and is hereby made absolute. All concur.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532712/	489 Pa. 580 (1980) 414 A.2d 1043 COMMONWEALTH of Pennsylvania v. Terry L. HESS, Appellant. Supreme Court of Pennsylvania. Argued October 18, 1979. Decided May 30, 1980. 581 582 Richard A. Sprague, Pamela W. Higgins, Philadelphia, for appellant. Joseph C. Madenspacher, Asst. Dist. Atty., for appellee. Before EAGEN, C.J., and O'BRIEN, ROBERTS, NIX, MANDERINO, LARSEN and FLAHERTY, JJ. 583 OPINION NIX, Justice.[] On April 29, 1976, a criminal complaint was issued in Lancaster County charging Terry L. Hess with perjury. The perjury was alleged to have occurred during testimony of Mr. Hess in the case of Commonwealth v. Haefner,[1] Nos. 3218-20 of 1975, also occurring in Lancaster County. This first complaint was quashed by order of the Court of Common Pleas of Lancaster County because of a substantive defect. A second complaint charging the same crime was voluntarily withdrawn by the District Attorney. A third complaint was filed, again charging the same crime, and a preliminary hearing was held thereon on August 27, 1976 before a district justice, following which appellant Hess was held for court. On August 31, 1976, four days after the preliminary hearing, an information was filed by the District Attorney charging Hess with perjury. Thereafter, on September 10, 1976 among other pre-trial motions, a Petition to Quash Information, Return of Transcript, Complaint and to Declare Preliminary Hearing Null and Void was filed on Mr. Hess' behalf. Following the submission of briefs and argument by the parties, a judge of the Court of Common Pleas on November 24, 1976 dismissed the petition. The basis of the dismissal was that one admitted to bail cannot be heard to complain of the inadequacies of the evidence offered during the preliminary hearing. Further, the Court of Common Pleas denied appellant's request to certify the matter for appeal pursuant to the Appellate Jurisdiction Act, Act of July 31, 1970, P.L. 673, No. 223, Art. V, § 501(b), formerly found at 17 P.S. § 211.501(b). Appellant filed an appeal to the Superior Court challenging the November 24 order. The District Attorney filed a motion to quash the appeal, contending that the November 24 order was interlocutory and not appealable. The Superior Court subsequently certified 584 the appeal to this Court for consideration and determination. Implicit in the Superior Court's certification was its uncertainty as to the proper disposition of the motion to quash. The underlying question raised in this appeal is the feasibility of permitting the trial process to be interpreted for the purpose of providing immediate review of the denial of a claim of the nature raised herein. The answer to this question will turn upon the nature of the right being asserted. See, e.g., Commonwealth v. Bolden, 472 Pa. 602, 373 A.2d 90 (1977). Complexity is added to the issue presented by virtue of the Common Pleas Court's refusal to address the merits of the question presented to it. If we were to limit our conclusion to the view that consideration at this juncture was inappropriate for a reason other than that decided by the court below, then we would leave unanswered whether the initial request for consideration before the Court of Common Pleas was properly refused. In view of the apparent uncertainty in this area and its importance to our jurisprudence, we will attempt to answer both questions, to wit: whether appellant is entitled to review at either or both levels. An additional reason for examining the validity of the lower court's conclusion, i.e., the underlying merit of the claim raised by appellant was not cognizable at that stage, is that if correct it would necessarily follow that there would also be no right of appellate review of the question. A proper analysis of the questions presented requires that we first discern the true nature of the claim appellant was attempting to raise. In styling the appellation of the motion, appellant elected to set forth various types of relief he sought. He was requesting that the information be quashed and that the complaint and transcript be returned to the appropriate body, who would be empowered to overrule the district justice's finding of a prima facie case. The reason offered as his basis for this relief was the assertion that the Commonwealth had failed to prove a prima facie case at the preliminary hearing. Since the court's right to exercise jurisdiction over the person of the accused in a criminal case is dependent upon 585 the Commonwealth's ability to establish a prima facie case, see Commonwealth v. Prado, 481 Pa. 485, 393 A.2d 8, 10 (1978) (citing cases), appellant was in fact asserting an unlawful detention. Thus, regardless of the designation used by appellant, the true nature of the motion was a request for habeas corpus relief. Our precedent establishes that we will not dismiss a request for habeas corpus relief solely on the basis that the pleading raising the claim was incorrectly labeled, where the purport of the motion is evident. Commonwealth v. Hetherington, 460 Pa. 17, 331 A.2d 205 (1975). The great writ of habeas corpus ad subjiciendum was designed to test the legality of the restraints upon an accused's liberty. The Habeas Corpus Act of 1785[2] is entitled "[a]n Act for the better securing personal liberty, and preventing wrongful imprisonments." Its preamble states that "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." The right to the protections afforded by this writ have long been part of our Commonwealth's history. Our state constitution has provided that "the privilege of the writ of habeas corpus shall not be suspended, unless when in case of rebellion or invasion the public safety may require it." Pa.Const., art. 1, § 14. Blackstone said of this remedy: "The great and efficacious writ, in all manner of illegal confinement, is that of habeas corpus ad subjiciendum; directed to the person detaining another, and commanding him to produce the body of the prisoner, with the day and cause of his caption and detention." 3 W. Blackstone, Commentaries []131. In discussing the federal constitution's habeas corpus provision, see U.S.Const., Art. 1, § 9, the Supreme Court has stated: We do well to bear in mind the extraordinary prestige of the Great Writ, habeas corpus ad subjiciendum, in 586 Anglo-American jurisprudence * * * Received into our own law in the colonial period, given explicit recognition in the Federal Constitution, Art. I, § 9, cl. 2, incorporated in the first grant of federal court jurisdiction, Act of September 24, 1789, * * * habeas corpus was early confirmed by Chief Justice John Marshall to be a "great constitutional privilege." * * * Although in form the Great Writ is simply a mode of procedure, its history is inextricably intertwined with the growth of fundamental rights of personal liberty. For its function has been to provide a prompt and efficacious remedy for whatever society deems to be intolerable restraints. Its root principle is that in a civilized society, government must always be accountable to the judiciary for a man's imprisonment: if the imprisonment cannot be shown to conform with the fundamental requirements of law, the individual is entitled to his immediate release. * * * History refutes the notion that until recently the writ was available only in a very narrow class of lawless imprisonments. For example, it is not true that at common law habeas corpus was exclusively designed as a remedy for executive detentions; it was early used by the great common-law courts to effect the release of persons detained by order of inferior courts. * * * Nor is it true that at common law habeas corpus was available only to inquire into jurisdiction, in a narrow sense, of the committing court. Fay v. Noia, 372 U.S. 391, 401-02, 83 S. Ct. 822, 827-830, 9 L. Ed. 2d 837 (1963). In addition to the deference this mode of procedure has traditionally enjoyed, it is also germane to consider the purpose of the preliminary hearing in the criminal trial process. The primary reason for the preliminary hearing is to protect an individual's right against unlawful arrest and detention. It seeks to prevent a person from being imprisoned or required to enter bail for a crime which was never committed, or for a crime with which there is no evidence of his connection. . . . 587 Commonwealth ex rel. Maisenhelder v. Rundel, 414 Pa. 11, 15, 198 A.2d 565, 567 (1964). See also Commonwealth v. Hetherington, supra, 460 Pa. at 21-22, 331 A.2d at 208. In refusing to reach the merits of appellant's claim that the Commonwealth had failed to establish a prima facie case, the lower court relied upon some of the earlier case law in this jurisdiction. At one point, it was maintained that an accused who is admitted to bail is not under sufficient state "custody" as to warrant immediate review of the justification for the restraint imposed. Commonwealth v. Weinstein, 177 Pa.Super. 1, 109 A.2d 235 (1954). The Weinstein view has since been expressly rejected. In Commonwealth ex rel. Paulinski v. Isaac, 483 Pa. 467, 397 A.2d 760 (1979) this Court pointed out that the refusal to permit the use of this procedure simply because appellant was in a bail status would result "in placing central emphasis on the history of the writ rather than upon its suitable employment in maintaining the balance `nice, clear and true between the state and the accused.'" Id., 483 Pa. at 472, 397 A.2d at 763. The restraints on an accused bound over for court and released on bail are sufficient to satisfy the custody requirement of a habeas corpus petition. Commonwealth ex rel Paulinski v. Isaac, supra, 483 Pa. at 472-473 & n. 2, 397 A.2d at 763, 764 & n. 2. Thus, the reason offered by the court below in justification of its refusal to reach the merits of appellant's complaint has been rejected by this Court and we now reaffirm the position set forth in Commonwealth ex rel. Paulinski v. Isaac, supra. However, we note that the decision of the trial court was filed on November 24, 1976 and that our decision in Isaac was handed down on January 24, 1979. Thus, the ruling of the lower court at the time it was made was in accordance with the then prevailing law. See Commonwealth v. Weinstein, supra. Although this fact may justify the court's action, it does not provide a basis for concluding that appellant is not now entitled to appellate review.[3] 588 The Commonwealth also offers as a basis for the refusal of the Common Pleas Court to consider the merits that any error at the preliminary hearing was cured by the filing of an information. This argument is premised upon the assumption that for these purposes there is no difference between the indictment process and the information process. The rationale for the rule that a defendant could not look behind an indictment to a prior irregularity during the preliminary stage, where the irregularity asserted was the insufficiency of the evidence presented at the preliminary hearing, was that theoretically the indictment provided an independent judicial judgment (as opposed to the judgment of a law enforcement agency) on the sufficiency of the evidence. Since the preliminary hearing was designed to provide the same protection, it was deemed that no harm was suffered even if the evidence was insufficient at the preliminary hearing, if the evidence before the grand jury was found to support a true bill. Commonwealth v. Weinstein, supra, 177 Pa.Super. at 2, 109 A.2d 235 (citing cases); see also Commonwealth v. Manni, 223 Pa.Super. 403, 405, 302 A.2d 374 (1973). Whereas the former rule, at least in theory, may have had some legitimacy, it is obvious that the information procedure that has now been substituted for the indictment process cannot in any way be considered a second judicial determination of the quantum of the evidence available to require an accused to stand trial. We, therefore, also reject this argument as a basis for finding that the Court of Common Pleas could properly refuse to consider the merits of appellant's claim.[4] In considering whether or not appellant may immediately appeal the dismissal of his claim to habeas corpus 589 relief, it must be remembered that the rules of appealability are not reciprocal in this area. While the Commonwealth may appeal from an order discharging a defendant upon a writ of habeas corpus, Commonwealth ex rel. Bryant v. Hendrick, 444 Pa. 83, 280 A.2d 110 (1971); Doyle v. Commonwealth ex rel. Davis, 107 Pa. 20 (1884), it is equally well settled that the defendant may not immediately appeal from the denial of his pretrial application for habeas corpus relief. Commonwealth v. Myers, 457 Pa. 317, 322 A.2d 131 (1974); Commonwealth ex rel. Gordy v. Lyons, 434 Pa. 165, 252 A.2d 197 (1969); Commonwealth ex rel. Bittner v. Price, 428 Pa. 5, 235 A.2d 357 (1967); Commonwealth ex rel. Fisher v. Stitzel, 418 Pa. 356, 211 A.2d 457 (1965); Commonwealth ex rel. Tiller v. Dye, 177 Pa.Super. 388, 110 A.2d 748 (1955). Although it has been deemed appropriate to permit immediate review by the court of common pleas of the finding of a prima facie case by the district magistrate, a balancing of the further disruption of the trial process against the harm to the accused weighs in favor of barring immediate appellate review unless "exceptional circumstances" are present. See Commonwealth ex rel. Riggins v. Superintendent of Phila. Prisons, 438 Pa. 160, 263 A.2d 754 (1970); Commonwealth ex rel. Boatwright v. Hendrick, 436 Pa. 336, 260 A.2d 763 (1969); Commonwealth v. Lindsley, 241 Pa.Super. 522, 524, 366 A.2d 310 (1976). Thus, under prior case law it is firmly established that the denial of a habeas corpus claim, based upon the insufficiency of the evidence presented to the issuing authority, without a showing of exceptional circumstances (which have not been argued here), will not provide a basis for immediate appellate review. Moreover, we are satisfied that there is no compelling reason to depart from this rule. In the unlikely event, the district justice and the court of common pleas having the habeas corpus application, were both in error in their assessment of the Commonwealth's evidence against the accused, the trial would not proceed beyond the demurrer stage. If a legitimate question is raised as to the existence of a prima facie case, and the common pleas court has a reservation as 590 to the propriety of its ruling, that court has the alternative of certifying the question pursuant to 42 Pa.C.S.A. § 702(b).[5] If in fact it is determined at trial that the evidence of the Commonwealth is sufficient to be submitted to the jury, then any deficiency in the presentation before the district justice would have been harmless. Finally, if the deficiency at the preliminary hearing stage can be shown to have tainted the verdict, in that event the direct appeal would provide an adequate remedy.[6] Thus, after weighing the slight possibility that the accused might unnecessarily have been required to proceed with trial up to the demurrer stage against the very real delay problem that would be created if we were to provide immediate appellate review, our present rule is justified and compels us to decline any invitation to change it. Accordingly, the motion to quash the appeal is granted, and the cause is remanded for trial. MANDERINO, J., did not participate in the decision of this case. ROBERTS, J., filed a concurring opinion in which LARSEN, J., joined. ROBERTS, Justice, concurring. I agree with the majority that appellant's appeal must be quashed. I do so, however, for reasons different from those of the majority. It is well-settled that after an indictment or information is issued, a defendant may not invalidate such indictment or information on the basis of a defect in a prior preliminary proceeding. See Albrecht v. United States, 273 U.S. 1, 5, 47 S. Ct. 250, 251, 71 L. Ed. 505 (1927) (Brandeis, J.) ("As the affidavits on which the warrant issued had not been properly verified, the arrest was in violation of the clause in the Fourth Amendment . . . . But it does not follow that, because the arrest was illegal, the information was or became void."); see also United 591 States v. Hughes, 311 F.2d 845 (3rd Cir. 1962); 8 Moore's Federal Practice para. 4.02. Once a court acquires jurisdiction over the defendant by reason of indictment or information, any challenge to the validity of prior assertions of jurisdiction, as in a preliminary hearing, is moot. See Commonwealth v. Krall, 452 Pa. 215, 219, 304 A.2d 488, 490 (1973). Accordingly, I would grant the Commonwealth's motion to quash appellant's appeal from the trial court's denial of appellant's pre-trial motions. LARSEN, J., joins in this concurring opinion. NOTES [] This case was reassigned to the writer on November 9, 1979. [1] 473 Pa. 154, 373 A.2d 1094 (1977). [2] Act of February 18, 1785, 2 Smith's Laws 275, §§ 1 et seq.; as amended, 12 P.S. §§ 1871 et seq. (1967); repealed by J.A.R.A. effective June 27, 1978, recodified at 42 Pa.C.S.A. §§ 6501 et seq. (1979 Pamphlet). [3] Thus, our disposition of this case does not create any injustice to the appellant for two reasons. First, the common pleas court applied the correct law at that time. Second, immediate appellate review of a denial of habeas corpus relief has traditionally been denied. [4] Under Pa.R.Crim.P. 307 the omnibus pretrial motion must be made within 30 days after the arraignment. This, of course, would also include a complaint of this nature. We are therefore satisfied that the allowance of a writ of habeas corpus for this purpose will not create an additional delay in the trial procedure. [5] In the present case, the court of common pleas refused to certify the matter for appeal under the predecessor to 42 Pa.C.S.A. § 702(b). [6] See, e.g., Commonwealth v. Loar, 264 Pa.Super. 398, 399 A.2d 1110, allocatur denied (1979), reconsideration denied (1980).	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532739/	414 A.2d 1203 (1980) Jean MATHESON v. The BANGOR PUBLISHING COMPANY, d/b/a The Bangor Daily News and V. Paul Reynolds. Supreme Judicial Court of Maine. Argued April 28, 1980. Decided May 28, 1980. Kobritz & Hamilton, Harold C. Hamilton (orally), Bangor, for plaintiff. Eaton, Peabody, Bradford & Veague, Bernard J. Kubetz (orally), Bangor, for defendants. Before McKUSICK, C. J., and WERNICK, GODFREY, NICHOLS, and GLASSMAN and ROBERTS, JJ. 1204 PER CURIAM. This report under M.R.Civ.P. 72(c) seeks our interlocutory review of a Superior Court ruling that defendant Reynolds in a discovery deposition must reveal the identity of a source of information he allegedly consulted prior to writing an editorial for the Bangor Daily News. Since we conclude the constitutional issue attempted to be raised by the parties is not appropriate for us to address on this record and at this stage of the proceeding, we discharge the report as improvident. This report comes to us on an agreed statement of facts. Plaintiff Jean Matheson brought this action in the Superior Court, on behalf of herself and her thirteen-year-old daughter, Jenny Selk, for alleged invasion of privacy by an editorial entitled "An extra kid" written by defendant Reynolds and published on June 12, 1978, by the Bangor Daily News.[1] The Matheson complaint set forth two separate counts, based apparently on sections 652D ("Publicity Given to Private Life") and 652E ("Publicity Placing Person in False Light"), respectively, of the Restatement (Second) of Torts (1976). Count I alleged that the matter publicized by the editorial was of a kind that would be highly offensive to a reasonable person and that was not of legitimate concern to the public. Count II alleged that the editorial placed the mother and daughter before the public in a false light, which would be highly offensive to a reasonable person, and that defendant Reynolds had knowledge of or acted in reckless disregard as to the false light in which they would be placed. In plaintiff's view the Bangor Daily editorial placed her and her daughter in a false light by suggesting that Jenny was an extra or unwanted child, who felt unloved, and by suggesting that Jenny's mother did not love or properly care for her. After defendants' motion for summary judgment had been denied by one Superior Court justice, plaintiff's counsel took the deposition of defendant Reynolds and of Mr. Banfield, the copy desk editor. During his deposition, Mr. Reynolds stated that before writing the editorial he had confirmed the accuracy and legitimacy of Jenny's advertisement by speaking to a person who knew plaintiff and her daughter. Mr. Reynolds refused to disclose the identity of his source or the conversations he had had with other members of the newspaper's editorial board concerning the editorial. Mr. Banfield also refused to answer questions regarding the editorial process. Plaintiff thereupon moved for an order requiring "the deposees to answer Plaintiff's questions." A second Superior Court justice heard plaintiff's motion and at the end of an opinion discussing only the question whether Mr. Reynolds must disclose his source, stated "Plaintiff's Motion is hereby GRANTED." He made no specific order compelling discovery. Cf. State v. Baker, Me., 390 A.2d 1086, 1089 (1978). While describing the source's identity as "crucial" to plaintiff's burden on her "false light" claim of establishing that defendants had acted with knowledge or in reckless disregard of the editorial's falsity, the Superior Court justice specifically stated that he did not "intimate that the evidence is sufficient for the jury to decide [that] the editorial suggests 1205 what Plaintiff claims, and hence that it [i. e., the jury] could even reach the issue of Defendant Reynolds' `actual malice'." The Superior Court's decision was silent as to plaintiff's questions to both deposees regarding conversations occurring during the editorial process. Defendants moved to report the case to this court on the ground that Reynolds would be "irreparably harmed" unless he could have an interlocutory review concerning the disclosure of a confidential source. The Superior Court ordered the report under M.R.Civ.P. 72(c) because there was no established precedent in Maine involving compelled disclosure in an invasion of privacy action of a journalist's confidential source. The parties prepared an agreed statement as the record on report that included neither the entire materials submitted to the first Superior Court justice on defendants' summary judgment motion nor his ruling on that motion beyond the mere docket entry of denial. The single question, which the parties have abstracted from the case in an attempt to get a binding Law Court decision even before discovery is complete and the case in order for trial in the Superior Court, arises from defendants' claim of a qualified privilege protecting journalists' confidential sources. Defendants argue that the claimed privilege is grounded in the freedom-of-the-press clauses of the federal First Amendment and of Article I, § 4 of the Maine Constitution. On the other hand, plaintiff cites persuasive authority to the contrary, including Herbert v. Lando, 441 U.S. 153, 175, 99 S. Ct. 1635, 1648, 60 L. Ed. 2d 115 (1979), which stated: Evidentiary privileges in litigation are not favored, and even those rooted in the Constitution must give way in proper circumstances.. . . "[E]xceptions to the demand for every man's evidence are not lightly created nor expansively construed, for they are in derogation of the search for truth." Thus, the parties press this court to make the difficult resolution of a conflict between defendants' First Amendment rights and plaintiff's interest in the fair administration of justice. Certain fundamental principles of appellate practice lead us to decline that task under the circumstances of this report. We have stated repeatedly that "the Law Court retains power to make its own independent determination whether in all the circumstances of a given case its decision `on report' would be consistent with the Court's basic function as an appellate tribunal." State v. Foley, Me., 366 A.2d 172, 173 (1976). Accord, Gendron v. Pawtucket Mutual Ins. Co., Me., 409 A.2d 656, 660 n.10 (1979); State v. Placzek, Me., 380 A.2d 1010, 1012 (1977). Report of a question of law prior to final disposition of the case by the Superior Court is a departure from the usual "final judgment" rule barring piecemeal appeals and should be used only on extraordinary occasions, so that the Law Court will not be compelled to act as an "advisory board for the direction of business of the court at nisi prius." Fidelity & Casualty Co. v. Bodwell Granite Co., 102 Me. 148, 152, 66 A. 314, 316 (1906). Thus, our "power to discharge a report inheres not only in our right and interest to control our own docket, but in our general powers of superintendence and supervision over inferior tribunals." Laverdiere v. Marden, Me., 333 A.2d 701, 702 (1975). We have also reiterated the undesirability of the Law Court's deciding constitutional issues prematurely or otherwise than in the context of a fully developed factual situation that demands a constitutional decision. See Blackwell v. State, Me., 311 A.2d 536, 537 (1973); Johnson v. Maine Wetlands Control Board, Me., 250 A.2d 825, 827 (1969), and cases cited therein. In both Blackwell and Johnson, reports were discharged because the agreed statements of fact were too meager to establish that determination of the constitutional questions at issue was necessary to a decision of the entire case, and thus the matters were reported prematurely. See also State v. Colburn, 134 Me. 494, 494, 182 A. 210, 210 (1936) (report discharged because agreed statement of facts was "insufficient to allow *1206 an intelligent decision of the problem presented"). It is true that in Collett v. Bither, Me., 262 A.2d 353 (1970), this court did entertain the report of a constitutional issue at the discovery stage, but we did so only because the Superior Court had specifically ordered Bither to answer an interrogatory that clearly deprived him of his constitutional privilege against self-incrimination. The constitutional issue and full factual situation are not posed as clearly or fully by the report in the case at bar as they were in Collett. First, we cannot decide the constitutional question of a journalist's First Amendment privilege in the abstract. Because the record before us does not reveal the basis for the denial of defendants' motion for summary judgment, we cannot simply assume it to be a holding that the subject editorial did place plaintiff in a false light so as to put into factual issue Mr. Reynolds' state of mind in writing it. Indeed, although he granted the discovery motion, the second Superior Court justice specifically cautioned that he was not finding there to be sufficient evidence even to get the false light claim to a jury. If plaintiff could not in any event have recovered on the only claim as to which she asserts the source's identity has any relevance, then the constitutional issue would not be reached. As M.R.Civ.P. 26(b)(1) makes clear, a party may compel discovery only of unprivileged matter that is relevant to the subject matter involved in the pending action. On this record we cannot adequately gauge the relevance[2] of the source's identity to plaintiff's "false light" claim. In addition, the Superior Court never entered an order specifically directing defendant Reynolds to disclose the informer's identity, and it never reached the question of what sanction might be imposed if Reynolds refused to comply with a specific order compelling discovery. We do not know what defendants' reaction to a specifically threatened sanction for noncompliance would be. It is entirely possible that this case and its constitutional question would never have reached the Law Court if it were not for the Superior Court's report. As we have previously warned: [I]t often is not an efficient use of total court resources to report the case to the Law Court merely on the chance that its decision may turn out to be the one that finally disposes of the case. State v. Placzek, supra at 1013. Because this case was reported to us improvidently, the entry must be: Report discharged. Remanded to the Superior Court for further proceedings consistent with the opinion herein. NOTES [1] The editorial read in full as follows: An extra kid Nobody ever said that growing up was easy. Grown-ups have a way of forgetting this axiom of adolescence. Kids, especially those who find it troubling to be neither fish nor fowl in the teenage years, never stop reminding themselves how tough it is to be sentenced forever to life as a minor. This personal ad in the May 31st edition of Penobscot Times tweaked our curiosity and our vague recollection of life as a blossoming humanoid: Miscellaneous ANYONE interested in keeping an extra kid for 2 years call Jenny Selk 827-5971. The NEWS editorial board didn't call Jenny. We didn't dare, what with the price of food and clothing and higher education. But we wanted to. We wanted to know why Jenny considers herself "an extra kid." Does she feel unloved? Parents moving away? Misunderstandings? We hope it works out okay for Jenny. The same goes for all the other wonderful young people who probably feel like extra kids sometimes too. [2] Mr. Justice Powell apparently sees a sliding scale of relevance: Under present Rules the initial inquiry in enforcement of any discovery request is one of relevance. Whatever standard may be appropriate in other types of cases, when a discovery demand arguably impinges on First Amendment rights a district court should measure the degree of relevance required in light of both the private needs of the parties and the public concerns implicated. Herbert v. Lando, 441 U.S. 153, 179, 99 S. Ct. 1635, 1651 (1979) (Powell, J., concurring).	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532849/	489 Pa. 522 (1980) 414 A.2d 1013 In the Matter of Lee MANDELL, Esq. Supreme Court of Pennsylvania. Submitted April 14, 1980. Decided May 30, 1980. 523 Vincent J. Ziccardi, Philadelphia, for appellant. Charles W. Johns, Pittsburgh, Howland W. Abramson, Philadelphia, for appellee. Before EAGEN, C.J., and O'BRIEN, ROBERTS, NIX, LARSEN, FLAHERTY and KAUFFMAN, JJ. OPINION OF THE COURT ROBERTS, Justice. On this appeal from denial of habeas corpus relief, appellant Lee Mandell, Esq. challenges his summary conviction for contempt under section II of 42 Pa.C.S. § 4131. Appellant contends that the evidence of record is insufficient to establish that he intentionally or willfully committed the allegedly contemptuous acts. We agree and accordingly, vacate the judgment of sentence and order appellant discharged. On July 21 and July 22, 1977, appellant represented a criminal defendant at trial before the Hon. Bernard J. Goodheart. The court entered a verdict of guilty on July 22, 524 1977, and postponed sentencing to September 28, 1977, to permit counsel an opportunity to prepare post-trial motions.[1] The court set September 14, as the deadline for appellant's written brief in support of post-trial motions. On September 21, 1977, Judge Goodheart notified appellant that the briefing deadline had passed and that the hearing on motions was scheduled for September 28, 1977, at 3:30 p.m. At approximately 4:15 p.m. on September 28, appellant appeared for the hearing. He explained that his late arrival was due to an unforeseen delay at the parole board hearing he was attending. Appellant also submitted supplemental post-trial motions and a written brief. In a proceeding not transcribed, Judge Goodheart then held appellant in contempt and imposed a fine of $100 on the basis of "cumulative" violations of direct court orders.[2] Appellant filed a petition for writ of habeas corpus, which was denied after hearing. This appeal followed.[3] 525 By statute, the Legislature has authorized the use of summary contempt power. "The power of the several courts of this Commonwealth to issue attachments and to inflict summary punishments for contempts of court shall be restricted to the following cases: I. . . . II. [To] disobedience or neglect by officers, parties, jurors or witnesses of or to the lawful process of the court; III. . . ." 42 Pa.C.S. § 4131.[4] See generally Levine Contempt Case, 372 Pa. 612, 95 A.2d 222, cert. denied, 346 U.S. 858, 74 S. Ct. 72, 98 L. Ed. 371 (1953). "In a prosecution for criminal contempt, the Commonwealth has the burden of proving every element of the crime beyond a reasonable doubt." In re Johnson, 467 Pa. 552, 557, 359 A.2d 739, 742 (1976); see also In re Cogan, 485 Pa. 273, 401 A.2d 1142 (1979). One element of contempt under subsection II is that of intentional or willful commission of the allegedly contemptuous act. Commonwealth v. Clarence Washington, III, 466 Pa. 506, 353 A.2d 806 (1976). Because the requisite intent is not present in this case, appellant's conviction for contempt is not supported by the evidence.[5] As our prior decisions have held, "the mere showing of noncompliance with a court order or misconduct impeding the administration of justice is never sufficient, alone, to prove contempt." Commonwealth v. Haeffner, 470 Pa. 392, 396, 368 A.2d 686, 688 (1977); see also Commonwealth v. Washington, 470 Pa. 199, 368 A.2d 263 (1977). "Unless the evidence establishes an intentional disobedience or an intentional neglect of the lawful process of 526 the court, no contempt has been proven." Commonwealth v. Clarence Washington, III, supra, 466 Pa. at 509, 353 A.2d at 807 (1976). So too, other courts have reversed contempt convictions where the basis of the conviction is counsel's lateness, but there was no showing of intent. Commonwealth v. Giordano, 254 Pa.Super. 543, 386 A.2d 83 (1978); United States v. Delahanty, 488 F.2d 396 (6th Cir. 1973); In re Farquhar, 160 U.S.App.D.C. 295, 492 F.2d 561 (1973); In re Sykes v. United States, 144 U.S.App.D.C. 53, 444 F.2d 928 (1971). Here, the prosecution for contempt was based only on appellant's missing a briefing deadline by two weeks, and arriving forty-five minutes late for a hearing.[6] Counsel stated the reasons for his tardiness. The Commonwealth introduced no evidence to establish either the invalidity of those reasons or the intent of appellant willfully to miss the scheduled hearing time. On this record, a summary conviction for criminal contempt under section II of the statute cannot be upheld.[7] Judgment of sentence vacated and appellant is discharged. NIX and LARSEN, JJ., concur in the result. NOTES [1] On July 29, 1977, Judge Goodheart sent appellant a letter indicating that appellant's post-trial motions were inadequate to preserve any issues for appeal. See Pa.R.Crim.P. 1123. Appellant responded that he intended to file more specific motions when the notes of testimony became available. Judge Goodheart wrote appellant again on September 21, 1977, when the deadline for briefing passed without appellant's having obtained the notes from the court reporter. At the hearing on the petition for writ of habeas corpus, appellant explained that he never collected the notes because his client could not pay the costs of transcription at that time. Instead, appellant borrowed the notes from counsel for an indigent co-defendant in order to prepare his supplemental post-trial motions. [2] Initially, Judge Goodheart relied upon appellant's failure to submit specific post-trial motions as a basis for the contempt. At the habeas corpus hearing, however, Judge Goodheart conceded that an order to file specific post-trial motions had never issued, but rather he had only recommended that appellant file specific motions. R. at 1.32. [3] Appellant elected to pursue habeas corpus relief rather than file a direct appeal to this court pursuant to 42 Pa.C.S. § 742; see also Commonwealth v. Harris, 409 Pa. 163, 185 A.2d 586 (1962). These parties have not challenged our jurisdiction and we see no reason to decline review of the claims presented. Cf. Commonwealth v. Wadzinski, 485 Pa. 247, 401 A.2d 1129 (1979) (procedural error of filing petition for writ of certiorari rather than appeal under the appropriate statute not fatal to action). [4] Section 4131 of the Judicial Code substantially re-enacts the Act of June 16, 1836, P.L. 784, § 23, 17 P.S. § 2041. See In re Cogan, 485 Pa. 273, 401 A.2d 1142 (1979). [5] We note that the Commonwealth has filed no brief in opposition to appellant's contentions. Nor has it otherwise informed the Court of its decision not to file a brief. [6] Appellant testified that upon realizing that he would be late for the hearing he either telephoned Judge Goodheart's chambers himself or asked his secretary to do so. [7] The circumstances presented in this case demonstrate the wisdom of procedural safeguards before a summary criminal contempt conviction is entered. Here, some prior warning would be especially appropriate before holding appellant in contempt. "Requiring a judge to warn an individual that his conduct is considered contumacious, however, may have the salutary effect of restraining oversensitive judges from acting immediately to impose contempt sentences for relatively minor incidents of misconduct. Moreover, prior warnings may be necessary in some cases in order to permit an individual to conform his conduct to expected courtroom norms or to ensure that the elements of the offense have been established." Kuhns, The Summary Contempt Power: A Critique and a New Perspective, 88 Yale L.J., 39, 45 (1978). See also ABA, Standards Relating to The Function of The Trial Judge, § 7.2 (1972).	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532855/	173 N.J. Super. 370 (1977) 414 A.2d 545 LEONORA R. GOTTFRIED, PLAINTIFF, v. THE PRUDENTIAL INSURANCE COMPANY OF AMERICA AND THE PENN MUTUAL LIFE INSURANCE COMPANY, DEFENDANTS. Superior Court of New Jersey, Law Division Somerset County. Decided September 9, 1977. 371 Richard H. Thiele, Jr., for plaintiff (Wharton, Stewart & Davis, attorneys). William L. Dill, Jr., for defendant (Stryker, Tams & Dill, attorneys). 372 GAYNOR, J.C.C. (temporarily assigned). In this action the plaintiff seeks to recover accidental death benefits provided by several policies issued by the defendants upon the life of plaintiff's husband, Stanley Gottfried. The defendants have refused payment of such benefits on the ground that the insured's death did not occur under such circumstances as to entitle plaintiff to the accidental death benefits under the policies. The facts giving rise to this controversy are not in dispute. The insured died suddenly at the age of 44 on May 5, 1974 as a result of a heart attack. He had no indication of any heart disease prior to the fatal attack and, in the summer of 1973 had been pronounced in sound physical condition, except for slightly elevated blood sugar, after undergoing a complete physical examination. While a youth, the insured had been an active participant in sports and for some years prior to his death regularly played tennis, as well as engaging in other athletic activities. At the time of his death, Mr. Gottfried was employed by The Singer Company as the Comptroller of one of the company's plants. However on the morning of May 4th, 1974 he had informed his superior that he was resigning because of his dissatisfaction with his progress in the company. On the evening of May 4, 1974, he attended an informal dinner party in the company of his wife at the home of friends in Bridgewater Township. He had a drink or two and a light supper. After dinner, three of the men, including Mr. Gottfried, decided to play basketball with a group of teenagers in attendance utilizing the tennis court owned by the host. The game commenced about 11:00 p.m. and continued for a half hour or more. It was a vigorous game, with the three men competing against three boys. After the game the decedent upon returning to the residence, appeared to be perspiring profusely. He sat down, asked for a towel to wipe his perspiration and, while the towel was being obtained, slumped over unconscious. Physicians in the area promptly responded, and Gottfried was 373 transported directly to the Somerset Hospital where he was pronounced dead at 12:03 a.m. on May 5, 1974. No autopsy was performed, and the death certificate indicated the cause of death as an acute myocardial infarction due to arteriosclerotic cardiovascular disease. This cause of death was confirmed by the opinion testimony of a physician, Dr. D. Goodman Rowland. It was also Dr. Rowland's opinion that the precipitating factors of the insured's death were an underlying coronary arteriosclerotic condition and the exertion experienced in the basketball game. Dr. Rowland opined that it was the stress of the physical activity superimposed upon the underlying condition which resulted in the fatal occlusion, and it was only because of such stress that the insured met his death on May 5th. He also admitted that, without the existing arteriosclerotic condition, the physical stress of the basketball game would not have caused the insured's death. Mr. Gottfried was insured under a Group Policy issued by Prudential Insurance Company of America to The Singer Company. This policy contained an Employee Group Accident Loss Insurance Rider which provides: ACCIDENT LOSS BENEFITS If an employee, while insured under this Rider, sustains accidental bodily injuries and within the period of ninety consecutive days following the date upon which such injuries are incurred (said period hereinafter referred to as the `Accident Loss Period'), suffers the loss of life as a direct result of such injuries and independently of all other causes, the Insurance Company will, subject to the provisions hereinafter stated, pay in one sum to the Employee's Beneficiary, the amount provided for such loss. EXCLUSIONS THE INSURANCE PROVIDED HEREUNDER DOES NOT COVER ANY LOSS WHICH RESULTS ... (b) DIRECTLY OR INDIRECTLY FROM BODILY OR MENTAL INFIRMITY OR DISEASE OR MEDICAL OR SURGICAL TREATMENT THEREOF ... 374 Mr. Gottfried was also the insured under four policies issued by the Penn Mutual Life Insurance Company. The provisions of these policies applicable to the subject action provide: THE PENN MUTUAL LIFE INSURANCE COMPANY agrees, subject to the terms and conditions of this agreement, to pay the Accidental Death Benefit upon a receipt of due proof that the death of the insured resulted directly and independently of all other causes from accidental bodily injury evidenced by a visible contusion or wound on the exterior of the body (except in the case of a drowning or internal injury revealed by an autopsy) and that such death occurred within 90 days after such injury was sustained and before termination of this agreement .. . Provided further however, that no benefit shall be payable under this agreement if death results directly or indirectly from (1) illness or disease of any kind or from physical or mental infirmity ... It is the plaintiff's contention that the circumstances of the insured's death are such as to bring it within the terms of the above quoted provisions of the subject policies and accordingly she is entitled to the supplemental benefits payable thereunder. The defendants assert that the death of Mr. Gottfried was brought on by reason of exertion from activity voluntarily pursued, without any unexpected or unforeseen event occurring beyond the injury itself, and therefore the fatal myocardial infarction which he suffered was not within the coverage of the policies providing benefits for death resulting from accidental bodily injury. Plaintiff's position is based upon an asserted distinction between the controlling words in the accident benefit clauses of the subject policies, i.e., "accidental bodily injury" and policy provisions conditioning accident benefits upon "bodily injuries effected through accidental means." Plaintiff acknowledges that when the insuring contract contains the "accidental means" language, coverage is intended only where the injury is the result of some unforeseen or unexpected event producing the injury, and that a heart attack brought about by exertion from activity voluntarily engaged in, and in which nothing unexpected or unforeseen occurs beyond the injury itself, would not be 375 covered for accidental benefits under a policy containing such language. However, plaintiff asserts that the key language contained in the subject policies, namely "accidental bodily injuries" provides coverage for accidental results, and that an unexpected heart attack consequent upon physical exertion is a resulting accidental injury to the body. Thus, it is argued that such coverage is not dependent upon some unusual or untoward event occurring beyond the injury itself. Plaintiff equates "accidental bodily injury" with "accidental result," and suggests that prior decisions, which denied recovery in factual circumstances similar to the case sub judice under policies containing "accidental means" language, would have reached opposite results if the contract provisions were as set forth in the policies insuring Mr. Gottfried's life. In effect, plaintiff seeks to avoid the result of the rule adopted in this State, i.e., the distinction between accidental means and accidental results in construing double indemnity provisions of insurance contracts, by ascribing a particularly restrictive meaning to the term "accidental bodily injury." The applicability of accidental benefit provisions to deaths occurring under circumstances analogous to the instant case has been previously considered by our Supreme Court. Linden Motor Freight Co. Inc. v. Travelers Insurance Company, 40 N.J. 511 (1963); Harris v. John Hancock Mutual Life Insurance Co., 41 N.J. 565 (1964); Perrine v. Prudential Insurance Company of America, 56 N.J. 120 (1970). As enunciated in these decisions the determinative inquiry to be made in such cases is whether the average policyholder could reasonably consider that there was something about the events preceding and resulting in the bodily injury which would lead him to call such events "accidental", having in mind the limiting language of the insurance contract. In the Linden case, the insured suffered a fatal myocardial infarction after lifting several heavy cartons during the course 376 of his employment. The beneficiary sought to recover double indemnity benefits under the insuring policy which provided for such payment upon the sustainment of "bodily injuries effected directly and independently of all other causes through external, violent and accidental means." In denying coverage for the accident benefits, the court reasoned that the average policyholder would understand that these benefits would be payable only where the death was attributable to something accidental, in the common sense, in the events preceding and leading up to the resulting injury. There being no unforeseen or unexpected happening while the insured was performing his work preceding the fatal attack, his death was not effected through accidental means. In reaching this result the court observed: In ascribing a reasonable interpretation to the terms of the policy here involved, it is, to us, beyond question that `means' has reference to `cause,' and that the double indemnity benefits of this policy should be available only where there is something accidental, in the common and popular sense, in the cause of the resulting injury, i.e., in the events preceding and leading up to it. The insurer has specified, and we think the average policyholder would fairly appreciate, that the insurance is not against every death which might be thought accidental because unforeseen, unexpected or unusual in the circumstances, but only covers those situations where there was something of like quality which happened during the preceding events and brought about or contributed to the result. This same test was utilized in Harris v. John Hancock Mutual Life Insurance Co., supra, in which recovery of accident benefits was sought under a contract providing coverage for disability arising out of bodily injury sustained "as the direct result of an accident." The injury suffered by the insured was a myocardial infarction sustained as the result of exertion in performing his regular duties. In concluding that this policy provision did not insure against an accidental result, the Court relied upon its prior decision in Linden, stating: 377 This case is therefore governed by Linden, in which we held that the contract did not cover under the following rationale: Where the policy does not, by its language, give coverage for simply an accidental result but required that there be `something accidental, in the common and popular sense, in the cause of the resulting injury, i.e., in the events preceding and leading up to it.' (40 N.J. at p. 526), the language cannot be construed to insure merely against an accidental result. Whether the preceding events the means or cause of the bodily injury resulting are accidental will be determined by the reasonable appreciation, understanding and expectation of the average policy purchaser in the light of and having in mind the limiting language of the insuring clause. This is a question of fact unless the average policyholder could not reasonably reach a conclusion of coverage in the particular circumstances. Where the resultant injury is to the heart, brought on by reason of exertion from activity, voluntarily pursued, in which nothing unexpected or unforeseen occurs beyond the injury itself, and there is nothing which a layman would understand to be an accident, the average policyholder could not reasonably reach a conclusion of coverage. Therefore, as a matter of law, there is no issue thereon to be submitted to the trier of the facts and recovery cannot be had. Subsequently, in Perrine v. Prudential Insurance Company of America, supra, in which the beneficiary sought to recover the double indemnity benefit under a policy providing for such payment in case death occurred "as a result ... of bodily injuries effected ... through ... accidental means", the court pointed out that in Linden it had enunciated, as the rule for the interpretation and application of accident provisions in insurance contracts, the test of the reasonable expectations of the average policyholder. By way of further explanation of its ruling, the Court stated: We indicated initially that the average policyholder would fairly appreciate that, in view of the restrictive language used, `the insurance is not against every death which might be thought accidental because unforeseen, unexpected or unusual in the circumstances * .' (40 N.J. at 526). And then we directed that the average policyholder inquiry be as to the events preceding and leading up to the result under the thesis summarized in Harris: "Whether the preceding events the means or cause of the bodily injury resulting are accidental will be determined by the reasonable appreciation, understanding and expectation of the average policy purchaser in the light of and having in mind the limiting language of the insuring clause. This is a question of fact unless the average 378 policyholder could not reasonably reach a conclusion of coverage in the particular circumstances.' (41 N.J. at 568). In those cases we concluded (with which the plaintiff in this case thoroughly agrees) that, where the resultant injury is a heart attack brought on by reason of exertion, no average policyholder could reasonably consider anything in the preceding events "accidental." Therefore we held the question became one of law and no recovery could be had. Plaintiff asserts that the opinions in the above cited cases make it clear that the denial of the supplemental benefits was only because of the specific limiting language of the insuring agreements, and that contracts which do not contain the key words "accidental means" must therefore be considered as insuring against accidental results. Reliance is placed upon the footnote in the Linden opinion in which the Court cited two cases from other jurisdictions in which coverage was found under policies providing benefits in the event of "accidental bodily injuries" for heart disorders occurring after some voluntary activity not involving any unforeseen event. However, plaintiff overlooks the context in which these cases were referred to, as well as the Court's observation that the average policyholder's understanding of an accident clause has to be the same whether the key words in the policy are "accidental bodily injuries" or "bodily injuries effected ... through . . accidental means." We cannot agree that the Supreme Court has drawn a distinction, or provided any basis for inferring a distinction, between accident terms of insurance policies granting benefits for a death effected through accidental means or for a death resulting from accidental bodily injury. Nor do we discern the distinction as urged by the plaintiff. A reasonable and natural understanding of the language "accidental bodily injury" is that of an injury caused by an accident, and accordingly, this term must be construed as having reference to the operative cause of an accident. Thus, an injury to be considered "accidental" must be the result of some unforeseen and unexpected event preceding and producing the injury. This conclusion 379 is supported by the case of Schwartz v. John Hancock Mutual Life Insurance Company, 96 N.J. Super. 520 (Law Div. 1967), aff'd. 99 N.J. Super. 223 (App.Div.), cert. denied, 51 N.J. 193 (1968), wherein the Court construed an "accidental bodily injury" provision as relating to an injury effected through accidental means, and also by the decision in Chelly v. The Home Insurance Company, 285 A.2d 810 (Sup.Ct., Del. 1971), that a policy insuring against "bodily injury caused directly by accident" provided coverage only for an injury preceded by unexpected events which might be termed accidental causes. As directed in Perrine, the issue thus to be determined is whether the average holder of a policy insuring against death resulting from "accidental bodily injuries" would consider that there was something about the events preceding an unexpected death which would lead him reasonably to call the means accidental, even though, strictly speaking, nothing unforeseen or untoward occurred in the course of the preceding acts. Here, Mr. Gottfried suffered the heart attack after engaging in a strenuous game of pick-up basketball. There is no evidence as to any unusual or unforeseen event which took place during this game. In fact, it is acknowledged by the plaintiff that no such event occurred. The fatal injury resulted from the exertion of the activity, which was voluntarily pursued by the insured, superimposed upon his underlying arteriosclerotic condition. There is nothing about the circumstances preceding and leading up to the unfortunate fatal infarction which could be considered as involving an accident, in the common and popular sense of that term, thereby giving rise to the supplemental benefits payable by the defendants for death resulting from accidental bodily injuries. As was concluded in Harris, where the resultant injury is a heart attack brought on by exertion no average policyholder could reasonably consider anything in the preceding events to be accidental. 380 We therefore conclude that coverage under the double indemnity provisions of the subject policies does not extend to the circumstances of the insured's death. By reason of this determination it is unnecessary to pass upon the other issues raised by the plaintiff. Accordingly, judgment is granted in favor of the defendant. An appropriate form of judgment may be submitted.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532864/	227 S.W.2d 881 (1950) VENEZIA v. VENEZIA. No. 12131. Court of Civil Appeals of Texas, Galveston. February 23, 1950. Merrill & Scott, of Houston, for appellant. Lewis Fogle, of Houston (now deceased) and Kahn, Branch, Heidingsfelder & Daniel, of Houston, for appellee. MONTEITH, Chief Justice. Appellee, Lucy Venezia, brought this action for divorce from her husband, Joseph Venezia, alleging as grounds therefor such cruel treatment as to render their living together as husband and wife insupportable. On a trial before the court without a jury, judgment was rendered granting appellee a divorce and the custody of their two children. In the judgment rendered, the court set aside the revenues from certain separate property of appellant's which had been improved with the use of community funds, for the use of appellee and their minor children for a period of years. The court created a lien on said property in appellee's behalf and provided for its sale at the end of that period of years, in the event a sale became necessary, for the enforcement of the lien. The trial court prepared and caused to be filed his findings of fact and conclusions of law in which he found on what we deem to be ample evidence that, as a result of injuries inflicted by appellant on appellee, she would probably never be restored to perfect health or be able to engage in gainful employment and that, since she had no source of income except the allowances which were made by the decree of the court in this suit, including the equities resulting from improvements made with community funds on separate property of appellant, and in view of the fact she would probably require additional medical attention in the future, it was necessary that these revenues be awarded appellee for the support of herself and their minor children. No complaint is made by appellant in so far as appellee was awarded a divorce or the custody of the children. He relies largely for relief from his points of appeal 882 on the alleged error of the trial court in setting aside for appellee's benefit certain of appellant's separate property which had been improved with the use of community funds, for a fixed period of years and in the creation of a lien on the property in appellee's behalf for the alleged reason that this provision of the decree will divest appellant of his separate property in contravention of Article 4638, Vernon's Ann. Civ.St. Article 4638, V.A.T.S. reads "The court pronouncing a decree of divorce shall also decree and order a division of the estate of the parties in such a way as the court shall deem just and right, having due regard to the rights of each party and their children, if any. Nothing herein shall be construed to compel either party to divest himself or herself of the title to real estate". The courts of this State have uniformly held that in divorce cases the trial judge has the responsibility of making "a division of the estates of the parties in such a way as the court shall deem just and right having due regard to the rights of the parties and their children if any," and that the court may take into consideration any disparity between the earning powers, the business opportunities, capacity and ability of the parties, and the benefit which the party not at fault would have derived from the estate of the other party through a continuance of their marriage. Hendrick v. Hendrick, Tex.Civ.App., 222 S.W.2d 281; Williams v. Williams, Tex.Civ.App., 171 S.W.2d 530, 531; Puckett v. Puckett, Tex. Civ.App., 205 S.W.2d 124; Liddell v. Liddell, Tex.Civ.App., 29 S.W.2d 868; Farris v. Farris, Tex.Civ.App., 15 S.W.2d 1083; Bagby v. Bagby, Tex.Civ.App., 186 S.W.2d 702, 15 Tex.Jur. 584. In the case of Hedtke v. Hedtke, 112 Tex. 404, 248 S.W. 21, 23, the Supreme Court, in construing said Article 4638, and discussing the power vested by this statute in the trial court, said: "The court pronouncing a decree of divorce is invested with wide discretion in disposing of any and all property of the parties, separate or community, and * * its action, in the exercise of such discretion, should be corrected on appeal only where an abuse of discretion is shown in that the disposition made of some property is manifestly unjust and unfair." In the instant case, the trial court, both in his findings of fact and in the judgment rendered, took into consideration, in the settlement awarded appellee, the fact that she was suffering from injuries inflicted on her by appellant and that as a result of these injuries she probably would not thereafter be able to engage in gainful employment. The trial court in this case arrived at his decision after a thorough hearing of the facts. A consideration of the record convinces us that he did not abuse his discretion in making the awards of the revenues from appellant's separate property for the maintenance and support of appellee and their minor children. The judgment of the trial court is in all things affirmed. Affirmed.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532865/	227 S.W.2d 977 (1950) 312 Ky. 434 McHARGUE v. CONRAD et al. Court of Appeals of Kentucky. March 7, 1950. Eldon S. Dummitt, Lexington, John G. Atchison, Lexington, for appellant. Troy D. Savage, Lexington, for appellee. SIMS, Chief Justice. The plaintiffs Emmet and Arnold Conrad, doing business as Conrad Bros., instituted this action against J. S. McHargue to recover $1940.25 for the breach of a contract whereby they rented defendant's farm in Fayette County for the calendar year 1947. Defendant's answer denied he had breached the contract, and by way of counter-claim he sought to recover from plaintiffs $4438 for their breach of the contract. A jury was waived and the case was tried before Hon. Richard J. Colbert, Special Judge. After hearing the evidence, Judge Colbert in an exhaustive opinion passed on each of the various issues and rendered judgment in favor of the plaintiffs 978 for a balance of $736.12, and defendant appeals. In his motion for a new trial defendant questions only three of the findings against him by the trial judge: 1. the item of $541.37 for one-half of the net proceeds of the wheat and barley crops; 2. the item of $225 for one-half of the third cutting of alfalfa; 3. the item of $112.50 for one-half of the stubblefield hay. There were many issues of fact raised by the pleadings and much proof was heard on the numerous items in dispute between the parties. However, it is the rule that where the facts are submitted to the court without the intervention of the jury, his findings thereon are entitled to the same weight as the verdict of a properly instructed jury, and we will not disturb them unless they are flagrantly against the evidence. Wells v. Board of Drainage Com'rs of Muhlenberg County, 237 Ky. 539, 35 S.W.2d 886; May v. Ken-Rad Corp., 279 Ky. 601, 131 S.W.2d 490; Bristow v. Taul, 310 Ky. 82, 219 S.W.2d 641. There was a conflict in the testimony as to whether defendant owes plaintiffs $112.25 for services they performed for him under a separate contract, therefore we are not at liberty to disturb the finding of the judge that defendant owed plaintiffs that sum. Likewise, there was a conflict in the evidence on the following items defendant claimed plaintiffs owed him but which the court found they were not indebted to defendant and we will not disturb those findings. These items are: $75 for failure of plaintiffs to bale the second crop of alfalfa; $135 for plaintiffs' failure to cut weeds on certain lands and to cut hay on hog lot; $250 damages done by plaintiffs to defendant's mower. Also, the testimony is conflicting as to plaintiffs' failure to deliver defendant his full one-half of the corn crop and we cannot disturb the judge's finding in favor of plaintiffs on this item. The largest item with which we are concerned is whether plaintiffs are entitled to one-half of the wheat and barley, and the straw therefrom, harvested on the land in 1947. The judge found the net proceeds from this item was $1082.75 and that one-half of this sum, $541.37, was due plaintiffs. The contract provided for the renting of "such areas of the land as will be available for producing crops, * * (and the tenants) agree to prepare the soil properly, plant, cultivate the crops, including tobacco, corn, wheat, barley, hay and pasture with care and in an adequate and satisfactory manner and divide the respective yields equally at the time of harvest." This contract was executed on Feb. 1, 1947, but plaintiffs did not move on the farm and start work thereunder until Feb. 24th. Defendant had sown the wheat and barley in the fall of 1946 at his own expense and plaintiffs had nothing to do therewith. In that summer of 1947 defendant had this grain harvested and the straw therefrom baled at his own expense. The only part plaintiffs took in the operation was sacking the grain and hauling it and the straw from the field. For this work defendant paid them $4 per day. The judge erroneously construed the contract as giving the plaintiffs one-half interest in the grain and straw, saying: "* * * Since all of the cover crops were sown in the fall of 1946, the contract would be meaningless as to the items mentioned if it did not include the wheat, barley and hay then growing on the land. * * * It would have been impossible for the plaintiffs to harvest any wheat or barley during the term of the contract if such crops had to be planted after the date of the contract." The answer to that line of reasoning is that the parties entered into a farming contract in February 1947 for the calendar year and could not have contemplated raising wheat and barley for that particular year, since these grains in this State are always planted in the fall to be harvested the next summer. Plaintiffs had nothing to do with the pitching of these grain crops and it is not reasonable to believe the parties contemplated plaintiffs should have one-half of the net proceeds thereof. Especially is this true in view of the fact that defendant paid them $4 per day for the time they spent in assisting in harvesting the grain and straw by hauling same from the field. *979 The rule is that in construing a contract, courts will look to the intention of the parties and will consider the subject matter of the contract, the objects to be accomplished, the situation of the parties and the conditions and circumstances surrounding them. Meacham v. Louisville & N. R. Co., 293 Ky. 642, 169 S.W.2d 830, and authorities therein cited. Applying this rule, it is clear that it was never the intention of the parties that plaintiff would share in the grain crops, including the straw therefrom, which had been sown at defendant's expense five months before he entered into the rental contract with plaintiffs. The court erred in adjudging that plaintiffs were entitled to recover of defendant $541.37 on the grain and straw, and that part of his judgment is reversed. Since the testimony was conflicting relative to whether plaintiffs were deprived of harvesting the alfalfa and stubblefield hay, we will not interfere with the court's finding that plaintiffs are entitled to recover one-half of 15 tons of alfalfa and one-half of 11¼ tons of stubblefield hay. However, the court erred in allowing plaintiffs to recover $30 a ton for the alfalfa and $20 a ton for the stubblefield hay without deducting therefrom what would have been the reasonable cost to plaintiffs in harvesting and baling same. Commonwealth v. Masden, 295 Ky. 861, 175 S.W.2d 1004, 169 A.L.R. 101. The proof shows that the reasonable cost of harvesting and baling this hay averaged $8 per ton. Therefore, plaintiffs should have been allowed $22 per ton for their half of the alfalfa and $12 per ton for this half of the stubblefield hay. Their half of these crops is $232.50 instead of $337.50 which the court allowed them. The judgment is reversed as to this item. The court further erred in adjudging that defendant should recover from plaintiffs $228 for one-half the corn fodder plaintiffs failed to cut and shock, since the contract did not provide plaintiffs were to cut and shock the corn. However, plaintiffs do not complain of this part of the judgment nor do they prosecute a cross-appeal, and we are unable to correct this error of the court on this appeal. The judgment is reversed with directions that the court enter one in conformity with this opinion.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532867/	173 N.J. Super. 517 (1980) 414 A.2d 618 THOMAS JOHN VAN LANGEN, ETC. ET AL., PLAINTIFFS, v. WAYNE CHADWICK ET AL., DEFENDANTS. Superior Court of New Jersey, Law Division Atlantic County. Decided March 24, 1980. 520 Robert Colquhoun for defendant Joint Business Adventure. 521 Barry D. Cohen for plaintiffs (Cooper, Perskie, Katzman, April, Niedelman & Wagenheim, attorneys). Michael Dailey for defendants Evantash and Friedman (Montano, Summers, Mullen & Manuel, attorneys). MILLER, J.S.C. This matter comes before the court on motions by two codefendants in a personal injury action. The suit arose out of a motor vehicle accident at the Shore Mall parking lot in Cardiff, New Jersey, that rendered the plaintiff a paraplegic. Defendant Joint Business Adventure (a/k/a Shore Mall Shopping Center) seeks to have plaintiff's requests for admissions stricken. Codefendant Evantash and Friedman, architects, seek to compel the designation of books, treatises and authorities to be relied upon by plaintiff at trial. They also request information that plaintiffs may have acquired respecting their expert. The motions will be discussed serially. The motion to strike is based upon defendant Joint Business Adventure's assertion that the questions set forth are irrelevant, immaterial and incompetent. Additionally, defendant feels that the requests were merely intended as harassment. A perusal of plaintiff's request for admissions reveals question which concern facts about prior accidents occurring at the same location. More particularly, the questions seek facts which, if admitted, are relative to issues of defective parking lot design, negligent design and dangerous conditions and notice thereof. The 14 requests for admissions appear to be straightforward, not overly lengthy and are within defendant's own knowledge. The objection is focused upon their relevance. R. 4:22-1 provides in part: A party may serve upon any other party a written request for the admission, for purposes of the pending action only, of the truth of any matters of fact 522 within the scope of R. 4:10-2 set forth in the request, including the genuineness of any documents described in the request ... Requests for admissions are not discovery devices to ascertain relevant facts. They were designed to ascertain an adversary's position with respect to these facts. Klimowich v. Klimowich, 86 N.J. Super. 449 (App.Div. 1965). The purpose of the rule is to facilitate trial by weeding out facts about which there is no true controversy but which are often difficult or expensive to prove. Williams v. Marziano, 78 N.J. Super. 265 (Law Div. 1963); Hunter v. Erie R.R. Co., 43 N.J. Super. 226 (Law Div. 1956). R. 4:22-1 is similarly patterned upon F.R.C.P. 36, as amended in 1970. The Advisory Committee Notice to the amended R. 36 stated: Rule 36 serves two vital purposes, both of which are designed to reduce trial time. Admissions are sought, first to facilitate proof with respect to issues that cannot be eliminated from the case, and secondly, to narrow the issues by eliminating those that can be. [Moore's Federal Practice, Vol. 4a § 36.01(7) (2d ed. 1978)]. The effect of an admission is conclusively established unless the court permits a withdrawal or amendment of the admission. R. 4:22-2, F.R.C.P. 37. Failure to admit the truth of any matter wherein the requesting party proves the truth of such matter may entitle that party to reasonable expenses and attorney's fees in making that proof. R. 4:23-3, F.R.C.P. 37(c). As to the scope of the request for admission of facts, a series of federal case decisions were rendered which are helpful as to the principles involved. The rule was designed to accomplish the relatively limited purpose of eliminating the necessity of putting on formal proof of essentially uncontroverted facts, not as a substitute for trial. First, of course, the matters with regard to which the admission is requested must be relevant and unprivileged. Second, the request must deal with matters essentially 523 factual, that is to say, it may not be a matter of pure opinion or a conclusion of law. Third, it should be simple and clear enough so that it is capable of being admitted or denied without qualification or explanation. Fourth, the matter must be one that can be answered by the person to whom the request is directed. Finally, the rule is not designed to canvass the entire range of evidence to be presented or to deal with the central controverted issues of the case. See cases collected in 4A Moore's Federal Practice (2d 1978), § 36.04(1-8). Defendant Joint Business Adventure primarily argues that the requests are not relevant. The relevancy requirement in the federal rule was deleted in 1970. R. 4:22 also contains no requirement for admissions of only relevant matters. It is only limited by the scope of R. 4:10-2, which encompasses any matters, not privileged, which are relevant to the subject matter involved in the pending action. This relevance standard does not refer only to matters which would necessarily be admissible in evidence but includes information reasonably calculated to lead to admissible evidence. Stout v. Toner, 125 N.J. Super. 490 (Law Div. 1973). Under this standard the requests in this case could produce facts which would be reasonably calculated to lead to admissible evidence. An obvious factual issue is raised as to facts surrounding notice of a prior accident which relates to design defects. The question then is whether this court should rule in advance on the admissibility of evidence. It is well settled that questions of admissibility should be preserved for the trial and objections to requests should not be entertained absent a showing of abuse. See Shawmut, Inc. v. American Viscose Corp., 12 F.R.D. 488 (D.Mass. 1952); Knowlton v. Atchison, Topeka and Santa Fe Ry., 11 F.R.D. 62 (W.D.Mo. 1951); Loring v. United Airlines, Inc., 19 F.R.D. 322 (D.Mass. 1956). At this juncture no ruling on admissibility is possible. However, evidence of a prior accident may be shown when calculated to establish existence of a condition long enough to 524 bespeak notice thereof to owner. This is subject to cautionary instructions to the jury. See Dolan v. Newark Iron & Metal Co., 18 N.J. Super. 450 (App.Div. 1952); Miller v. Muscarelle, 67 N.J. Super. 305 (App.Div. 1961); Muscato v. St. Mary's Catholic Church, 109 N.J. Super. 508 (App.Div. 1970). The result is, of course, that the motion to strike the requests for admissions must be denied, reserving to defendants the right to object to the admission of any part of the requests into evidence at the trial. The second motion before the court is codefendant architects Evantash & Friedman's application to compel plaintiff to designate all treatises, books or authorities not named in the report of plaintiff's experts upon which plaintiff will rely at trial. Furthermore, the application seeks to compel plaintiff to disclose the source and extent of his knowledge regarding defendant's expert as to the design of another shopping center. Plaintiff contends that such an application is irrelevant and immaterial, harassing, spurious and an invasion of plaintiff's right to reserve his trial strategy and mental impressions until the time of trial. Additionally, plaintiff argues that defendant can obtain all of the trial preparation material by doing a little research and that plaintiff should not be forced to subsidize defendants either financially or legally by disclosing the information requested. Discovery procedures should be liberally construed to compel production of all relevant, unprivileged information and information that may lead to the discovery of relevant evidence. R. 4:10-2(a); Franklin v. Milner, 150 N.J. Super. 456 (App.Div. 1977). With particularity to the request for the designation of all treatises, books or authorities, R. 4:10-2(a) provides: Unless otherwise limited by order of the court in accordance with these rules, the scope of discovery is as follows: (a) In General. Parties may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending 525 action, whether it relates to the claim or defense of the party seeking discovery or to the claim or defense of any other party, including the existence, description, nature, custody, condition and location of any books, documents, or other tangible things and the identity and location of persons having knowledge of any discoverable matter. It is not ground for objection that the information sought will be inadmissible at the trial if the information sought appears reasonably calculated to lead to the discovery of admissible evidence; nor is it ground for objection that the examining party has knowledge of the matters as to which discovery is sought. [Emphasis supplied] Defendants are not asking for notes or confidential reports prepared in anticipation of litigation. They request books, treatises and authorities to be relied upon. In Ruth v. Fenchel, 37 N.J. Super. 295 (App.Div. 1955), aff'd 21 N.J. 171 (1956), the court stated: ... for purposes of the application of the rule we adopt, it would generally be the better practice that there be some notice to the adversary of the treatise intended to be used on cross-examination. The information could be made available or elicited at pretrial, by use of discovery proceedings, or as the court might otherwise direct. [at 320] Ideally, it would save much time in trial preparation if respective counsel knew in advance what texts, treatises or authorities they should use for purposes of cross-examination. It is potentially frustrating to have an expert witness not recognize, or refuse to recognize, treatise after treatise as authoritative. However, the motion lacks sufficient specificity to alert plaintiff as to what is requested. Clarification of defendant's request is necessary. Interrogatories requesting names of texts, treatises or other works which would be utilized by expert witnesses or by the defendant physician or his attorney on cross-examination was held proper in Myers v. St. Francis Hospital, 91 N.J. Super. 377 (App.Div. 1966). The court also permitted discovery of books the defendant physician had in his working library dealing with 526 exchange transfusions in infants where the action was for medical malpractice arising from a blood transfusion. Correspondingly, only relevant books, treatises and authorities as to the claim against defendant-architects are to be disclosed. The issues respecting this defendant involve design, construction and maintenance of parking lot facilities. Narrowly stated, the request falls within the scope of discovery and is not barred or limited by R. 4:10-2(c), the "work product privilege," or R. 4:10-2(d), covering experts during trial preparation. As to defendant's request to compel plaintiff to disclose the source and extent of his knowledge regarding defendant's expert as to the design of another shopping center, a proper showing is necessary. Here the request relates directly to information acquired during trial preparation. Since the request is directed to plaintiff about defendant's expert, R. 4:10-2(c) is dispositive of the issue. It states: Trial Preparation; Materials. Subject to the provisions of R. 4:10-2(d), a party may obtain discovery of documents and tangible things otherwise discoverable under R. 4:10-2(a) and prepared in anticipation of litigation or for trial by or for another party or by or for that other party's representative (including his attorney, consultant, surety, indemnitor, insurer or agent) only upon a showing that the party seeking discovery has substantial need of the materials in the preparation of his case and that he is unable without undue hardship to obtain the substantial equivalent of the materials by other means. In ordering discovery of such materials when the required showing has been made, the court shall protect against disclosure of the mental impressions, conclusions, opinions, or legal theories of an attorney or other representative of a party concerning the litigation ... [Emphasis supplied] Plaintiff's knowledge stemming from materials prepared or acquired in anticipation of trial are discoverable upon a showing of substantial need and an inability without undue hardship to obtain a substantial equivalent of the materials by other means. R. 4:10-2(c). Codefendants could have easily 527 ascertained whether or not their expert was involved in the design of a shopping center or its parking lot by merely requesting the expert to check his files. No showing of substantial need or undue hardship for this information is presented. Codefendants could obtain this information from their own expert. Accordingly, defendant Joint Business Adventure will serve answers to plaintiff's requests for admissions within 30 days. Plaintiff will supply the names of all books, treatises or authorities to be relied upon at trial which relate to design, construction or maintenance of parking facilities.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532869/	287 Md. 540 (1980) 414 A.2d 907 ARTHUR KUPFER v. STATE OF MARYLAND [No. 161, September Term, 1979.] Court of Appeals of Maryland. Decided May 22, 1980. The cause was argued before MURPHY, C.J., and SMITH, DIGGES, ELDRIDGE, COLE, DAVIDSON and RODOWSKY, JJ. George E. Burns, Jr., Assistant Public Defender, with whom was Alan H. Murrell, Public Defender, on the brief, for appellant. 541 Ray E. Stokes, Assistant Attorney General, with whom was Stephen H. Sachs, Attorney General, on the brief, for appellee. MURPHY, C.J., delivered the opinion of the Court. The central issue in this case is whether probation may be extended beyond the five-year maximum probationary period prescribed by Maryland Code (1957, 1976 Repl. Vol.) Art. 27, § 641A, which provides in pertinent part: "Upon entering a judgment of conviction, the court having jurisdiction, may suspend the imposition or execution of sentence and place the defendant on probation upon such terms and conditions as the courts deem proper. The court may impose a sentence for a specified period and provide that a lesser period be served in confinement, suspend the remainder of the sentence and grant probation for a period longer than the sentence but not in excess of five years." Appellant Arthur Kupfer was convicted of forgery and larceny after trust in the Criminal Court of Baltimore and sentenced to two concurrent four-year terms of imprisonment. On November 16, 1971, the court suspended his sentence and placed him on probation for five years. Under the terms of his probation, Kupfer was required to make restitution in the amount of $3,000. On November 8, 1976 one week before the termination of Kupfer's probationary period the court, with Kupfer's written consent, extended his probation until November 16, 1981, five years beyond the statutory maximum. On August 26, 1977 a warrant was issued for Kupfer's arrest for violating the terms of his probation. After several continuances, a hearing on the alleged violation was held on July 24, 1979. Kupfer moved to dismiss on the basis that the five-year maximum probationary period had elapsed. The State argued that Kupfer's consent to the extension constituted a waiver of the maximum term of probation. The court agreed with the State's position and denied the motion to dismiss; 542 it subsequently found Kupfer guilty of violating his probation and ordered that his probation be continued under a new schedule of payments. Kupfer appealed, contending that once the maximum five-year probationary period authorized by the statute had expired, the court was without authority to extend it, with or without his consent.[1] The State claims that the order continuing Kupfer's probation was not a final judgment which settled or concluded his rights and thus cannot be appealed. Assuming appealability, the State asserts that Kupfer's consent to the additional probationary term estops him from challenging the validity of the extension. (1) Appellate jurisdiction in both criminal and civil causes is generally dependent upon a statutory grant of power. Estep v. Estep, 285 Md. 416, 422, 404 A.2d 1040 (1979); Smith v. Taylor, 285 Md. 143, 146, 400 A.2d 1130 (1979); Warren v. State, 281 Md. 179, 182, 377 A.2d 1169 (1977). Maryland Code (1974, 1976 Repl. Vol.) § 12-301 of the Courts and Judicial Proceedings Article provides that "a party may appeal from a final judgment entered in a civil or criminal case by a circuit court. The right of appeal exists from a final judgment entered by a court in the exercise of original, special, limited, statutory jurisdiction, unless in a particular case the right of appeal is expressly denied by law. In a criminal case, the defendant may appeal even though imposition or execution of sentence has been suspended."[2] We have held consistently that an order revoking probation and reinstating a previously suspended sentence 543 is a final and appealable judgment. Burch v. State, 278 Md. 426, 428-29, 365 A.2d 577 (1976); Skinker v. State, 239 Md. 234, 235-36, 210 A.2d 716 (1965); Coleman v. State, 231 Md. 220, 222, 189 A.2d 616 (1963); Swan v. State, 200 Md. 420, 425-26, 90 A.2d 690 (1952). The fact that Kupfer's probation was modified and continued, rather than revoked, does not deprive us of jurisdiction to hear this appeal. The judgment from which Kupfer is appealing is the very finding that he did in fact violate the terms of his probation. See Swan v. State, supra, 200 Md. at 425. This determination is both final and appealable. Neither the sanction which Kupfer received for violating probation, or the fact that he consented to the extension, has any effect on the finality of this judgment.[3] (2) Section 641A provides, in clear and unambiguous language, that the aggregate period of probation which a court may impose upon entering a judgment of conviction cannot exceed five years. The court's authority to suspend the execution of sentence and to place a defendant on probation derives directly from the statute which strictly delineates its power in this respect. See State ex rel. Sonner v. Shearin, 272 Md. 502, 325 A.2d 573 (1974). In other words, in specifying that the court may grant probation for a period of time longer than the sentence which it imposed "but not in excess of five years," the legislature placed a definite limit on the maximum period of probation which a defendant may 544 be compelled to undergo. The statute provides for no exceptions or extensions of this period. Thus, when the trial court extended appellant's probation beyond the five-year maximum period, it was acting beyond the statutory power granted to it. That Kupfer consented to the extension in no way validated the court's action for the statutory maximum probationary period may not be enlarged by assent. The Court of Special Appeals so indicated in Laurie v. State, 29 Md. App. 609, 349 A.2d 276 (1976). Other jurisdictions are in accord. See, e.g., State v. Duncan, 15 Or. App. 101, 514 P.2d 1367 (1973). Judgment reversed, with costs. NOTES [1] We granted certiorari prior to consideration of the appeal by the Court of Special Appeals. [2] Section 12-101(f) of the Courts Article defines a "[f]inal judgment" to mean "a judgment, decree, sentence, order, determination, decision, or other action by a court, including an orphans' court, from which an appeal, application for leave to appeal, or petition for certiorari may be taken." [3] This conclusion is consistent with our holding in Warren v. State, supra. In that case, we said that an order for probation without judgment was not a disposition from which a defendant could appeal. Our holding was based on the fact that no judgment of guilt of the underlying crime is entered under Code (1957, 1976 Repl. Vol.) Art. 27, § 292 (b) unless the defendant violates a condition of his probation. We said, 281 Md. at 185: "As a consequence, even assuming arguendo that the determination of guilt is a `final judgment' for purposes of § 12-401 [governing appeals from District Court], that judgment is not entered in a § 292 (b) disposition and is thus not appealable. "Moreover, in our view it is not the finding of guilt, but rather a subsequent event either the successful completion of the probationary period or the revocation of probation which actually settles the rights of the parties."	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532912/	32 B.R. 880 (1983) In re NAUDAIN, INC., formerly known as Brooks Shoe Manufacturing Company, Inc., et al., Debtors. BROOKS SHOE MANUFACTURING COMPANY, INC., Plaintiff, v. UNITED TELEPHONE COMPANY, Defendant. Bankruptcy No. 81-04333G, Adv. No. 82-0669G. United States Bankruptcy Court, E.D. Pennsylvania. September 21, 1983. Kathryn R. Heidt, Duane, Morris & Heckscher, Philadelphia, Pa., for debtor/plaintiff, Naudain, Inc., formerly known as Brooks Shoe Manufacturing Company, Inc., et al. J. Gregg Miller, Barbara H. Sagar, Pepper, Hamilton & Scheetz, Philadelphia, Pa. and Daniel T. Dineen, United Telephone Co. Legal Department, Carlisle, Pa., for defendant, United Telephone Co. Adelman, Lavine, Krasny, Gold & Levin, Philadelphia, Pa., for the Creditors' Committee. OPINION EMIL F. GOLDHABER, Bankruptcy Judge: In the case sub judice, the debtor, relying on section 553(a)(3) of the Bankruptcy Code ("the Code"), seeks the return of a deposit, 881 which it delivered to the defendant prior to having filed its petition for reorganization under chapter 11 of the Code, in order to secure payment for future telephone charges. Because the record establishes that the sole purpose of the deposit was to have monies available by which the defendant could setoff future bills of the debtor, we conclude that the debtor is entitled to recover the deposit in question. The facts of the instant case have been stipulated by the parties and are as follows:[1] On or about September 1, 1981, after sometimes failing to receive timely payments from the debtor during the preceding two-year period and having learned that the debtor was experiencing financial difficulties, the United Telephone Co. ("United Telephone") requested the debtor to make a deposit for future telephone services. United Telephone was referred by the debtor to Hempstead Bank ("the bank"), and the former thereupon requested the bank, a secured creditor of the debtor, to make a deposit on the debtor's behalf. The original amount requested for the deposit was $20,000.00, but United Telephone subsequently reduced the requested amount of the security deposit to $15,000.00, which amount "the deposit") was to be held as security for future local and toll services of the debtor. As of September 1, 1981, there was outstanding proximately $92.00 in unpaid charges. The debtor and the bank were also advised at this time that failure to remit the deposit to United Telephone by September 8, 1981, would result in disconnection and termination of all telephone services. This deadline was subsequently extended to September 11 and the debtor promised to pay the deposit on or before that date. The debtor agreed to pay the deposit in order to insure continued telephone service. The debtor and United Telephone intended that United Telephone could apply the deposit against future amounts owing to United Telephone by the debtor in the event the debtor failed to pay such amounts to United Telephone. On September 11, 1981, United Telephone advised the bank that it would disconnect the service at 3:00 or 3:30 p.m. if it had not received the debtor's deposit by that time. At approximately 1:00 p.m., United Telephone was informed by a representative of the bank that the funds had been wire transferred to United Telephone, via United Telephone's account with its bank, the account numbers of which had been furnished to the bank for the purpose of the wire transfer. United Telephone reconnected and reinstituted service shortly before 5:00 p.m. after its bank informed it that the bank had received the deposit of $15,000.00 by means of the wire transfer. On October 23, 1981, Brooks filed a petition for reorganization under chapter 11 of the Code. On or about October 30, 1981, United Telephone received a formal notice that a bankruptcy petition had been filed by the debtor, that a first meeting of creditors had been scheduled and that certain acts and proceedings against the debtor and its property were stayed pursuant to section 362(a) of the Code. During the period from September 12, 1981, through October 23, 1981, the debtor incurred charges to United Telephone in the total amount of $15,343.64 for telephone services provided by United Telephone to the debtor ("the charges"). As of October 23, 1981, the total amount of the deposit plus interest thereon at a rate of 6% per annum was $15,170.00. In early November, 1981, counsel for the debtor contacted United Telephone for the purpose of making a post petition deposit pursuant to section 366 of the Code.[2] United Telephone thereupon 882 requested a deposit of $8,000.00. Counsel for the debtor suggested that United Telephone keep $8,000.00 of the deposit and return $7,000.00 to the debtor. United Telephone declined this suggestion and the debtor paid a deposit of $8,000.00 to United Telephone for post-petition service in order to assure continuing telephone service. On or about November 19, 1981, United Telephone applied the deposit plus accrued interest thereon to the charges, thereby reducing the pre-petition obligation of the debtor to United Telephone by $15,170.00. This application was made pursuant to the standard internal accounting procedures of United Telephone and the debtor was subsequently notified that said application had been made. On February 11, 1982, counsel for the debtor demanded, in writing, the return of the deposit. On March 22, 1982, Brooks instituted this adversary action against United Telephone in order to recover the $15,000.00 deposit and to have United Telephone held in contempt for violating the automatic stay provisions of sections 362(a)(6) and (a)(7) of the Code.[3] On May 19, 1982, United Telephone notified the debtor that it: (1) had reversed its accounting procedures relating to the application of the deposit; (2) was holding the deposit; and (3) would not take any further action concerning the deposit until it received guidance from the Bankruptcy Court. The amount of the deposit held by United Telephone, as of May 19, 1982, had increased to $16,080.20 as a result of the inclusion of additional interest. Since September 12, 1981, United Telephone has continuously held the money constituting the deposit in its possession except for the period of approximately November 12, 1981, through May 19, 1982, during which time such money had been applied by United Telephone to the charges. The debtor challenges United Telephone's application of the deposit to the charges as being an impermissible setoff under section 553(a)(3) of the Code, which provides: (a) Except as otherwise provided in this section and in sections 362 and 363 of this title, 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, except to the extent that * * * * * * (3) the debt owed to the debtor by such creditor was incurred by such creditor (A) after 90 days before the date of the filing of the petition: (B) while the debtor was insolvent: and (C) for the purpose of obtaining a right of setoff against the debtor. 11 U.S.C. § 553(a)(3) (1979). United Telephone contends that the application of the deposit to the charges was not an impermissible setoff because the deposit does not constitute a debt owed by United Telephone to the debtor. Rather, United Telephone argues that the deposit, which was given to United Telephone to secure the debtor's obligation to pay for future telephone services, should be characterized as collateral for which United Telephone 883 obtained a security interest therein pursuant to the Uniform Commercial Code.[4] However, the parties have specifically stipulated that they "intended that United Telephone could apply the deposit against future amounts owing to United Telephone by Brooks in the event Brooks failed to pay such amounts to United Telephone."[5] Moreover, United Telephone, in its memorandum of law, acknowledges that the deposit was acquired solely for the purpose of being applied against future unpaid bills of the debtor.[6] In light of the foregoing, we conclude that an intent to apply a money deposit against an obligation does not evidence an intent to create a security interest in the money but rather evinces an intention to merely create a right of setoff.[7] Furthermore, we are convinced that the deposit constitutes a "debt" within the meaning of the Code. A "debt" is defined by the Code as "liability on a claim." 11 U.S.C. § 101(11) (1979). A "claim" is defined by the Code as a "right to payment, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured. . . ." 11 U.S.C. § 101(4) (1979). The security deposit in question was paid directly to United Telephone and United Telephone held the deposit for its own use.[8] In the event the debtor paid its phone bills in full or in part, United Telephone had an obligation to pay the debtor all or a portion of the deposit. Consequently, we conclude that the debtor possessed a "right of payment" even though said right may have been contingent upon the debtor's fulfillment of its obligations to United Telephone.[9] United Telephone contends additionally that section 553(a)(3) only prohibits the setoff of a debt which a creditor incurs to a debtor for the purpose of obtaining a right 884 of offset against an antecedent debt owed by the debtor to such creditor. Since it is undisputed that the subject deposit was incurred solely for the purpose of being applied against the debtor's future unpaid bills, United Telephone argues that section 553(a)(3) does not prohibit it from offsetting the deposit against the charges. United Telephone maintains that section 553(a)(3) was intended to be a codification of prior case law developed under the former Bankruptcy Act ("the Act") which disallowed certain bank setoffs that could be considered preferences under the preference section of the Act, which required that the preferential transfer be on account of an antecedent debt.[10] As a codification of such prior law, United Telephone contends that section 553(a)(3) was intended only to reach setoffs that would have been prohibited as unlawful preferences under the Act. In other words, United Telephone argues that the type of debt which section 553(a)(3) prohibits from being offset is a debt which has been incurred by a creditor in order to be offset against an antecedent debt which the debtor owed to the creditor. First and foremost, section 553(a)(3) itself contains no requirement that the offset be against a debt that is antecedent. Moreover, the fact that section 553(a)(3) may have been a codification of pre-Code cases that dealt mainly with the situation where a bank took a deposit and set it off against an antecedent debt owed by the debtor hardly stands for the proposition that section 553(a)(3) is applicable only when a debt is incurred by the creditor in order to offset said debt against an antecedent debt owed by the debtor to the creditor.[11] Consequently, we will grant the debtor's amended complaint to recover the subject deposit.[12] Finally, it is undisputed that United Telephone violated the automatic stay provisions of section 362(a) of the Code by applying the deposit (plus the accrued interest thereon) to the charges.[13] The question becomes whether to hold United Telephone in contempt for so violating the stay. United Telephone applied the deposit to the charges in November, 1981, but on May 19, 1982, some five (5) months later, it "reversed its accounting procedures" and notified the debtor that it would continue to hold the deposit pending our determination of the instant action. Consequently, United Telephone argues that it has restored the status quo and that it has acknowledged our power over this matter and should therefore not be held in contempt. While United Telephone wilfully executed the offset with full knowledge that the debtor had filed a petition under chapter 11 of the Code and without seeking relief from the stay, we choose not to hold United Telephone in contempt. "[C]ivil contempt . . . sanctions . . . are designed to restore the status quo which existed prior to the violation of the judicial order." James Earl Houdashell and Dorothy Louise Houdashell v. Missouri Public Service Company (In re Houdashell), 7 B.R. 901, 902 (Bkrtcy. 885 W.D.Mo.1981). We find it dispositive that United Telephone has reversed the offset and now stands ready to dispose of the deposit, in which United Telephone asserts an interest, in accordance with our order.[14] NOTES [1] This opinion constitutes the findings of fact and conclusions of law required by Bankruptcy Rule 7052 (effective August 1, 1983). [2] Section 366 of the Code provides: (a) Except as provided in subsection (b) of this section, a utility may not alter, refuse, or discontinue service to, or discriminate against, the trustee or the debtor solely on the basis that a debt owed by the debtor to such utility for service rendered before the order for relief was not paid when due. (b) Such utility may alter, refuse, or discontinue service if neither the trustee nor the debtor, within 20 days after the date of the order for relief, furnishes adequate assurance of payment, in the form of a deposit or other security, for service after such date. On request of a party in interest and after notice and a hearing, the court may order reasonable modification of the amount of the deposit or other security necessary to provide adequate assurance of payment. 11 U.S.C. § 366 (1979). [3] Sections 362(a)(6) and (a)(7) of the Bankruptcy Code provide: (a) Except as provided in subsection (b) of this section, a petition filed under section 301, 302, or 303 of this title operates as a stay, applicable to all entities, of * * * * * (6) any act to collect, assess, or recover a claim against the debtor that arose before the commencement of the case under this title; (7) the setoff of any debt owing to the debtor that arose before the commencement of the case under this title against any claim against the debtor; and * * * * * * 11 U.S.C. § 362(a)(6); § 362(a)(7) (1979). [4] In a similar situation, the court in Griffith v. Southwestern Bell Telephone Company (In re Voight), 24 B.R. 983 (Bkrtcy.N.D.Tex.1982), stated: When consideration is given to the fact that the depositor is required by the tariff [as is the debtor in the instant case] to timely pay current bills under threat of suspension or termination of service and the fact that the telephone company does have, and exercises, the right to suspend or terminate service for nonpayment of current bills one can reasonably conclude that the purpose of the deposit is to have monies available by which the telephone company can setoff the final bill. As mentioned above if those deposits had been held by the telephone company as a common law pledge by segregating and holding the deposits in trust the telephone company would inhabit a stronger position. However, where the telephone company has commingled the deposits with its general accounts the status becomes that of a creditor-debtor relationship (citations omitted). Thus each debtor was an unsecured creditor of the telephone company for the amount of the deposits, with interest, and the telephone company was an unsecured creditor of each debtor for the amount of the final bill for services. 24 B.R. at 986. In the instant case, United Telephone has not established that it segregated the debtor's deposit in a separate account. [5] Under Pennsylvania law, a setoff is accomplished when a creditor gives "sufficient evidence of intent" to make a setoff. See Goldstein v. Jefferson Title and Trust Co., 95 Pa.Super. 167, 170 (1928). [6] See United Telephone's memorandum of law at 14. [7] Section 9104 of the Pennsylvania Commercial Code specifies that division 9 (Secured Transactions) of the Commercial Code does not apply to any right of set-off. See 13 Pa.Cons. Stat.Ann. § 9104(9) (Purdon Pamphlet 1983). [8] In the case of In re Shepherd, 17 B.R. 278 (Bkrtcy.E.D.Pa.1982), this court held that where a tenant's security deposit was placed in an escrow account subject to the interests of both the landlord and the debtor, no debt ever arose from the landlord to the debtor and, consequently, the assertion by the landlord of his rights in the escrow fund was not a setoff within the confines of § 553(a)(3) of the Code. [9] In this regard, we note that section 542(b) of the Code provides: (b) Except as provided in subsection (c) or (d) of this section, 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. 11 U.S.C. § 542(b) (1979). [10] The Bankruptcy Act has been superseded by the Bankruptcy Code as of October 1, 1979. The Bankruptcy Reform Act of 1978, Pub.L. No. 95-598, § 403, 92 Stat. 2683 (1978). [11] "This provision [§ 553(a)(3)] represents a codification of case law, and is intended to cover the problem of setoff of bank deposits made by the debtor within the 90 days prior to bankruptcy." 4 Collier on Bankruptcy ¶ 553.08, at 553-44 (15th ed. 1983). However, Collier's also provides that "[t]he circumstances under which this prohibition of setoff exists [§ 553(a)] are those implying that the creditor attempted to obtain a preference or put itself in a preferred position relating to other creditors. Id. [12] In addition, we will disallow any claim which United Telephone may have against the debtor pursuant to § 502(d) which provides: (d) Notwithstanding subsections (a) and (b) of this section, the court shall disallow any claim of any entity from which property is recoverable under section 542, 543, 550, or 553 of this title or that is a transferee of a transfer avoidable under section 552(f), 522(h), 544, 545, 547, 548, 549, or 724(a) of this title, unless such entity or transferee has paid the amount, or turned over any such property, for which such entity or transferee is liable under section 522(i), 542, 543, 550, or 553 of this title. 11 U.S.C. § 502(d) (1979). [13] See §§ 362(a)(6) and (a)(7) cited in note 3 supra. [14] As a final matter, United Telephone contends that it should be entitled to retain the deposit even if the deposit is deemed to have been incurred in violation of § 553(a)(3) because it gave new value to the debtor in the form of telephone services after the receipt of the deposit in accordance with § 547(c)(4) which provides: (c) The trustee may not avoid under this section a transfer * * * * * * (4) to or for the benefit of a creditor, to the extent that, after such transfer, such creditor gave new value to or for the benefit of the debtor (A) not secured by an otherwise unavoidable security interest; and (B) on account of which new value the debtor did not make an otherwise unavoidable transfer to or for the benefit of such creditor; * * * * * * 11 U.S.C. § 547(c)(4) (1979). However, we do not construe a deposit as being a transfer of property since it does not constitute a parting with property by the depositor but instead creates a debt owed to the depositor. Therefore, we conclude that § 547(c)(4) is inapplicable to the instant case.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532887/	227 S.W.2d 310 (1950) BOLES et ux. v. RED et al. No. 2748. Court of Civil Appeals of Texas, Eastland. February 3, 1950. Rehearing Denied March 3, 1950. 311 L. D. Hawkins, Breckenridge, Frank S. Roberts, Breckenridge, for appellants. Harrell & Harrell, Breckenridge, for appellees. GRISSOM, Chief Justice. G. H. Red, Jr., a minor, by next friend, sued T. L. Boles and wife for title and possession of the surface of a strip of land containing 4.79 acres. The Boles, by cross-action, asserted title to the strip and also claimed a roadway by prescription and a way of necessity over a tract of about 500 acres, the surface of which was owned by G. H. Red, Jr. Red's 500 acre tract lay on the west, north and east of a 100 acre tract owned by Boles in the same section. The strip that both Boles and Red claim and that is in controversy here is the north half of a 9.58 acre strip of land that runs north and south across both Boles' 100 acre tract and Red's 500 acre tract in section 451. This strip was used as a right-of-way by the Eastland, Wichita Falls & Gulf Railroad Company from about 1920 until the railroad tracks were removed in 1944. Half of the strip lies within Boles' 100 acre tract on the south side of section 451 and half within Red's 500 acre tract. Boles' 100 acre tract was conveyed by Wharton to Connellee, trustee for said railroad, in 1920, for the purpose of establishing the new townsite of Gunsight. Only the north half of said 9.58 acres right-of-way strip, which projects out of Boles' 100 acre townsite tract and lies within Red's 500 acre tract, in section 451, is in controversy here. The Boles claim that for 50 years prior to February, 1948 there has been a clearly marked road running north and south across said section; that said road entered section 451 on its south boundary line at a gate about half way between its southwest corner and the southeast corner of Boles' 100 acre townsite tract which is also within section 451); that said road entered section 451 from the north through a gate in the fence on the north boundary line of section 451, about one-fourth of a mile east of the northwest corner of said section; that said road touches the west boundary line of Boles' 100 acre townsite tract at a gate in its west boundary line about midway between the northwest and southwest corners of said townsite tract. The Boles contend that when Wharton, in 1920, executed a deed to said railroad company to the 9.58 acre strip, to be used as a railroad right-of-way, and on the same day conveyed to Connellee, trustee for said railroad company, the 100 acre townsite and retained title and possession of the remaining 500 acres, more or less, in section 451, Wharton thereby caused the townsite to become inaccessible except across the 500 acres retained by Wharton, or the land of strangers on the south. This is correct. The Boles charge that Wharton, by executing said deed and retaining the remainder of the section, impliedly granted a way of necessity across said 500 acres to and from said 100 acres townsite. The Boles further contend that they, and the public, have a roadway by prescription from the north gate to the south gate across said 500 acre tract. In addition to the 100 acre townsite tract, which has as its south boundary a part of the south boundary line of section 451, Boles owns 160 acres which joins Red's 500 acre tract on the northeast. The court instructed the jury to find for Red on the question of title to and possession 312 of that portion of the 100 foot wide railroad right-of-way strip lying north of Boles' 100 acre townsite tract and within Red's 500 acre tract, and on the issue of a road by prescription north and south across section 451, on the issue of a way of necessity from Boles' 100 acre townsite north to the gate on the north boundary line of survey 451 and on the issue of improvements in good faith. The court instructed a verdict for the Boles on the issue of a way of necessity from the gate in the west boundary line of Boles' 100 acre townsite tract southwest over the established road to the gate in the south boundary line of survey 451. The jury returned the verdict as instructed. Judgment was rendered accordingly. The Boles have appealed. Boles' first three points are: (1) that Wharton's deed to said railroad company of the 100 foot railroad right-of-way strip on its face, as a matter of law, conveyed the fee simple title to the surface and not merely an easement; (2) that the undisputed evidence shows that when said deed was delivered, the parties thereto mutually intended that it should have such effect and thereafter so mutually interpreted and construed it; and (3) that a fact issue was raised as to whether said deed conveyed the fee simple title to the surface of the strip. It was agreed that Dr. Wharton was the common source of title to section 451, including said right-of-way strip. In 1920 Dr. Wharton and wife executed a deed to said 100 foot right-of-way to said railroad company, reciting therein that they "granted, sold and conveyed, and by these presents do grant, sell and convey unto the said railroad company a right-of-way (said right-of-way to be not less than one hundred feet in width) for the construction, maintenance and operation of a railroad, the erection of telephone poles and wires, in, upon and across the following described lot, tract or parcel of land,to wit: "`A strip of land 100 feet in width, 50 feet on each side of the center of the Eastland, Wichita Falls and Gulf Railroad, through Section 451, S.P.R.R. extending a linear distance of 4166 feet, and containing 9.58 acres, more of less, excepting, however, any and all minerals in and under the said land. "`To have and to hold the above described premises, together with all and singular the rights and appurtenances thereto in any wise belonging unto the said railroad company, its successors or assigns, for the uses and purposes hereinabove set forth.'" (Italics ours). On the same day the Whartons also executed a warranty deed conveying to Connellee, trustee for said railroad company, said 100 acre townsite tract, now owned by Boles. After describing said tract, the deed recited, "containing one hundred acres, exclusive of 4-79/100 acres, contained in the original railroad right-of-waythrough the above described tract." All minerals were excepted from the conveyance. In November, 1944, said railroad company executed a deed to Boles and wife to the Gunsight townsite 100 acre tract and to said 9.58 acre railroad right-of-way strip. After describing said townsite tract, the deed recites: "containing 100 acres of land, exclusive of 4.79 acres of land contained in the original railroad right-of-way of the said EastlandRailroad running through the above described tract. "Also a strip or parcel of land 100 feet in width, 50 feet on each side of the center of saidRailroad, through said Section 451,extendinga lineal distance of 4.166 feet, and containing 9.58 acres of land, more or less. The total amount of land hereby conveyed being 109.58 acres, more or less, and contained in the above described two tracts." In August, 1947, D.C. Wharton et al., the beneficiaries under the will of Dr. J. W. Wharton, deceased, executed a deed to E. H. Ellington conveying "a strip of land 100 feet wide across Section 451, S. P. Ry. Co. land, in Stephens County, Texas, and being the land formerly occupied as a right-of-way by the EastlandRailway Company" and referring to the record of Dr. Wharton's deed to the railroad company for description. 313 In October, 1948, Ellington executed a warranty deed to the strip to the plaintiff, G. H. Red, Jr. In September, 1931, Dr. Wharton and wife executed a warranty deed to H. E. Baldridge conveying 500 acres, more or less, out of section 451. Following the description of the 500 acre tract was the following: "And being all of said Section No. 451, save and except those two tracts of land heretofore conveyed by us to the Eastland Railroad Company, described as follows: First Tract: Being 9.58 acres to be used by them for right-of-way purposes". There followed a reference to the record of the right-of-way deed from Wharton to the railroad and description of the 100 acre townsite tract. In January, 1933, Baldridge and wife conveyed to G. H. Red, father of the plaintiff, said 500 acres, more or less, out of Section 451, describing the land conveyed and excepted as it was in Wharton's deed to Baldridge. In December, 1934, Red conveyed to plaintiff G. H. Red, Jr., the surface of said 500 acre tract, more or less, describing the land conveyed and excepted as in Wharton's deed to Baldridge. Dr. Wharton died in 1937. The executor of his estate did not include said right-of-way strip in the inventory of his estate. The railroad company, from the time of Wharton's deed to it until it executed a deed to Boles, rendered taxes on 109.58 acres out of section 451. It is impossible to absolutely know from the record whether or not Dr. Wharton and his successors in title to the 500 acres, more or less, that remained in section 451 after conveyance of the 100 acre townsite and the 9.58 acre right-of-way out of said section, continued thereafter to render and pay taxes on the 4.79 acres of said right-of-way strip lying north of the 100 acre townsite tract and within Red's tract of 500 acres, more or less. The county tax collector testified that section 451 was carried on the tax records as 605 acres but he did not know how many acres were actually in the section. The patent called for 640 acres. After Boles got a deed from the railroad company to the 100 acre townsite and the 9.58 acre right-of-way he rendered only 104 acres in section 451 for taxation. The railroad company had been rendering 109.58 acres. Dr. Wharton and his successors in title rendered for taxation 500 acres out of section 451. The tax collector testified that he could not say that Dr. Wharton "wasn't rendering his part of that right-of-way ." The Boles say the railroad company mortgaged the strip and thereby asserted title to it. No mortgage is in the record, but there is a release by Manufacturers Trust Co., executed in 1945, releasing the 9.58 acre strip and 100 acre townsite that recites said tracts were mortgaged by the railroad in 1920 to secure a bond issue. Said two tracts were there described as they were in the railroad company's deed to Boles and wife. In 1944 the railroad company passed a resolution reciting that the right-of-way strip was abandoned and proposing to sell it and thereafter executed a warranty deed to said strip to Boles. The granting clause in the deed to the strip from Dr. Wharton to the railroad company expressly recites that the thing conveyed is "a right-of-way." The use or purpose for which the "right-of-way" is conveyed is stated to be "for the construction, maintenance and operation of a railroad, the erection of telephone and telegraph poles and wires, in, upon and across" the land described. The habendum clause states that said railroad company is to hold the described strip, which is "not to be less than 100 feet in width,for the uses and purposes hereinabove set forth." We conclude that said instrument, as a matter of law, conveyed only a right-of-way and did not convey the land. Right of Way Oil Co. v. Gladys City Oil, Gas & Mfg. Co., 106 Tex. 94, 157 S.W. 737, 739, 51 L.R.A.,N.S., 268; Gulf Coast Water Co. v. Hamman Exploration Co., Tex. Civ.App., 160 S.W.2d 92 (writ ref.); Penn v. Holland, Tex.Civ.App., 105 S.W.2d 351, 354, (writ ref.); 132 A.L.R. 142 et seq. We call attention to the fact that Red recovered title to only the north half of the 9.58 acre right-of-way strip, which 314 half lies within Red's 500 acre tract. We recognize the rule that a statement in a deed of the purpose for which land is conveyed will not necessarily constitute the grant less than a fee simple, but here the deed purported to convey only a "right-of-way." However, we agree with appellants that in the conveyance of the right-of-way it was unnecessary and useless to except the minerals. The minerals would not have been conveyed by said deed and there was no necessity for the exception. Perhaps the exception was made through an abundance of precaution, however, regardless of the reason therefor, the exception did not have the effect of conveying something which the deed did not purport to convey, namely, the land, described merely as that over which the right-of-way ran. Points one to three are overruled. Appellants, the Boles, contend the evidence raised a question of fact as to whether they have title to the strip under the ten year statute of limitation. Appellees, Red et al., say that the railroad company went into possession of the strip under a deed which conveyed only a right-of-way and not the fee; that the railroad used the strip for right-of-way purpose until 1944, when its use was abandoned by the railway. We agree with appellees' statement thus far. However, appellees argue that the fee to the right-of-way strip was conveyed to Red in December, 1934, ten years before the land was abandoned for right-of-way purposes by the failroad, and that Red was then, and still is, a minor. In support of this argument, appellees refer to the 1934 deed from G. H. Red and wife to their son, G. H. Red, Jr., wherein they conveyed to Red, Jr., the surface of 500 acres, more or less, out of section 451. After reference to the record of the patent to section 451, the 500 acres is further described in said deed as "being all of said Section, save and except those two tracts of land heretofore conveyed to the EastlandRailroad Company to-wit: First Tract: Being 9.58 acres to be used by said railroad for right-of-way purposes" and Boles' 100 acre townsite tract. This does not support appellees' contention that the fee to the right-of-way strip was conveyed to Red, Jr., in 1934. The railroad right-of-way was expressly excepted from that conveyance. The fee to that portion of the right-of-way strip laying north of Boles' 100 acre townsite tract, which was recovered by Red, Jr., was not conveyed by Dr. Wharton and was owned by his devisees when they attempted to convey it to Ellington in August, 1947, unless title thereto had been acquired by the railroad company, or the Boles, by limitation. We agree with appellees' argument that enjoyment of an easement and acts of ownership consistent therewith do not show an adverse claim, to the fee and do not start limitation running against the fee. 2 C.J.S., Adverse Possession, § 89, page 646. However, the evidence is not conclusive that the railroad company's acts were all consistent with the claim to and enjoyment of a mere easement. Appellants argue that the facts hereinafter indicated are shown by the evidence and, if they do not conclusively show title in appellants by limitation, that such evidence raised an issue of fact as to appellants having acquired title to the strip under the ten year statute of limitation. Appellants say that after Dr. Wharton executed a deed to the right-of-way to the railroad in 1920, that neither Dr. Wharton nor his devisees ever rendered said strip for taxes or paid taxes thereon; that the railroad consistently thereafter rendered said strip of land for taxes; that the railroad asserted title to the fee in 1920 by mortgaging it; that the railroad asserted title thereto when its board of directors, in September, 1944, passed a resolution reciting that retention of the strip was no longer necessary and that the road was being abandoned and the railroad company proposed to sell said strip and that the railroad asserted title under its deed from Wharton by executing and delivering to appellants a warranty deed to the strip, in November, 1944. Appellants further contend that after Dr. Wharton executed a deed to the railroad, in 1920, there is no suggestion in the record that the Whartons ever asserted any interest in the strip until the beneficiaries under Dr. Wharton's will 315 executed a deed to Ellington in 1947; that Dr. Wharton's executor and the appraisers of his estate did not include the strip, or any interest therein, in the inventory of his estate, although they showed that they had section 451 in mind by reporting ownership of a half interest in the minerals in 500 acres out of section 451. Appellants further point out that eleven years after Dr. Wharton conveyed the strip, and the 100 acre townsite, to the railroad, he conveyed to Baldridge the remaining 500 acres in section 451, excepting from the conveyance the strip and the townsite, without mentioning any reversionary interest in the strip. D. C. Wharton, son of Dr. Wharton, testified that since the death of his father in 1937, neither he nor his brothers or sisters have made any claim to the right-of-way strip. However, he testified that he thought there was a clause in the "contract" that if the strip ceased to be used for railroad purposes it would revert to the Whartons; that the reason he didn't pay taxes on the strip was that he was not in charge of the estate; that he had no authority; that he did not learn that the railroad company was paying taxes on the strip; that he thought he had something to sell or he would not have signed the deed purporting to convey the right-of-way strip to Ellington. Appellants further argue that the renditions by Dr. Wharton and his executor and beneficiaries and Baldridge, Red and Red, Jr., tend to show that they did not claim title to the strip and that the railroad company's mortgage and tax renditions show the railroad company's claim thereto was hostile and adverse to them. There is evidence tending to show all the things claimed by appellants and mentioned above as tending to show they have title by limitation. After careful study of the entire statement of facts, we conclude this was a question of fact and the court erred in instructing a verdict thereon and adjudging title to the strip to be in Red, Jr., as a matter of law. See Brown v. Weare, 348 Mo. 135, 152 S.W.2d 649, 136 A.L.R. 296. Since there was a dispute in the evidence as to whether fences built by Boles along the right-of-way enhanced its value, the question of Boles' recovery for improvements was also a question for the jury. Appellees say the court erred in instructing the jury and awarding appellants a way of necessity from the west gate in Boles' 100 acres townsite to the gate in the south boundary line of section 451. When Dr. Wharton conveyed the townsite tract to the railroad company he retained the remaining 500 acres in the same section. The 500 acres, more or less, retained lies on the west, north and east of the townsite tract. The only way that occupants of the townsite could travel to and from said tract, except by rail, was over the 500 acres retained by Dr. Wharton, or over the land of strangers lying on the south of the townsite tract and between the townsite and a public road on the south. "The general rule is that, where there is conveyed a tract of land which is surrounded by the grantor's land or by his and that of third persons, and to which the grantee can only have access or egress through lands other than that conveyed, the grantee has a right of way by necessity over the remaining land of the grantor." 15 Tex.Jur. pages 784, 785. See also Bains v. Parker, 143 Tex. 57, 182 S.W.2d 397, 399 and Stuart v. Larrabee, Tex.Civ. App., 14 S.W.2d 316, 320 (writ ref.). We do not believe Boles right to a way of necessity is defeated by the fact that at the same time that Wharton conveyed to the railway company the 100 acre townsite he also conveyed to it said right-of-way. It is not reasonable to believe that Wharton expected the residents of the townsite to enter and leave it only by train. We think the court did not err in instructing the jury to return a verdict against appellants, the Boles, to the effect that they were not entitled to either a way of necessity or a road way by prescription across Red's 500 acre tract from the Boles 100 acre townsite tract north to the gate in the north side of Red's 500 acre tract. The Boles were not entitled to two ways of necessity from their townsite 316 tract to a public road. Relative to their claim of a roadway by prescription, there was evidence that a road, with variations, had existed in that general location since about 1883 and that the public and especially those residing in that part of the country habitually used it for many years and that the road was used in about 1920 for carrying the United States Mail. There were gates where said road entered and left Red's 500 acre tract that were maintained by the owners of that tract. Prior to 1920, Dr. Wharton owned both tracts. Before that time there could have been no claim that one tract was the dominant and the other the servient estate, since they had the same ownership. The evidence does not tend to show that the use or possession of the roadway by appellants was exclusive. On the contrary, it shows that they, along with Red and his predecessors in title, used said roadway in common with others in the vicinity. We conclude that appellants' claim of a right to use the road was not adverse but permissive. See 98 A.L.R. 592; Sassman v. Collins, 53 Tex. Civ. App. 71, 115 S.W. 337, 339; 111 A.L.R. 221; Bretzke v. Gode, Tex.Civ.App., 289 S.W. 111. It is undisputed that since about 1920, when Dr. Wharton sold 100 acres out of survey 451 to the railway company and conveyed the right-of-way, that the owners of said survey have maintained gates at the only entrances thereto. That those who have used the road in question have opened and closed both gates "out of respect to the owners of the land." It is admitted by Mr. Boles, appellant, that when an oil company was drilling a well on an adjoining farm and wanted to improve a part of this road so they could use it ("wanted to pull some trees out of the way so they could get in there, and Mr. Sorrels got Dick Wohlford to go in and pull down all of the trees so they could work the road") that he went with Mr. Sorrels to Eastland to see Mrs. Ellington and asked her for permission to work on the road. That Mrs. Ellington granted permission. That they then improved said road. It is undisputed that the owners of section 451 and their lessees have always used the road in question. Mr. Boles testified: "Q. And all of the owners of that land have always used that road in getting in and out of that place, haven't they? A. That's right." Mr. Boles testified that he used the road in 1945 to look after his own and Mr. Walker's cattle grazing on the 500 acre tract, Mr. Walker then being the lessee of the Ellingtons, who then owned the 500 acres across which the road in question runs. Mr. Boles testified: "Q. You were a tenant under him? A. Yes, sir." A tenant cannot claim adversely to the landowner and such relationship, existing at any time during the period of limitation, breaks the continuity of the adverse claim. Sassman v. Collins, 53 Tex. Civ.App. 71, 115 S.W. 337, 339 (writ ref.). The Supreme Court of Texas in Texas Western Ry. Co. v. Wilson, 83 Tex. 153, 157, 18 S.W. 325, 326, said, "A single act of acknowledgment by the defendant of the owner's title is fatal to the right." Such evidence sustains the judgment denying appellants a roadway both by prescription and necessity running north and south across Red's 500 acres. The general rule applicable to a roadway by prescription claimed by an individual, is stated in 15 Tex.Jur. 797, as follows: "To establish a prescriptive right to an easement the use must be exclusive. The use of a way, for example, in common with others or the general public is not sufficient to create a prescriptive right, though the way be used for the prescriptive period. Especially is this true where there is no independent assertion of a right more pronounced and peculiar in behalf of the claimant and more indicative of an adverse claim than the open and notorious use with others. If the way is also used by the owner of the land, the use is not adverse and will not give a prescriptive right." That part of the judgment awarding Red, Jr., title to the 4.79 acre right-of-way within Red's 500 acre tract, and that part of the judgment disposing of appellants' claim for improvements in good faith, are reversed and the cause remanded. In all other respects, the judgment is affirmed.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532918/	227 S.W.2d 387 (1950) SULLIVAN v. UNIVERSAL ELECTRIC CONST. CO. OF ALABAMA, Inc., et al. No. 9836. Court of Civil Appeals of Texas, Austin. February 1, 1950. Rehearing Denied February 22, 1950. 388 Scott Snodgrass, of San Angelo, W. G. Bedford, of Winters, W. E. Allen, of Coleman, for appellant. Victor Bouldin and W. B. Browder, Jr., of Vinson, Elkins, Weems & Frances, of Houston, Scarborough, Yates, Scarborough & Black, of Abilene, Hilton E. Howell, of Waco, for appellees. ARCHER, Chief Justice. This is a suit instituted by C. E. Sullivan and L. A. David, but David withdrew as a party and the case was prosecuted to final judgment by Sullivan, against the City of Winters, its governing officials, the Universal Electric Construction Company of Alabama, Inc., its corporate surety upon a performance bond given by it to the City, and Ballard-Hassett Company and certain named individuals alleged to be owners of original revenue bonds, refunding bonds and lease revenue warrants, and alleged to have been active participants with the City in the consummation of certain invalid transactions relating to a contract of Universal Electric Construction Company of Alabama, Inc., to build an electric generating plant and distribution system for the City of Winters. The plaintiff sought a declaration by the court fixing and determining the rights of all the parties under the original construction contract entered into in November of 1941, and under certain amendments thereof attempted to be effected in September of 1946, and he sought an adjudication of the validity of certain refunding bonds and lease rental warrants issued as a result of the 1946 negotiations, and of a portion of a series of refunding revenue bonds issued in the year 1948 while the suit was pending for trial in the district court. The case was heard before the court without the intervention of a jury, and judgment was rendered that the plaintiff take nothing. The court filed findings of fact and conclusions of law. It is alleged that in 1941 the City had an election, overwhelmingly voted in favor of the issuance of $175,000 revenue bonds, and on November 15, 1941, entered into a contract with Universal for the construction of an electric light and power plant and distribution system for its residents. When the bonds were first voted, an injunction suit filed by the West Texas Utilities Company thwarted progress for some months. However, construction was commenced after such delay, but on March 12, 1942, when the plant was approximately seventy-five per cent completed, the City was ordered to halt such construction by official order of the War Production Board. In further disruption of construction during the war, engines, wire and other critical materials already installed or on hand were taken by the Government. War Production Board orders and governmental restrictions were released in the summer of 1946, and the City again began its fight to secure its own electric light and power plant and system. The City, its mayor, aldermen and attorneys found that the $16,000 remainder due to Universal upon the construction contract had been expended during the war years and that the City had no way to raise such sum; the Second War Powers Act, under which the War Production Board had issued orders halting construction, providing immunity to the contractor against a suit for damages; labor and material were almost impossible to obtain, and prices were greatly in excess of prices before the war. The City and its duly elected officers continued to fight, and conceived the idea of reducing the contract price to the available $144,000, already paid Universal, and of securing from the bond 389 purchaser, Neu, the necessary engines. They negotiated a new or supplemental contract or novation with the contractor. They got Neu to buy and supply the engines and rent them to the City on a day to day basis. With the good faith and wholehearted cooperation of the contractor and the money lender, this plan was evolved by the City into the transactions of September 10, 1946, of which Sullivan complains. In February 1947 the plant was completed. All of the bonds, warrants and contracts of which Sullivan complained when the suit was filed were paid, discharged and cancelled, and additional engines and equipment secured for the then successfully operating power plant. The engines belong to the City, the entire plant and distribution system belongs to and is operated by the City, and the contractor has been paid. There is now outstanding the bond obligation against the revenue from the electric system, but there are not now and there have never been any tax bonds, warrants or other obligations imposed upon the residents of Winters in the acquisition of the municipal plant. Appellant assigns as error nine points. Under the first point he complains of the failure of the trial court to decree whether the transactions of September 10, 1946, or any phases were invalid, and if so to fix the rights and liabilities of the City of Winters; and by the second point, the error of the court in refusing to declare the supplemental contract of September 10, 1946, to be void; and by the third, the error in refusing to decree the $34,000 of refunding bonds issued September 10, 1946, and the interest coupons attached thereto to be void, as an attempted refunding of that amount of interest coupons of the original 1941 bond issue; and by the fourth point the error of the court in refusing to decree that the ordinance authorizing the lease agreement with Neu was invalid; and further by the fifth point the court was in error in refusing to adjudicate that the transactions of September 10, 1946, were a fraudulent scheme between the contractor Neu and the Bond Company, so that the contractor would be released from his obligations and that Neu and the Bond Company would wrongfully receive refunding bonds and lease rental warrants at the expense of and in fraud upon the rights of the City; and by the sixth point, the error of the court in refusing to decree that the $219,000 revenue bonds issued in 1948 were valid only to the extent that they represented the original 1941 issue of $175,000 with simple interest; and by the seventh point, of the error of the court in refusing to decree that the $36,396.50 of the $150,000 bonds issued in 1948 were invalid; by the eighth point error is assigned at the failure of the court to decree that $1,116.56 (or at least $871.56) of the $219,000 bonds in payment of interest were invalid; and, likewise, in the ninth point of the error of the court in refusing to decree that the $6,832.50 of the $150,000 bonds of 1948 used to create a sinking fund to pay the first six months' interest on the total of the 1948 bond issue were invalid. The appellees rely on seventeen counterpoints, generally, to the effect that the court properly rendered judgment that the plaintiff take nothing because he had no litigable or justiciable interest in the subject matter of the suit, and that the funds to be expended or pledged were to be paid solely from revenue derived from the municipal electric power plant and system; and a lack of interest in the matter in controversy as is required in any other suit or action; and that the West Texas Utilities Company was the real party; and failing to consider testimony in this connection; and that equitable relief was barred by violation of the laws; and that at the time of the trial the bonds voted in 1948 had been issued and that all bonds and other contracts and obligations theretofore issued in the acquisition of the City's electric distribution and power system and complained of by plaintiff had been taken up and cancelled; and further that the matters and issues so sought to be litigated were moot at the time of the trial; and that the bonds voted and issued in 1948 were properly and legally voted and then issued by the City; and further that the contract of September 10, 1946, between the City and Universal was a valid, legal and binding agreement upon the parties; and that the contract was 390 a novation or amendment based upon a good, legal and valuable consideration; and further that the $34,000 of refunding bonds were good and valid, and that the amount expended by Neu and Universal at the request of the City upon interest was a proper and legal charge; and further that the ordinance authorizing the lease was valid, and that the transactions of September 10, 1946, were not fraudulent; and, finally, that the case being one tried without a jury and there is evidence in the record to support the findings of the trial court, such findings have the same force as a verdict of a jury and should not be disturbed by this court. The trial court overruled pleas in abatement filed by appellees, and after a final trial on its merits the court again overruled the pleas in abatement and other dilatory motions and exceptions, and entered a judgment that plaintiff (appellant herein) take nothing by the suit and that all other relief be denied, that the law and facts are with the defendants, and that plaintiff be granted no relief. In our opinion the trial court erred in holding that appellant had a justiciable interest authorizing him to maintain his suit. The general rule is stated in 1 Tex. Jur., 625, Sec. 18, as follows: "In general the law affords to private persons a remedy for private wrongs only. * * "An action does not lie to restrain interference with a mere public right at the suit of an individual who has not suffered or is not threatened with some damage peculiar to himself. * * * If the damages be only such as are common to all, the action must be brought by the lawfully constituted guardian or guardians of the public interest." This rule was early announced by the Supreme Court of Texas in a line of cases of which City of San Antonio v. Strumberg, 70 Tex. 366, 7 S.W. 754, is typical, and has never been varied except for the line of cases of which Terrell v. Middleton, Tex.Civ.App., 187 S.W. 367, is an example, in which it is held that a taxpaying citizen may enjoin the unlawful expenditure of tax funds to which he is obligated, as a tax payer, to contribute. None of the contracts, bonds or warrants, or transactions involved in this case are payable from taxation. The entire cost of the City's electric light and power system is being paid from the proceeds of revenue bonds under arts. 1111-1118, Vernon's Ann. Civ.St., and under the express terms of these Articles the project is self-liquidating, and the bondholders can never demand payment out of funds raised or to be raised by taxation. This court had before it this question in the case of West Texas Utilities Company v. Smith, Tex.Civ.App., 168 S.W.2d 665, 666, Writ Ref., in which it was held: "That a taxpayer of the City does not have a litigable interest in the subject matter which would authorize him to maintain a suit to enjoin execution or enforcement of contract or bonds of this character was held in Fisher v. City of Bartlett, Tex.Civ.App., 76 S.W.2d 535, error dismissed; Id., Tex. Civ.App., 88 S.W.2d 1068, error dismissed. This was the only point decided in the two appeals; and the decision was later expressly approved in Hazelwood v. City of Cooper, Tex.Civ.App., 87 S.W.2d 776, error refused. Authorities on the subject are reviewed at some length in Powell v. City of Baird, [Tex.Civ.App.], 132 S.W.2d 464." The right of appellant to maintain this suit under the provisions of Sec. 9 of art. 2368a, Vernon's Ann.Civ.St., is discussed and denied in Fisher v. City of Bartlett, 76 S.W.2d 535, 538, in which this court said: "The right of action given to the taxpayer in the last quotation is expressly limited to the particular class of contracts provided for in the section; namely, those `creating or imposing an obligation or liability of any nature or character upon such * * * city.' Section 11 of the act (Vernon's Ann.Civ.St. art. 2368a, § 11) specifically provides that nothing therein shall prevent cities from erecting utilities under articles 1111 to 1118, `provided, that in making such contracts or agreements or 391 warrants or other obligation to be paid out of the property and income from such system or systems, the governing body of such city or town shall comply with the provisions of this Act in regard to notice and competitive bids and the right to a referendum of such question.' This section seems clearly to indicate that it was the purpose of the Legislature to emphasize the fact that the act was not intended to apply generally to utilities acquired under article 1111 et seq., but to ingraft on those articles the provisions of the act specifically enumerated in section 11; namely, those regarding notice, competitive bids, and the right to a referendum. Section 9, it will be observed, relates only to evidences of debt or other obligation, whether such evidence be by warrant, bond, funding bond, refunding bond, or other; whereas the last paragraph of section 2 relates to contracts and agreements. The latter, as above seen, which relates to contracts, is expressly limited to such as create or impose an obligation or liability upon the city; and the former, we think, is to be given the same effect with reference to the evidence of such obligation or liability. " * * The two quoted provisions of the act, it seems to us, are complementary and should be read together,the first relating to the debt at its inception, namely, the contract; and the latter to the completed debt, namely, the evidence of indebtedness. Some of the accorded relief, no doubt, the taxpayer would be entitled to independently of these provisions, and to that extent they are but declaratory of the common law. That fact alone, however, is not a warrant, we think, for extending to a taxpayer a right of action with regard to a class of securities as to which it has been uniformly held he has no litigable interest. There should also be clear intention of the Legislature, evidenced by the language employed, to give that right. Taxpayers as such clearly have no interest in securities which could never be paid out of any fund to which they contribute as taxpayers. Any citizen of the city is as much interested by virtue of his citizenship as a taxpayer is by virtue of owning taxable property within the city; and there would appear to be no valid reason for withholding this right from the general citizen while according it to the taxpaying citizen, in case of securities which can under no circumstances affect the rights of the taxpayer as such. There is therefore a manifest reason for according the right of injunction to the taxpayer in the case of contracts, the performance of which may constitute a liability against the city and evidences of indebtedness thereby created, and withholding such right as regards securities which can never be a charge against the city. The Legislature has, no doubt, the power to confer upon a taxpaying citizen the right to injunctive relief against payment of the character of securities herein involved; but we do not think a fair interpretation of the language it has employed evidences such intention." The revenue bonds having been sold and the proceeds expended, appellant is also precluded under the rule announced in Hoffman v. Davis, 128 Tex. 503, 100 S.W.2d 94, 95, where the court held: "We find it unnecessary to determine the question of whether under the statutes as they existed at the time the contracts involved were executed, the commissioners' court was wholly without power to enter into them. This for the reason that, regardless of how the obligation arose, the suit is one for the collection of a debt alleged to be owing to the county as such, and the question of the right of citizens to institute and prosecute an action for the collection thereof does not rest upon a determination of how the obligation arose. * * * * * * "A further reason for denying plaintiffs in error the right to maintain this suit lies in the fact that they have no private interest in the subject-matter. When a taxpayer brings an action to restrain the illegal expenditure by the commissioners' court of tax money he sues for himself, and it is held that his interest in the subject-matter is sufficient to support the action; but when the money has already been spent, an action for its recovery is for the county. The cause of action belongs to it alone. Our courts do not recognize the right of one 392 to bring a lawsuit for another merely because he might derive some indirect benefit therefrom. * * * * * * * * "* * * Once the right of citizens to bring suits of this nature is granted, under our system of practice the courts would be compelled to try them in the same way as they do other suits, and we know of nothing they could do to prevent the abuse of the privilege. But we are not called upon to decide either whether citizens would abuse the privilege, if granted, or whether it should be granted. What we decide is that it has not been granted. Whether or not it would be a wise public policy to grant it is a legislative, and not a judicial question." Under this holding no other question raised by the parties need be considered or determined. The judgment of the trial court is reversed and judgment is here rendered dismissing appellant's suit. Reversed and dismissed.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532919/	271 Pa. Super. 528 (1979) 414 A.2d 379 COMMONWEALTH of Pennsylvania v. Willis JONES, Appellant. Superior Court of Pennsylvania. Argued July 9, 1979. Filed November 16, 1979. 530 Carol E. Haltrecht, Assistant Public Defender, West Chester, for appellant. John E. White, Jr., Assistant District Attorney, West Chester, for Commonwealth, appellee. Before WIEAND, NIX and WEKSELMAN, JJ.[] 531 WIEAND, Judge: Willis Jones was convicted of third degree murder in connection with the shooting death of Woodrow Bare, Sr. Post trial motions were dismissed, and Jones was sentenced to prison for not less than three nor more than seven years. He appeals from the judgment of sentence. We reverse and remand for a new trial. Woodrow Bare, Sr., was shot at or about 1:30 o'clock, A.M. on August 21, 1976. By 2:10 o'clock, A.M., on the same morning, appellant and several others were in custody. Appellant had been drinking earlier that night and had accosted the decedent's son and brother. When decedent heard about the altercation, he pursued appellant's pick-up truck, which had other persons in it, but gave up the chase when appellant was able to outdistance decedent's van. During this chase, Walter Bare, decedent's brother, had been in a vehicle behind the van. Thereafter, appellant stopped at a bar, after which he drove to decedent's home. He there observed the decedent, in his van, coming toward his pick-up truck. He shot decedent with the rifle which he kept in the truck. A collision then occurred between decedent's van and appellant's truck. Appellant left the area of the shooting and hid the rifle in a cornfield. When he later returned to the scene of the shooting, he was accused of being the perpetrator by Walter Bare. Bare had previously told police of the shooting and had given them the license number of appellant's truck. Police observed two high power rifle casings on the floor of the truck and damage to appellant's truck, which corresponded to damage on decedent's van. They placed appellant under arrest. After his arrest, appellant was kept in a detention cell at the Oxford Borough Police Station until 6:30 o'clock, A.M. During this time he had an altercation with a cellmate, damaged the cell, and slept. He was awakened at 6:30 o'clock and submitted to a neutron activation test. He was advised of his rights under Miranda[1] after which he gave an 532 exculpatory statement and signed consents for the search of his home and truck. Following these events appellant was again placed in a detention cell where he remained for another two hours. During this period the police, with help from David Blackburn, who had also been arrested in connection with the shooting, attempted unsuccessfully to find the murder weapon. Shortly before noon, appellant was removed to the Avondale State Police Barracks where, after having been given food, he made a brief, oral inculpatory statement, which, inter alia, specifically disclosed the location of the rifle. With this information police were readily able to find the murder weapon in the cornfield where it had been hidden. Jones was arraigned at 3:00 o'clock, P.M. Two days later, while appellant was in prison, he gave a written, inculpatory statement containing a full account of the shooting. Prior to trial, appellant moved to suppress his several statements and the murder weapon. The trial court refused the applications to suppress, and these items of evidence were used at trial by the Commonwealth. Appellant argues that this was error. Initially, he contends that police lacked probable cause to arrest him and that the evidence, therefore, was the product of an unlawful arrest. This is not a meritorious argument. Probable cause to arrest existed if, at the time appellant was detained by the police, the facts and circumstances known to them and of which they had reasonably trustworthy information, were sufficient to warrant a prudent man in believing that appellant had committed the shooting. Commonwealth v. Powers, 484 Pa. 198, 201, 398 A.2d 1013, 1014 (1979). The test is not one of certainties but one of probabilities dealing with considerations of everyday life. Commonwealth v. Dickerson, 468 Pa. 599, 605, 364 A.2d 677, 681 (1976). The facts known must be viewed from the vantage point of a prudent, reasonable, cautious police officer on the scene at the time of the arrest guided by his experience and training. Commonwealth v. Tolbert, 235 Pa.Super. 227, 230, 341 A.2d 198, 200 (1975). 533 In the instant case, there was probable cause to believe that appellant had killed or participated in the killing of the decedent. When police arrived at the decedent's home, they were given the number of appellant's license by decedent's brother, who together with other relatives of the decedent, knew that appellant's truck had been at the scene of the shooting and collision of vehicles. Appellant's damaged truck and the corresponding damage to the decedent's van suggested that the two vehicles had been in a collision. Additionally, two rifle casings were observed on the floor of the truck when appellant emerged therefrom. We also reject appellant's contention that his statements and the consent to search his house and truck were given involuntarily. This argument is based on testimony that appellant became ill during the early morning questioning. The fact of illness did not alone compel a finding that consent had been given involuntarily. Illness is only one factor to be considered in assessing the totality of the circumstances surrounding the giving thereof. Commonwealth v. Goodwin, 460 Pa. 516, 333 A.2d 892 (1975); Commonwealth v. Jones, 457 Pa. 423, 322 A.2d 119 (1974); Commonwealth v. Moore, 454 Pa. 337, 311 A.2d 620 (1973); Commonwealth v. Hunt, 263 Pa.Super. 504, 398 A.2d 690 (1979). Other evidence supported the trial court's finding that appellant's statements and consents to search were voluntary. Moreover, the only statement given as a result of this original interrogation was exculpatory in nature, and the record does not disclose that incriminating evidence was found as a result of the subsequent search of appellant's house and truck. We are constrained to agree with appellant that the oral statement made shortly before noon was the product of unnecessary delay between appellant's arrest and arraignment. Appellant was arrested and taken into custody at 2:10 o'clock, A.M., on August 21, 1976. He was not arraigned until 3:00 o'clock, P.M., almost thirteen hours later. The statement in which he revealed the location of the rifle was made shortly before noon, approximately ten hours following arrest. 534 Rule 130 of the Pennsylvania Rules of Criminal Procedure and Commonwealth v. Futch, 447 Pa. 389, 290 A.2d 417 (1972) required that appellant be taken before a magistrate for arraignment without unnecessary delay. This rule was designed "to put a stop to the practice of arresting an individual and holding him during a lengthy period while continuing the investigation before arraigning him." Commonwealth v. Smith, 472 Pa. 414, 418, 372 A.2d 761, 763 (1977); Commonwealth v. Cherry, 457 Pa. 201, 205, 321 A.2d 611, 613 (1974); Commonwealth v. Hancock, 455 Pa. 583, 587, 317 A.2d 588, 591 (1974). The Supreme Court has repeatedly said that "pre-arraignment delay is unnecessary unless required to administratively process an accused." Commonwealth v. Eaddy, 472 Pa. 409, 412, 372 A.2d 759, 760 (1977); Commonwealth v. Smith, supra; Commonwealth v. Williams, 455 Pa. 569, 573, 319 A.2d 419, 421 (1974); Commonwealth v. Dixon, 454 Pa. 444, 447, 311 A.2d 613, 614 (1973). See also: Commonwealth v. Gasper, 262 Pa.Super. 141, 146, 396 A.2d 685, 688 (1978). Before evidence will be suppressed on the grounds of unnecessary, pre-arraignment delay, the evidence must be reasonably related to the delay, and must be prejudicial to the defendant. Commonwealth v. Williams, supra. The Supreme Court has narrowed the relevant time frame to the time elapsing between arrest and securing the evidence, for it the unnecessary delay occurred after the evidence had been secured, the evidence was not related to the subsequent delay. Commonwealth v. Williams, 484 Pa. 590, 592, 400 A.2d 1258, 1259 (1979). In the instant case, an initial delay occurred between appellant's arrest and his interrogation at or about 6:30 o'clock, A.M. It was caused, at least in part, because the investigating detective was engaged in interrogating other suspects. Cf. Commonwealth v. Simmons, 239 Pa.Super. 220, 362 A.2d 402 (1976). At 6:30 o'clock, A.M., appellant was taken from the detention cell, was interrogated, and was given a neutron activation test. He was then returned to his cell, where he was held while police continued their investigation. Thereafter, he was removed to the state 535 police barracks at Avondale, where he made an inculpatory statement shortly before noon. The delay between 6:30 o'clock and noon was unnecessary. During this period appellant was held while police made an additional investigation and conducted a search for the murder weapon. A confession which was the product of such delay should have been suppressed. Commonwealth v. Smith, supra. During appellant's oral statement, made at or about noon, he divulged information identifying the location of the murder weapon. Whether the weapon should have been suppressed as the fruit of the improperly obtained statement is an issue which the trial court did not consider, for it found that the oral statement had not been the product of unnecessary delay. David Blackburn, it will be recalled, had told the police of the general whereabouts of the weapon. He said that the rifle had been placed in the first row of a cornfield on Route 272 and that a handkerchief had been tied around a cornstalk to mark the spot. Despite this information, the search for the weapon had been unsuccessful. After appellant made his statement containing more specific information, police found the weapon in a cornfield adjacent to Route 272 and approximately three or four miles from the decedent's residence. Police testimony disclosed that the field in which the rifle was found would in any event have been searched before nightfall. It was conceded by the Commonwealth, however, that appellant's statement to the police "greatly facilitated the finding of the weapon". In Commonwealth v. Brown, 470 Pa. 274, 368 A.2d 626 (1976), the Supreme Court held that where evidence showed that a murder weapon obtained as a result of illegal police activity would eventually have been discovered in the course of a lawfully conducted investigation, such evidence need not be excluded. To hold otherwise "would serve only to frustrate the objectives of the adjudicative process without providing any enhancement of that process." Id., 470 Pa. at 282, 368 A.2d at 630. See also: Commonwealth v. Wideman, 478 Pa. 102, 385 A.2d 1334 (1978). 536 Because the case must be remanded for a new trial, the trial court will have an opportunity to receive additional evidence and determine whether the finding of a murder weapon by the police was the result of the improperly obtained, oral statement from appellant. If so, the weapon must be suppressed. If, on the other hand, the weapon would have been found irrespective of appellant's statement and by virtue of a lawfully conducted police investigation, then the evidence need not be excluded and may be used by the Commonwealth. Commonwealth v. Brown, supra; Commonwealth v. Wideman, supra. Upon remand, the trial court should also hear and determine whether appellant's written statement, given two days later, was obtained by exploiting the original improperly obtained statement or whether there had been an attenuation because of intervening time and circumstances. After appellant had been arraigned about 3:00 o'clock, P.M., on August 21, 1976, he was taken to and confined at the Chester County Prison. On August 23, 1976, two days later, he was interviewed in prison by two state policemen who first repeated to him the rights to which he was entitled under Miranda. At that time appellant voluntarily answered questions and signed a written statement. This written statement was not rendered inadmissible ipso facto because a prior incriminating statement had been the product of an unnecessary arraignment delay. Cf. Commonwealth v. Greene, 456 Pa. 195, 317 A.2d 268 (1974); Commonwealth v. Mitchell, 445 Pa. 461, 285 A.2d 93 (1971). The question to be determined is "whether, granting [the] establishment of the primary illegality, the evidence to which instant objection is made has been come at by exploitation of that illegality or instead by means sufficiently distinguishable to be purged of the primary taint." Wong Sun v. United States, 371 U.S. 471, 487-88, 83 S. Ct. 407, 417, 9 L. Ed. 2d 441, 455 (1965). See also: Commonwealth v. Garvin, 448 Pa. 258, 293 A.2d 33 (1972). This must be determined from the totality of the circumstances. 537 The judgment of sentence is vacated, a new trial is granted, and the case is remanded for further proceedings consistent with the foregoing opinion. NOTES [] Justice ROBERT N.C. NIX, Jr., of the Supreme Court of Pennsylvania, and Judge I. MARTIN WEKSELMAN of the Court of Common Pleas of Allegheny County, Pennsylvania, are sitting by designation. [1] Miranda v. Arizona, 384 U.S. 436, 86 S. Ct. 1602, 16 L. Ed. 2d 694 (1966).	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532950/	32 B.R. 678 (1983) In re Fred THOMASES, Debtor. Bankruptcy No. 82 B 11235 (EJR). United States Bankruptcy Court, S.D. New York. September 7, 1983. 679 Willkie, Farr & Gallagher, New York City, for debtor. Skadden, Arps, Slate, Meagher & Flom, New York City, for Harry Gordon. DECISION ON ORDER TO SHOW CAUSE TO VACATE ORDER GRANTING RULE 205 EXAMINATION OF HARRY GORDON EDWARD J. RYAN, Bankruptcy Judge. On July 13, 1983 a hearing was held before this court on why an ex parte order authorizing examinations of Harry Gordon under Bankruptcy Rule 205(a) should not be vacated. On June 20, 1983 Judge Galgay approved a motion on the part of Fred Thomases, debtor and debtor in possession, to examine Harry Gordon pursuant to Rule 205(a). Gordon maintains that the ex parte order should be vacated. Fred Thomases is a shareholder and creditor of Brucol Industries, Inc. (Brucol) and its affiliated industries. The Brucol companies are Chapter 11 debtors in possession in a proceeding pending before Judge Galgay. Prior to the initiation of Brucol's reorganization proceeding during August, 1981, both Thomases and Gordon had executed personal guaranties to various institutions which had granted loans to Brucol. Both Thomases and Gordon filed Chapter 11 petitions, which were undoubtedly precipitated by the claims of their guarantee creditors. Prior to the filing of his own reorganization petition, Gordon had commenced an adversary proceeding on February 7, 1983 to modify the Section 362 stay as to Fred Thomases to enable Gordon to file and prosecute certain actions against Thomases in New Jersey. On May 31, 1983, Gordon filed complaints in the New Jersey State Superior Court, and the Federal District Court of New Jersey (the New Jersey Actions), and alleged against Thomases in both actions acts of common law fraud and violations of the federal Racketeer Influenced and Corrupt Organizations Act (RICO) 18 U.S.C. ¶ 1961 et seq. (1976). These allegations were claimed to be in connection with inter alia Thomases' alleged failure to keep Gordon apprised of the financial condition of the Brucol Company, and with certain alleged misdeeds of the operation of a partnership which financed account receivables for and made loans to Brucol. On May 31, 1983, Gordon filed a proof of claim against Thomases in this court in lieu of the New Jersey actions, and annexed copies of the New Jersey complaints to the proof of claim. Thomases now seeks to examine Gordon as to his claims that are pending before the New Jersey courts. Under Bankruptcy Rule 205(a) where a witness other than a "bankrupt" is to be subjected to an examination, some showing of cause must be stated by the movant. It is within the discretion of the court to decide in each particular case what constitutes sufficient cause and whether to require examination of a party. 12 Collier on Bankruptcy ¶ 205.08 at -84 (14th ed. 1978). Generally, the court must consider whether denial of production would cause the moving party undue hardship. See Freeman v. Seligson, 405 F.2d 1326, 1336 (D.C.Cir.1968). Counsel for Fred Thomases claims that a Rule 205(a) examination is necessary "to confront Mr. Gordon with the allegation that he didn't know what was going on in this business in which he and Thomases were partners, to confront him (Gordon) with the allegation that Thomases was essentially stealing money from the business while Gordon was at the same time signing notes to Thomases partnership, the so called vehicle." Record p. 4. Counsel for Fred Thomases has failed to demonstrate the existence of good and sufficient cause for a Rule 205 examination. Given the fact that the same discovery may be had before the New Jersey courts as to deposing Harry Gordon, this court perceives no undue hardship that is imposed on Fred 680 Thomases by precluding a Rule 205(a) examination of Harry Gordon before this court. Accordingly, the ex parte order issued by Judge Galgay, allowing for a Rule 205(a) examination of Harry Gordon by counsel for Fred Thomases should be vacated.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532971/	227 S.W.2d 347 (1950) HACKLER et al. v. H. KOHNSTAMM & CO. OF TEXAS. No. 14150. Court of Civil Appeals of Texas, Dallas. January 20, 1950. Rehearing Denied February 17, 1950. 348 Edwin M. Fulton, Gilmer, W. C. Hancock, Pittsburg, Thompson, Knight, Wright, Weisberg & Simmons, and Wm. E. Collins, Dallas, for appellants. Matthews & Nash, Dallas, for appellee. YOUNG, Justice. Appellee's statutory action was against the Sheriff of Camp County and surety on his official bond in form of motion under Arts. 3825 and 3826, Vernon's Ann.Civ.St., viz. 1: (3825) "Should an officer fail or refuse to levy upon or sell any property subject to execution, when the same might have been done, he and his sureties shall be liable to the party entitled to receive the money collected on such execution for the full amount of the debt, interest and costs, to be recovered on motion before the court from which said execution issued, five days previous notice thereof being given to said officer and his sureties." (3826) "Should an officer neglect or refuse to return any execution as required by law, or should he make a false return thereon, he and his sureties shall be liable to the party entitled to receive the money collected on such execution for the full amount of the debt, interest and costs to be recovered as provided in the preceding article." H. Kohnstamm & Company of Texas (a corporation) was the creditor whose judgment against George Collins had been duly rendered in Dallas County Court at Law No.1; a thirty-day execution issuing thereunder on June 15, 1948 and sent by plaintiff's counsel to Sheriff Hackler of Pittsburg, Camp County, for levy on any assets of debtor Collins subject to execution, the latter doing business as Pittsburg Laundry at the time. Several letters were written to the sheriff by counsel insisting on prompt levy during July and August, with no response, the process being returned about September 10 with notation: "This execution came to hand 5-21-11 A. M. I investigated 349 Geo. Collins place several times and I found at no time any thing to leavy on About $10.00 or $12.00 worth of paper and washing powder. He has sold out and moved from here. H. F. Hackler Sheriff Camp Co." No indemnity bond was ever requested or furnished. Appellee in its motion alleged the ownership by judgment debtor of property subject to execution on which the sheriff had failed and refused to levy, also that above return was false; and, further, "that while said execution was in the hands of said Sheriff, George Collins, judgment debtor herein, sold the business known as Pittsburg Laundry for a valuable consideration, and for a sum considerably in excess of the amount of this judgment herein against said Collins." Appellant specifically denied making a false return, alleging due diligence in handling of process and that appellee had suffered no injury. His testimony in substance was that he had repeatedly requested Collins to pay the judgment, Collins promising from time to time to have the money; judgment debtor telling him that all laundry equipment was mortgaged; that he was a married man with wife working in the business; and that on consultation with the County Attorney, whose advice was requested, he (the sheriff) had concluded that all laundry machinery and equipment constituted exempt property and not subject to execution. The property in question (sold during the interval to an outside party for $3,000 cash and assumption of $8,000 mortgage) consisted generally of the following items: a twenty-five horse power boiler, two Zephyr washers, one Billingsley extractor, one Perry tumbler, Watkins flatiron worker, six Pantex presses, cash register, scales, three horse power Ingersol Rand air compressor, homemade 36" four-blade one-half horse power motor fan, five tables, bins, a counter, three canvas laundry baskets with wheels, canvas hampers without casters, a Pantex double sleever, and irons. Art. 3832, subd. 5, Vernon's Ann. St., exempts from execution "All tools, apparatus and books belonging to any trade or profession", which of course would include the business of a laundry. Huebsch Mfg. Co. v. Coleman, Tex.Civ.App., 113 S.W.2d 639, 642. The cited case quotes with approval the following statement from Smith v. Horton, 19 Tex. Civ. App. 28, 46 S.W. 401, that "While the statute does not enumerate what belongs to any particular trade or profession, but leaves it for judicial determination, still it is definite enough to include only such tools and apparatus as properly belong thereto, and are essential to the conducting of the business. For instance, the printing press, type, cases, etc., are tools belonging to, and are exempt, to, the printer; the awl, last, etc., to the shoemaker; the forge, anvil, * * * hammers, etc., to the blacksmith; the saw, hammer, plane, chisel, etc., to the carpenter; and so on." In McMillan v. Dean, Tex.Civ. App., 174 S.W.2d 737, 739, the Austin Court, after a review of earlier decisions, Supreme Court and otherwise, then observed that the statutory terms of "tools and apparatus," though to be liberally construed, would embrace only such tools and apparatus as belong to a trade or profession, not being inclusive of things that might be merely useful or beneficial to the carrying on of the particular business. The test just stated is well in accord with the holding of our Supreme Court in Simmang v. Pennsylvania Fire Ins. Co., 102 Tex. 39, 112 S.W. 1044, 132 Am. St. Rep. 846, that fans, ice boxes and cash register, among other equipment, cannot be claimed as exempt to a restaurant keeper; likewise in Hammond v. McFarland, Tex.Civ.App., 161 S.W. 47, it was held that a sach register and refrigerator were not tools or apparatus belonging to the trade of a butcher. Under above decisions some of the enumerated assets were undoubtedly not exempt, for example, the cash register, motor fan and scales. The value of these named articles was not developed at the trial, appellee's proffered testimony along such line having been withdrawn by counsel on objection of defendant. It may be inferred, however, that the items were of some substantial worth. Articles 3825 and 3826 are some what penal in nature and are to be strictly followed in order to sustain a judgment. J. M. Radford Grocery Co. v. Owenby, Tex. 350 Civ.App., 34 S.W.2d 385; Ellis v. Blanks, Tex.Civ.App., 25 S.W. 309; a complete defense to the action consisting of proof that no money could have been collected by the sheriff on execution and levy by use of proper official diligence. If, on the other hand, it is developed by the testimony that money could have been realized by a prompt and diligent handling of the process by the official, a statutory liability would follow in full amount of the judgment debt, interest, and costs; and the articles in question (3825, 3826) are to such extent punitive. It is our conclusion that this is the rationale of decision in the great majority of cases wherein these statutes have been discussed. "Our Supreme Court has declared that the primary object of this statute is to give compensation to the plaintiff in execution for any injury suffered by him on account of the default of the officer, and that, when no such injury has been sustained, no right to recover exists. The failure of the officer to discharge his duty in the premises renders him and his sureties prima facie liable to the plaintiff in execution for the full amount of his debt, interest, and costs, and the burden is on the officer to overcome such prima facie case by showing that nothing could have been collected on such execution by proper official diligence. Smith v. Perry, 18 Tex. 510, 511, 70 Am.Dec. 295; Vaughan v. Warnell, 28 Tex.119; Griswold v. Chandler, 22 Tex. 637, 640; Ellis v. Blanks, Tex.Civ. App., 25 S.W. 309, 310. Mere insolvency of the defendant in execution, within the ordinary meaning of that term, is not sufficient to absolve the officer. He should show that there was no property belonging to the defendant subject to execution within his official jurisdiction out of which plaintiff's judgment, or any part thereof, could have been made. Griswold v. Chandler, supra; Ellis v. Blanks, supra; Hale v. Bickett, 34 Tex. Civ. App. 369, 78 S.W. 531. That the Valley Plumbing & Supply Company, defendant in execution in this case, had properly subject to execution in Cameron county is not denied. So the defense relied upon must be sustained, if sustained, at all, by the sufficiency of the attempted showing that no part of plaintiff's judgment could have been made out of such property by a prompt levy upon the same and a prompt sale thereof." B. F. Goodrich Rubber Co. v. Valley Plumbing & Supply Co., Tex.Civ.App., 267 S.W. 1036, 1038. "This statutes is very sweeping in its terms and makes the officer and his deputies liable to the party entitled to receive the money collected on the execution for the full amount of the debt on the officer's failure to return the execution. Its terms show that it is predicated on the proposition that the officer is made liable in the summary manner perscribed by the statute on his ability to have realized money on the execution had he been prompt in the performance of his duty when the execution was placed in his possession. If no money could possibly have been realized on the execution, it necessarily follows that no liability would attach to the sheriff and his bondsmen for the failure to make the return. This doctrine is announced in the case of Hale et al. v. Bickett, 34 Tex. Civ. App. 369, 78 S.W. 531. *" Richardson v. Johnson-Layne Coffee Co., Tex.Civ.App., 252 S.W. 253, 255. (All italics ours.) As an extenuating circumstance appellant points to the fact that the property was heavily mortgaged. "The mere fact that there are prior liens upon the property of a defendant in execution is no justification for failure, on the part of the officer, to levy the writ. The defendant's equity of redemption is subject to his debts, and the plaintiff in execution has the right to have that sold for what it will bring, and the proceeds applied to the payment of his judgment." Smothers v. Field, Thayer & Co., 65 Tex. 435 (Syl. 3). The implied findings of the trial court that these laundry assets of debtor Collins were not wholly exempt and that appellant failed to exercise due diligence relative to execution of the process in his hands, have support in the record, with result that the judgment under review must be in all respects affirmed.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532956/	227 S.W.2d 795 (1950) CARTER et al. v. TOMLINSON et al. No. A-2261. Supreme Court of Texas. February 22, 1950. Rehearing Denied March 29, 1950. 796 Ernest May, Ft. Worth, George Sergeant, Dallas, Robert W. Calvert, Hillsboro, Tom L. Tyson, Corsicana, John D. Cofer, Austin, Robert Lee Bobbitt, San Antonio, Edwin Hawes, Jr., Wharton, Gilbert T. Adams, Beaumont, E. G. Lloyd, Jr., Alice, Ed B. Levee, Jr., Texarkana, Wm. J. Fanning, Sulphur Springs, O. T. Moore, Jr., Lockhart, Judd R. Stuart, Strawn, Truett B. Smith, Tahoka, W. A. Combs, J. Edwin Smith, Jesse Andrews, Houston, Howard Dailey, Dallas, for petitioners. Thompson, Walker, Smith & Shannon, Ft. Worth, Rawlings, Sayers & Scurlock, Ft. Worth, Culbertson, Morgan, Christopher & Bailey, Ft. Worth, Cantey, Hanger, McKnight & Johnson, now Cantey, Hanger, Johnson, Scarborough & Gooch, Ft. Worth. Gillis A. Johnson, Joe G. Montague, Sidney Samuels, Bert Walker, W. S. Margowski, E. G. Aycock, A. B. Culbertson, Charles L. Stephens, all of Ft. Worth, for respondents. SHARP, Justice. This cause involves certain proceedings at the State Democratic Convention held in Fort Worth in September, 1948, whereby the State Convention seated a delegation favorable to petitioners over one favorable to respondents. The convention elected the petitioners Jack Carter and Mrs. J. W. Douglas as Democratic Executive Committeeman and Committeewoman, respectively, from the Tarrant County district. The convention also required each precinct chairman to take a pledge to support the democratic nominees for president and vice-president. Respondents Neville G. Penrose and Mrs. Bennett L. Smith, together with certain parties elected as delegates to the State Convention and certain Tarrant County precinct chairmen, brought suit for an injunction against the petitioners here. The Court of Civil Appeals at Fort Worth affirmed the trial court's judgment granting to certain respondents a temporary injunction. The material facts of this case are set out in the opinion of the Court of Civil Appeals, reported in 220 S.W.2d 351, and there is no need to further burden this record with a recitation of such facts. 797 At the very outset we must decide if this cause presents a justiciable matter for the courts, or if the Legislature has taken such jurisdiction away from the courts and lodged the jurisdiction over contests of this character solely within the party convention and other party machinery. This Court has heretofore passed on the power of the State Democratic Convention to manage its own affairs. Stanford et al., v. Butler et al., 142 Tex. 692, 181 S.W.2d 269, 153 A.L.R. 1054; Seay v. Latham, 143 Tex. 1, 182 S.W.2d 251, 155 A.L.R. 180. The issue involved there was whether the electors selected by the Democratic Convention held in May, 1944, could be substituted by the Democratic Convention held in September, 1944. In Seay v. Latham this Court held that the State Democratic Convention held in September, 1944, had that power. The State Democratic Convention held on September 12, 1944, adopted the following resolution: "Be it resolved that the State Executive Committee direct the presiding officer of each precinct convention and each county convention to require all persons who desire to participate in said conventions to pledge themselves that they will support the nominees of the Democratic party for all National, State and County officials. And if any person declines to so pledge himself, then he shall not be allowed to participate in the convention." The State Democratic Convention in May, 1948, adopted the following resolution: "Resolved that all members of this Convention, officers and electors, shall be pledged to support all the nominees of the Democratic Party." In the course of the Democratic Convention in September, 1948, a resolution was adopted, from which the following is quoted: "(Each) County Chairman shall communicate with each Precinct Chairman in his county, either by registered mail or in person, and secure from such Precinct Chairman a written statement, signed by such President Chairman, stating that such Precinct Chairman is supporting and will continue to support the nominee of the Democratic Party for President and Vice-President, to-wit: Hon. Harry S. Truman and Senator Alben W. Barkley, in the coming general election; and such Precinct Chairmen are hereby required to file such written, signed statement with the chairman of such County Democratic Executive Committee within one week after receipt of such communication from the County Chairman. "In the event any Precinct Chairman fails or refuses to file such statement with the County Chairman within the time and in the manner above prescribed, then his office shall be and is hereby declared to be vacant and shall be filled as hereafter provided and in the manner prescribed by law; * * ." In 1891 Section 8 of Article V of the Constitution Vernon's Ann.St., was adopted, which conferred upon the District Court the authority to try contested elections. Section 8 provides that, "The District Court shall have original jurisdiction * * of contested elections". This Court held in Odell v. Wharton, 87 Tex. 173, 27 S.W. 123, that the foregoing section of the Constitution was not self-executing, because it prescribes no rules by which jurisdiction may be enforced. It was also held that a contested election is not a civil suit, and therefore cannot be tried by the rules applicable to such cases. See also 16 Tex.Jur., p. 138, § 113. The power to enact laws regulating contested elections rests with the Legislature, and the statutes enacted must be looked to in order to find the provisions controlling the trial of contested election suits. If such statutes provide a method of procedure, that method is final and exclusive, and the courts are limited to such procedure. 16 Tex.Jur., pp. 142-146, §§ 115 and 116. At various times the Legislature has enacted many articles of the Statutes relating to elections and contested elections. Among the articles enacted are Vernon's Ann.Civ. St. Articles 3047, 3107, 3118, 3130, 3134, 3137, 3139, 3146, 3147, 3148, 3152, and 3156. Article 3107 reads: 798 "Every political party in this State through its State Executive Committee shall have the power to prescribe the qualifications of its own members and shall in its own way determine who shall be qualified to vote or otherwise participate in such political party; provided that no person shall ever be denied the right to participate in a primary in this State because of former political views or affiliations or because of membership or nonmembership in organizations other than the political party." (Emphasis ours.) Article 3118 provides how county executive committeemen shall be elected, and defines their duties. Article 3134 prescribes how the delegates from the precinct and county conventions may be selected. The action of the Democratic Convention complained of occurred on September 14, 1948, and this suit was filed in the District Court on October 18, 1948. The provisions of Articles 3148 and 3152, if available, were not involved, and they pass out of this controversy. Article 3139 prescribes the time when the State Convention shall convene and the duties of the convention. In Love v. Buckner, 121 Tex. 369, 49 S.W.2d 425, this Court held that the State Executive Committee of a political party could require party voters to make a pledge, before being permitted to participate in a precinct or county convention of the party, to support nominees of such party for President and Vice-president. In construing this article this Court also held in Bell v. Hill, 123 Tex. 531, 74 S.W.2d 113, that the right to determine policies and membership of a political party is to be exercised by the State convention of the party, and cannot be conferred on a State or governmental agency of the Legislature. It was also held in that case that in determining the membership of a political party, the will of the party is supreme, and the executive committee is a mere agency, notwithstanding the statute providing that the political party, through the State Executive Committee, shall have power to prescribe qualifications of its members. See also Seay v. Latham, supra. It will be observed that the latter part of Article 3107 prohibits the party from disqualifying its members, under certain conditions, in the following language; " * ; provided that no person shall ever be denied the right to participate in a primary in this State because of former political views or affiliations or because of membership or nonmembership in organizations other than the political party." This provision just quoted has been sustained by this Court in Love v. Wilcox, 119 Tex. 256, 28 S.W.2d 515, 70 A.L.R. 1484. The basic reason for the enactment of Article 3107 and the decisions of this Court upholding the right of the party to demand a pledge of those who vote in the primary elections to support its nominees rests upon the ground that the party has the right to demand that those who vote in the primaries, and those who seek to hold offices within the party, should make a pledge to support the party nominees. Anything less than this would destroy all party unity, loyalty, and discipline in primaries and conventions. In 1941 the Legislature materially amended certain articles of the Statutes, and repealed others, relating to contested elections. Among the articles amended is Article 3146, which reads: "Except for a place on party tickets for public elective offices, all contests within a political party shall be decided by the State, District, or County Executive Committee, as the nature of the office may require, each such Committee to retain all such powers and authority now conferred by law." In the case of Wall v. Currie, 147 Tex. 127, 213 S.W.2d 816, 819, this Court quoted with approval the statement contained in 29 C.J.S., Elections, § 88, pp. 121-122, as follows: "Except to the extent that jurisdiction is conferred by statute or that the subject has been regulated by statute, the courts have no power to interfere with the judgments of the constituted authorities of established political parties in matters involving party government and discipline, to determine disputes within a political party as to the regularity of the election of its executive 799 officers, or their removal, or to determine contests for the position of party committeemen or convention delegates." In the case of Wall v. Currie, supra, Currie claimed that he had been elected chairman of the Dallas County Executive Committee of the Republican party, and that Wall sought to interfere with him in the performance of his duties. The trial court dismissed the cause for lack of jurisdiction. This Court sustained the action of the trial court, and applying the foregoing rule to the facts of that cause held: "It is well established in this state, as well as in a majority of the other states, that officers of a political party, such as members of a party executive committee, are not public or governmental officers, even when provided for by statutory law." In this State political parties have not by law been created either State or governmental agencies, and in the absence of a statute covering the matter, committees of any political party in acting for the party's interests are not acting as officers of the State. And it is held that officers of a political party, such as chairmen of the County Executive Committees and precinct committeemen, although provided for by election laws, are not regarded as public or governmental officers. Koy v. Schneider, 110 Tex. 369, 218 S.W. 479, 221 S.W. 880; Waples v. Marrast, 108 Tex. 5, 184 S.W. 180, L.R.A.1917A, 253; Walker v. Mobley, 101 Tex. 28, 103 S.W. 490; McCombs v. Stevenson, Tex.Civ.App., 195 S.W.2d 566; Walker v. Hopping, Tex. Civ.App., 226 S.W. 146; 16 Tex.Jur., pp. 56-59, §§ 47-49. By Article 3107 the State Executive Committee of every political party in this State is clothed with the authority to prescribe the qualifications of its own members, and shall "in its own way determine who shall be qualified to vote or otherwise participate in such political party;" subject to the exception specified therein. Some confusion arose as to whether the courts or the political party had jurisdiction to settle disputes within the party. This question was definitely settled when the Legislature in 1941 overhauled the election statutes and enacted H.B. No. 857, Chap. 635, Regular Session 47th Legislature, p. 1400 of the General and Special Laws, repealing certain articles of the Statutes and amending others. Vernon's Ann. Civ.St. Art. 3125 et seq. Article 3146 was one of the articles amended, and it now provides that all contests shall be decided within the political party, "except for a place on party tickets for public elective offices". When Articles 3107 and 3146 are construed together, the conclusion is inescapable that respondents were not seeking places on the party ticket for public elective offices, and the action of the convention was final. The rule is well settled in this State that the contest of an election, lacking the elements of a civil suit, is a political rather than a judicial question, and the courts under their general powers, legal and equitable, have no jurisdiction of such a controversy. 16 Tex.Jur., p. 135, § 111. The District Court did not have jurisdiction to try the matters alleged by respondents relating to the political offices they sought to retain, nor did it have jurisdiction to issue the temporary injunction against petitioners; and the trial court and the Court of Civil Appeals erred in holding that it did have such jurisdiction. This appeal involves only the issuance of a temporary injunction by the trial court. The right of respondents to recover damages as alleged by them was not determined in the trial court nor in the Court of Civil Appeals, and that issue is not involved here. Upon that issue we express no opinion. The judgments of the trial court and the Court of Civil Appeals are reversed, the injunction issued is dissolved, and respondent's alleged cause, with the exception of their claim for damages, is dismissed. SMEDLEY, J., concurring in part and dissenting in part. SMEDLEY, Justice (concurs in part and dissents in part). As I understand the opinion of the majority it neither intends nor purports to decide the merits of the questions or controversies 800 in this case, but holds merely that neither the district court nor the Court of Civil Appeals had jurisdiction of the questions or controversies, and so holding reverses the judgments of those courts, dissolves the injunction and dismisses the suit except the part of the suit which seeks recovery of damages. I can agree with that part of the judgment which dismisses the suit brought by respondents of Class 4 against petitioners Carter and Mrs. Douglas and dissolves the injunction as to those petitioners. This because, and solely because, that part of the suit is in my opinion a "contest" within the meaning of Article 3146 of the Revised Civil Statutes as amended in 1941 which, according to that article, is required initially to be submitted to and decided by the State Executive Committee of the party. With the following holdings of the majority opinion I do not agree, and from them respectfully dissent: (1) What seems to be the holding that irrespective of Article 3146 the courts have no jurisdiction of the questions involved in this suit because they are political questions for decision by party officers or representatives only; (2) the holding or the implications of the opinion that the decision by a party committee under Article 3146 of a contest such as that brought by respondents of Class 4 is not subject to judicial review; (3) the holding that the suit brought by respondents of Class 5, the precinct chairmen, to prevent interference with them in holding and performing the duties of the political offices to which they had been lawfully elected, is a "contest" within the meaning of Article 3146 to be determined or determined in the first instance by a committee of the party. In addition to discussing the several questions above mentioned, it will be necessary also to consider the question whether the Convention's resolution of which respondents of Class 5 complain was valid. By the suit of respondents of Class 4 and the suit of respondents of Class 5 four distinct questions are presented. They are: (1) Must the question as to the validity of the election by the Convention of petitioners Carter and Mrs. Douglas as members of the State Democratic Executive Committee be submitted, or submitted in the first instance, by reason of Article 3146 as rewritten in 1941, to the State Committee; (2) if not, was the election of petitioners Carter and Mrs. Douglas valid; (3) is the question as to the authority of the State Convention to exact of precinct chairmen the pledge set out in the resolution under penalty of removal from office a question that must, under Article 3146, be submitted, or submitted in the first instance, to a party committee; (4) if not, did the State Convention have that authority. These questions are important and should be treated separately and carefully considered. The petition filed in district court by respondents contains many allegations of irregularities in the organization and action of the Convention and failure on the part of those in control of the Convention to comply with provisions of the applicable statutes. These allegations, the truth of which was admitted in open court by petitioners for the purpose of hearing the application for temporary injunction, are supplemented by elaborate findings of fact made by the trial court. The statement in the majority opinion of the nature of the case and of the facts is so meager that it is impossible to determine from the opinion the full scope and effect of its conclusions. In discussing the several questions it will be necessary to set out something of the nature of the suit and some of the relevant facts. Taking up the first question, Article 3146 as amended provided that: "Except for a place on party tickets for public elective offices, all contests within a political party shall be decided by the State, District, or County Executive Committee, as the nature of the office may require". Respondents insist that the suit which questions the right of petitioners Carter and Mrs. Douglas to act as members of the State Executive Committee is not a "contest" within the meaning of Article 3146, arguing that petitioners Penrose and Mrs. Smith, Class 4 of respondents, are suing as incumbents and the only lawful members of the State 801 Executive Committee from the Fort Worth Senatorial District, and are seeking to prevent petitioners Carter and Mrs. Douglas, who are more claimants and pretenders, from interfering with respondents in the performance of their duties. The record shows, however, that petitioners Carter and Mrs. Douglas were elected by the body which assembled at Fort Worth in September, 1948, and acted as the State Democratic Convention, and that respondents by this suit are attacking the validity of the election of petitioners Carter and Mrs. Douglas, alleging irregularities and acts contrary to the statutes in the organization and in the proceedings of the Convention, including the election of petitioners Carter and Mrs. Douglas without recommendation by the delegates chosen by the county convention of the senatorial district. Class 4, respondents Penrose and Mrs. Smith, allege that they were elected as members of the State Democratic Executive Committee at the State Convention in 1946 and still hold their positions and offices because no successors have ever been duly and regularly elected to succeed them. Their suit necessarily involves the determination of the validity of the election of petitioners Carter and Mrs. Douglas. It is therefore a contest within the meaning of Article 3146. Respondents argue that the contest should not be submitted to the State Executive Committee because that committee, on September 13, 1948, decided in respondents' favor a contest as to whether Class 3 respondents had authority to represent the Tarrant County Senatorial District in the State Convention and that they should not be required again to submit the same issue to the State Committee. The action taken by the State Committee on September 13, 1948, was a resolution that only the certified delegates from Tarrant, Dallas, Harris, Harrison "and other counties" should be seated and placed on the temporary roll. The Convention's failure to follow that resolution is one of the irregularities of which respondents complain, but the State Committee's resolution was not a decision of the validity of the Convention's election thereafter of petitioners Carter and Mrs. Douglas as members of the State Executive Committee. Respondents further contend that they should not be required to submit the contest to the State Executive Committee, because those who claim membership of the Committee do so by virtue of the Convention held on September 14, 1948, and would be called upon to determine the validity of the very proceedings upon which their own right to sit depends. Under Article 3139 the State Convention elects a chairman and a vice-chairman of the State Executive Committee and sixty-two members thereof, two from each senatorial district. The record indicates that the same irregularities and the same acts contrary to statutory requirements, of which Class 4 respondents complain in connection with the election of petitioners Carter and Mrs. Douglas, occurred in the refusal to seat delegates and in the election of members of the Executive Committee representing several other counties or senatorial districts. But it does not appear that the same course was followed, or to what extent it was followed, in refusal to seat delegates and in the election of State Committee members from senatorial districts composed of counties other than Tarrant, Dallas, Harris, Harrison and "other counties". And looking to the entire record, including the admitted facts and the trial court's findings, it is in my opinion not shown that so great a number of the committee members elected by the Convention are disqualified as to disqualify the committee from hearing and deciding in the first instance the validity of the election of petitioners Carter and Mrs. Douglas. Believing that the question as to the validity of the election of petitioners Carter and Mrs. Douglas should first be submitted to the State Executive Committee, I express no opinion on the merits of that question. The sweeping language of the opinion of the majority seems to comprehend a conclusion that the party committee's decision in a contest, under Article 3146 as amended in 1941, of the validity of the election of a member of the State Executive Committee 802 is final and not subject to judicial review. With such a conclusion I cannot agree. Looking to the language of the amended article, it provides merely and briefly that the contest shall be decided by the committee. There is no expression of an intention that the committee's action shall be final and not subject to judicial review and no express provision is made for judicial review. It has long been and is still the settled law of this State, unless the opinion of the majority changes it, that party rights and party nominations and party offices claimed or held under statute law are not merely political rights of which the courts will not take cognizance, but that they are legal rights and that when the action of political parties is regulated by statute law "their action to the extent that it is so governed may be reviewed by the courts as the only means of giving effect to the sovereign law of the State." Gilmore v. Waples, 108 Tex. 167, 174, 188 S.W. 1037, 1040; Love v. Wilcox, 119 Tex. 256, 28 S.W.2d 515, 70 A.L.R. 1484; Clancy v. Clough, Tex.Civ. App., 30 S.W.2d 569. Election to membership in the State Democratic Executive Committee is governed by statute law, the several articles of the statutes as to the selection of delegates to the State Convention, the organization of the Convention and the manner in which members of the State Executive Committee are recommended and elected. This being true, the question whether a member of the committee has been elected in accordance with that legislation is not a political question, but is necessarily a question for court decision. It does no violence to the terms of Article 3146 as amended to hold its meaning to be that the contests to which it applies must first be submitted to the committee and that the committee's decision is subject to proper judicial review, to the end that such contests may in the first instance be decided by a party forum but allowing resort to the courts for review of that forum's action and thus affording opportunity for effective, that is judicial, enforcement of rights given and regulated by statute law. This construction gives effect to Article 3146 and at the same time permits effective endorcement of rights arising under and regulated by statute. It is unnecessary here to undertake to define either the manner or the scope of the judicial review. The opinion of the majority seems to reach the further conclusion that, regardless of Article 3146, the courts have no jurisdiction to decide the controversies in this suit. The opinion accomplishes this by emphasizing the general language of Article 3107 to the effect that political parties through their state executive committees shall in their own way determine who shall be qualified to vote or otherwise participate in the parties, by stressing statements that political parties may govern themselves, by ignoring Gilmore v. Waples, 108 Tex. 167, 188 S.W. 1037, and disregarding the settled law of this State as so clearly announced in that decision. Gilmore v. Waples has never been overruled and the soundness of the opinion in that case has never been questioned by this Court. It was approved and followed in Love v. Wilcox, 119 Tex. 256, 28 S.W.2d 515, 520, 70 A.L.R. 1484. Associate Justice Greenwood, who wrote the opinion in Love v. Wilcox, referred to the opinion in Gilmore v. Waples as "the profound opinion of Chief Justice Phillips". The following brief quotation from the opinion in Gilmore v. Waples is enough to demonstrate that the settled law so well declared there controls the question here under consideration and to show how far the opinion of the majority herein departs from that settled law: "With our legislation covering the subject, whether a given nomination has been made in accordance with that legislation or in violation of it, presents, not a political question, but necessarily, a judicial question. For what purpose and to what end, it may appropriately be inquired, have the various statutes in relation to party nominations been enacted in this State if the rights and duties therein defined and the matters they purport to govern still present mere political questions, to be settled alone by party law and in the party forum, and are therefore beyond the cognizance 803 of the courts? The very purpose of this legislation was to relieve these matters of their more political character, as was their nature afore time, and subject them to the regulation of the statute law. The courts exist only to enforce the law. This includes the statute law. If they have no cognizance of rights arising under a civil statute regulating a political party, upon the ground that the body regulated is political and therefore any question affecting it is also political, though in terms governed by an express statute, it must follow that a political party is beyond the control of the law. But political parties are not beyond the control of the law. When regulated by law, their action to the extent that it is so governed may be reviewed by the courts as the only means of giving effect to the sovereign law of the State. In such case the inquiry is judicial because made the duty of the courts; and the questions presented are likewise judicial because arising under the written law." The statutes which regulate the action of the Democratic Party in Texas contain careful and detailed provisions for the method of electing delegates to the state conventions, the organization of those conventions and the recommendation and election of members of the State Executive Committee, and for the election of precinct chairman by qualified voters of the precincts, the term of office of the precinct chairman and the duties to be performed by them. The rights arising under those provisions are legal rights and questions whether members of the State Committee have been elected in accordance with that legislation or in violation of it and whether precinct chairman are entitled to hold and perform the duties of the offices to which they have been elected are judicial questions, questions for determination by the courts, because they arise under the written law. It is to be observed also that the opinion of the majority seeks by citation of Wall v. Currie, 147 Tex. 127, 213 S.W.2d 816, to support its conclusion that the questions in this case are not for judicial determination. Wall v. Currie has no application whatever to this case. As clearly shown by the opinion, the decision there made applies only to party action of the Republican Party, which had less than 200,000 voters in the last preceding general election. It was held that because the controversy in that case was over a party office and not one provided for or regulated by statute, it was a controversy to be determined within the party and not by a court. This suit by respondents of Class 5 is not a contest within the meaning of Article 3146. The respondents of that class are seeking to prevent what they allege to be unauthorized and unlawful interference with them in their exercising the rights and duties of precinct chairman, to which offices they were regularly elected in the general primary election of July, 1948, by the qualified Democratic voters of their precincts. They were elected in accordance with the statute, Article 3118, and under the article and other articles they have important duties to perform during their two-year terms, primarily for the benefit of those who elected them. There is no contest in this suit of their election or of the election of any other parties claiming rights to their offices. The rights which they assert are to hold and exercise their offices without unauthorized interference and without unauthorized removal. These are rights for judicial cognizance and for judicial enforcement, because they grow out of and are regulated by statutory enactment. Gilmore v. Waples, 108 Tex. 167, 188 S.W. 1037; Love v. Wilcox, 119 Tex. 256, 28 S.W.2d 515, 70 A.L.R. 1484. The material facts as to the suit by respondents of Class 5, admitted by petitioners and found by the trial court, are as follows: The substance of the resolution adopted by the State Convention and of which respondents of Class 5 complain is: The county chairman of each county is required to procure from each precinct chairman of his county a written and signed statement that he "is supporting and will continue to support the nominees of the Democratic Party for President and Vice-President, to wit: Honorable Harry S. Truman and Senator Alben W. Barkley, in the coming general election." In the event any precinct chairman fails or refuses to 804 file the statement within one week after the receipt of the communication from the county chairman, "then his office shall be and is hereby declared to be vacant." The vacancy shall be filled by those members of the County Executive Committee "who have executed and filed such statements of support of the party nominees". Respondents of Class 5 were elected as precinct chairmen at the general primary election in July, 1948, by citizens of Tarrant County who were "duly qualified voters and Democrats". A substantial number of those precinct chairmen, respondents of Class 5, have a present intention (that is, when the resolution was passed and this suit was filed) to vote for Truman and Barkley at the general election. Others of them have the present intention of not voting for anyone at the general election, because they have not supported and do not intend to support the nominees of any other party outside of the Democratic Party, and because of what they believe to be an "irreconcilable conflict arising between the avowed course of the national nominees with respect to the invasion of States' rights through the Civil Rights Program and segregation of races, to which the Democratic Party was committed by tradition as a principal faith of that party, distinguishing it from the Republican Party, as well as on account of the resolution in evidence adopted by the Texas Democratic Party at the May Brownwood State Convention with respect to such matters." The pledge required of the precinct chairmen by the resolution "was not exacted or sought in good faith" for its recited purpose of securing party loyalty. As was well known to those who sponsored and caused the adoption of the resolution, the precinct chairmen had no duties to perform between the time of the State Convention and the date of the general election. And the true purpose of the adoption of the resolution and the exaction of the pledge was "that all, or a large number, of such Class 5 plaintiffs would refuse to comply with such an exaction accompanied by threat; and that many would resign and others would refuse to sign the pledge", and that their offices would become vacant and could be filled by those of the "faction" represented by petitioners. Petitioners seek to justify the Convention's adoption of this resolution by referring to the broad provisions of Article 3107 that every political party, through its State Executive Committee, shall have power to prescribe the qualifications of its members and shall in its own way determine who shall be qualified to vote or otherwise participate in the political party, and they make the argument that the Convention was authorized to adopt the resolution because there is nothing in the statutes expressly prohibiting the action. Article 3107 is a part of the chapter of the statutes on the subject of nominations by parties of 200,000 and more voters, and it must be read in connection with the other articles of the chapter. Its general language is necessarily restrained by the particular language of other articles in the chapter. The particular language of Article 3118 is that the precinct chairmen shall be elected for two-year terms at the general primary election by the qualified voters of their respective precincts. The general language of Article 3107 was not intended and should not be used to nullify the particular terms of Article 3118. The argument that the Convention had the right summarily to remove precinct chairmen from their offices because there is no express prohibition in the statutes of that kind of action is not a valid argument. The statute, Article 3118, in giving to the qualified Democratic voters of the precincts the authority and the right to choose by election those who will serve them for two years as precinct officers, prohibits, by necessary implication, the State Convention from removing those officers. What becomes of local government as to those local officials, set up and defined by Article 3118, if the will be local Democrats and their lawful selection of their officials can be defeated by the State Convention's summary removal of the officials? It must be conceded that party action, whether by convention or by committee, when the party is regulated by statute, must be reasonable and in good faith. Seay v. 805 Latham, 143 Tex. 1, 8, 182 S.W.2d 251, 155 A.L.R. 180; Love v. Buckner, 121 Tex. 369, 371, 49 S.W.2d 425. The resolution seems clearly to be unreasonable in view of the facts of this case and as applied to respondents of Class 5. The resolution is not a direction to the county committees or to the county chairmen to inquire into the party loyalty of the precinct chairmen, giving them opportunity to be heard and to give evidence that they are Democrats or that they intend to support the nominees at the November election. It is not even a warning that they will be removed if they do not make that proof. It does not direct the local committee to remove them. By peremptory terms the resolution prescribes the pledge to be taken and requires it to be signed and filed within a week, and it undertakes to make the resolution self-executing after adjournment of the convention by providing that if any precinct chairman fails or refuses to sign the pledge within the time specified "his office shall be and is hereby declared to be vacant". The resolution required the pledge of those of Class 5, a substantial number of the class, who had present intentions to vote for Truman and Barkley at the general election but were unwilling to sign a pledge accompanied by threat of removal. The resolution required the pledge of others of Class 5 who did not intend to vote at all in the general election, because they were Democrats and would not vote for the candidates of any other party but were unwilling to vote for Truman and Barkley, for reasons, by them deemed sufficient, growing out of the resolutions and platform adopted at the National Democratic Convention. The pledge required by the resolution, in purpose and effect, goes well beyond the uniform test which must be printed on every official ballot in primary elections: "I am a (name of the party) and pledge myself to support the nominees of this primary." If the pledge does not appear on the ballot, it is void and cannot be counted. Article 3110. And yet it is held by this Court that one who takes that pledge is under only a moral obligation which cannot be enforced in court. Westerman v. Mims, 111 Tex. 29, 36-38, 227 S.W. 178; Love v. Wilcox, 119 Tex. 256, 276, 28 S.W.2d 515, 70 A.L.R. 1484. In the case last cited it was also held that the Democratic State Executive Committee had no authority to deny participation in the party primary, as a candidate for governor, to one who was willing to take the test prescribed by Article 3110 and "to comply with the pledge contained in that test to the utmost of conscience and good faith", but was unwilling to take the additional pledge which the committee sought to require that he would support all nominees of the Democratic Party during the year. The pledge sought to be exacted in the resolution here under consideration is that the precinct chairman is supporting and will continue to support the nominees of the Democratic Party for president and vice-president. It is not a test, as that required by Article 3110, to evidence qualification to vote in the primary election or to become a candidate of the party. It is sought to be required of precinct chairmen long after their election and as a condition to their continuing to hold the offices to which they have been elected. And so it is an effort to impose after election an additional qualification for the office. The pledge set out in Article 3110 is required of all participants in the primary election, votes and candidates. "The power to pass on the sincerity of the candidate's pledge and to endorse or condemn his past party record is to be exercised by the party voters." Love v. Wilcox, 119 Tex. 256, 278, 28 S.W.2d 515, 525, 70 A.L.R. 1484. The precinct chairmen's party membership and party loyalty were determined by their election in the primary where they and those who voted subscribed to the statutory test. Their summary ejection, by means of the resolution, from the offices to which they had been elected would nullify the statute under which they were lawfully elected and would defeat the will of the Democratic voters of their precincts. As above shown, respondents are entitled to judicial action to prevent the enforcement of the resolution against them, because Article 3118 by necessary implication forbids summary removal by the Convention 806 of precinct chairmen lawfully elected, and further because the resolution is, under the facts of this case and as applied to respondents of Class 5, unreasonable. For a third reason respondents of Class 5 are entitled to injunction to prevent interference with them by enforcement of the resolution. It is in the fact, alleged in the pleadings and admitted in open court and found by the trial judge, that the resolution was not adopted in good faith. Seay v. Latham, 143 Tex. 1, 8, 182 S.W.2d 251, 155 A.L.R. 180. The substance of the allegation and the finding has been stated above. It is in brief that the resolution was not adopted in good faith to secure party loyalty, but was merely a part of the purpose to "purge" the party of those who did not adhere to petitioners' political philosophy. Love v. Buckner, 121 Tex. 369, 49 S.W.2d 425, relied upon by petitioners, held that it was not beyond the power of the Democratic State Executive Committee to require persons seeking to participate as delegates in county conventions, held to select delegates to the State Convention, at which delegates to the National Convention were to be selected, to take a pledge to support the nominees of the party for president and vice-president by voting for the Democratic electors. The instant case is not one in which a test is prescribed for eligibility to sit in a party convention or to become a candidate for party office. The pledge in this case was sought to be exacted from respondents of Class 5 for the purpose of removing them from offices to which they had been elected at a primary election in which they and those who elected them took the statutory pledge. Petitioners cite Scurry v. Nicholson, 9 S.W.2d 747, as decided by the Court of Civil Appeals. That court held that the Democratic County Executive Committee had the right to oust Nicholson, who had been elected to membership on that committee and who thereafter refused to take a pledge required of him by the committee that he would support the election of Alfred E. Smith as president and all other nominees of the party. There are at least two important points of difference between that case, as decided by the Court of Civil Appeals, and the instant case. They are, first, that it was shown as a fact in that case that Nicholson admitted and frankly stated that he would not support Governor Smith and that he was a member of a political organization known as "Anti-Smith Democrats". The second is that in that case the ouster of the local party official was by the local committee. That case came to this Court, which did not pass upon the right of the county committee to oust one of its members. It was held merely that the district court should have sustained a general demurrer to the plaintiff's petition because the plaintiff sued only Scurry and complained not of his conduct but only of acts of the county committee Nicholson v. Scurry, 119 Tex. 250, 28 S.W.2d 512. If precinct chairmen may be removed by party action after they have been elected, the power to remove them should rest in local representatives of the party rather than in the State Convention. These respondents were elected for two-year terms by the Democratic voters of their precincts. Article 3118. There is no statute providing for their removal. The general rule is that when the term of office is not fixed by law, the power of removal is incident to the power to appoint. 43 Am.Jur., p. 31, Sec. 183; 46 C.J. p. 985, Sec. 146. There is the further rule that appointments for a fixed term of years cannot be terminated except for cause. 43 Am.Jur., p. 32, Sec. 183. And another that when an officer holds for a definite term he is entitled to notice and hearing in order that he may have opportunity to defend, the statute not providing otherwise. 43 Am. Jur., p. 51, Sec. 212. According to these settled principles, the State Convention would not have the authority to remove the precinct chairmen, and certainly could not remove them summarily and without hearing. The implication from the statutes is that, if there is authority to remove these party officers, it is in the County Committee and not in the State Convention. While this suit by the precinct chairmen is not a contest under Article 3146, it is to be observed 807 that that article in providing for contests specifies that contests shall be decided "by the State, District, or County Executives Committee, as the nature of the office may require". Article 3118, which provides for election of precinct chairmen, also provides that "any vacancy in the office of chairman, county or precinct, or any member of such committee (referring to the County Executive Committee) shall be filled by a majority vote of said executive committee." These two articles manifest the intention of the legislature to place control of local party officials in local party representatives. The entire plan of the statutes regulating the Democratic Party is to construct the party organization from the bottom upwards, in order that the qualified voters of the party in the precincts and counties may select those who shall act for them as local party officers and as delegates to county and state conventions, instead of permitting party leaders to construct the party organization from the top downwards. Authority in the State Convention summarily to eject local party officials who have been duly elected by local party members would be quite inconsistent with the entire plan of the statutes and with the legislative intent manifested by the statutes. 9 R.C.L. p. 1088, Sec. 97; People ex rel. Coffey v. Democratic General Committee, 164 N.Y. 335, 58 N.E. 124, 51 L.R.A. 674. Several statements in the opinion of the majority may appear to express opinions on the merits of the questions in the case. They are to be taken, however, as intended to support the conclusion that the questions are not for judicial determination and so not within the jurisdiction of the Court, for the Court could not hold that it has no jurisdiction of questions and at the same time express its opinion on them. The part of the judgment of the trial court and of the Court of Civil Appeals which enjoins petitioners from seeking to declare vacant the offices of the respondents of Class 5, the precinct chairmen, from interfering with them in the performance of the duties of their offices and from seeking to remove them therefrom, should be affirmed.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1532986/	227 S.W.2d 142 (1950) PETERSON v. BROWN. No. 4-9089. Supreme Court of Arkansas. February 20, 1950. William K. Harris and Daily & Woods, Fort Smith, for appellant. Lawson Cloninger and Myles Friedman, Fort Smith, for appellee. HOLT, Justice. Appellee, a food broker, resided in New Iberia, La. Appellant, a resident of Fort Smith, was, prior to September 1945, operating a canning plant in Sallisaw, Okla., processing and packing, in tin cans, mustard and turnip greens. July 9, 1945, appellee purchased, through appellant's broker, 1000 cases of mustard greens and 500 cases of turnip greens. Shipment was made from Sallisaw on July 9th and delivery was made not later than July 16th, 1945 to appellee at New Iberia. A part of the shipment was stored in a warehouse in New Iberia and the remainder in a warehouse in Alexandria. Appellee sold to customers from these warehouses the above canned goods, over a period of approximately two years, or until the stock, of these canned goods at New Iberia, had been reduced to 225 cases, and that at Alexandria to 45 cases. Appellee brought the present action September 4, 1948, more than three years from the date of sale, or delivery. He alleged 143 in his complaint, in effect, breach on the part of appellant of an implied warranty that the goods were merchantable, fit for resale, and for human consumption; that the 225 cases in New Iberia were seized August 20, 1947, condemned and destroyed under the provisions of the Federal Pure Food and Drugs Act, 21 U.S.C.A. § 342(a) (3), and the 45 cases at Alexandria were likewise seized on February 25, 1948 and later destroyed. He sought to recover $714.12 in damages. Appellant's answer was a general denial and affirmatively pleaded the three year Statute of Limitations as a complete bar to the suit. A jury trial resulted in a verdict for appellee for $704.29, and from the judgment is this appeal. For reversal, appellant strongly contends that appellee's cause of action was barred by the three year Statute of Limitations, and that the court erred in refusing his request to so instruct the jury. We have reached the conclusion that this contention must be sustained. The sale in question was made July 9, 1945, and delivery made not later than July 16, 1945. The present suit was filed September 4, 1948, more than three years and one month from the date of sale, or delivery. The contract of sale was oral and the three year Statute of Limitations applies (Ark.Stats.1947, section 37-206). The primary and decisive question here is: When did this statute begin to run, or from what date must it be computed? In this case, there was no allegation of fraud or any proof thereof, and we have been unable to find any evidence in the record that would toll the statute, or that would establish a new date, subsequent to July 1945, from which the statutory period should be computed. The general rule, subject to exceptions, which we do not find present here, appears to be that any breach of warranty of soundness, kind or quality is broken when made and the statute of limitations begins to run from the date of the sale. In 37 C.J. 836; 54 C.J.S., Limitation of Actions, § 138c, the rule is stated as follows: "Where unsound personal property is sold with a warranty of soundness, the warranty is broken as soon as made and the statute begins to run from the date of the sale, not from the time when the buyer sustains consequential damage. Likewise where goods are warranted to be of a certain kind or quality, but are not of that kind or quality, the warranty is broken when made and the statutory period is computed from the date of the sale, not at the time when special or consequential damage results, or from the date when the breach is discovered; and this, although meanwhile the buyer is wholly unable to ascertain whether the goods comply with the warranty." Appellee concedes that the above is the general rule and says that the court "has stated in previous decisions that the Statute of Limitations ordinarily commences to run when the cause of action accrues, and that a plaintiff's ignorance that a cause of action exists will not prevent it from running," but that the present case falls within exceptions to the general rule, and further says: "This court has not passed upon the question directly, but decisions made by this court indicate that it would hold that the Statute of Limitations would begin to run only when a latent defect in personal property is discovered, or reasonably should have been discovered." He then cites and relies strongly upon Louisville Silo & Tank Co. v. Thweatt, 174 Ark. 437, 295 S.W. 710, and the case of P. H. Sheehy Co. v. Eastern Importing & Mfg. Co., 44 App.D.C. 107, L.R.A.1916F, 810, to which reference was made in the Thweatt case. Our construction, however, of our holding in the Thweatt case tends strongly to support the above general rule, and appellant's contention. In that case, there was involved the sale of a steel granary to be used in storing rice, and we held, on one of the actions therein, that the Statute of Limitations was tolled by the seller's promise to make repairs and that the statute therefore began to run from the date following the last effort to make repairs. In the present case, as pointed out above, there is no proof of anything that would toll the statute. 144 In the Thweatt case, this court said [174 Ark. 437, 295 S.W. 712]: "Ordinarily, a cause of action for breach of warranty in the sale of personal property accrues upon the delivery of the property, the warranty being broken when made, and the statute of limitations runs from the date of delivery. This is true because the commencement of the limitation is contemporaneous with the origin of the cause of action." There we recognized and announced the general rule, and a minority rule. The Sheehy Co. case (a canned goods case) was referred to only as supporting the minority view. We also recognized and affirmed the rule that, in the absence of fraud, contract (or evidence sufficient to toll the statute), an action for breach of implied warranty of fitness of personal property accrues from the date of sale, and delivery, the warranty being broken when made and the limitations statute runs from that date. In the Thweatt case, there was evidence from which it was held the statute had been tolled and it was there said: "We hold, therefore, that while the statute of limitations ordinarily begins to run against an action for breach of warranty upon the sale and delivery of a chattel which does not comply with the warranty, yet the statute is tolled so long as the vendor insists that the defect can be repaired and is attempting to do so." In the comparatively recent case of Liberty Mut. Ins. Co. v. Sheila-Lynn, Inc., 185 Misc. 689, 57 N.Y.S.2d 707, 710, the Supreme Court of New York said: "The traditional doctrine is that a cause of action for breach of warranty of quality and fitness normally accrues at the time of the sale, notwithstanding the fact that the purchaser may not then be aware of the existence of any cause of action. Williston on Sales, sec. 212-a. `Inability to ascertain the quality or condition of property warranted to be, at the time of the sale, a particular quality or in a certain condition, has never been allowed to change the rule as to the time when a right of action for a breach of the warranty occurs.'" In the case of Krueger v. V.P. Christianson Silo Co., 206 Wis. 460, 240 N.W. 145, 146, which involved an agreement and effort to repair, similar in effect to the situation in the Thweatt case, above, the Supreme Court of Wisconsin, held, in effect, as this court held in the Thweatt case, that the limitation on an action for a breach of warranty should be computed from the date the silo was completed, but that subsequent promise and efforts to repair tolled the statute as in the Thweatt case. It was there said: "A cause of action on contract, whether for damages or otherwise, commences to run from the time of the breach, whether the facts are known to the party having the right or not and if the latter, whether through ignorance, neglect or mistake of such party or fraud of his adversary. There is no exception. (Citing cases.) * * * "Ignorance of his rights on the part of the person against whom the statute has begun to run, will not suspend its operation. He may discover his injury too late to take advantage of the appropriate remedy. Such is one of the occasional hardships necessarily incident to a law arbitrarily making legal remedies contingent on mere lapse of time." In the case of I. Kennard & Sons Carpet Company v. Dornan, 64 Mo.App. 17, where there was involved a warranty of a happening of something in the future, or an act that would toll the statute, that court announced the general rule in this language: "The general rule unquestionably is that in all personal actions for the violation of an express or implied contract the statute begins to run from the date of the wrong, and not from the date of the damages caused by it. The wrong and not the damage constitutes the cause of action. Such has been the rule since an early day (Sheriff of Norwich v. Bradshaw, 1 Croke Eliz. 53), and that distinction is emphasized in the leading case of Wilcox v. Plummer, 4 Pet. 172, 177, 7 L. Ed. 821." In the Wilcox case, the U. S. Supreme Court held that the statute (of limitations) 145 runs "from the time of the injury, that being the cause of action, and not from the time of damage or discovery of the injury." We hold, therefore, as indicated, that the three year Statute of Limitations, in the circumstances here, began to run from the date of sale and delivery of the goods in question, and since appellee's action was not begun until more than three years following the sale and delivery, it was barred. Appellee earnestly argues that appellant failed to file his motion for a new trial within the time required by our statute (Ark. Stats. 1947, section 27-1904), which provides: "The application for a new trial, * * shall be made within fifteen (15) days after the verdict or decision was rendered, unless unavoidably delayed; Provided * * *." Appellee says that "under the statute it was mandatory upon the appellant to file his motion for a new trial within the time fixed in said statute (15 days) unless unavoidably delayed, that the trial court arbitrarily and erroneously extended the time for the filing of said motion." He therefore contends that the motion for a new trial and bill of exceptions should be stricken from the record and the judgment affirmed since no error appears upon the face of the record. We cannot agree. The record reflects that the judgment here was rendered June 10, 1949, and on June 17th thereafter, the court, on appellant's oral motion, entered its order granting appellant until July 11th, within which to file his motion for a new trial. Appellant filed his motion on July 6, 1949, well within the time allotted. The record further reflects the following court order: "Now on this 18th day of June, 1949, comes the defendant by his attorneys, Daily & Woods and William K. Harris, and asks permission of the court to be allowed until July 11th, 1949, to file motion for new trial, and the Court, after hearing all the evidence and being well and sufficiently advised in the premises doth grant the defendant until July 11, 1949, to file Motion for New trial." It further appears that appellant's reasons for requesting an extension of time were that the court reporter was unable to furnish list of exceptions within the statutory period and that appellant's counsel was busily engaged in other court trials. We find, in the circumstances, no abuse of the trial court's discretion in granting to appellant the extension of time indicated. In circumstances, similar in effect, to those presented here, we held in the comparatively recent case of Missouri Pacific Railroad Company v. Moore, 199 Ark. 1035, 138 S.W.2d 384, 388, that the court did not abuse its discretion in extending the time for filing motion for a new trial, but on the other hand that a failure to grant the time requested "would have been arbitrary and an abuse of discretion." See also, Metropolitan Life Insurance Company v. Thompson, 203 Ark. 1103, 160 S.W.2d 852. Accordingly, the judgment is reversed, and since the cause appears to have been fully developed, it is dismissed.	01-03-2023	10-30-2013
https://www.courtlistener.com/api/rest/v3/opinions/1533007/	272 Pa. Super. 189 (1979) 414 A.2d 1071 COMMONWEALTH of Pennsylvania v. Frank R. HART, Appellant. Superior Court of Pennsylvania. Argued August 27, 1979. Filed November 16, 1979. 191 Joseph H. Reiter, Philadelphia, for appellant. Lee M. Kaplan, Assistant District Attorney, Philadelphia, for Commonwealth, appellee. Before HOFFMAN, EAGEN and HESS, JJ.[] 192 PER CURIAM: Frank R. Hart, appellant, appeals from a judgment of sentence of five to fifteen years imprisonment imposed following a conviction of murder of the third degree in a nonjury trial in the Court of Common Pleas of Philadelphia. Hart advances three assignments of error in support of his request for a new trial. A brief recount of the evidence presented at trial is necessary. Jessie Hines died as the result of a subdural hematoma caused by a blow or blows to the head. Three individuals, two of whom were minors, testified they witnessed Hart punch Hines five or six times shortly before his death. The defense contended that no beating occurred and that the subdural hematoma which caused death was caused by falls taken by the victim as a result of his "degenerate brain condition after years of alcoholism" and "grand mal seizures . . . attributed to withdrawal from alcohol." Hart's first assignment of error relates to cross-examination by the prosecuting attorney of a defense witness, Hart's mother, who had testified during direct examination that she knew the deceased; that he drank; that he suffered seizures; that he fell when he took seizures; and, that he had been hospitalized as a result. During cross-examination, the following occurred: "Q. [y]ou're aware that [the victim] did fall and he was injured in the service and a toe was amputated. You know that, don't you? "[Defense Counsel]: Objection; Your Honor. "The Court: Objection overruled. "Q. That was when he was in the service years ago he received an injury and he was getting partial disability from it? "[Defense Counsel]: Objection. "The Court: Objection overruled." Thereafter, the witness explained that the falls she had referred to during direct examination were not related to the injury brought out during cross-examination because the 193 victim in the falls recounted did not trip, rather he "blanked out." Hart argues that the question misled the trier-of-fact in that no evidence was previously admitted to show such an injury. First, the witness indicated knowledge of such an injury even if it was not established by previous evidence. Second, the trial judge, as the factfinder, indicated he did not consider this evidence in determining the verdict. Accordingly, as in Commonwealth v. Hill, 223 Pa.Super. 42, 43, 296 A.2d 860 (1973), "this is not a case where the testimony relating to improper cross-examination causes a factfinder to be mislead." Hart's second assignment of error involves redirect examination by the prosecutor of one of the minor eyewitnesses: "Q. Shawn, are you afraid of Mr. Hart? "[Defense Counsel]: Objection, Your Honor. "The Court: Objection overruled. "Q. Are you afraid of Mr. Hart? "A. In a way. "Q. What do you mean in a way? "[Defense Counsel]: I thought he said no way. "The Court: In a way. "Q. What do you mean in a way? "A. Well, he was, you know he had beaten up the family and all of them of Miss "[Defense Counsel]: Objection, Your Honor. "The Court: Objection sustained." Hart argues the testimony was irrelevant and inflammatory. We need not consider the latter testimony of unrelated alleged beatings. As to this testimony, the objection was sustained and defense counsel requested no further relief from the court. Commonwealth v. Hill, 479 Pa. 346, 388 A.2d 689 (1978); Commonwealth v. Glenn, 459 Pa. 545, 330 A.2d 535 (1974). As to the witness's testimony that he feared Hart, while, under the circumstances, it may have been irrelevant 194 and, hence, inadmissible, we do not believe it warrants the grant of a new trial. First, the trial court indicated it did not consider any of the above challenged testimony in rendering its decision. Second, the allegedly improper reference to fear was an isolated incident. Compare Commonwealth v. DeCampli, 243 Pa.Super. 69, 364 A.2d 454 (1976) (systematic and repetitive improper inferences warrant reversal). Third, as our Supreme Court has said, albeit while discussing inflammatory photographs: "`If this had been a trial before a jury, [appellant's] argument would be a more compelling one. However our examination of the record of a trial without a jury differs in certain respects from our examination of a jury trial record. [Citation omitted.] In the case of a trial before a jury, we must be mindful that twelve laymen, unlearned in the technicalities of the rules of evidence, can be easily confused or prejudiced by certain evidence admissible as having value for one purpose but not for another. When the [appellant] waives a jury trial, we have a right to expect a more perceptive and judicious application of the rules of evidence by the trial judge, learned in the law.. . . He, unlike a layman, also knows that improperly admitted evidence must be stricken from consideration.'" Commonwealth v. Batty, 482 Pa. 173, 178, 393 A.2d 435, 438 (1978), quoting from Commonwealth v. Rouse, 207 Pa.Super. 418, 421-22, 218 A.2d 100, 102 (1966). The trial court indicated it did not consider the evidence, and, hence, what the Supreme Court said in Commonwealth v. Batty, supra, applies here. Fourth, given the main issue at trial was whether Hart beat the victim and given three eyewitnesses testified to the beating having occurred, the error, if any, is harmless because it did not contribute to the verdict. Commonwealth v. Story, 476 Pa. 391, 383 A.2d 155 (1978). Hart's third assignment of error relates to the competency of the two eyewitnesses who were eleven and thirteen years of age at the time of trial. The competency of these witnesses was explored during direct and by cross-examination. No objection to the witnesses' testimony on the basis 195 of incompetency was entered at trial, but, in post-verdict motions and in this appeal, Hart argues the witnesses were incompetent in that "a consciousness of the duty to speak the truth" was not shown. Because no objection was entered at trial, the issue is waived. Commonwealth v. Clair, 458 Pa. 418, 326 A.2d 272 (1974); Commonwealth v. Speicher, 259 Pa.Super. 433, 393 A.2d 904 (1978). Recognizing the presence of a waiver, appellate counsel, who was also trial counsel, argues he was ineffective in not objecting. The Commonwealth responds by asserting that the issue of ineffectiveness is waived under Commonwealth v. Blair, 460 Pa. 31, 331 A.2d 213 (1975), because it was raised for the first time in a brief, rather than in motions, before the post-verdict motion court. Since the post-verdict motion court accepted and considered the ineffectiveness issue, it is properly before us. Commonwealth v. Gravely, 486 Pa. 194, 404 A.2d 1296 (1979). Furthermore, counsel cannot be expected to argue his own ineffectiveness, and, accordingly, a waiver of this issue could not occur at the post-verdict motion proceedings under the circumstances. Commonwealth v. Dancer, 460 Pa. 95, 331 A.2d 435 (1975). With regard to a claim of ineffectiveness when advanced by counsel who is alleged to have been ineffective, our Supreme Court has said: "While this Court will entertain a claim of ineffective assistance of counsel on appeal by the same attorney who served as trial counsel if reversible error is apparent on the record before us, we will not reject such a claim without a remand for appointment of new counsel." Commonwealth v. Fox, 476 Pa. 475, 479, 383 A.2d 199, 201 (1978). [Emphasis added.] Applying the Fox analysis, we cannot say reversible error is apparent in the present record. While Commonwealth v. Rimmel, 221 Pa.Super. 84, 289 A.2d 116 (1972), if applied instantly, might reveal reversible error, the criteria there announced to determine if a consciousness of the duty to speak the truth has been established has been severely 196 criticized and, in effect, abandoned by this court. See Commonwealth v. Mangello, 250 Pa.Super. 202, 378 A.2d 897 (1977); Commonwealth v. Payton, 258 Pa.Super. 140, 392 A.2d 723 (1978). Furthermore, applying the more appropriate criteria of Commonwealth v. Payton, supra, reversible error is certainly not apparent. The witnesses' responses might indeed establish competency, and, even assuming they do not, the failure to object to the examination of the witnesses may indeed have had a rational basis in that counsel could have concluded further examination would have only emphasized the competency of the witnesses and thereby hindered cross-examination. In any event, we cannot now make that determination because under Commonwealth v. Fox, supra, we are compelled to remand for the appointment of new counsel to represent Hart in advancing the claim of ineffectiveness. Accordingly, the record is remanded to the trial court for the purpose of conducting a hearing to determine if trial counsel was ineffective in not entering an objection to the competency of the two minor eyewitnesses. New counsel is to be appointed to assist Hart in these proceedings. If the trial court rules Hart was not denied effective trial counsel, Hart may file a new appeal. NOTES [] Chief Justice Michael J. Eagen of the Supreme Court of Pennsylvania and Judge Warren K. Hess of the Court of Common Pleas of Berks County, Pennsylvania, are sitting by designation.	01-03-2023	10-30-2013

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